E44: USA's Afghanistan embarrassment, China's new algo laws, future of robots + Italy recap!

Jason Calacanis 0:00 By the way, boys-

David Sacks 0:01 I am in black.

Chamath Palihapitiya 0:01 Look at this, I'm down, I'm, I'm up a button.

Jason Calacanis 0:04 Oh. Up a button, yes please.

David Sacks 0:05 This is why the All-In pod is falling apart, is we got one bestie who thinks he's fucking Hemingway, we got another one who thinks he's Italian nobility, we got another one who all he wants to do is geek out about science and discuss nothing topical. I mean, you guys are a total mess. Total mess.

Jason Calacanis 0:20 And you're off fucking boat.

Chamath Palihapitiya 0:21 And you, off fucking boat. And you.

Jason Calacanis 0:22 The fuck are you doing?

0:22 Here's our cold open (laughs) .

David Sacks 0:23 I'm present.

Chamath Palihapitiya 0:24 God.

David Sacks 0:25 I've been present.

Jason Calacanis 0:26 Present.

Chamath Palihapitiya 0:26 You've been present.

David Sacks 0:26 I've been waiting for two weeks.

Jason Calacanis 0:28 Keep your mind on social.

0:28 And we got the guy who wants to be the next Tucker Carlson.

David Sacks 0:31 I've been waiting for two weeks to come off.

Jason Calacanis 0:31 Oh, really? Did, did Henry Belcaster write that opening for you?

David Sacks 0:35 No, what's wrong with that?

Jason Calacanis 0:35 Yeah.

0:35 Did your writing team write that soliloquy?

David Sacks 0:37 I'm coming in hot. I've been waiting two weeks to go off.

Narrator 0:39 I'm going all in.

Jason Calacanis 0:39 Three, two...

Narrator 0:42 Don't let your winners ride.

Jason Calacanis 0:45 Rain Man David Sacks.

Narrator 0:49 I'm going all in. And I said- We open sourced it to the fans and they have just gone crazy with it.

Jason Calacanis 0:53 Love you, bestie. Okay, everybody. Welcome back to the All-In podcast. We took two weeks off for vacation. Uh, with us today- Vacation? (laughs) ... from-cation, uh, Sacks is off his boat and ready to go, uh, after the tremendous boat episode. Friedberg, who didn't come to Italy-

Chamath Palihapitiya 1:14 David, why are you working from an IRS office?

Jason Calacanis 1:18 (laughs)

Chamath Palihapitiya 1:20 What? Oh, Sacks is in the IRS office.

Jason Calacanis 1:21 David Sacks, David Sacks has joined a call center. Which call center are you working for?

David Sacks 1:25 (laughs) It's just a nice, white wall.

Jason Calacanis 1:26 This is David Sacks from the call-in app. Can I set up your podcast for you, please?

1:29 Sacks, you, you better fucking get here by tonight.

David Sacks 1:31 Okay.

Jason Calacanis 1:32 Yeah, Sacks, when aren't you coming?

Chamath Palihapitiya 1:32 You better play fucking cards, bestie. This is bullshit.

Jason Calacanis 1:34 Bestie, you better fucking show up. This line-up is a shit-show.

1:37 Mr., Mr. Beast is showing up.

1:38 Mr. Beast is gonna play cards, and he plays eight, queen, eight, off-suit to crack Phil. It's gonna be very entertaining.

David Sacks 1:45 All right, I'm, I'm flying back this afternoon, so.

Chamath Palihapitiya 1:46 It's Mr. Beast, Alan, Shiffle-

Jason Calacanis 1:50 And Jeff.

Chamath Palihapitiya 1:50 ... Muth.

Jason Calacanis 1:51 (laughs)

Chamath Palihapitiya 1:51 This is gonna be fucking fireworks tonight.

David Sacks 1:53 Okay, I am coming, I am coming, I am coming.

Jason Calacanis 1:55 Fireworks. All right, all right.

1:55 I am coming to the meeting as-

Chamath Palihapitiya 1:56 Lock it up, the eighth seat, your eighth seat is locked up.

David Sacks 1:58 Wait, what time does it start?

Jason Calacanis 2:00 Asshole.

Chamath Palihapitiya 2:00 Seven, it's 7:00 AM. No, no.

Jason Calacanis 2:02 It's gonna be all night.

2:02 David, is your, is your, uh, is your guest house taken?

Chamath Palihapitiya 2:05 No, you can stay in the guest house if you want.

Jason Calacanis 2:07 Great.

2:08 Here we go.

Chamath Palihapitiya 2:09 No, we start, we start-

Jason Calacanis 2:09 Are we starting the show at 5:00? Is this the show?

Chamath Palihapitiya 2:12 David, we start at 6:00, David. We start at 6:00. Yes, David, we start at 6:00, but now I, we're gonna break for dinner as normal at 7:00. So, get here by fucking 6:00.

David Sacks 2:17 Oh, I'll come. I gotta have dinner with my kids. I haven't seen them in a month. So, uh...

Jason Calacanis 2:21 (laughs)

2:22 (laughs)

Chamath Palihapitiya 2:23 (laughs)

Jason Calacanis 2:23 All right, just so you, you remember their names, it's boop, boop, and boop. And there's three of them, okay?

2:29 Uh, yeah, yeah. There's three.

David Sacks 2:31 I'll come, I'll come after dinner, okay?

Jason Calacanis 2:33 All right, all right.

2:33 Okay, good. Good, you're locked.

2:34 All right, here we go. Uh, first topic of the day is, uh-

Chamath Palihapitiya 2:37 No, you didn't do the intros, asshole. Go to, go to the rest of the intro.

Jason Calacanis 2:40 Right. Two... (laughs) All right.

Chamath Palihapitiya 2:40 No, no, you already did that part. Just introduce the... You had started with Sacks and you didn't say myself and Friedberg.

Jason Calacanis 2:45 When did you become the director? Okay, sit down, Scorsese.

Chamath Palihapitiya 2:48 (laughs)

Jason Calacanis 2:48 All right, with us again, the dictator himself, Chamath Palihapitiya.

2:52 Back from his Italian castle.

2:54 Fresh off his Italian castle retreat. Uh, one button up.

David Sacks 2:58 Maybe we should call you the duke instead of the dictator.

Jason Calacanis 3:01 Yeah.

David Sacks 3:01 Because you've really taken this, this Italian nobility thing to heart.

Jason Calacanis 3:05 You know, Jason, Jason invaded-

3:05 Maybe you'll Duce it? You Duce it?

3:07 Jason invaded my, my castle.

David Sacks 3:10 (laughs)

Jason Calacanis 3:10 He ravaged my toilets, several of them.

David Sacks 3:14 (laughs)

Jason Calacanis 3:14 (laughs)

3:14 He literally had, he co-opted the butler, he co-opted the chef. And when he would bicycle back into the- I was living Chamath's best life, I'll be totally honest, for a week. He would bicycle, he would bicycle back to the, to the house. The gate would close, and they would scurry out with two little Cokes, a huge glass filled with ice. I was so confused when I got back. Two Coke Zeros. I was like, "What's going on?" He's like, "Uh, Mr. Jason, Mr. Jason." (laughs) Mr. Jason, he always-

David Sacks 3:39 What, what percent, what percent of your book did you write, J Cal?

Jason Calacanis 3:42 Um, well, a non-fiction book, typically 60,000 is the target. So I'm gonna write 60 and then try to edit it down to 50. And I got the first 10 done. In six days of writing.

Chamath Palihapitiya 3:50 Can I, sorry, can I just say? On the, on the plane, as well as at my house, Jason read us the intro... I'm not gonna say what they're about or the title of the book. The first couple chapters. It's fucking amazing.

Jason Calacanis 4:02 Oh, wow.

Chamath Palihapitiya 4:03 Both the idea...

Jason Calacanis 4:03 What's the book about?

Chamath Palihapitiya 4:03 No, no, no. I legit... The idea is amazing, the title is fantastic, and what he's written so far is exceptional. I was genuinely like-

Jason Calacanis 4:14 Aw.

Chamath Palihapitiya 4:14 It's great. It's really, really great, Jason.

Jason Calacanis 4:15 Well, a lot of it was informed by the discussions we've been having here. Uh, uh, of course, back in the mix is Friedberg, the queen of quinoa, uh, in front of some K-Mart artwork, um, that he purchased for his new house. Uh, how are you doing-

4:29 (coughs)

4:30 ... Queen? Uh, h- how are you feeling about your decision to not come to Italy with us? Hej Queen.

4:35 I don't wanna talk about it.

Chamath Palihapitiya 4:37 Hey, can we, uh, can we tell our best Italy story?

Jason Calacanis 4:40 Oh, my God. I don't know what the best... (laughs) There's a lot of best Italy stories.

Chamath Palihapitiya 4:43 Well, I wanna tell two stories. And one of them is the joke I didn't make at the speech, which I thought was the best fucking joke. And I wanna just get your reaction. So I'm just gonna tell it. Okay, so-

Jason Calacanis 4:52 All right. So just to give a little background here.

Chamath Palihapitiya 4:54 Our friend's 50th birthday.

Jason Calacanis 4:56 Two of our friends had a 50th birthday (laughs) . It's me and our other friend. And so we were in, uh, Italy for a week as a group, playing cards and celebrating those two birthdays.

Chamath Palihapitiya 5:06 The joke I didn't make was the following joke. Which is, "All right, guys. I just wanna call out-"

Jason Calacanis 5:10 And this is for friend number one, redacted.

Chamath Palihapitiya 5:13 Yeah, redacted. Yeah, yeah. "Uh, I just wanna call out the elephant in the room. You know, there's really someone very, very famous amongst us." Um-

Jason Calacanis 5:20 Uh-oh.

Chamath Palihapitiya 5:21 ... you know, he's known, uh, to be one of the richest men in the world. He's known, um, you know, to really, uh, love rockets. He throws, you know, uh, rockets all the time." Um-

Jason Calacanis 5:32 (laughs)

Chamath Palihapitiya 5:33 "The despotic leader of North Korea is here. Kim Jong-un, everybody." And I point to DC. (laughs)

Jason Calacanis 5:38 Oh, my God.

5:39 (laughs) That was such a...

Chamath Palihapitiya 5:40 That is so important. (laughs)

Jason Calacanis 5:40 I know. (laughs) Wow.

Chamath Palihapitiya 5:42 And that was a joke I didn't get to make.

