Episode #322: Interview with Kevin D. Williamson

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Ron and Ed welcome Kevin D. Williamson, fellow with National Review Institute and National Review’s roving correspondent. Kevin writes “The Tuesday,” a weekly newsletter. His latest book, Big White Ghetto: Stone Broke, Stone-Cold Stupid, and High on Rage in the Dank Wooly Wilds of the ‘Real America,’ was published in October.

Ron’s Questions: Segment One

Kevin, welcome to The Soul of Enterprise.

That speech [Ronald Reagan’s Moscow University speech that opens the show] was written by Josh Gilder, who is George Gilder’s cousin. We had Peter Robinson on a few weeks ago, who of course, wrote the Berlin Wall speech. So it's all it's all connected, Kevin.

We're sorry to bring you on during such a slow news week. But let me ask you this. You wrote about Ochlocracy—mob rule—in your book, The Smallest Minority. Should Trump be impeached?

Victor David Hanson has one of the most interesting takes on Trump, from a historical perspective, he calls him a tragic hero. The town brings in this guy to clean up the town and then once he does that, they kick him out.

Let me ask you this. I've never heard how you got to National Review. How did you wind up with at National Review?

Peter Robinson did that, too. He wrote to Bill Buckley and asked him for help. And that's how he landed as a speechwriter in the White House, through Christopher Buckley.

Did you ever get to meet William Buckley?

Excellent. It's kind of an unfair question, but what do you think Bill Buckley would think of Trump, and his administration? 

I've heard you say that before. It’s a great retort. So Kevin, you wrote Big White Ghetto. It was published last year. Even my dad read it and absolutely loved it. I know it's from decade, or over a decade, of on-the-ground reporting, isn't it? You traveled all over, and you start in Booneville, Kentucky, seat of Owsley County. It’s supposedly the poorest place in the USA, but you say it's actually number three, when you look at the 2020 rankings. What confounds conservatives, liberals, and libertarians about that place?

You talk about how there's no cure for poverty, because there's no cause of poverty, it's the natural condition of mankind. So what do you think would help a place like this? Is it bourgeois principles? Is it the success sequence?

Like you say, get a U-Haul. Kevin, this has been great. Thank you so much. We're up against our first break.

 

Ed’s Questions: Segment Two

Our guest today is Kevin D. Williamson. And one of the books that Ron referred to in his opening that I'd like to talk to Kevin a little bit more about is his book called The Politically Incorrect Guide to Socialism. You think you know about socialism, but you really don't until you read this book. It's just fantastic. So let me get the first question out of the way: define socialism.

Kevin D. Williamson

Socialism is the public provision of private goods through central planning.

Ed Kless

And this can happen in countries that are considered capitalist, right? We have socialism here, things like the school system.

A question on that because you go into great detail on each of these places, Venezuela, Sweden, North Korea. The book is almost ten years old, maybe it is ten years old at this point, I think 2011 was the publication date. Are you surprised that these regimes have continued to last for another decade? Did you think that some of them were going to be gone by now?

As you were doing the research for the book, did you find that any of those brands of socialism worse than another, the ones that still exist today? Would you say North Korea is probably the worst? Or do you still have reservations about Venezuela, China?

China seems to be emerging to some extent because of the markets. But Ron and I have a real concern for what's going to happen in Hong Kong. Have you any thoughts on the situation in Hong Kong? What's going to happen there?

It would be great for us just from a mindshare perspective. You know, we play Reagan's speech about the economy in mind. And to have those great minds come here, it would be fantastic.

Are you familiar with Jimmy Lai at all, he is a dissident leader over there? We've talked to Father [Robert] Sirico about him what a tragic story, he refuses to leave. He just he stays.

And [China’s] social credit score that they've implemented, it’s a horrible thing. You find out that you do something against the government, you can't buy a train ticket, can't buy a plane ticket, you’re really locked into where you are.

Some of us even will even have two devices [to be tracked on], not only your phone, but your watch, just as a backup system. But we're up against our next break.

Ron’s Questions: Segment Three

Welcome back, everybody. We're here with National Review roving reporter, Kevin Williamson. And Kevin, before I get back to Big White Ghetto, just to follow up with the conversation you were having with Ed about Hong Kong. I do believe the UK has started to admit some of those people. I think they've done 200,000 or 300,000 visas, from what I understand. But what about China? What’s your take on the NBA, Nike, Apple, all these companies, Disney, absolutely capitulating to censorship and other forms of government control, all the while this stuff with the Uyghurs is going on, and everything else. I mean, do you see any way out of that?

Yeah, it's really a conundrum. There are no easy answers, are there?

Back to [your book], Big White Ghetto. There was a chapter where you were in Alabama, and at one point it was the number one place for opioid prescriptions being written. But you say that Ground Zero of the opioid epidemic is at Walgreens. Explain that.

You also wrote about Colorado’s legalization of marijuana. And you say the stoners rejoiced, but not so much the cops in Nebraska.

You do a podcast with Charles Cooke, Mad Dogs and Englishmen, and he wrote the book, The Conservatarian Manifesto. Do you identify with that sentiment?

Charles has got an incredible accent. One last point, we’ve got about a minute, but I have to tell you, you wrote an article back on November 25, 2020 on raise the entrance fees to national parks [“Raise the Entrance Fees for Our National Parks”]. Kevin, I can only imagine the hate mail you must have got for this. But I thought it was brilliant. You pointed out that a family of four will spend 4200 bucks to go to Disneyland for a week, but it's 35 bucks to go into Yellowstone. But then you made a really profound point. You said a nation that isn't ready for meaningful Yellowstone pricing isn't ready for meaningful carbon pricing.

It was a great article, I had to tell you how much I enjoyed that.

Ed’s Questions: Fourth Segment

We are back on The Soul of Enterprise with Kevin Williamson. Kevin, thanks so much for appearing, we've got one more segment with you. I wanted to turn your attention back to your book on socialism, but only because, this is something that Ron and I talk about often in a business context, and that is the notion of socialism, it sometimes puts inappropriate measurements in place. The example that you give is that in the Soviet Union, they used to measure nails by the pound. So, as a result, they made big, really big nails, and they had plenty of them, but no little nails. But then the same thing takes place in the education system with regard to measurement. Talk a little bit about that.

And, of course, the public schools really came into being in full force during the Progressive era, when this whole measurement thing came about. What I really loved about your book is the story you tell about how Woodrow Wilson was responsible for a socialist coup in the United States. Talk a little bit about that.

Fair enough. Wilson was definitely of a socialist mindset. I mean, he brought everything through the war, the war mentality to everything he did.

We've got about two minutes left, and just to pick up on the theme that we started with. Of course the country recovered from Woodrow Wilson’s socialism. We've been able to recover. What does the country do, maybe even specifically the GOP, to begin to recover post-Trump?

I think that the sleepy-Joe moniker might be what we're all looking for. That would be great. If we could be sleepy for a while. All right, Kevin Williamson, on that note, we are going to wrap things up. Ron, what do we have coming up next week. 

Ron Baker 

We have Art Carden, Ed, who's the co-author along with Deirdre McCloskey of Leave Me Alone and I'll Make You Rich.

Links to Kevin D. Williamson’s writings and podcast:

To subscribe to Kevin’s weekly “The Tuesday,” follow this link.

Kevin’s National Review archive can be found here.

Listen to Mad Dogs & Englishmen here.

Kevin’s New York Post archive can be found here.

Kevin’s Amazon page is here.

To subscribe to National Review, go here.

To support National Review Institute, go here.


Bonus Content is Available As Well

Did you know that each week after our live show, Ron and Ed take to the microphone for a bonus show? Typically, this bonus show is an extension of the live show topic (sometimes even with the same guest) and a few other pieces of news, current events, or things that have caught our attention.

Click the “FANATIC” image to learn more about pricing and member benefits. 

Episode Reprise: Interview with Dr. Walter Williams

[EDITORS NOTE: Click here to listen to the show. In lieu of the passing of Dr. Walter Williams, Ron and Ed are going to re-run this episode during their normal Friday show (New Years Day). They will be live again on Friday, January 8th.]