Jason Calacanis 5:43 Oh, wow. You can't tell that joke. (laughs)

Chamath Palihapitiya 5:44 Because, because it would, it would, in the context of, you know, obviously, it would have been very-

Jason Calacanis 5:48 Yeah. All right. And, uh...Yeah, it was just a great trip, I have to say. Uh, I took-

David Sacks 5:55 Well, my, my-

Jason Calacanis 5:55 ... the two weeks-

David Sacks 5:56 Yeah, my Italy story is that-

Jason Calacanis 5:57 Here we go.

David Sacks 5:57 ... so the second birthday is J-Cal. The first-

Jason Calacanis 6:00 Mm-hmm.

David Sacks 6:00 ... birthday is a friend to remain nameless.

Jason Calacanis 6:02 Redacted.

David Sacks 6:02 The second birthday, redacted, the second birthday was J-Cal's 50th. Then we find out that J-Cal's birthday was actually like six months ago.

Chamath Palihapitiya 6:09 Six months ago, November-

Jason Calacanis 6:10 November 28th.

David Sacks 6:10 Yeah, nobody-

Chamath Palihapitiya 6:11 Yeah.

David Sacks 6:11 ... nobody cared, and frankly-

Chamath Palihapitiya 6:13 (laughs)

David Sacks 6:13 ... none of us went to Italy for J-Cal's birthday. We went-

Chamath Palihapitiya 6:16 We went for the other party. (laughs)

Jason Calacanis 6:16 Three months ago.

David Sacks 6:17 (laughs) We went to the party. (laughs)

Chamath Palihapitiya 6:17 We went to the other guys'. We went to the other guys' party. (laughs)

David Sacks 6:20 Yeah, J-Cal's birthday is like COVID, he keeps trying to bring it back in different variants-

Chamath Palihapitiya 6:25 (laughs)

Jason Calacanis 6:25 (laughs)

David Sacks 6:25 ... and no one wants any part of it. (laughs)

Chamath Palihapitiya 6:27 (laughs)

Jason Calacanis 6:30 (laughs)

David Sacks 6:32 So on the last night, the last night-

Chamath Palihapitiya 6:34 Oh, man.

David Sacks 6:34 ... of the trip, we had the J-Cal birthday party. And what do they serve? Pizza. I mean-

Chamath Palihapitiya 6:38 Pizza.

David Sacks 6:39 ... like because it's on J-Cal's dime. I mean, the rest of the week, we had this, like, magnificent-

Jason Calacanis 6:42 Yeah. Well, God forbid-

David Sacks 6:44 ... five-star everything.

Chamath Palihapitiya 6:44 Nice. Interesting.

Jason Calacanis 6:44 ... you throw my birthday party for me, Sax.

David Sacks 6:46 You didn't even throw in any breadsticks. I mean, he was like-

Chamath Palihapitiya 6:49 (laughs)

David Sacks 6:49 ... he just DoorDashed Domino's.

Jason Calacanis 6:50 We had truffle pizza, unlimited truffles.

Chamath Palihapitiya 6:54 I will say-

Jason Calacanis 6:54 It was delicious. I think it was the best meal. I think you're just a little jealous 'cause the dinner you hosted maybe didn't hit the notes you wanted to hit, Sax.

David Sacks 7:02 Oh, my God, are you serious? We brought in Cirque du Soleil-

Chamath Palihapitiya 7:03 I mean, he flew in a fucking troupe from Las Vegas. (laughs)

David Sacks 7:06 (laughs)

Jason Calacanis 7:06 (laughs)

Chamath Palihapitiya 7:06 He flew in a circus troupe.

Jason Calacanis 7:08 No, I was talking about the food. I was talking about the pizza versus the-

Chamath Palihapitiya 7:09 You know, by the way, I just wanna say-

Jason Calacanis 7:11 ... steak.

Chamath Palihapitiya 7:11 ... that, that whole circus thing in the s- in the water, uh, I got so mad at one of my kids because it was so dark and the kids were in the pool.

David Sacks 7:19 Yeah.

Chamath Palihapitiya 7:19 And he kept diving-

Jason Calacanis 7:21 Yes.

David Sacks 7:21 Yeah.

Chamath Palihapitiya 7:22 ... into the wa-

David Sacks 7:22 Yeah.

Jason Calacanis 7:22 Yeah.

Chamath Palihapitiya 7:22 And I kept saying, "Stop, I can't see."

David Sacks 7:24 Yeah, I know.

Chamath Palihapitiya 7:26 "You will end in-" And so I was just like, it, he nev- none of the kids should have been in the pool in there.

David Sacks 7:29 I agree with that. And, and the truth of the matter is, you know, my five years old was in the pool too and all I could do is keep an eye on him-

Chamath Palihapitiya 7:35 Keep an eye on him.

David Sacks 7:35 ... 'cause I was so worried about it-

Jason Calacanis 7:36 I was playing lifeguard with my three as well.

David Sacks 7:38 ... that I didn't, I didn't enjoy the show for that reason.

Jason Calacanis 7:40 Yeah, me too.

Chamath Palihapitiya 7:42 But, they had the time of their lives.

David Sacks 7:43 Yes, they loved it. And actually-

Jason Calacanis 7:45 So-

David Sacks 7:45 ... that was, that was definitely worth it. I mean-

Chamath Palihapitiya 7:46 And the day before, I want to give credit to Sax because Sax and I went down to that restaurant (laughs) and we made them open up the wine closet, we raided it-

David Sacks 7:54 (laughs)

Chamath Palihapitiya 7:54 ... we found the best three bottles of wine, and we brought them back for everybody.

Jason Calacanis 7:58 Aw, that's nice.

David Sacks 7:59 And then, and then, I'm not sure if you remember this, we taped an episode of Call-In, in which, uh-

Jason Calacanis 8:03 I was a little drunk.

David Sacks 8:04 Yeah.

Chamath Palihapitiya 8:04 I was drunk. I was completely drunk.

David Sacks 8:06 Yeah. So anyway, the whole world can listen to us drunk on Call-In, in, uh, we're launching on September 2nd, so there will be-

Chamath Palihapitiya 8:13 Oh, wow.

Jason Calacanis 8:13 Nice.

David Sacks 8:13 Yeah.

Jason Calacanis 8:13 Nice. Congrats. Yeah.

David Sacks 8:15 Yep.

Jason Calacanis 8:15 It's gonna be a big deal and, uh, congratulations to the All In syndicate members who wet their beaks, and to my syndicate members, uh, people don't know this, but it was the absolute record we've ever had for any syndicate. I believe at the end of the day, we had 150 slots and we had 950 people apply, Sax.

Chamath Palihapitiya 8:32 Amazing.

Jason Calacanis 8:33 We had a million or so in allocation, and I think we had seven million in demand.

David Sacks 8:39 I am-

Chamath Palihapitiya 8:39 That's amazing.

David Sacks 8:39 ... really excited-

Jason Calacanis 8:40 ... at thesyndicate.com.

David Sacks 8:41 ... I'm really excited-

Chamath Palihapitiya 8:41 I think Call-In's going to be huge.

David Sacks 8:43 ... about this product.

Jason Calacanis 8:43 Oh.

David Sacks 8:43 Yes, I'm really excited about this product. It's the best product-

Chamath Palihapitiya 8:46 I think it's gonna be huge.

David Sacks 8:46 ... I've been involved in creating. It's better than Yammer, it's better than PayPal, truly.

Chamath Palihapitiya 8:51 (laughs) Oh, spicy take.

Jason Calacanis 8:54 Wow.

David Sacks 8:55 It's, it's really good.

Chamath Palihapitiya 8:56 I'm glad, I'm really glad Daddy, Daddy got a little taste.

Jason Calacanis 8:59 Sax, don't hurt your, um, don't hurt your elbow patting yourself on the back there-

David Sacks 9:03 (laughs)

Jason Calacanis 9:03 ... but go ahead, continue. (laughs)

David Sacks 9:04 (laughs) That's a-

Chamath Palihapitiya 9:05 You got a little, you got a little product manager elbow there? Patting yourself on the back?

Jason Calacanis 9:08 Don't dislocate your tricep.

David Sacks 9:10 The feedback we've gotten from users has been incredible. I mean, it's just, the reaction is really strong.

Jason Calacanis 9:14 I'll tell you what's good about it. Here's, here's what I think you nailed. Um, as a person who's been in podcasting for over a decade, um, the critical, um, aspect of this is when you pop up your club or room on Call-In, it creates a podcast out of it with an RSS feed, um, and you can go listen to the previous show. So if you are listening to this and you wanted to create your own version of All In, you could do it on Call-In. Just get three of your knucklehead friends and talk about your adventures on boats and private jets and drinking fine wine wherever you are, and you can start your own podcast.

David Sacks 9:52 Yeah, it's not really about the room.

Jason Calacanis 9:53 Expensive wine not included.

David Sacks 9:55 Right. It's not... The key insight, it's not about the room, it's about the show.

Jason Calacanis 9:58 Hmm.

David Sacks 9:58 You know, like everything we think of as social audio is really just a feature of creating a show, creating a new podcast.

Jason Calacanis 10:05 Mm-hmm.

David Sacks 10:05 And, uh, so anyway, people really like it. I'm very excited. September 2nd is the date.

Jason Calacanis 10:08 How many shows have been created in the beta?

David Sacks 10:11 This is the thing that's blowing me away is like well over 100. I think maybe-

Jason Calacanis 10:14 Oh, wow.

David Sacks 10:14 ... a couple of hundred. If you go to the show directory, you d- and, and the cover art that people have created is really elaborate, you know.

Jason Calacanis 10:21 Nice.

David Sacks 10:21 People are really getting into it.

Jason Calacanis 10:22 I don't know why somebody's never made it.

Chamath Palihapitiya 10:24 I've said this before, I think you're a phenomenal-

Jason Calacanis 10:25 Yeah.

Chamath Palihapitiya 10:25 ... you're a phenomenal, uh, product builder. So I think this is really exciting.

David Sacks 10:29 Thank you.

Jason Calacanis 10:29 Yeah, under- underrated product builder, I would say. You know, it's just interesting that this doesn't exist. Somebody should have made this already, like there's Zencastr and Riverside for recording podcasts, there's Libsyn for hosting them.

Chamath Palihapitiya 10:40 What, uh, what's happened as a, as a protected minority, I'd like to ask this question. What happens, what's happening to Clubhouse?

Jason Calacanis 10:48 Um, I think it's irrelevant. I'll be tr- I don't, I don't, I don't want to dunk on founders, but, um, I think that they, uh...

Chamath Palihapitiya 10:56 No, but why can't they just do these features? It sounds, I mean, I'm not, I'm not-

Jason Calacanis 10:59 I mean, anybody can do anything. I, I guarantee you they will copy Sax's-

Chamath Palihapitiya 10:59 ... I'm not trying to take anything away from you, David, but these are-

Jason Calacanis 11:01 ... features for sure.

Chamath Palihapitiya 11:02 Yeah.

Jason Calacanis 11:03 I think they will copy it at some point.

David Sacks 11:04 Yeah. But, but I think that-

Jason Calacanis 11:05 It's inevitable.

David Sacks 11:05 ... so it's a good, it's a good question and I really think there's different visions here. So I mean, I've listened to their founder talk about his vision, and it's very much about creating this live serendipitous-type experience, like kinda like a cocktail party. And that's fine, we're not doing that. We're creating long tail podcasting is what we're doing. In my experience, it's informed by what we've all been doing on the show for the last year and a half, which is podcasting, right? And the thing that I've seen that I didn't know until we did the All In pod is how much work goes into what J-Cal does behind the scenes.

Chamath Palihapitiya 11:35 It's incredible.

David Sacks 11:35 You know, we got Nick doing six hours of post-production on the show. I want to automate all that work away so anybody can do what we do. And that's like a very different vision than-

Chamath Palihapitiya 11:44 No offense, Nick. (laughs)

David Sacks 11:46 (laughs)

Jason Calacanis 11:46 No, I mean, there, not everybody is gonna want to put the type of post-production into this. They don't have... You know, I've got six people on our podcast team, like it's, not everybody's got that infrastructure. So over time, you'll build that, I believe it. Um, and I think-

David Sacks 12:00 Yeah.

Jason Calacanis 12:00 ... it'll turn out great. All right, let's get to our first-... um, topic here. Uh, while we were away,

Jason Calacanis 12:07 the United States started the process of leaving Afghanistan after a 20-year war, uh, in which, I think it's pretty safe to say, that was an unwinnable war and, uh, we, uh, have failed like the Russians did. Sachs had a, uh, tweet, uh, that was, uh, well, getting a little bit of play on the old Twitter. "What we're seeing before our eyes is the collapse of the American empire because the people in charge are completely corrupt and incompetent but we can't talk about that because insiders can never criticize other insiders. The Larry Summers rule."

David Sacks 12:43 Did I tweet that?

Jason Calacanis 12:44 You did.

David Sacks 12:45 Oh, man.

Jason Calacanis 12:45 Um-

David Sacks 12:46 (laughs)

Jason Calacanis 12:46 Yeah, I mean, so y- you might have had a couple of drinks.

David Sacks 12:49 (laughs)

Jason Calacanis 12:49 Um, and then-

Narrator 12:49 Sorry, you, he actually didn't. He just texted that in the group.

Jason Calacanis 12:52 Okay, so that was a confidential text to our thought-

David Sacks 12:54 (laughs)

Narrator 12:54 (laughs)

Jason Calacanis 12:54 ... to our group that we're not supposed to even say exists.

David Sacks 12:57 Well, no, it's okay. Don't beep it. It's okay. I mean, it's, it's, it's true. It's, it's not exactly what I tweeted, but it's similar to things I've been tweeting.

Jason Calacanis 13:05 Mm-hmm. And tragically, uh, yesterday, um, ISIS-K, which is an Afghan affiliate of the Islamic State, claimed responsibility for, uh, two suicide bombings outside of the airport and that tragically killed, uh, over 100 people, uh, 90 Afghan citizens and 13 American service members. Uh, I guess, you know, we're not here to talk about, um, wars. It's not exactly in the mandate, but everybody wants our opinion on this, so let's get started. Sachs, you have strong opinions. We'll start with you.

David Sacks 13:37 Well it's, yeah, I mean, how can you not talk about this? This feels to me, this is one of those events where, you know, I was glued to my TV for days. I think I was in France at the time the Taliban overrun, overran Kabul. And yeah, it was, you know, the, the Afghanistan war's been going on for 20 years. No one's been talking about it. It's just this thing that's been happening in the background. But all along we've been assured by the Pentagon that we're winning. "Hey, you know, don't worry about this. We got this." And then you wake up one day and all of a sudden we've lost the war and the Taliban's overrunning the country, and you're like, "What is going on here?" You know, not only is the, the botched withdrawal incompetent, the fact that we were lied to for two decades about what was really happening. Um, the, the idea that we had created, you know, we were... How many times were we told that we had created this Afghan army, it was 300, uh, strong, we spent, you know, $2 trillion in the country, uh, you know, being ... and we were told the whole time that we were building institutions there, uh, that, you know, that we were creating a democracy in the Middle East, that, uh, we were even, you know, um, promoting gender equality and, uh, lecturing the Taliban on toxic masculinity or something like that. And then we find out one day that, poof, the whole thing was just kind of a lie. It was this giant debacle and now we can't even get our, uh, we can't even get our civilians out of the country.

Chamath Palihapitiya 14:55 Not only that, but we, we've seen 12 people, 12 American servicemen and women killed yesterday-

Jason Calacanis 15:02 13 American.

Chamath Palihapitiya 15:02 Yes, today try- um, 13 trying to protect the airport. Uh, almost 100, um, Afghans. Uh, now we'd only have to not only contend with the Taliban, whose positions I don't think any of us know about, but we also have to deal with ISIS-K, which is like some, you know, offshoot affiliate of ISIS run by a guy who was actually summarily killed by the Taliban, but that didn't clearly stop anybody. The, the level of honestly just to say the, the, the lying that we've been doing on this topic is just utterly, um, it's really, really scary. You know, how could we have gone 20 years, $2 trillion, 2,400 American lives and counting, and found a way to just basically waste all this money and tell ourselves these lies for so long, and it turns out none of it was true? Um, and then the back half of it is that we look like a little bit of a country that's sort of in decline because we can't even figure out an orderly withdrawal. It's not as if, you know, this thing came out of the blue out of nowhere. This was a negotiated withdrawal, so we had months to plan for this, you know? And we had months to do the right honorable moral thing for all of these, for, for all of these people that helped us in that country. Just to give you a, a, a small anecdote. You know, the day that Kabul was overrun, you know, the Democrats were actually tweeting out about, uh, celebrating Librarian Day. That's what they were focused on. Jason and I, on the way back, you know, I, we flew back with my, with my mom and my sister. We, we stopped in Toronto to drop them off and the planes beside us... Jason, do you remember this?

Jason Calacanis 16:52 He had two big planes-

Chamath Palihapitiya 16:52 Um, I think Brett-

Jason Calacanis 16:53 ... cargo planes.

Chamath Palihapitiya 16:53 I think Brett or Paul were telling us, our pi- my pilots were telling us. These planes, uh, had been going back and forth saving refugees in Afghanistan and it's like, wow, what an honor to just be beside these, these amazingly heroic men and women. And, you know, I don't know, Jason, if you saw, but as we were refueling, they came and boarded and they were getting ready to leave again.

Jason Calacanis 17:14 Wow.

Chamath Palihapitiya 17:15 And meanwhile, that, America cannot get even to a point of view on the topic. And I think that's what's so shameful. It's like, not only did we spend the money, not only did we lose all these lives, not only didn't we have an orderly withdrawal, we couldn't even at the end guarantee the safety of Americans or do the right thing for all these people who risked their lives to help us fight clearly a useless war.

Jason Calacanis 17:38 Freeberg, you have thoughts watching all this? I know you don't like when we delve into politics too much, but what are your, you have, you have any thoughts you want to add? Yeah.

David Friedberg 17:46 I don't know if it's about politics as much as, um, I kind of use a little bit of a startup analogy. Like America never really found product market fit (laughs) with what we were trying to do in Afghanistan. There, there's some fantastic, um, Gallup polling that's been done in Afghanistan, uh, over the past, uh, 15, 20 years already. And they've actually had people on the ground polling there.And most recently, w- which has been consistent for over 10 years, polling's shown that 87 to 90% of Afghans, um, said that the government is corrupt. This is the government, you know, put in power, put in place by the United States. 90% say businesses are corrupt. And if you go back to a poll they ran in 2010, the question was, "In general, which of these statements comes closest to your point of view? Sharia law must be the only source of legislation." 56% of the Afghan population in 2010 believed that to be true and another 38% said, "Sharia law must be a source of legislation, but not the only source." That leaves just 7% of people that think that Sharia law should not be, um-

Jason Calacanis 18:55 Is it Sharia or Shari'a?

David Friedberg 18:56 Sharia, sorry. Sharia law-

Jason Calacanis 18:58 Sharia, oh.

David Friedberg 18:58 ... should not be part of the, um, legislative process, uh, in defining the Afghan laws and constitution. And so, um, you know, it's really telling that, you know, it's almost like when you, when you start a company and you try and create a product and you sell it to a customer base, you gotta figure out what the product is, you gotta make sure the customers want it, and then y- the, the, the idea for the startup works. The problem here is our views as, as a nation, and maybe Western democracy, doesn't necessarily fit with what that market wants. And we can certainly make the case that we believe that our ethics and our values are superior and provide more of an opportunity for individual freedom and liberty, things that we believe should be available around the world, but if the market's not buying it, the customers don't want it, you're really just raising a ton of venture money trying to create a product that no one really wants. And at the end of the day, you're t- you're a trillion dollars down and you have to shut the thing down and it goes bankrupt. And that's effectively what- what went- went down here. And if you look at the history of Afghanistan, remember they were in the Soviet-Afghan War in the '80s, nearly the entire decade of the '80s, then the Talib- Taliban came along and provided a degree of stability in the '90s. And then all of a sudden, this Al-Qaeda 9/11 war began, um, you know, after Taliban had been in power for a year and it's been 20 plus years of strife and ch- or 20 years of strife and challenge where the population have increasingly viewed the government to be corrupt, businesses to be corrupt. And here's a really interesting statistic, um, which also came out of this, uh, polling that Gallup does. Over the last 10 years, the percentage of Afghans that are happy with their present household income has gone... or- or not happy, sorry, with their present household income has gone from 60% to 90%. Nine out of 10 Afghans as of last year were not making enough money to make ends meet. So, you put all of these facts together, you've got this long history of strife with this, you know, company effectively coming in trying to tell you how to run your government, how to run your- your country, that doesn't match with your beliefs on- on- on your- your- the way you think a government should be built. You've got all of this turmoil that's happened historically. You know, it really was, um, I would say to some degree, this inevitable failure of a startup that got overfunded, that never found product market fit, that never really got off the ground. Certainly the exit strategy on how do you wind something down in this case, and it certainly relates to human lives and the tragedy of the partners that we had on the ground, um, was- was totally mishandled. But the broader picture here is like w- we, you know-

Chamath Palihapitiya 21:20 I think it's more corrupt than that. I think that we basically engaged in a $2 trillion wealth transfer from the people of the United States, the citizens of the United States, to the military industrial complex. That's what we did.