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Biography

Born in Philadelphia, Pennsylvania, Dr. Walter E. Williams holds a B.A. in economics from California State University, Los Angeles, and M.A. and Ph.D. degrees in economics from UCLA. He also holds a Doctor of Humane Letters from Virginia Union University and Grove City College, Doctor of Laws from Washington and Jefferson College. Dr. Williams has served on the faculty of George Mason University in Fairfax, Virginia, as John M. Olin Distinguished Professor of Economics, since 1980; from 1995 to 2001, he served as department chairman. He has authored ten books: America: A Minority ViewpointThe State Against Blacks, All It Takes Is GutsSouth Africa's War Against CapitalismMore Liberty Means Less GovernmentLiberty vs. the Tyranny of SocialismUp From The Projects: An AutobiographyRace and Economics: How Much Can Be Blamed On Discrimination? and American Contempt for Liberty

Dr. Williams is the author of over 150 publications which have appeared in scholarly journals such as Economic InquiryAmerican Economic ReviewGeorgia Law ReviewJournal of Labor EconomicsSocial Science Quarterly, and Cornell Journal of Law and Public Policy and popular publications such as NewsweekIdeas on LibertyNational ReviewReader's DigestCato Journal, and Policy Review.

He has made scores of radio and television appearances which include “Nightline,” “Firing Line,” “Face the Nation,” Milton Friedman’s “Free To Choose,” “Crossfire,” “MacNeil/Lehrer,” “Wall Street Week” and was a regular commentator for “Nightly Business Report.” He is also occasional substitute host for the “Rush Limbaugh” show. In addition Dr. Williams writes a nationally syndicated weekly column that is carried by approximately 140 newspapers and several web sites. His most recent documentary is “Suffer No Fools,” shown on PBS stations Fall/Spring 2014/2015, based on Up from the Projects: An Autobiography

Dr. Williams serves as Emeritus Trustee at Grove City College and the Reason Foundation. He serves as Director for the Chase Foundation and Americans for Prosperity. He also serves on numerous advisory boards including: Cato Institute, Landmark Legal Foundation, Institute of Economic Affairs, and Heritage Foundation. Dr. Williams serves as Distinguished Affiliated Scholar at the Mercatus Center at George Mason University. 

Dr. Williams has received numerous fellowships and awards including: the 2017 Bradley Prize from the Lynde and Harry Bradley Foudation, the Fund for American Studies David Jones Lifetime Achievement Award, Foundation for Economic Education Adam Smith Award, Hoover Institution National Fellow, Ford Foundation Fellow, Valley Forge Freedoms Foundation George Washington Medal of Honor, Veterans of Foreign Wars U.S. News Media Award, Adam Smith Award, California State University Distinguished Alumnus Award, George Mason University Faculty Member of the Year, and Alpha Kappa Psi Award. 

Dr. Williams has participated in numerous debates, conferences and lectures in the United States and abroad. He has frequently given expert testimony before Congressional committees on public policy issues ranging from labor policy to taxation and spending. He is a member of the Mont Pelerin Society, and the American Economic Association.

Ed’s Questions

Your show Good Intentions, do you think the situation is better or worse, and why can’t we seem to shake this good intentions versus actual outcomes paradigm we’re stuck in?

What, specifically, do you mean by spiritual poverty?

Do you think the current welfare regime contributes to this situation because it encourages this behavior because of the way the programs are structured?

I’ve heard you speak eloquently on the freedom of association and the impact it has from an economic standpoint. Would you mind talking a little bit about that?

I’d actually prefer that bigots self-identify so I could avoid them.

Ron’s Questions

You published your autobiography, Up From The Projects: An Autobiography, in 2010. One story I found fascinating was about your economics professor Armen Alchian, who asked the class: why do we build the Golden Gate bridge when a military bridge would do just fine? He didn’t know the answer. Do you now have an answer to that question?

[Professor Williams recommends the book Universal Economics, based on Armen Alchian’s work].

In 1989, you published South Africa's War Against Capitalism, which sounded like an ironic title at the time. What would you say is the biggest misperception about apartheid [apart-hate]?

Speaking of immigration, what would be your preferred policy on immigration?

Would you be for more legal immigration?

Do you favor a point system, or charging people, to get into the country?

Do you think we’ll ever see a market for body organs?

I find it ironic that Iran allows the sale of body organs, but here in the capitalist west we do not?

You and Dr. Sowell have taught me that a shortage usually has nothing to do with actual physical scarcity but because the price is wrong.

If we had to rely solely on people’s altruism, we’d have a materially lacking life.

If you had a meeting with President Trump, what would be one piece of economic advice would you give him?

Special Event: First-ever live chat (and wine party!)

For all of our Patreon members (more on that below), Ron and Ed will be hosting their first-ever live chat (and wine party)! This event will take place on Tuesday, December 29th (or Wednesday if you are in the Eastern Hemisphere) at 5 pm Eastern Time in the US (4 pm CT/3 pm MT/2 pm PT, others adjust accordingly). Bring your own wine or alternate beverage!

Are you interested in becoming a Patreon member? Our members receive commercial-free episodes (otherwise known as “anti Greg Kyte” episodes), bonus content, and more such as live chats.

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Episode Reprise: Business Lessons from A Christmas Carol

On this episode (originally number 73), Ron and Ed explored the business lessons from one of the most recognized and beloved stories shared during the holidays, Charles Dickens’ novella, A Christmas Carol. While many of you know the story and seen one or more of the adaptations, many fewer of you have read the original work which, like most of Dickens, an absolute joy to read and has much to say about business practices.

“It is so good,” says Ron, “that you want to read it more slowly to savor it, like a fine wine.”

Ed is also a long time fan as is his daughter as you can see from this video clip.

Episode #321: Second interview with Dr. Mary Ruwart

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Ron and Ed welcomed back to the show, Dr. Mary Ruwart. Her book Death by Regulation demonstrates the futility of the US FDA and was prescient with regard to the bureaucratic delays we have seen with the vaccine for COVID-19. We explored this topic and more with her.

Ed’s Questions: Segment One
Welcome to The Soul of Enterprise: Business in the Knowledge Economy, sponsored by Sage, transforming the way people think and work so their organizations can thrive. I’M Ed Kless, with my friend and co-host, Ron Baker, and on today's show, folks, we are so pleased to welcome back to the show for a second time, Dr. Mary Ruwart. How's it going, Ron?

Ron Baker
Good, Ed. We just got a California Bay Area County lockdown.  

Ed Kless
You’re in official lockdown now? Do you have toilet paper and wine? 

Ron
Yes. I'm ready. 

Ed
You're good to go. All right. Well, let's jump right in. I'm thrilled to bring back, as I said the last time on the show, one of my personal heroes, Dr. Mary Ruwart. It's Dr. Mary, right? Let me just read the introduction, then we'll get into it. Mary Ruwart is a research scientist, ethicist, libertarian author, and activist. She received her Bachelor of Science in biochemistry in 1970, and her PhD in biophysics in 1974, both from Michigan State, she had an assistant professorship and then took a position with the Upjohn company in 1976. Dr. Ruwart was also involved in developing therapies for a variety of diseases, including liver cirrhosis and AIDS. We had her on last time to discuss her book, Death by Regulation: How We Were Robbed of the Golden Age of Health, and How We Can Reclaim It. Both Ron and I highly recommend that book. And as I said previously, it's more scary than a Stephen King novel, because it's actually the truth about what's going on with the FDA. And Ron and I made use of it a lot of the times that we've been talking about the COVID situation. We'll say to one another, we should talk to talk to Dr. Mary Ruwart about this. And now we're happy to bring her back on. Welcome back to The Soul of Enterprise, Mary Ruwart. 

Mary Ruwart
Well, thank you. Thank you. 

Ed
And you're okay with me calling you Mary, Right. What a tempest in a teapot that whole thing is. But anyway, let's move on to the more important stuff. You are uniquely qualified to answer some of the questions that both Ron and I have talked about, and that we've been asked by some of our listeners. But let's first talk a little bit about what your thoughts are around COVID. You think COVID is a real thing, right? It's something to be concerned with?

Ed
So that's a question, but it's way down on my list, but I'm going to jump right in and ask. So a vaccine that's been developed for that, how effective is it against those mutations? 

Ed
Sure. Is that what the mRNA is, the fact that they're developing off of the spikes rather than the innards of the of the virus itself? 

Ed
Okay, so that has nothing to do with the spikes that they use. But why is that. Why would doing the vaccine off of the spikes be better than the innards of the cell for mutations? 

Ed
Oh, I see. 