Jason Calacanis 21:31 Well, I mean, uh, I have two points I wanna- I wanna build on from- from yours, Friedberg, and now yours, Chamath, which is the original mandate here was to go in, get rid of Al-Qaeda, and to also, you know, kill Osama bin Laden and to not have, uh, the Taliban giving safe harbor to Al-Qaeda. That quick... that mission got accomplished in large part in the first year or two, and then, uh, when we finally got to Osama bin Laden in Pakistan, I think it- it probably would have been a better idea to understand this is an unwinnable war, get in there, destroy the Taliban, leave, and then say, "If you come back, we'll do it again, but we're not gonna stay here for 20 years," to your point, Friedberg, and try to create a revolution if the people are not ready for it. I think that we have to start looking at our foreign policy and saying, "We do need... we do have a better view of human rights, clearly, than the Middle East, uh, and certainly Afghanistan, and we do wanna promote human rights around the world and freedom." This isn't-

Chamath Palihapitiya 22:27 But we're not doing that.

Jason Calacanis 22:28 Right, and that-

Chamath Palihapitiya 22:29 We're not- we're not- we're not freedom fighters of democracy or justice. We are led-

Jason Calacanis 22:33 We should be. We should be.

Chamath Palihapitiya 22:34 We are led by motives of revenue and profit.

Jason Calacanis 22:36 I know that, but we should be.

Chamath Palihapitiya 22:37 And-

Jason Calacanis 22:38 And when we went and we kicked the Nazis' asses, uh, and we beat Japan when, you know, they were trying to dominate the world, we were doing it to stop communism. And I think when you look at nation building and these- these kind of revolutions, to Friedberg's point, they- they have to want it as well. So we should be working with the countries that are teetering on going from authoritarianism to democracy-

Chamath Palihapitiya 23:00 I disagree.

Jason Calacanis 23:00 ... and we should take the high ground and we should be the moral authority of the world-

Chamath Palihapitiya 23:04 Other than that-

Jason Calacanis 23:04 ... 'cause if we're not, who's going to be?

Chamath Palihapitiya 23:06 I- I- I agree with that part, but I think the right thing to do is just to open our doors and say, "You know what? We're here. There's a draft, right? And the smart and the capable and the willing, we're willing to basically bring, uh, inside of our borders so that they can work on our behalf." And that's what other countries, I think, get right about all of this stuff. Like, a- again, as a Canadian, um, you know, the Canadian perspective of this is not that you deploy troops and you get embroiled in these, you know, debacles over 20 years and thousands of lives and trillions of dollars. It's the exact opposite. They're there to support humanitarian efforts, right? They're there to send peacekeeping forces as they need to. But otherwise, their real response is to actually then open the borders for folks that wanna be there who are then wanting to trade up, Jason, to those values because that's the simple way to self-select. Instead of saying, "I'm going to impose my version of democracy over there," I'm actually gonna show you what our version looks like over here and if you wanna come, the doors are open.

Jason Calacanis 24:05 Yeah. Certainly being an example is step one, and we, I think, do that largely well, but we do need to sometimes intervene. And I think that's the question here is when is it just to intervene when there is human rights on the line?

Chamath Palihapitiya 24:18 ... and the country is teetering on authoritarianism or democracy. Like, where is that line?

David Sacks 24:23 The just cause here was to go get Osama bin Laden because he attacked us. And we should have gotten out of that country as soon as we realized that bin Laden was no longer there. I mean, that was basically after the Battle of Tora Bora. And if we didn't leave then, we certainly should have left after we got bin Laden in around 2010. So what were we still doing there? We were engaged in this exercise of nation building, which, by the way, we spent $6 trillion on nation building exercises in the Middle East between Afghanistan and Iraq. Uh, for what? For naught. This is why the electorate is in such a foul mood. How many of our domestic disputes are caused by the fact that we squandered that $6 trillion? That's more than, uh, Biden's entire domestic agenda. Um, you know, so we wasted all this money. To Freeberg's point, we never understood the culture there. And to Jamal's point, it was a giant money-fundling operation to defense contractors. Um, there's a, a great piece reporting by an independent journalist named Michael Tracey, and he talked to frontline grunts about the, the wasteful spending. You know, they'd send 12 Humvees to some local Afghan partner. Only two of them would ever get there. The other 10 would s- would break down and disappear and no one would even know where all the money went. It was like an unbelievable orgy of, of wastefulness and, um, you know, one other important detail in this. There, there's a, a, a, a guy who I think should be much more famous to all of us. Uh, his name is John F. Sopko. He's the special inspector, uh, general for Afghanistan reconstruction. Uh, that's short for SIGAR. He was appointed by Congress about 13 years ago to look into what was really happening in Afghanistan and to report on quote, "lessons learned" from the Afghan war, and so for 13 years, Sopko has been very quietly, diligently interviewing people fro- everyone from frontline troops to commanders about what's really been happening in Afghanistan. And he's been releasing these reports that everyone in DC knows about but nobody in the country knows about. Let me just read you... These are just the chapter titles from his latest report, okay?

Chamath Palihapitiya 26:23 (laughs) Oh, Jesus.

David Sacks 26:25 J- just the chapter titles. Harmful spending patterns, resistance to honesty, personnel struggles, willful disregard for critical information, incorrect theories (laughs) of change, poor understanding of local context, and b- by the way, that includes ignoring things like the sexual abuse of young boys by Afghan l- warlords who are our allies, okay, which the New York Times reported on. We completely have swept that under the rug, okay? That's just the table of contents, okay, from one of his latest reports, which is about 100 pages. It's-

Chamath Palihapitiya 26:55 So complete incompetence on our, in our government. Complete waste.

David Sacks 26:58 The Pentagon was telling us the whole time... I mean, while this guy Sopko, the SIGAR, you know, the s- the special inspector general, was telling us the truth of what was happening, you've got the Pentagon telling us and the elected leaders the whole time that we're winning this war, that things are improving. They had all these, uh, bogus metrics to prove it, and you know, and so it's this, it's a systemic failure.

Jason Calacanis 27:21 But Sax, what would be their motivation to say it's not working?

David Sacks 27:25 Look, I, I think, I think that... Well, right, what would be the motivation? You're right.

Chamath Palihapitiya 27:28 Well, you, you can't, you can't fix what you don't measure and so basically, like, if you want to lie, there, there you have it. We have that now for 20 years of lying.

David Sacks 27:36 Let's talk about the metrics because this is actually an important point.

Jason Calacanis 27:39 But this is my point, is like, what, what's, wh- wh- wh- what's the objective for them to be measured? What's the objective in that case?

Chamath Palihapitiya 27:45 No, the, the objective is to demos- no, the objective is to demonstrate leadership. The objective is to basically say, "You know what? This is really not working," and this is about putting yourself in the position of a person whose child is over there, okay? If any of our children were there who signed up because they thought they wanted to do the right thing and, and, and you know, be in the Army or the Navy or the Marines, found themselves in Afghanistan, got killed, God, heaven forbid, and then that body comes back and there's this report comes with it, which is effectively what it is, okay? This is the coda to the death of two point, you know, 2,400 Americans and $2 trillion, I would be so heartbroken. I am heartbroken just thinking about this. Like, this is not... That's not what we're about. So we can't keep doing this and we can't keep lying. We can't rationalize lying anymore.

David Sacks 28:41 Right. Well, I, I agree with that and let me just speak to the point about the metrics. 'Cause the problem was not that we didn't have any metrics. The problem is that the metrics were bogus. Now, why is that? Well, first of all, the mission was very unclear. It's not clear how you measure the success of transforming a country to Afghanis- uh, like Afghanistan to our values. I mean, what, what really are the metrics for that? So, what the military started doing is not measuring outputs, but measuring inputs. So you have, you know, the commanders on the ground saying, "Well, today, we trained a thousand new Afghan troops," okay? But what they don't say is that over 90% of those troops are illiterate and 85% of them are on drugs. I mean, and this is what the journalists who are on the ground when they would do the interviews with these, you know, with these, uh, you know, frontline, uh, commanders or trainers, they would find this out. Now, why wasn't this in the report? Well, because the military is a culture that's based on advancement. It's basically a... The Pentagon is a big country club. It's a big insiders' club. There's a dogma. The dogma was, "We're winning the war." And if you want to advance in that organization, you're not gonna be the one, you're not gonna be the skunk at the garden party who tells the generals that they're full of shit. You're basically gonna be the guy who gives them the metrics they wanna hear. And then their boss, the f- the, the, the person who's the boss of the frontline guy is gonna improve things 20%. He's gonna shape things another 20%, and then the next guy in the chain of command shapes things 20%, and by the time you get all the way to the top, the chairman of the Joint Chiefs is telling Biden, "We have a, an army that's 300,000 strong. These guys are gonna take over the country. We're not gonna have a problem. We're gonna have plenty of time to get our people out." And that is why we had a lackadaisical withdrawal strategy. These guys thought they had all the time in the world because systemically, they've been bullshitting themselves about having a 300,000-man Afghan army.And then, you know, when you actually look under the hood of this thing, there is no army. It's just basically a bunch of kleptocracy.

Chamath Palihapitiya 30:33 I think what happened at the end of this thing is even more dangerous for the future. On top of everything you said, David, which I agree with, is that, what we basically said is that we will engage in whatever cover-up is necessary because we're not willing to lead and talk about the mistakes we've made and to do the things that are necessary to really fix it. And that's what's really fucking sad. Because as he said, as you said, Sax, the minute that you knew that, uh, bin Laden wasn't there, we had a choice. Then the minute you knew that he was already dead, we had a choice, and the choice was to do the fucking right thing. And instead, what happened was we got caught up in virtue signaling, we got caught up in personal advancement, we got caught up in the grift, we got caught up in graft, we got caught up in corruption, we got caught up in the, you know, military-industrial complex and here's, here's where we are. And the crazy thing is, Biden had a moment where he could have stepped in and said, "You know what, guys? I'm looking at all of this data. Here's the new plan." And he didn't do it either.

Jason Calacanis 31:36 Let me ask you a question. If Biden had run an orderly exit and then it spiraled into Taliban and, and reverted-

David Sacks 31:43 Mm-hmm.

Jason Calacanis 31:43 ... back to where it was, how would you feel about all this, Sax?

David Sacks 31:46 I think, I think, I definitely don't-

Jason Calacanis 31:47 Because that would have been, that's the goal, right? Trump wanted to get out-

David Sacks 31:50 Yes.

Jason Calacanis 31:50 ... and, and Biden both wanted to get out.

David Sacks 31:51 Yes.