Ed
No, that's absolutely true. But what are your thoughts? Not necessarily on each individual vaccine. Obviously, no one would know that. But the technology that was used by, specifically, Madonna. I read this in a New York Times article that they actually developed it within two days of the sequencing of the genome.  

Ed
Okay, so it hasn't been demonstrated, but it definitely has lowered the symptoms. And this was interesting to me, it was developed within two days, and in my view, and after reading your book, then the last 12 months or 11 months have been process around approval. And this just makes me crazy to think about this. Do I have this right? 

Ed
Is there a difference, medically, between something developed as a vaccine, which is a preventative and something that's developed to, say, for heart medication that lowers blood pressure? Should there be a different testing regimen for one versus the other? In my layman's mind, one is about efficaciousness, the reduction of some kind of a symptom, that's a response. The other is really preventative from you getting something. Once it's proved safe, isn't efficaciousness, shouldn't that be tested in a lot larger samples? I mean, that just my logic. But am I right there? 

Ed
Okay, and you mentioned, and I've heard this as well, that the messenger RNA is new technology. It has been used in certain other cases; I think they developed an Ebola [vaccine] but they just didn't have enough trials to test it. If the technology proves effective, I want to try to use the right words, if the technology proves efficacious, and that taking a sequence genome from a virus and then quickly turning it around in two days, and that proves safe, can we make a certain assumption about a future vaccine? That future vaccines that are developed in this way, are just as safe? Or is that not something that we can assume? 

Ed
You're not a lay person as I, were you amazed at how quickly this was developed? Or was this something that, having been in the industry, you're like, yeah, I've been following this, it was not surprising to you? 

Ed
Just quickly, before we have to take our break, are you concerned about it [the vaccine’s safety]? Is that something that you personally would be concerned with? 

Ed
Right, and that could happen, it's kind of a random thing. Well, this is great. I have so many more questions, as does Ron, but we have to take our first break. 

Ron’s Questions: Segment Two
Welcome back, everybody. We're here with our second interview with Dr. Mary Ruwart. And Mary, I wanted to ask you, I'm not a conspiracy theorist, no tin foil hat. But where do you think this virus originated? I mean, probably an animal. But do you think it came out of a lab or a wet market, an animal market? 

Ron
Oh, that's interesting. In the early days of the virus, give us your grading of the FDA’s response, the CDC’s response? What went right, what went wrong? What would you have done if you were in there? Or advising the president? I know it's brutal. But we do want your opinion. 

Ron
It brings me back to your book. Because if a private company like Upjohn was responsible for that, and they blew it, it would pay a price. And the FDA and the CDC are going to end up getting bigger budgets, I'm sure. Did the government do anything good? 

Ron
I was going to ask you about that, so I'm thrilled that you explained that. I know you know Jeffrey Tucker [Episode #201]. He called the lockdowns positively medieval. What's been your assessment of these lockdowns, restaurants, bars, all these different things? 

Ron
Are you as sick as Ed and I are of “follow the science.” Science is a discovery process, right? It can't really tell you exactly what to do. And then, we know science may not lie, but some scientists do? 

Ron
One of the things I learned from your book was the off-label use of drugs and maybe in our next segment, when I have you back, I'll ask you about that. But unfortunately, we're up against our break.  

Ed’s Questions: Segment Three
And we are back with Dr. Mary Ruwart. Her book, which we highly recommend, Death by Regulation: How We Were Robbed of the Golden Age of Health, and How We Can Reclaim It, is on sale at Amazon and other book places. Please go out and give that a read. It's a great work. And I really think that most people really will enjoy it. Mary, I wanted to talk a little bit about the libertarian policy aspects of this. For those listeners who don't know, Mary, you were once our vice presidential nominee for the Libertarian Party, back in, what 1980? 

Ed
Oh, you never got the nomination. Okay, so I have my history wrong there. Thank you for the correction. But I voted for you. Ron talked a little about this, and you mentioned that giving [the vaccine] to healthcare workers is probably the best option. Should government mandate that though, or how should we decide who gets the vaccine, and when? 

Ed
And then you get into private accommodations, could a hotel chain say that you have to produce your vaccine card before you stay at a particular hotel, or even a supermarket say you have to show that you've been vaccinated before you come into the supermarket? We would say libertarian-wise, why sure. But then that gets to a public accommodation issue. So this intersection of rights again, we get back to the baker problem. 

Ed
Ron, which was the airline that put the insurance as part of its fare [Emirates]. They created an insurance that if you fly on their plane and you get COVID for any reason, they will take care of your medical bills, which is a really interesting incentive to have people come and fly. So a great libertarian solution. On the distribution, I think we can all we probably agree that healthcare workers first is the best way to go. But there is a question of do you then go to elderly the best option? Or do you go to younger folks to try to build up the herd immunity quicker so that there's less distribution? It isn't that clear cut, is it? 

Ed
Interesting. So I did not realize that. So it may even be a case that even if they haven't tested it extensively enough to be able to know that with regard to the elderly population. Really? 

Ed
It was interesting, the flu shot is 60-70% efficacy and the Coronavirus [vaccine], at least in the initial trials, is somewhere between 90% and 95%. Which leads me to another question. They tested this, the double Jab, let's call it. It's the stick and then a booster two weeks later, I believe. But I think it was the Moderna trial, they showed that there's a fairly high efficacy with just one jab, almost as high as the flu vaccine. So then the ethical question becomes is should we double jab people, or do you get it out to the maximum number of people? This is yet another question that's not, in my mind, clear cut. 

Ed
Question, just quickly going back to the CDC and FDA and your grade of F, which I agree with you wholeheartedly on. With your understanding of those organizations, and I'm not trying to be an apologist for any administration, would it have been significantly different if there was somebody else in the White House? 

Ed
Sure. But my point is, these are bureaucracies that, regardless of who sits in the White House, are going to behave in a similar fashion. 

Ed
Mary, I'm going to go a little bit over in this segment, but I wanted to ask you this question quickly. As I mentioned, Ronald Bailey was on the show about two to three months ago [Episode #307]. And one of the things that he said, based on this Moderna technology, he thought that it is possible that what we are experiencing will be the last pandemic because of the technology that's in place. So in 30 seconds, your thoughts on that? 

Ed
All right, well, Mary, Ron's going to take you the rest of the way home. Thank you once again for appearing on the show. We'll have you back in the future, perhaps, to talk about this in six months to see where we are at that point.  

Ron’s Questions: Segment Four
Welcome back, everybody. We're here getting a medical degree from Dr. Mary, Ruwart. And, Mary, I wanted to ask you, I've read so much conflicting information from the World Health Organization, from the CDC’s own studies, where do you come down on [face] masks? 

Ron
There seems to be a moral hazard, or a Peltzman Effect, that I've got this mask, so I'm 100% safe. And that's not the case, is it?  

Ron
Don't surgeons change their masks every hour or so? 

Ron
I assume you're a free-trader, being a libertarian, as are myself and Ed. Are you worried that China produces so many of our drugs and the ingredients that go into drugs? We hear percentages like 90% of drugs come out of China, which I know is not true, but in general, do you worry about that? 

Ron
What's your assessment of the COVID task force? Dr. Fauci, Dr. Birx, all the others. They seem to contradict themselves, overall what's your assessment?

Ron
Last time you were on [Episode #192], I didn't get a chance to ask you this. But there was that compassionate use waiver that the FDA used to give? Are you encouraged now that 38 states that allow right to try? [It’s actually national now, every state allows right to try]. 

Ron
It also amazed me that Britain got the vaccine jabs quicker than we did. Does that tell you something about its process? 

Ron
Mary, thank you so much. This has been wonderful. We really appreciate you giving us your perspective on things, you definitely know this stuff really well. So thank you. And Ed, what do we have coming up next time we meet? 

Ed
Next week we're going to have replay of our Business Lessons from A Christmas Carol, and on January 1st, we are re-running our show with the great Walter Williams. And then January 8, we'll be back with a live show with Kevin Williamson of National Review.


Bonus Content is Available As Well

Did you know that each week after our live show, Ron and Ed take to the microphone for a bonus show? Typically, this bonus show is an extension of the live show topic (sometimes even with the same guest) and a few other pieces of news, current events, or things that have caught our attention.

Click the “FANATIC” image to learn more about pricing and member benefits. 

Episode #320: Interview with Peter Robinson

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Ron and Ed welcomed Peter Robinson, host of the Hoover Institution's show Uncommon Knowledge. This show (Uncommon Knowledge) is among Ron and Ed's top listens, but it is Peter's own work about which they talked. Most famously, Peter authored the speech given by Ronald Reagan where he implored, "Mr. Gorbachev, tear down this wall!"

Ron’s Questions: Segment One
Welcome to The Soul of Enterprise: Business in the Knowledge Economy, sponsored by sage, transforming the way people think and work so that organizations can thrive. I'm Ron Baker, along with my good friend and VeraSage Institute colleague, Ed Kless. On today's show, folks, we are talking to living history. We have President Ronald Reagan's speechwriter, Peter Robinson, with us. Hey, Ed, how's it going? 

Ed Kless
Ron, I am so excited about this. I have been looking forward to this day since we booked Peter about a month ago. And even though my monitor broke today, my computer monitor, I am still happy guy. That's how good this is going to be. 

Ron Baker
I've been really excited about this since we were able to book him, but let me just read his bio. Peter Robinson is the Murdoch Distinguished Policy Fellow at the Hoover Institution, and hosts Hoover's video series program and podcast on Uncommon Knowledge. In 1979, he graduated from Dartmouth College, where he majored in English. Then he went on to study politics, philosophy, and economics at Oxford University, from which he graduated in 1982. He's also got a Stanford MBA, which we'll talk to him about. He served six years in the White House from 1982 to 1988, for both Vice President George Bush and President Ronald Reagan. He's the author of three books, two of which we'll probably focus on today. Peter Robinson, welcome to The Soul of Enterprise. 

Peter Robinson
Thank you. My pleasure. My pleasure. So far, so far.

Ron Baker 
Okay. Well, we'll see if you feel that way at the end of the hour, but we are just thrilled to have you on. I've been dying to be able to chat with you. You were born in 1957. 

Peter Robinson
Oh, stop. I know, I know. All that buttering me up. And now the knife, all right. 

Ron Baker
At 25 years old, you're in the White House. How does a kid from Vestal, New York, get to the White House at age 25? 

Peter Robinson 
On a fluke, of course. Let me see if I can compress, there's a certain amount of background you need to have to make sense of it. But I'll compress it as best I can. Graduate from high school, go to Dartmouth College, which you mentioned. And then I studied at Oxford. And then the bit that you left out, which I left out—you were reading a bio which I composed—but you've asked, so I'll tell you. After I finished my work at Oxford, I stayed there for a year to write a novel. And the novel turned out to be so bad that even I couldn't read it. So I was broke. I mean, I was really broke. I hadn't paid my final bills at Oxford. And, what was his name, the steward was Colonel somebody, I started getting very nasty letters from Colonel whatever his name was. And I was staying in a 500 year old cottage, the plumbing was 500 years old at least, I'm sure. And that cost me five pounds a week and I could barely afford that. Alright, so I wrote letters to people who I thought might be able to give me leads on a job. And the only person as I recall, certainly most people didn't reply, but Bill Buckley replied, and I can't claim to have known him well. But he always paid attention to student journalism. And I'd written a few pieces in the Dartmouth newspaper that had caught Mr. Buckley's attention as he was to me then, but he eventually became Bill. He wrote to me and said, You like politics, you like writing, go to Washington—this is 1982—and see my son, Christopher Buckley, who was then a writer for George HW Bush, the Vice President. Christopher may be able to find you a job in the still new Reagan Administration. All right. I flew back to Washington. I did present myself to Christopher. And what I didn't know, and Bill I don't think knew when he wrote the letter, Christopher announced to me that he was leaving the job in two weeks, and that his replacement had just fallen through. And he said while you're in the building, go downstairs. This is the old Executive Office Building. Go downstairs and see Tony Dolan. Tony Dolan was then the chief speechwriter to the President. And while I was talking to Tony, the campaign manager for Lou Lehrman, who was running for Governor of New York against Mario Cuomo, called to ask Tony if he could recommend a speech writer. So Tony and Christopher, good friends, conspired, and effectively what they did was put together a kind of fraternity prank. Christopher told the Bush people that he'd found the perfect replacement, me, but that they better move fast because the Lehrman campaign wanted me, and Tony told the Lehrman campaign they had to move fast, because the Vice President's office was going to hire me. Two weeks followed. The Lehrman campaign flew me to New York three times, I was in and out of the White House for interviews with the Bush staff. I got offers from both. I thought Lou Lehrman might lose in November, which was only a few months away. But George Bush at least is safe until 1984. That's two years. So for reasons of job security, I took the job with the Vice President. Did anybody ask for a writing sample? No. Did anybody ask if I had ever even written a speech? No. Both sides assumed that the other had performed the due diligence. And that was really lucky because I had never written a speech in my life. And that is how I ended up in the White House at the age of 25. And may I say? I ordinarily would wish you a large listening audience. But I'm hoping not too many people are listening right now.

Ron Baker
That's an awesome story. And then in the first year, you write over 150 speeches? 

Peter Robinson
Well, yes, but they were, let's put, let's put it this way. The volume was such that I typed most of those speeches. 

Ron Baker
Well, in your book, How Ronald Reagan Changed My Life, which came out 2003. You say the book is not a memoir, it's a primer. You document ten life lessons you learned from Reagan. I don't want to go through them all, because I want people to read the book. But his idea on the Cold War, Peter, I've heard the story a lot, that his idea was “We win, and they lose.” He had that way of taking a complex issue and making it simple. But you analyze this in a way I've never heard before. You said, “actors get used to the idea of alternative endings.” And I just thought that was brilliant.

Peter Robinson
Well, it was Reagan who was brilliant. The premise of the book, it's not a speechwriters memoir of the White House. I was so young when I got there. And this huge figure of Ronald Reagan, I was young, and there were all kinds of ways in which I took his impression. And, I was still figuring out how you did it, how you made a career, so I studied him, I really did study him. And so it was a very, very important part of his own formation, that he was a movie actor Early on in the industry. He moved to Los Angeles and got a contract as an actor in the 1930s. And in his first three years, this is in the book, I can't recall the number now, but was something like in the first three years, he made over 20 pictures. This is long before television, and they were turning out pictures. The President, I heard him say several times, “They didn't want them good. They wanted them Thursday.” He was under deadline. And it was often the case in those days, that the writers who were often a bungalow on their own working on the script, would get behind the shooting. And you get the actors and the crew on the set. And it's expensive, the clock is running. And if you don't have a script, and some of the actors were able to improvise, and Reagan had developed a reputation for being able to imagine the next, having the shot up from the script the day before. And he would he could imagine the dialogue that would come next, the action that would come next. And they could begin shooting with Reagan improvising. Alright. So and of course, when you're in that profession, in that business, you might test a movie in those days, they weren't testing all of them, but you might test a movie and the executives would say now the ending is too much of a downer, give it a new ending. And the ability just to think this, my conclusion was that Reagan developed partly because of his movie acting, he developed a really deep understanding of the sheer open-endedness of life. And so, he becomes a conservative in the 1960s, he becomes President in the 80s and throughout this period, thinking about the Cold War is calcifying, and the intellectuals have concluded—it’s a strange thing when you think about it, but nobody did think about it—the intellectuals had concluded the Kissinger/Nixon point of view that the American position was growing weaker. And that the best we could do, we were playing from a weaker and weaker hand, we'd have to make concessions. The bold stroke of the opening to China from Nixon’s and Kissinger’s point of view, we needed China. We couldn't handle the Soviets on our own anymore. And even conservatives, Jean-Francois Revel published a book in the 80s called How Democracies Perish. Whittaker Chambers, this great glowing, luminous figure among conservatives, who wrote the magnificent book Witness, he writes himself in that book, that when he left the Communist Party, to become—not to join another political party—but to become an anti-communist, he did so with the consciousness that he was leaving the winning side to join the losing side. And so, what's so strange about this is that nobody can tell you when they get up in the morning exactly what's going to happen in the course of the day. But intellectuals, even on the right, had decided they knew how the century was going to end that, that the history was moving on this. And Ronald Reagan comes along and says, “No, no, I don't see why stories can have different endings. Life is open ended. History is open ended.” I also think, I couldn't prove this, but I also suspect, when he was a kid, a high school kid, he was a lifeguard on a river there, they roped off a portion of the river, the Rock River as I recall. And over the course of several summers, he pulled, and he was proud of it, he knew the number, it was 77 people he pulled out of the water. So he prevented some 77 drownings. Well, there's something about that, you pull a floundering swimmer out of the water, and at that moment, you've changed history, you've changed that life, that person's history. And you do that 77 times, and you get the idea you can make a happy ending, you can intervene in history, you can intervene in events, and they can come out differently from the way that the currents of the river, left untouched, might take a drowning swimmer down, the currents of history that the intellectuals thought they understood. And Reagan just comes along with this Midwestern common sense. You know, I think we can handle this attitude. So that's the long answer to a very simple question. But there was something really deep in him that understood the contingency of life, the open-endedness of individual lives, but also of history itself. It's not pre-determined.