Jason Calacanis 31:51 So if we just executed twice as good or 50% better, there'd be no problem here. We all want to be out, correct?

David Sacks 31:56 Yes. That, that decision, the decision to get out was a 70% popular decision when Biden made the decision in April and then they botched this withdrawal.

Jason Calacanis 32:04 And when Trump made it last time, because he did the cease-fire, he negotiated, uh-

David Sacks 32:07 That's right. This is a bipartisan decision.

Jason Calacanis 32:08 Bipartisan, yeah.

David Sacks 32:09 This is a bipartisan decision to get out. Let's not pretend otherwise. It was clearly the correct decision to get out. But here's where Biden screwed it up, okay? And there's some blame that needs to be apportioned to Biden and to, and to the, to the generals, and we don't really know who screwed it up, but collectively they did. The big mistake, the original sin of this withdrawal is that they pulled out of Bagram Airfield at the beginning of July. Okay? They didn't just pull out, they literally ghosted, uh, the Afghan... I mean, they pulled out in the middle of the night without telling anybody. The Afghans, uh, army, who are our allies, woke up the next morning and the Americans were just gone and the electricity had been turned off. I mean, this was unbelievable. And so the problem is, we then lost our air superiority over the country, we lost our ability to conduct, uh, close combat air support, we lost our ability to do a mass evacuation, okay? We basically gave up our central military asset in the country before we got the civilians out, before we got our allies out. And there were 18,000 of these so-called SIVs, the Special Immigration Visas, these are the Afghani, uh, translators and helpers who were embedded in our combat unit, units. We, the, the, the State Department, meanwhile, was totally caught up in bureaucracy, slow-walking their applications. Those 18,000 translators are now stuck there, okay? They have 50,000 dependents. We're talking about spouses and children's-

Jason Calacanis 33:25 Brutal.

David Sacks 33:26 And th- so they have no way of getting out. And then the final thing that just takes the cake is that we gave a list to the Taliban of, "Here's our biggest helpers. When, if they go to the checkpoints, we want you to let them through."

Jason Calacanis 33:36 Oh, my Lord.

David Sacks 33:37 So they basically-

Jason Calacanis 33:38 So it was basically an assassination list. This was your death list.

Chamath Palihapitiya 33:39 They were given a kill list.

Jason Calacanis 33:40 Ugh.

Chamath Palihapitiya 33:40 They were given a kill list to the Afgh-

Jason Calacanis 33:42 They were stupid, yeah.

David Sacks 33:42 To the, uh, Taliban.

Jason Calacanis 33:43 Yeah.

David Sacks 33:43 I mean, this is really unforgivable and it's, and it's... And this was, it's not like this was unknown, okay? There was a bipartisan working group of both Democrats and Republicans who wrote a letter to Blinken at the State Department back in May saying, "We are-"

Jason Calacanis 33:56 They should have just-

David Sacks 33:57 "... afraid of the, about the safety of our Afghan allies. You need to get them out now. The State Department is taking too long processing the Special Immigration Visas. You're totally caught up in red tape bureaucracies. Solve this problem." Blinken did nothing. He was another deer caught in the headlights.

Jason Calacanis 34:13 They could have also just, uh, instead of making people fill out all these forms and all this red tape, I heard one commenter saying, like, the right thing to do in situations like this is to just get everybody out, put them in a holding, uh, location, and then process them there. In other words, if this person says they're a translator and their family and they have, you know, relatively good paperwork, get them out, put them into that holding pattern, and then figure out how to process them later. We got to wrap on this discussion and get to some other topics, but the interesting thing to watch here is what's gonna be the future of Afghanistan and I don't know if you guys, uh, saw the Financial Times story, but

Jason Calacanis 34:49 China is watching this, uh, like a hawk and they have-

Chamath Palihapitiya 34:53 China and Russia are just sitting there laughing.

Jason Calacanis 34:55 Well, China is even worse. They have aspirations of partnership in this region with Pakistan already and Afghanistan and building superhighways and expanding their train network and having their own Silk Road essentially to, to get to the Middle East from China and this is going to be the, uh, axis of, uh-

Chamath Palihapitiya 35:15 They look to the United States and-

Jason Calacanis 35:17 ... of authoritarianism.

Chamath Palihapitiya 35:18 B-Biden asked Putin if, if it was okay for us to stage military resources from, you know, from, from, from close quarters in Asia and then Putin was like, "No, go." Jason, I think what you, what you just pointed out is the motivating factor for, um, having a presence in this and other similar, similarly situated territories around the world.

Jason Calacanis 35:40 Yeah.

Chamath Palihapitiya 35:41 Th- a lot of people assume it's about imperialism and imposing kind of American democratic principles and ideals. I think that's the way the narrative is sold internally here at this country, but the truth, from the intelligence community and I think the folks that maybe are a little bit more thoughtful and long-term thinking about this sort of stuff, is that the absence of an American presence in certain parts of the world will enable, um, the, uh, the success of what we would consider competing states globally. Um, and you know, there is still that unanswered question ultimately of how do we compete on a global stage, um, given what is currently, um, a very negative view on our having a presence overseas, a military presence overseas, a physical presence overseas, um, in these sorts of territories and it begs the question of does that really set us up for challenges and failures in the 21st century as a nation state?... um, as the other global players, in particular China, you know, take advantage of these openings.

David Sacks 36:37 Yeah. Well, I- I- I agree with that, and let me just, let me just say why China is so smart and we are so dumb. China is going to Afghanistan right now and cutting deals with the Taliban to build a highway so they can get to the rare earth minerals th- which, uh, Afghanistan is rich in, and they're gonna use the, the super highway they're gonna build to get that out and feed their economy. That is how they're gonna spend their capital in Afghanistan. Meanwhile, we spent over two trillion and we have nothing to show for it. You know, they go abroad in search of rare earth minerals, we go there to lecture people on toxic masculinity. It is absurd.

Chamath Palihapitiya 37:11 (laughs)

David Sacks 37:11 Okay? Now, the, the president-

Chamath Palihapitiya 37:13 (laughs)

Jason Calacanis 37:15 Well, I ... you know what, Sax? It's a little too cynical. We were also protecting-

David Sacks 37:18 No, it's not. No, it's not.

Jason Calacanis 37:18 ... and educating women in that country and protecting them-

Chamath Palihapitiya 37:20 And pronouns, don't forget the pronouns.

Jason Calacanis 37:22 ... from being gang raped.

Chamath Palihapitiya 37:22 Yes, we don't forget about pronouns.

David Sacks 37:23 That's right.

Jason Calacanis 37:24 They, them. They, them. It's very important.

David Sacks 37:26 We ... That's right. We go there to lecture people on their pronouns. The, the, the, the president-

Jason Calacanis 37:28 No, that, that is too, far too cynical, Sax.

David Sacks 37:30 No, it's not.

Jason Calacanis 37:31 We went there to protect some people who wanted democracy and to allow women to read and to be members of society.

Chamath Palihapitiya 37:39 Oh, we, we just, we just-

David Sacks 37:39 Friburg, give me the numbers.

Chamath Palihapitiya 37:39 I'm sorry, we just flushed that, we just flushed that right down the toilet. Sorry.

Jason Calacanis 37:42 I know that, but I mean-

Chamath Palihapitiya 37:43 We do, we, we just-

Jason Calacanis 37:43 ... let's not conflate that we just want to lecture them.

Chamath Palihapitiya 37:45 No, but David, David is right. We knew that the minute we pulled out, we were casting 50% of that population to a complete state of stasis that was completely not known. Like when, under-

Jason Calacanis 37:58 So are you saying, Sax, that we should have stayed there with some presence?

David Sacks 38:00 Well, this is, this is like the argument in Vietnam that we met-

Chamath Palihapitiya 38:02 No. Tell the truth. We should have just told the truth. "We're leaving. We don't have a plan, and this is gonna risk all women. It's gonna risk people that helped us and we are not sure what's gonna happen, but you know what? We decided we're leaving." That was the truth.

David Sacks 38:15 Remember, remember the Vietnam War? We killed two million Vietnamese to make the country safe for democracy. You know what the Vietnamese said at the end of that? "We'd rather have our two million people back." We see these wars in terms of ideology. We think we're going there to spread democracy. They see it in terms of nationalism. All they see is a foreign invader trying to impose their values. That's why they don't buy into what we're doing. And by the way, the whole idea that we're gonna plant Madisonian democracy in the soil of the Middle East, that was a 20-year folly that cost us trillions, and one of the reasons why there are no Madisons over there, there are no Madisons, there are no Jeffersons, there are no Washingtons. Who is gonna take up that cause? What we had in Afghanistan is this President Ghani, who's a crook, who was off on the first helicopter with millions of our dollars. That is how stupid we are.

Jason Calacanis 39:03 It's the last place we should be trying to do democracy. There's other places where it's teetering and we can probably be more helpful.

David Sacks 39:09 The American president, John Quincy Adams, this is back when America had a rational foreign policy, he said, "America does not go abroad in search of monsters to destroy." That used to be our foreign policy. Now, we involve ourselves all over the world to impose our values for no reasons, it is costing us a fortune, and it has led to the crumbling of the Americ- of, of, of American wealth and power.

Chamath Palihapitiya 39:34 And it completely erodes our trust in institutions, particularly the institution of the federal government. And we're left just scratching our head saying, "If not these guys, then who is gonna figure this out? Who's gonna lead us out?"

Jason Calacanis 39:47 So what are we, what are we doing Taiwan? If, if, uh, Chamath and, uh, Sax, if you're ... don't wanna be-

Chamath Palihapitiya 39:52 No, Jason, Jason, this-

Jason Calacanis 39:52 If you don't wanna support democracy in the world, what happens to Taiwan in your world?

Chamath Palihapitiya 39:56 This signed Taiwan's death warrant. I'm sorry, but you should just assume that Taiwa-

Jason Calacanis 40:00 So we should just let Taiwan go?

Chamath Palihapitiya 40:01 No, my point is the following. Taiwan will, when the, when PRC has the right window, be under complete Chinese control, and we, because of how we have executed this and how we've executed the rest of our Middle Asia strategy, means that we will not really engage. And the reason is because it will be an enormous food fight inside the United States, where all of these past experiences of us fucking this up will come up.

Jason Calacanis 40:28 Should we defend Taiwan, Friburg?

Chamath Palihapitiya 40:30 Except, by the way, the difference is we're not going to... We would not be going to war with a bunch of, like, fucking tribal people in the mountains carrying sticks and AK-47s from the '80s. This is China. So if we can't-

Jason Calacanis 40:43 It's a different scale.

Chamath Palihapitiya 40:44 If we, if we can't beat and win in Afghanistan-

Jason Calacanis 40:46 Well, I mean, we also-

Chamath Palihapitiya 40:48 ... w- what are our chan- I mean, I'm sorry guys, but this is like-

Jason Calacanis 40:50 Our chances alone, it's not worth it with a group of Japan-

Chamath Palihapitiya 40:55 It's over.

Jason Calacanis 40:55 ... South Korea, Australia and the EU-

Chamath Palihapitiya 40:58 It's over.

Jason Calacanis 40:58 ... we should be defending Taiwan, in my mind. What do you think, Friburg? Should we try and defend Taiwan when this inevitably leads to the Chinese government finding their window, as Chamath is predicting?

Chamath Palihapitiya 41:07 Again, I don't think that the motivating factor could necessarily be imposing democratic principles as the priority. If you were to, to, to actually weigh that decision, you would realize that you should probably have a presence in some Latin American countries. You should probably have a presence in Central Africa where there are authoritarian regimes that are doing terrible things. But we don't have a competing global interest there to defend against.

Jason Calacanis 41:40 Well, to be clear, it, Taiwan is right now democratic, (laughs) so we would be defending a democracy.

Chamath Palihapitiya 41:45 Friburg, Jay Kal is asking a specific question, "If China invades Taiwan, do you think the United States should get involved?" On a principles basis or do I think the United States will get involved? (laughs) Like-

Jason Calacanis 41:56 Either one.

Chamath Palihapitiya 41:57 Yeah, I mean, I think the challenge is the escalation with China, right? So that's gonna be the big calculus. It's really about what's the, what's the long-term cost? Certainly on a, on a principled basis, you'd say, "Let's go defend the weak and go protect them b- 'cause they, they share principles and ideals with us."... but the, the, the backlash, the challenge would be if we were to do this, global trade would stall. There would be, um, massive, um, issues at home with people saying that we're getting involved in an overseas war. Uh, all of the reasons that from a political perspective, it would stall our economy, it would cause all these... you know, I- I'm kind of, um, speculating a bit here, but the actual cost isn't just about sending a few thousand troops over and surrounding the island and protecting people. It's actually much more severe than that. And if you were to weigh it, it could be that we end up with 25, 30 million people losing their jobs over the next decade because of the economic fallout that occurs, um, in our doing that, and so on and so forth. And a lot of American prosperity that we get to enjoy, um, you know, kind of, kind of declines. And so that's the real calculus, and I don't know how to do that calculus, but I think that is the calculus that, that is being done by the intelligence community to figure out the answer to that question.

Jason Calacanis 43:01 Let's swing it to Sax to do-

David Sacks 43:02 Yeah.

Jason Calacanis 43:02 ... a little bit more of this calculus, because what we're talking about here is not giving up an authoritarian state-

David Sacks 43:06 Right.

Jason Calacanis 43:06 ... that wants to be authoritarian.

David Sacks 43:07 Right.

Jason Calacanis 43:08 We're talking about a democracy on the risk board-

David Sacks 43:10 Yes.

Jason Calacanis 43:10 ... that would be taken and flipped from a democracy i- like Hong Kong has been flipped.

David Sacks 43:15 I think it's a, I think it's a very important distinction that Taiwan is already a democracy. They got there on their own. They've done a lot of hard work building that country since, uh, that, basically the, the country became separate from mainland China, I think in 1945. It's never been under the control of the CCP. It's, uh, they, it's a, a free enterprise system. It's democratic capitalism. There are, there's basically 24 million free souls who live on that island and if we show any weakness, and we frankly already have by what we've done in the Middle East, if we show any weakness, they will fall under the boot of the communist regime. So I think it's, there's a big difference between trying to plant democracy or nation build, uh, verse, in a country that's never had it before in thousands of years, and basically being friends and allies with a country that already is a democracy and just wants to be free. And I think our message to China should just be, we like things the way they are. We don't want them to change. That's it. We have a policy of str- what's called strategic ambiguity to Taiwan. It basically says that we may come to the defense of Taiwan or we may not, and I think we should just continue with that policy. I think our message should just be, we like the status quo. We don't think it should change. Let's leave things alone.

Jason Calacanis 44:30 I think that that's fine, but I think we need to be investing hundreds of billions. The trillions of dollars we wasted in Afghanistan could have been better served building an infrastructure in America for chips and semiconductors and a bunch of these critical components, because then it would give us a lot more bargaining room to, uh, actually be able to play out that strategic ambiguity more fully. I think the reality is that despite the policy framework, the practical economic reality is that we would be engulfed in a war if, if Taiwan were taken over by China, because as Friedberg said, our economy would ground to a halt because those critical assets are linchpins for how massive swaths of the American economy work.

David Sacks 45:13 Yeah. I'll, I'll tell you one thing we should be making plans for. I don't know if our military is competent enough, but we've talked on this pod before about how, what, 70% of the advanced chips come out of Taiwan, co- uh, companies like, uh, TSMC. If China takes over that island, I mean, those chips are the new oil, right? We're going to be dependent on them in a way we never should be for our supply chain. You're right, Chamath, we never should have gotten this dependent. But frankly, our military needs to have a plan to sabotage those chip factories because we can't let them fall under the control of the CCP. Um, I don't know if they're competent enough to do that, but, but if Taiwan falls, it needs to be a poison chalice for the CCP.

Jason Calacanis 45:50 We're gonna need to make some decisions here because Russia with Crimea and the Ukraine and their ambitions, and then China taking over Hong Kong and looking at Taiwan... I mean, I- I think the lesson here is if you're a dictator and you are allowed to take over other regions and other, you know, countries, you're not going to stop. It's the nature of dictators. And we have to at least put our foot down. You know, Afghanistan's a shit show, but these other places, you know-

Chamath Palihapitiya 46:15 We're flat-footed right now, J-Kel. We're stumbling forward.

Jason Calacanis 46:17 I know. That's why... This is a serious problem.

Chamath Palihapitiya 46:18 We're not... And so, and so we need to, we need to sort of like recenter ourselves and get momentum, you know. You, to use a poker analogy-

Jason Calacanis 46:25 Yes.

Chamath Palihapitiya 46:25 ... we basically just bluffed off half our stack with the jack-eight offsuit.

David Sacks 46:29 (laughs)

Jason Calacanis 46:29 (laughs)

Chamath Palihapitiya 46:29 And then when, and then when you get the ace-king suited, you have no chips to play with.

Jason Calacanis 46:34 Yeah.

David Sacks 46:34 Right.

Chamath Palihapitiya 46:35 You know, and you're just like, "What was I doing?"

Jason Calacanis 46:36 We have to reestablish ourselves, our credibility.

David Sacks 46:37 Ba- basically, 9/11, 9/11 put us on tilt, okay?

Chamath Palihapitiya 46:41 On tilt.

David Sacks 46:41 And we've been l- and we've been losing pots for the last 20 years.

Jason Calacanis 46:44 Yeah.

David Sacks 46:44 Now we just lost the big one. And the question is, to Chamath's point, are we gonna lose the rest of our stack or are we gonna go take a walk around the block like Muth does-

Chamath Palihapitiya 46:51 Recenter ourselves.

David Sacks 46:51 ... and recenter.

Jason Calacanis 46:53 Exactly.

Chamath Palihapitiya 46:53 Time to recenter. Time to take a little... Okay.

Jason Calacanis 46:54 Time to reset.

Chamath Palihapitiya 46:55 On the recentering thing, China is going in the opposite direction in a way that could actually help us. Meaning like, you know, it's, uh, it's a pretty scary set of things that's happening over there, but it's also a kind of instructive about how we could recenter ourselves because there's... they're actually enacting the laws that we all talk about, we've been talking about for seven months, but they're actually willing to do it. And they... and so if American policy makers would actually just-

Jason Calacanis 47:18 Should we pivot to what's going on over there with the China or should we go to robotics?

Chamath Palihapitiya 47:22 Uh, let's, let's finish China and then we can, and then, and then we can talk about...

Jason Calacanis 47:25 China is continuing their, uh, crackdown of tech companies, uh, and has proposed a ban on foreign IPOs. Uh, The Wall Street Journal had some exclusive reporting today. I'll just read a quote and then hand it over to Chamath. "China plans to propose new rules that would ban companies with large amounts of sensitive consumer data from going public in the US," people familiar with the matter said. And in addition to that, uh, under these new rules, they are looking at the algorithms that are being run, uh, and different services and making them transparent. And the Chinese government will basically control the algorithms that have caused so much chaos here in the United States with Facebook and Twitter and YouTube. And then finally, they're gonna close the loophole on VIEs. Chamath, do you want to explain what this means from a market perspective?

Chamath Palihapitiya 48:14 Today's a really big day, um, because of these things, Jason, as you just said. So let me just break this down because I think it's interesting for us to all learn about this together. So one thing is around the technology, which I'll talk about in a second, which you just pre- uh...... uh, talked about and then, uh, previewed. And then the, the second is around the capital markets and the money flow, and that, and this is a really big deal. So what is a VIE? Because you're gonna hear this a lot. A VIE is what's called a variable interest entity, and what it is, is just a massive workaround. So essentially what happened was, uh, a VIE was a legal business where, you know, an entity had control of a company, okay, through a contract, but not through equity. So it's kind of like, you know, Sax, like I had a contract with Colin that said I can dictate, you know, who does what, et cetera, but I don't own any equity. Now, the, the company that completely ran afoul of all of these things was Enron. And back in 2001, Enron went fucking ham, as we all know. They had a bunch of these VIEs, and they used it to basically shield a bunch of losses and do a bunch of shady things. So then there was a bunch of accounting laws that were introduced. China, on a completely separate track around that same time, was like, "Hey, listen. We want to control our economy, so we're gonna prohibit foreign ownership." So just that, uh, for all you guys to know, China to this day does not allow a foreigner to own a piece, uh, large sections of the Chinese economy. Okay? So as of 2018, which is the last updated list as far as I could find it, there are 33 sectors of the economy where China says you cannot be a foreigner and own any equity. Okay?

Jason Calacanis 49:54 You have to have a local partner.

Chamath Palihapitiya 49:57 No. You cannot own any equity. Yeah. Exactly. The local partner.

Jason Calacanis 49:59 Well, if you want to start a business there, you have to have like a partner.

Chamath Palihapitiya 50:01 Yeah.

Jason Calacanis 50:01 Like Yahoo did. Yeah.