Ron Baker
It's a wonderful explanation, and I never have heard it like that before. And of course, he went on, as Margaret Thatcher said, “Ronald Reagan won the Cold War without firing a shot.” You trace that victory in the Cold War to four speeches. I'm just setting up Ed here because we're almost at our breakpoint, but… 

Peter Robinson
One answer per segment…I’ll shorten up my answers… 

Ron Baker
No, no, we'll just hold you over for our bonus episode. You give the British Parliament speech that he delivered in 1982 where he said, basically, Marxism was on the ash heap of history. And you say that's where he announced his strategy. And the Evil Empire speech in March of 83, where he made the moral case for pursuing the strategy. And then the Berlin Wall speech in 87, which of course you are responsible for writing, which pressed his advantage, and then of course, the Moscow State University speech written, I think, by your best friend, Joshua Gilder [George Gilder’s cousin], and of course that was his victory speech. 

Peter Robinson
Yeah.  

Ron Baker
Now, we want to hear the story—I know you're probably sick of telling it—but I'm sure Ed is going to ask you about the story of the Berlin Wall speech, which I think is great. So, I just set you up for that in the next segment. But unfortunately, we're up against our first break.  

Ed’s Questions: Segment Two
And we are back on The Soul of Enterprise with Peter Robinson, author of the “Mr. Gorbachev, tear down this Wall” speech. And Peter, I grew up during that time, I had graduated high school in 1984, and was in college when that speech was made. And I just have to ask you, tell us the story of how that speech came about. 

Peter Robinson
I'm happy to. Spring of 1987, April 1987, we speech writers were told that an event had been added to the President's calendar. He was already scheduled in June to visit Italy, he’s going to go to Rome to see the Pope and see the President of Italy. Then there was a Venice Economic Summit, which was going to take several days. And at the request of the West German government, the staff added a stop in West Berlin to the trip. So after Venice, he'd fly to West Berlin, as we called it in those days, West Berlin for about half a day and then fly back to Washington. Berlin was celebrating its 700th anniversary. It was celebrating its centennial anniversary. And the Queen of England had already visited. Gorbachev was going to visit and that was the point. The West German government, if the leader of the Soviet Union was going to visit East Berlin, which Gorbachev was going to do, then the [Helmut] Kohl government wanted the President of the United States to visit West Berlin. Okay. So I was told where the President would stand, that the speech would last about half an hour, and that he'd have an audience of in the range of 10,000 to 40,000 people. And given the setting, he should talk about foreign policy. Period. That was the direction I got. I flew with the American advanced team, people who are going to be making press arrangements, coordinating matters of security with the West Germans and so forth. I flew with that team to West Berlin, saw the site where the President would speak, paid a visit on the ranking American diplomat in West Berlin, got a helicopter ride over the Berlin Wall. And then that evening, broke away from the American party and got in a cab and went out to a suburb of West Berlin. Where some West Germans put on a dinner party, 15 or so people, for me. The host and hostess, and I had never met, but Dieter Elts was his name. He just died last year. Dieter just finished a career at the World Bank in Washington and retired back to Germany. We had friends in common and our Washington friend, our common friend, got in touch and said could you host Robinson so he can meet some Berliners. My problem was that when I saw the site where the President would speak, I just couldn't imagine coming up with material that would be equal to the Wall, equal to the weight of history. I stood on an observation platform in those days and looked over the Wall into East Berlin, where the buildings were decrepit, the colors seem to be leached out of the scene. Gray concrete, you could still see a great deal of World War II damage, shell marks on buildings, soldiers marching back and forth, dog runs. I just thought what, what can I write? And the ranking American diplomat reminded me that West Berlin was a left leaning city, a couple of major universities there, you know how far to the left universities are. Since West Berlin is entirely surrounded by East Germany, they're very sensitive to the subtlety and nuance required in East-West relations and so forth. So at the dinner party that evening when I was with West Berliners, I told them this. And I said, when I flew over the Wall, I can't see how you could get used to it. The ranking diplomat here [told me], “Don't make a big deal out of the Wall because they've all gotten used to it by now.” And there was silence. And I thought I committed a gaffe, just to kind of gaffe that the diplomat wanted the President to avoid. And then one man raised his arm and pointed. And he said, “My sister lives just a few kilometers in that direction. And I haven't seen her in more than 20 years. How do you think we feel about this Wall?” And then they went around the room. And every person told a story about the Wall. They hadn't gotten used to it, they'd stopped talking about it. But if you asked, they would tell you. And our hostess, Ingeborg Elts, a lovely woman, she died three or four years ago. But she became quite angry, and she said, “If this man Gorbachev is serious with this talk, Glasnost, Perestroika, he can prove it by coming here and getting rid of that Wall.” And I put that in my notebook. And I knew immediately, instantly, that if the President had heard that comment, if he'd been there, he would have responded to that. The simplicity, the decency, the power of it. And, of course, I also lunged at the line, the remark, because I was a 30 year old speechwriter in a lot of trouble. I just couldn't figure out what material, but when she said that I thought, “That's it. That's it. That's it.” So I went back to Washington and drafted a speech around this line, this idea. And Khatami, Griscom was the Director of Communications. He liked the speech. And Tony Dolan, the chief speechwriter, Tony Dolan, Tommy Griscom, and I, pulled a fast one, and persuaded the staff secretary to give the speech to the President on a Friday so he could review it that weekend at Camp David, on the ground that the President had a lot of speeches coming up, and he ought to be given a chance to get his reading in early. The invariable rule in the Reagan White House was that speeches went out to staffing before they went to the President. And we got this speech to the President first. And on the following Monday we had a meeting in the Oval Office, and we're talking about a number of speeches, Josh Gilder wrote a speech for the President to deliver to the Pope. And the President was alive. He had quite a lot of comments on that, more material he wanted to add. Then we got to my speech. And he said, “Well, that was a good draft. That's a fine speech.” I wanted more from him, we always wanted more from him. And so I said, “Mr. President, I learned when I was in West Berlin that they'll hear you on the other side of the Wall by radio, maybe even as far east, depending on weather conditions, as Moscow. Is there anything you'd like to say to the people on the Communist side of the Wall? And the President, this is one of those, I can still play this one in my mind. The President thought for a moment and he said, “Well, there's that passage about tearing down the Wall. That's what I want to say to them. That Wall has to come down.” And I was disappointed because we hadn't gotten fresh material. But that just shows what a fool I was. The speech went out to staffing. From the day it went out to staffing until the President delivered, which was about three weeks, the State Department opposed it, The National Security Council opposed it, the diplomat in Berlin opposed it. They submit draft after draft, as I recall, seven alternative drafts, different pretexts, but from each the line “tear down this Wall” was missing. Then the traveling party left for Italy, I was not part of the traveling party. So this piece, what I've told you so far is firsthand. Now I'm telling you what I heard by Tony Dolan told me the story and Ken Duberstein, the Deputy Chief of Staff. The State Department continues to object. Now they're in Italy. And Ken Duberstein decides he has no choice but to take the decision—it’s bad staffing if you have to make your principal make the same decision twice, right—so you try to resist that, that's a waste. The most precious resource in the federal government is the time of the President of the United States. But Ken decided he really had no choice. So he sat the President down in some Italian garden, he tells me, and described that the State Department said the speech was naive, it would raise false expectations, it would put Gorbachev in a tight position in the Politburo, and so forth. And he had the President reread the central passage, and then they talked about it for a while. And Ken said, and this moment came where the President got that—you guys are too young to remember this—twinkle in his eye.

And the President said, “Now, Ken I'm the President, aren't I?”

“Yes, sir. We're clear about that much.” 

“So I get to decide if that line stays in?”

“Yes, sir. It is your decision.”

“Well, then it stays in.”