Chamath Palihapitiya 50:02 So all technology companies fall under this, all data companies, any education company, any media company. So you can imagine it's basically every part of the economy that matters. And so what... Because of all these restrictions, you know, the Chinese internet companies were like, "Hey, hold on a second. I need to get access to the capital markets. What do I do?" They dusted off the VIE structure and they basically created all of these, um, you know, Caymans holding companies, and that's where all the American investors would go and buy equity from or contribute equity to. And so, you know, Tencent, Alibaba, Baidu, dd.com, JD, all of these folks have these VIEs. And what's interesting about these VIEs is it's written clear as day, but not a single investor seemed to care. But in the prospectuses of these Chinese companies, they were clear. It doesn't mean you actually have a claim on the assets. It doesn't mean you can actually make a demand of management. I mean, if you saw this in an American prospectus, you would not put a single dollar into these companies, but in fact, the exact opposite happened, because people were greedy and chasing the money. And, and these risks, by the way, came back to bear, 'cause Jason, I think you were the one that gave the example of the Chinese tutoring guys, where, you know, overnight, this guy lost 99% of his net worth. I think this was, uh, one or two pods ago. The way they did that was that they canceled the VIEs. They said, "Online tutoring? Nope. Sorry. These things can't exist anymore." And so essentially, we have this situation now where, uh, VIEs are part of 58 companies, uh, massive Chinese mega cap companies that are in the huge indexes in, in the United States. These 58 companies account for $2 trillion of market cap. We are, we are, we are now in a situation now where the Chinese government basically says, "For online tutoring, we're gonna cancel the VIEs. In a bunch of other areas, we're gonna start with regulation. We could cancel the VIEs later." And so we've essentially put the capital markets, in my opinion, on pause. And so now let's transition to this other part.

Jason Calacanis 52:08 Capital markets in China.

Chamath Palihapitiya 52:09 Capital markets in China, I think now, are the most volatile they've ever been. Essentially, the People's Republic of China, the government, the CCP chooses how and who will make money, and they are basically putting their foot down in a big way in the capital markets.

Jason Calacanis 52:25 What happens to the 1.62 trillion in existing shares that have been bought by people around the world? Would there be some way to unravel that or a tender offer?

Chamath Palihapitiya 52:34 You're gonna have to delist these ADRs. I don't exactly know what would happen. I think what happens is this.

Jason Calacanis 52:39 Well, it's unprecedented. Am I correct?

Chamath Palihapitiya 52:39 No, you, you have capital laws, Jason, because when they canceled the online tutoring VIEs, the stock prices basically went to zero. So you could eviscerate $2 trillion of market cap tomorrow if they decide, you know what? That VIE for Alibaba... By the way, Nick, I'll send it to you, but it's a, it's a thing of art. If you look at the VIE structure for Baba, I mean, it is a fucking babushka doll of nesting entities and this or that.

Jason Calacanis 53:02 (laughs)

Chamath Palihapitiya 53:02 I don't know how any investor who bought shares in Alibaba actually took the time to understand what they were actually buying.

Jason Calacanis 53:10 They suspended disbelief because they were greedy.

Chamath Palihapitiya 53:13 So, so the point is, that's happening. Okay? So the, the capital markets are now, I think, getting, uh, really constrained. The complement to this is that they're starting to now introduce legislation as a prelude, in my opinion, to canceling some of these VIEs in the most important area that we care about, which is tech. So Jason, to your point, the Chinese cyberspace watchdog today or yesterday I think it was, they just published a list of draft regulations that will now become law. I'm just gonna read this to you. So, uh, let me just, just FYI for you guys. So let me just give you a sense of them. "Users must be provided with a convenient way to see and delete all the keywords that an algorithm uses to profile them." Number two. "Providers shall not-"

Jason Calacanis 53:58 I'd like to have that.

Chamath Palihapitiya 53:58 "Providers shall not record illegal and undesirable keywords in the user points of interest or as user tags and push information content to them, and they may not s- become discriminatory or biased based on that information. Um, users must be informed that algorithms are being used on them to recommend content or products to them, and they must be allowed to opt out and see completely generic, non-personalized results. The algorithm recommendation shall adhere to main-" This is incredible. "To mainstream values." I don't know what that means. "They must actively s-"

Jason Calacanis 54:32 Uh, it means harmony in China.

Chamath Palihapitiya 54:34 "They must actively spread positive energy and promote the application of algorithms for the better."... provider shall regularly review and evaluate and verify these algorithms, models, and datas with these watchdogs. These watchdogs will now start to increasingly take board seats on the com- on, on Chinese companies. So you put these two things-

David Sacks 54:55 Yeah.

Chamath Palihapitiya 54:55 ... together, it is a big moment in China tech.

David Sacks 54:58 Takeover.

Chamath Palihapitiya 54:58 It's a takeover.

David Sacks 54:59 Yes. Yes. I mean, so, so some of those provisions sound like, you know, privacy regulations we might want to adopt over here.

Chamath Palihapitiya 55:06 Completely.

David Sacks 55:07 But I think we should focus on the one towards the end that you mentioned. The algorithm recommendation service providers shall adhere to mainstream values-

Chamath Palihapitiya 55:14 Hm.

David Sacks 55:14 ... actively spread positive energy and promote application outputs for the better.

Chamath Palihapitiya 55:19 Wow.

David Sacks 55:19 Now, how do you actively spread positive energy? I mean, as a business person under that regulation, like what does that even mean? I mean, it basically means-

Chamath Palihapitiya 55:29 It, it means what you're not spreading, David. It means you're not spreading a protest in Hong Kong. It means you're not talking about the Uyghurs. It means you're not talking about Tiananmen Square. You're not creating social unrest. This is a way for them to say, you know, positive energy means don't criticize Xi Jinping or the CCP or bring up topics that are in the no-fly zone like the Uyghurs.

Jason Calacanis 55:49 Well, they're, they're gonna have content moderation guidelines. Yeah.

David Sacks 55:51 Yeah, they're bringing it all under their control. That's what it's about. I mean, thes- this is the type of thing that, despite all of our problems, makes me very happy to be an American. (laughs)

Chamath Palihapitiya 56:00 Yeah.

David Sacks 56:00 Can you imagine?

Chamath Palihapitiya 56:00 Well, I would, I would say though that-

David Sacks 56:02 Yeah.

Chamath Palihapitiya 56:02 ... the first part of what I said about their regulations to me seem really intelligent. And I think Americans would want that, and if American policymakers would actually just suspend disbelief for a second, go to the Chinese website, me- Nick, we can put a link into the, into the show notes of where the regulations were published, and actually try to implement those laws, I think we as Americans, we'd all want most of them except that one.

Jason Calacanis 56:22 Yeah, well, that's what the devil does. They mix the lies with the truth in order to get (laughs) you to be convinced to give up your freedoms. Friedberg, what are your thoughts?

David Friedberg 56:29 I'm getting increasingly convinced that this idea of a decentralized blockchain-based government governing might work in the 21st century. (laughs) I just feel like they're... The, you know, we keep hearing more about the overreach and the ineptitude of, uh, centralized institutions like, uh, CCP and the US government and, you know, I'm not hearing anyone that says, "Man, you know, this is a great... We're seeing great progress."

Chamath Palihapitiya 56:57 Well, I, I, I actually... No, but Friedberg, I think, I think the CCP is actually pretty good. I, uh, what they do, we may not agree with them, but I think they're pretty

Narrator 57:03 I agree with you.

Chamath Palihapitiya 57:04 ... competent.

David Friedberg 57:04 I agree with you generally, yeah. But I do think it, it creates an incentive and a motivation also because if you don't agree with their, their, their principles, you know, you're gonna find yourself looking for an alternative. So, you know, I don't know, we shou- uh, this is probably not the right time or forum for this conversation. We should probably do it on another show, but we should talk about, um, some of the innovations, uh, blockchain innovations that, that, that are taking place. And J-Cal, I know you spent a lot of time on this as well, but, you know, it'd be worth kind of talking about the notion that, you know, can you see, um, governing move to the blockchain? Um, and what does society look like in maybe the 22nd century if this becomes a reality? And how do we, h- h- how does the world kind of evolve there?

Jason Calacanis 57:48 Well, in the crypto world, you would put in some effort, you would have some skin in the game, and you would, because of your processing power, your nodes on the network would get some votes. So it'd be like in a democracy, how much money you had or how much work you produced, you had some sort of say, which kind of sounds like ours.

David Friedberg 58:05 I mean, imagine if the US government instead of, you know, having some folks go to Congress and say, "I want a trillion dollars," and spend 25 years in Afghanistan. You know, it was more of a distributed decision-making process where data was available in real time, metrics were used to make the decision, and, um, the folks that actually contributed dollars, uh, to the network ended up being the ones that made the decisions based on how many dollars they've contributed or based on some other principle of decision-making, um, that doesn't kind of aggregate institutional ineptitude, uh, which is kind of part of the issue we've seen here.

David Sacks 58:39 Well, so I think that brings up an interesting point, which is, you know, when we talk about all the ways that we could have spent these trillions of dollars better than nation-building. Here's the, here's the fundamental problem, and I agree with that. I mean, I wish we had spent the six trillion that we spent on nation-building in the Middle East, I wish we had spent that at home domestically on our own priorities. But here's the problem is, I think what Afghanistan and specifically the military-industrial complex shows is how good these special interests get at extracting money from the system while providing so little value. You know, we spent s- the mil- we, th- these contractors spent, or, uh, we, they, they charge so much to basically deliver so little on Afghanistan. Do you really think it's going to be much different for the trillion-dollar, the $1.2 trillion infrastructure bill that's coming? You know, and if we created some-

Chamath Palihapitiya 59:25 If they're licking their lips, they're looking at us.

David Sacks 59:26 Yeah, exactly. The, the, the people, the groups who are going to get that money, who are gonna feast on that trillion dollars are people who their skill set is lobbying, okay? That is what they spend their time doing. And if you're-

David Friedberg 59:39 Sorry, I took it backwards.

David Sacks 59:40 No, listen. And if you are really good at lobbying, why would you even waste your time trying to get good at delivering value? You're not. That's your business is lobbying.

Jason Calacanis 59:48 Well, that is your value. Yeah, that is your skill set.

David Sacks 59:50 That's your value. Exactly. So this idea that we can basically spend a trillion dollars on some domestic innovation program, the problem is it'll never go to the right people, it'll never go to the innovators.

Jason Calacanis 1:00:01 Hm.

David Sacks 1:00:02 The best thing we could do is just not spend the money, quite frankly.

Jason Calacanis 1:00:05 So smaller government?

David Sacks 1:00:08 Or how about, how about just not a government that's at $20 trillion in debt? I don't know how it's like smaller or small government to, if we were to save six trillion, we'd still be 14 trillion in debt. It's not a small government.