As Air Force One left Venice to fly to Berlin, the fax machine clicked into action and the State Department sent in another alternative draft. And Ken said, Ken was in the limousine on the way to the Wall in West Berlin with the President, who leaned over and slapped Ken on the knee and said, “The boys at State are going to kill me for this. But it's the right thing to do.” So, that's the story of that speech. You gave me credit for the speech, which in some superficial, narrow sense, I'm grateful. And thank you. It's true, but not deeply true. The deep truth is that that speech belonged to Ronald Reagan. I'd been formed by his thinking, by his speaking style. I was in Berlin to listen for material that would appeal to him. I wrote that speech for him. I worked for Vice President George HW Bush, I knew him well, he was a magnificent man. But I would never have written that for George Bush, and George Bush would never have delivered it. When I wrote speeches for him, when he was Vice President, you'd hand him a speech on foreign policy, he'd take it and say thank you. And then look at you without even looking at the speech, he’d look at you and say, “Now you've cleared this with State, right?” And Ronald Reagan didn't actually care too much what State had to say if he disagreed. So I would never have written it for anybody else. And nobody else would have delivered that speech. That speech belongs to Ronald Reagan. 

Ed Kless 
Well, thank you for that. It's a fantastic, marvelous story. And it is really the iconic line of Reagan's presidency, which is obviously pretty intense. 

Peter Robinson
Now, see, I just gave Reagan credit, as is true. At the same time, Oh, if only I got royalties. 

Ed Kless
I mean, the T-shirts alone. We’re a little bit over but I do want to ask you this question. Do you think that had the Berlin Wall not come down 2.5 years or so after [the speech], would it still have its place? 

Peter Robinson
What, the speech? 

Ed Kless
Yeah, that line.  

Peter Robinson
Not a chance. Not a chance. When he gave that speech, it had a certain amount of impact. The Berlin press paid attention to it. It was interesting, because it was the kind of division that we've gotten used to during four years of Donald Trump. The highbrow press hated it. And the lowbrow populist press loved it. In Germany, as in this country, incidentally, The New York Times of course, huffed and puffed and denounced it. And the New York Post, as I recall, there were the more populist press in this country liked it, but it was, it was a big speech, but it was just a big speech. It disappeared after a couple of weeks. It was when the Wall came down, that the speech—I don't know how else to put it, it seemed retrospectively prophetic, if you see what I mean. That speech gets remembered because Ronald Reagan was right. He was right. You can't ease up on communism. You can't go part way, you have to take this Wall down. That's the interior dynamic of freedom. All right, so no, I don't think we would remember it at all if that Wall hadn't come down.

Ed Kless
All right, well, we are up against our next break.  

Ron’s Questions: Segment Three
Well, welcome back, everybody. We're here with Peter Robinson. And Peter, what a great story. Wow, that was chilling. Just because, like we said, it's living history. I just want to ask you really quick, you went back to Berlin for the 15th anniversary of that speech and did a Fox documentary, I believe, with Tony Snow. And then they recreated that dinner party that you had? What was it like to see East Berlin at that point?  

Peter Robinson
Of course it was good to see the people who had helped me, and in particular, Ingeborg Elts, we went back to their house, it was very good to see them. Tony Snow, the late Tony Snow, what a sweet man, and a good journalist, I do miss him, too. Tony said, “Come on. Let's go.” We finished shooting at one point, and he had been back several times. I had never been back. So what you had in my mind was this vivid image, it's still vivid. To me this is a problem. Even young Germans don't, it's almost impossible to explain what it felt like to be in West Berlin, a modern city, lights, traffic, action, people well dressed, with a wall all the way around. You could forget about it for a moment and then you'd be walking down the street, you turn and at the end of that alley, there would be a wall. All right. So Tony, and Tony had been there before. And we walked through the Brandenburg Gate, which 15 years before had been walled off. It had been on the other side of the wall. And we walked up Unter den Linden, “under the linden trees,” which you can think of it as a German version of the Champs Elysées, or the Mall in London. It was the central historic thoroughfare of Berlin, with great historic buildings, which now had been restored. It was so thrilling. I'd seen them only from a distance and they were crumbling. Now they've been restored. And Tony, Tony knew his Berlin history. And we went to, as I recall, it was the headquarters, it was either the old Soviet embassy—the Soviet Union no longer existed—or it was the headquarters of the East German Communist Party, it was some commie building. And we got there, and it was a Rolls Royce dealership. I thought that was almost too much of a triumph for capitalism, but it was just so thrilling to be in this place that had been walled off and dark. And honestly, this sounds so, I don't know, corny or hokey, but when I was there in 1987, when I looked at, stood on the observation deck, and looked into East Berlin, the only thing I can compare it to, with regard to what it may feel like was, it was as if I were Frodo getting my first glimpse into Mordor. It just felt dark. It almost felt as if there was a kind of malign presence there. It was an evil empire, to coin a term, it really did feel that way. And it was gone. It was gone.

Ron Baker
It reminds me of what Nixon said about communism. He said, “The color of communism is not red, it's gray.” Speaking of the Rolls Royce dealership, there's a communist Museum in Prague. And it tells the whole story, and it's above a McDonald's. So beautiful blending of capitalism and communism. 

Peter Robinson
Oh, and there was a moment, this has got to be available online someplace. But there's a moment after the fall of the Berlin Wall, after the fall of the Soviet Union. I think it was the back page of some expensive advertising site. I think it was the whole back page of Vanity Fair. And there's Gorbachev in the back of a limousine with a fancy suitcase or briefcase and it's an ad for Louis Vuitton. The last General Secretary of the Soviet Union with a Louis Vuitton briefcase. 

Ron Baker
Didn't he sell his birthmark to a vodka distributor? It cracked me up. On Gorbachev, I wanted to ask you this, because in the book you cite an interview that he did. And he said, he was speaking of Ronald Reagan: “He was an authentic person and a great person. If someone else had been in this place, I don't know if what happened would have happened.” Did Reagan win the Cold War? I mean, Gorbachev gets a lot of credit from the left. Where do you come down.  

Peter Robinson
Here's where I come down. This goes back to what we were talking about earlier, the contingency of history. Had someone other than Reagan, or just click through the people who might have been President in place of Reagan. Suppose Jimmy Carter had won. Suppose Bob Dole, or Howard Baker, or George HW Bush been President, had defeated Reagan in the Republican primary. I can't project from what we know about any of those men, that they would have stood up to the Soviets, and taken the heat for increasing the defense budget, cutting taxes to revive this economy, putting the Pershing missiles in place in 1983, delivering speech after speech after speech that sounded like trumpet blasts. Would any of them have done that? I can't believe it. I don't think they would have. Did Reagan win the Cold War by himself? You cannot describe the end of the Cold War without [Pope] John Paul II, or Margaret Thatcher, or indeed Mikhail Gorbachev. I think I might also add Lech Walesa and Vaclav Havel. But I do think you can say there were ten people without whom things would have been different. No Margaret Thatcher fracturing of the NATO coalition. No Ronald Reagan continuation of detente. No John Paul II, no demonstration of the illegitimacy of communism in Eastern Europe, even three decades after imposing communist regimes. No Gorbachev, it might not have ended peacefully. I wonder, I keep going back and forth, not that anybody cares about it at this stage, But how much credit does Gorbachev deserve? When really what everybody hails him for doing is behaving like a decent human being. And not calling the troops, the Red Army out of the barracks in Eastern Europe. Now, they did call out the Red Army in 1956 and put down the Hungarian uprising, they did it again, the tanks rolled into Prague in 1968. And Gorbachev could have done it. The Red Army had a massive presence throughout Eastern Europe, he could have crushed the revolutions of 1989. And he didn't. Well, alright, we should be grateful to him for that, I suppose. But what he did do is behave like a decent human being. He behaved like someone other than a communist, other than a doctrinaire communist. In any event, without Gorbachev it's hard…if Andropov had not died when he did, if Chernenko or Brezhnev were still alive, this would not have ended peacefully.

Ron Baker
And of course, Gorbachev wanted to save communism. I mean, he was a diehard believer.  

Peter Robinson
Correct. He was. The way I think of it is that Gorbachev was the last true believer, he was the last real communist. And in some ways, he was a bit of a throwback. Brezhnev, Chernenko, and Andropov, they all understood the need for the iron fist. Gorbachev was kind of strangely naive, he believed that communism itself was so appealing, that people would choose communism, even if you remove the iron fist. And of course that's nonsense. Nonsense. 

Ron Baker
Awesome. Well, Peter, I've only got about a minute with you, but you wrote a book called Snapshots from Hell: The Making of an MBA about your time at Stanford, published in 1994. As a CPA, I get a lot of questions about “Should I get a CPA or an MBA?” First thing I do is say, go get this book. I've recommended this book to so many people, I think we've both prevented a lot of MBAs as a result. You write at the end of that book: “The reader will have to check in with me again in twenty or so years to learn how my classmates and I stand.” It's been 26 years. Do you regret going to Stanford to get an MBA? Or was it a worthwhile experience? 

Peter Robinson
I have by last count, I have five classmates who are billionaires. And what I regret is not having gotten to know them much, much better as undergraduates. My business degree didn't really take, and yet at the same time, do I regret it? Actually, I don't regret it. You know, it's impossible to undo bits of your life. And here I made good friends. I made friends who are still my friends during that crazy MBA experience. An MBA is only useful for particular kinds of people. And I'm not sure I was one of those kinds of people. In fact, I'm pretty damn sure I wasn't. 

Ron Baker 
Is that what landed you at Hoover Institution? That you were out there and made connections? 

Peter Robinson 
Yes, Ronald Reagan said to me, when I was leaving the White House, in my little farewell meeting, he said, “Now, where are you going?” And I told him, “Stanford Business School.” And he said, “Well, the faculty out there is a little left-leaning. But you get in touch with my friend, Milton Friedman. And so I show up at Stanford Business School, Milton Friedman was across the street at the Hoover Institution, and I thought, how many times am I going to get an introduction from a President to a Nobel Prize winner? So I did present myself to Milton Friedman, who—I don't know if you ever knew him—he was a delight. He could be quite rough on you if he thought you were mistaken intellectually. But he was a delightful, warm, generous, wonderful man. And he kind of introduced me around Hoover. So later, I was invited to return to Hoover. I suppose that's the advantage of my MBA, that I happen to run into people across the street. I got to know people across the street at Hoover. 

Ron Baker
I met MIlton and his wife, Rose, once at a speech they gave, and we've had his son on, David Friedman, he was a delight. But unfortunately, Peter, I'm out of time and if I go anymore, Ed's going to kill me.  

Ed’s Questions: Segment Four
And we are back on The Soul of Enterprise with Peter Robinson. And Peter, it's not often that I get chills doing this show. It has happened on a couple of occasions. But your story is certainly one of them. But one of the times when I've got chills listening to one of your shows on Uncommon Knowledge was your more recent interview with Jimmy Lai. Our listeners have heard Ron and I talk about Jimmy and his experiences, and coming to Hong Kong when he was a boy and getting a bar of chocolate and it changing his life completely. What are your thoughts on the situation, both with Jimmy specifically, but also with what's going on with Hong Kong? And what maybe the US should do about it? 

Peter Robinson
Yeah. You guys can put a link up to the show, perhaps the most recent interview I did with him. So Jimmy Lai is a great figure. He is. I had to have had the feeling when I was talking to him, that in one way or another, he's the kind of man that George Washington must have been. I'm talking about a Chinese man, of course, who speaks heavily accented English. I don't mean that he had the bearing of Washington. I mean he had the courage of Washington, or St. Thomas Moore, a similar kind of person. So Jimmy Lai, a billionaire, and he has British citizenship. And he won't leave Hong Kong. He just said, “This city means everything to me, it gave me the life that I have. I'm not leaving.” When all his, I shouldn't say all his friends, but I know many of his American friends, and they're just desperate for him to get out of there. Which would be easy for him to do. He's one of these rich Chinese who has houses in other places. He will not leave. And so in the last interview, which I did this past summer, I said, “Well, Jimmy, what? They've detained you a couple of times already, this is not going well.” And he said, and he referred to his faith—he’s a convert to Catholicism, so he's a Christian—and he said, “Well, it could be that this is what is. This is what I need for the good of my soul. Maybe I need to go to prison. Maybe I need to suffer for the good of my soul.” Unbelievable for a man to say that. And now of course they've carted him off. He is in prison. What do I think about Hong Kong? I don't know what kind of trades or sanctions might be useful. I was persuaded by Jimmy, whom I interviewed maybe a year ago, and then I interviewed him again this past summer. But a year ago, he made the argument that the mainland Chinese, the communist Chinese, were going to leave Hong Kong alone because they needed it too badly. Something like 60% of foreign investment flowing into China flows through Hong Kong, because investors from Europe and this country want to be able to understand that they've got the rule of law on their side, they'll be able to remove their profits, and so forth. And so the Chinese need Hong Kong, and they'll be very careful, any moves will be incremental. And that was just wrong. I don't believe the analysis was incorrect. As far as I can tell, the Chinese are going to damage themselves. But the horrible power dynamic that seems to power communism, and it seems to be driving them, they can't take dissent. They can't handle that. They can't handle the truth. They can't permit the truth. So I just remember that I did an interview with Nathan Sharansky, who was a refusenik in the Soviet Union. And why did the Soviets, that he said he tried until he was 20, or 21, to be a good Soviet citizen. And here's what it meant. It meant that you said what you knew they wanted to hear. You read the books that they permitted you to read, you lead your life the way you knew they wanted you to lead your life. And at the same time, you knew that it was all a lie. So the question is, why do they insist on this? And the answer is because they need a humiliated, broken population. And the Chinese seem to have fallen into the same, so this to me, one thing that we're finding out here—you might want at some point, you might want to invite Stephen Kotkin on the show, Stephen Kotkin is the Princeton historian. He's working on the third and final volume of what will surely be the definitive biography of Stalin. Stephen came out here to Berkeley, and he began visiting the Hoover Institution as a young graduate student. So we're talking about a man who's 60ish now. So for four decades Stephen has been poring over the archives of the Soviet Union and communist documents, at Hoover and other places, it started at Hoover. He probably knows more, and has read more archives, meetings, notes on meetings from the Politburo and  and so forth, than any person alive, including Russians. And I once said to him, “Stephen, what's the central finding? What's the one thing that you learn from poring over those archives?” and Steven replied immediately, “That they were communists. They were communists, they really believed it. And even when they had nothing to prove to each other, even when they were in private conversation with each other, the members of the Politburo talk like communists, they used Marxist-Leninist terms, they use that kind of analysis.” And as far as I can tell, for some years now, we in the United States have permitted ourselves to believe that the people running China aren't really communists, they don't really believe that stuff. What they believe in is markets and economic growth. And what that means is that eventually they'll move in our direction politically as well. They'll permit greater political freedoms. They're communists, that's what we're finding out now. They really are communists.

Ed Kless
One minute left, and a totally unfair question to wrap it up. What would Reagan do? 

Peter Robinson
Tell the truth. He would tell the truth. I think that's what I'm struck by every speech you give. Someone said, well, did the Berlin Wall speech make any difference? The answer is, I don't know. It's really hard to say. But think of a speech that we know is a great speech. Take the Gettysburg Address. Did it make any difference? Beats me, you can't prove it, right? You can't say GDP ticked up, you can't prove it. Every speech, even big speeches, it's a message in a bottle. You give a speech, and you hope that human beings hear it and respond in some way. And so what I learned from Ronald Reagan is that even when you're President of the United States, and you seem to command the attention of all the media, giving a speech is an act of faith. It's an act of hope. And in dealing with the Soviets in those days, you just didn't. But he did it all the same he, and John Paul II, and Margaret Thatcher, you tell the truth. Why? Because it's the truth. And so that's what Reagan would do. He would tell the Chinese what they were like, he would tell them what they were. 

Ed Kless
Peter Robinson, thank you so much for appearing on The Soul of Enterprise. We hope you come back. I got through like only a short portion of the questions that I wanted to ask you. Thanks so much.


Bonus Content is Available As Well

Did you know that each week after our live show, Ron and Ed take to the microphone for a bonus show? Typically, this bonus show is an extension of the live show topic (sometimes even with the same guest) and a few other pieces of news, current events, or things that have caught our attention.

Click the “FANATIC” image to learn more about pricing and member benefits. 