Jason Calacanis 1:00:20 I think the good jumping-off point here might be the Supreme Court eviction moratorium, uh, and the Supreme

Jason Calacanis 1:00:27 Court not upholding it. And what are your thoughts on that, Sax? Because it does relate to this never-ending free money train, no repercussions of personal behavior and, you know, spending insanely.... forever, it seems. Like, we're never going to stop-

David Friedberg 1:00:45 Yeah, the-

Jason Calacanis 1:00:45 ... with the stimmies.

David Friedberg 1:00:46 Yeah, the, I think the Supreme Court threw out, uh, Biden's eviction moratorium as unconstitutional. Look, I think it's great. You know, the, the government should not be, uh, preventing, uh, e- ev- eviction, you know, especially not the federal government. I don't understand how that's supposed to work. I mean, all you d- l- look, I don't wanna see anybody get evicted, but the reality is, you have to pay your rent. And if, and if there are groups of people who can't pay their rent and the government decides that, uh, that those people should be helped, the right way to help them is to give them the money to pay their rent, not just to tell landlords, "Sorry, like, you can't collect rent anymore, and evict you."

Jason Calacanis 1:01:21 Yes, Congress should give more stimulus to those people, but-

David Friedberg 1:01:23 Yes, it's a, it's a, it's a taking, it's a clear taking from landlords to say that, "Oh, your tenants don't have to pay you anymore." How does that make sense?

Jason Calacanis 1:01:31 Well, how do we unwind the free money train? Because there's 10 million job openings right now that are not getting filled, and then we have unemployment starting to unwind, or the bonus unemployment's unwinding, and then we have all this, uh, free rent concept or just, you don't have to pay your rent. At, at some point, it, it feels like we have to let the free market come back, and maybe people can't pay their rent, so they go take one of the 10 million jobs? I know that sounds cold-hearted, uh-

David Friedberg 1:02:01 No, J- Jason, you've talked, you've talked about this before.

Jason Calacanis 1:02:01 ... but at some point, there has to be some landing.

David Friedberg 1:02:04 You've talked about this before in California. We have a labor shortage in California becau- we- we've basically run a controlled experiment in the, uh, UBI, universal basic income, where we've b- basically been paying people not to work or p- or paying them regardless of whether they work. Guess what? They don't take jobs. And so we actually have a labor shortage in California despite having high unemployment. At some point, the government's gonna have to say to people, like, "Look, COVID is not an excuse for shirking your adult responsibilities." You know, we all have a responsibility to go to work, to pay our rent, you know, to pay our parking tickets. And COVID has been this excuse for suspending, you know, this, this sort of normal life. And the problem is, COVID's gonna be around forever. It's like the cold or the flu. It can't continue to be this excuse for people not working, not paying rent, not doing what they're supposed to be doing.

Chamath Palihapitiya 1:02:52 I think on top of that, though, I think, Jason, maybe you wanna talk about this. I think on top of that, we, uh, are amplifying that by taking people's agency away. And we are-

Jason Calacanis 1:03:03 Prop 22.

Chamath Palihapitiya 1:03:04 Yeah. And Prop 22 is a perfect example of that which you should talk about, but when you put these two things together, on the one hand, you have a government that basically wants to subsidize, uh, opting out of the system. And then you have a set of laws that, if they're not unwound, reinforce that dynamic. And you put these two things together, and folks just wanna sit on the sidelines.

Jason Calacanis 1:03:27 Yeah. Let's get Friedberg involved. Friedberg, you wanna talk about the Prop 22, um, Supreme Court decision, et cetera?

David Friedberg 1:03:34 Yeah, there was an appeals court-

Jason Calacanis 1:03:36 Appals court, I'm sorry.

David Friedberg 1:03:37 ... um, yeah, an appeals court that, uh, overturned some elements of the, uh, California Prop 22, which was a heavily lobbied California proposition lobbied by Uber and Lyft and other, um, businesses that have built, effectively, marketplaces for independent contractors like drivers and delivery people and so on. The SEIU, which is a big employees union, had, um, you know, fought very hard to pass legislation in California that made it, um, effectively very difficult for people to operate as independent contractors and forcing companies like Uber and Lyft to treat them like full-time employees, or to treat them like employees. And so Prop 22 was to counter the union-funded legislation, um, which basically provided more freedom and flexibility to workers where there weren't all these very arbitrary random rules that if you're a writer, you can be an independent contractor, but if you're a driver you cannot, and you know, all, all this nonsense that, that took place because the unions were trying to increase the scale and scope of, of their union base. Um, and so Prop 22 was passed in California after much spending and lobbying, and it passed by a pretty decent margin. And then this court ruling basically in, in the appeals court overruled the constitutionality of some elements of Prop 22, which brings into question whether that Prop 22 is actually gonna hold in California. Therefore, are all these people who are drivers for Uber, delivery people for DoorDash, um, and all these companies that are creating, like Thumbtack, and you know, all these companies that are creating marketplaces for individuals to have flexible work, to go and work where they want when they want, to find gigs, to find, you know, short-term jobs, to find, um, you know, tasks and projects that they can run, uh, are they now gonna be seeing that those marketplaces stop working? Because when you have to start treating those people like employees, the flexibility and freedom that those marketplaces enable stalls out and s- and kind of, you know, as we're already seeing. So, it's, it's super nasty, and the implications are that we're now seeing, um, uh, you know, we're, we're now facing once again this crisis of, you know, are, are basically lower income people, um, people that wanna have flexible labor are gonna be restricted from having access to, to gig jobs, um, because the unions wanna force everyone into a full-time job, which, you know, as our friend Bill Gurley pointed out, is kind of like an archaic element of, yeah, the 19th and 20th century. I mean, this is like a-

Jason Calacanis 1:05:58 L- let's play, uh, a clip-

David Friedberg 1:05:58 ... old school way of work.

Jason Calacanis 1:05:59 ... from, uh, Bill Gurley and, and here it is.

David Sacks 1:06:01 There's one big issue that I don't think is talked about enough which is, you know, the, if you poll the drivers, they're not looking for any changes. They're f- really happy with the flexible work product. If you look at the voters of California, they stepped up and voted and made it very clear in a, in a state that voted two to one, you know, in favor of Biden, they came down very strong, 60-40, that they didn't want this to happen. And there's one, uh, entity that's really been pushing this the whole time, going all the way back to '85, and that's the SEIU. It is a single union, but to call them a single union understates it 'cause they are the granddaddy of special interest groups. I, I sent along some data maybe you can put on the screen. Um, they spend more money lobbying than any other organization in our country and have for many, many years. Um, they only represent two million members, but th- oddly, those members are in hospitality, healthcare, and government services. They're not even in this industry. So, they're taking the dues from their members and using it to fight these battles because they wanna expand their footprint. What they're really after is putting $400, $420, which is the minimum member union fee for the two million they have, they wanna expand that to these drivers. So, they don't actually-

Jason Calacanis 1:07:20 Yeah.

David Sacks 1:07:20 ... wanna help them, they wanna add to their cost. Um, but they're the, they're the, they're the one that's been pushing this the whole time.

David Friedberg 1:07:27 And I, I think it's worth just saying one thing on this which is, um...... you know, this is, uh, really kind of, um, a question not about California and Prop 22, but it's a question about what is work and all the tech companies that are enabling a new form of work globally. People don't wanna have 40-hour-a-week jobs. People don't wanna have to go sit at a desk all the time. People wanna have flexibility in their lives. They wanna have gigs. Technology enables us to quickly find short-term jobs, short-term opportunities to work on things and make some money and figure out how we wanna build our lives in a more flexible way, figure out how workers wanna build lives in a more flexible way across all industries. And, um, it's really, uh, frankly, um, you know, uh, uh, a, a non-progressive policy to say that everyone has to be pigeonholed into working, you know, full-time, 40-hour-a-week labor jobs, be employees, and not have the flexibility of running their own business in their own way with the, uh, with their own time and choosing what they wanna go do and work on. Um, and so this sort of legislation and this sort of battle is a really important one for defining the future of work in the United States, which will ultimately represent the future of work globally.

Jason Calacanis 1:08:35 And the craziness of all this, David, is that Uber drivers, Lyft drivers, DoorDash drivers, et cetera, are getting paid a fortune now because there's a labor shortage, and these ridesharing companies have given a minimum, uh, $21 an hour fee. So, (laughs) I, I don't know exactly what's going on here, but it seems to me like it's a union grab because everybody else who's affluent or rich, real estate folks, uh, you know, doctors, whoever, can be freelance, but if you're a rideshare driver or a freelance writer, you don't get to be. And, uh, it seems just incredibly unfair.

David Sacks 1:09:15 It is. And, you know, one of the best things about COVID, I think for all of us, is that we learnt that we could do our jobs from anywhere. We didn't have to go into an office. We didn't have to work the standard, whatever, nine to six hours. We could be anywhere. We had flexibility. And, I mean, I think it's one of the lasting consequences of COVID that's b- actually been very positive for a lot of people. And here you have the government basically trying to take away and prohibit freelance work, flexible hours, uh, gig-type jobs. These are the sort of modern, flexible working relationships that people want. Why are they getting rid of it? Because of lobbying pressure from the SEIU, which only has two million members. It's not even a big union, but they got Lorena Gonzalez in their back pocket. She passed AB5 in California. The people of California didn't want it. Remember, 58% of Californians said, "We don't want this," so they overturned it in this ballot initiative, and now you got this activist judge basically f- you know, um, inventing these specious grounds for overturning Prop 22, which is what the people want. So, it's ridiculous. And, you know, the common thread to me on this show that I've come to realize about American politics is just the degree of special interest corruption. And, you know, people are used to thinking in terms of left versus right. It's not. There's a special interest corruption that pervades everything. You've got this union that is destroying freelance work and flexible working relationships because of corruption because it benefits them. You got defense contractors in Afghanistan who are just looting, looting the Pentagon and the federal budget because it's in their interest. You've got these special interests of both the right and the left. This is a central problem in American politics, and you know, what they do to cover up the naked self-interest is they disguise it in a kind of woke virtue signaling. So they'll start, you know, talking about, you know, how what they're doing is for the benefit of these drivers when the drivers don't even want it.

Jason Calacanis 1:11:06 And to build on that, I'd say, you know, my great realization from having this conversation with y'all every week is that we are starting to propose a nanny state in which people have no agency. Even if they want to have agency over their life and career, you are taking it away. And then, if there's no repercussions to people's behavior and they have no agency, they become, you know, uh, disenfranchised from society, and why are they going to participate, and then what kind of society do we have if people can't make their own choices? And you see it also in, you know, uh, accreditation laws, and you see it y- where only rich people can invest, and now you're seeing it with this freelancing where, you know, uh, my dad would have