This week was Bonus episode 320 - “Post-Peter, ACO Merch, and Fascism”. Here are some of the links we discussed:

Episode 319 - Interview with Robbie Kellman Baxter

robbie kellman baxter.jpg

This past week Ron and Ed welcomed Robbie Kellman Baxter, author of The Forever Transaction. We talked about, of course, SUBSCRIPTIONS! Robbie's customers include Netflix, the National Restaurant Association, and The Mail Newspapers in the UK, as well as dozens of Silicon Valley SaaS and consumer subscription companies.

A Bit More About Robbie
Robbie Kellman Baxter is best known as the creator of the popular business concept Membership Economy. She is the founder of Peninsula Strategies LLC, a management consulting firm, as well as the author of the bestselling book, "The Membership Economy: Find Your Superusers, Master the Forever Transaction & Build Recurring Revenue" . She coined the popular business term “Membership Economy", which is now being used by organizations and journalists around the country and beyond. Before starting Peninsula Strategies in 2001, Robbie served as a New York City Urban Fellow, a consultant at Booz Allen & Hamilton, and a Silicon Valley product marketer. She has an AB from Harvard College and an MBA from the Stanford Graduate School of Business.

Ed’s Questions: First Segment

Welcome to The Soul of Enterprise: Business in the Knowledge Economy, sponsored by Sage, transforming the way people think and work so their organizations can thrive. I’m Ed Kless with my friend and co-host, Ron Baker, and folks on today's show, we are thrilled to have with us Robbie Kellman Baxter. Hey, Ron, how's it going?

Ron: Good, Ed. I'm looking forward to this. I've read Robbie's books this year, so I've been marinating in her ideas.

Ed: Locked and loaded for today. I'm sure so let me let me bring her on. First. We'll get the Bio out of the way. Robby Kellman Baxter is a strategy consultant helping companies develop and optimize membership models and subscription pricing, has deep expertise in subscription-based and SAAS models, and the membership economy. She brings over 20 years of strategy, consulting and marketing expertise to Peninsula Strategies, her strategy consulting firm, focused on helping companies leverage the subscription model, the digital economy, and freemium, to build deeper relationships with customers. She is the author of The Membership Economy: Find Your Super Users, Master the Forever Transaction, and Build Recurring Revenue, 2015 [and, The Forever Transaction: How to Build a Subscription Model So Compelling, Your Customers Will Never Want to Leave, March 2020. Robbie coined the term “membership economy” and it is now being used by organizations and journalists around the world. Thanks so much for being with us today Robbie Kellman Baxter.

  • Let's start out with the basics. What's the membership economy?

  • So talk about that difference in your mind. What is the difference between having members versus just having customers?

  • I was reminded when I started hearing the term, there was a commercial, I believe in the 70s and 80s, for American Express, and the tagline was “membership has its privileges.” I'm sure you recall that. And that came to mind. And I think that's a great thing to keep in mind, right? Is, what are the privileges that you're developing? And you call it the difference between having the membership as a product versus membership as the mindset?

  • It is really loaded, but it's a good word. I think it's an important word. One of the things that Ron and I have talked about for years and years and years is that in order to make any change inside your organization, as Werner Earhart says, all transformation, all change is linguistic. So the language you use is very important. And it was funny, because earlier today I was talking to somebody who has a membership organization. And we came to this very same conclusion: you're treating your membership as a product, not as this notion of a relationship. And have you seen, I'm gonna kind of go sideways on this, Ryan Hamilton's appearance on the Stephen Colbert show, where he talks about trying to cancel his cancel his gym membership.

  • He's got a great line in the routine where he says “If you have to write a letter to cancel something in 2020, you're being bullied.”

  • And he said at the end, he says, “I actually had to walk by the gym to go to the CVS to buy the envelopes. But isn't that interesting, the other example that I've heard you use, Ron and I have used it, the Hotel California, the worst membership experience of all of our lives, especially if you grew up in the 70s, was the Columbia House Records, which was literally the Hotel California because I bought the Eagles album.

  • And they wouldn't let me, they kept sending me stuff. And, it's so funny that I think we've had to make this adjustment; they had some really good ideas. But what is it that we can do to adapt some of those great ideas that Columbia House and other places had, but make them with the Cancel button front and center?

  • It's horrible. So, is subscription membership a pricing tactic? Or is it a strategy?

  • So I’m curious, do you use the subscription membership model for all of your pricing? Like in the work that you do, I noticed that you do consulting, you obviously do coaching, which I would imagine is subscription?

  • The industry that I can come from, which is Sage, the organization that I work for. We sell accounting software. And this is one of the big conversations inside the organizations right now who used to sell what we call on-premises software, and then have now moved to Software as a Service. The software is now priced on subscription, but their services are not. And there is similar to your thing, a big-bang upfront, with this kind of ongoing thing. That said, I'm trying to coach my people to get past that and really look to see if there is a way that you can make this subscription and take the loss leader of the big-bang up front? So what are some of your thoughts on that?

  • I think that's very true, especially in the industry that I'm talking about, because nobody changes their accounting system because they think it would be fun, right? Hey, let's do this, that would be fun. We know that they're doing it because they're in a world of hurt someplace, like their current system is significantly deficient in some way. Because really, with accounting systems, and I hate to say this as someone who works for a company that does this, debits equal credits, all systems, ultimately is what those things can do. We are already up to our first break.

Ron’s Questions: Segment Two

  • Welcome back, everybody. We're here with Robbie Kellman Baxter, the author of The Membership Economy and The Forever Transaction. Robbie, on your Membership Economy book, you talk about the move from customer service to customer success. There seems to be a customer success department in a lot of subscription-based businesses. You also talk about how membership is an attitude, whereas subscription is more like a financial arrangement. Because with a membership, you're committed until you cancel, right? I mean, you have to actively break up to cancel. And Ed and I think about this in terms of “choice architecture,” and psychology. There's just something deeply different, whether you call it membership or subscription, about joining something, versus just entering into a transaction.

  • The peace of mind. And the convenience, like you say, I think they're completely undervalued. I'm a recovering CPA, and I work in the accounting, legal, advertising space with professional firms. And I'm trying to get them to move to this. And I realize that you're talking about this in the book, this all you can eat option, but like concierge doctors, or direct primary care doctors, I do think these firms could set up, hey, whatever you need, you're covered. Anything we’re capable of doing under our roof, you are covered. If you get audited, you know just like a doctor, whatever you need, stitches, broken leg, whatever, they'll do it, you're covered, and that just swaddles the customer in this peace of mind and convenience that they will pay dearly for.

  • We talked about, and I know you’ve spoke already at the Professional Pricing Society, Ed and I are faculty members there. So we've been teaching value pricing for years, and value pricing was all about, and you say this in one of the books, pricing the customer—it’s the airline model, your pricing each customer, not the seats. The customer, whether they are business or leisure, when did they buy their ticket, all those types of factors. And in the subscription model, what's different is your pricing the relationship. I think about the Porsche Drive program, I'm not subscribing to a car, I'm subscribing to Porsche. That's a big, big difference isn’t it?

  • And 80% of the Porsche Passport members are new to the brand, which is phenomenal. They did rebrand it, by the way. It's Porsche Drive, not passport. I'm bummed because I thought Passport was great marketing. One objection we get from firms, and I'm sure you hear this all the time, is what about that one-off service? You know, I think you call them Ala carte services? And I'm like, Okay, well, you could carve out and price that separately. But if you're constantly doing that, why can't you just bake it into the model?

  • That's just one of the main disadvantages of value pricing, pricing the customer. And at Professional Pricing Society, for a long time, we thought that that was the trend, you're going to have individual prices for each customer. But the membership economy kind of blows that up and says no, no, make it transparent. Make it Netflix, and just let people use what they need. They're not going to abuse it, maybe 2% might use 20% of your resources, but you can price for that. You can actuarially price the portfolio. That's the other thing I love about this model and spread that risk amongst all of your customers.

  • You said something about the airlines that I just love, you said that they're an excellent example of an electric fence rather than a magnet. I love that. Do you think with the airlines, will we see any major carriers like United move to a subscription option, where you just pay them 50 grand a year and they fly you anywhere you need to go?

  • Do you think they should?

  • We've got less than a minute, Robbie, but just real quick, do you think this is easier to do for a company that's really focused? I mean, I'm thinking the difference between Coke and Pepsi. Pepsi is involved in food, and fast food, and all this stuff. But Coke just does beverages? It's much easier if you're focused, isn't it?

  • It's easier to put guardrails and it's easier to bake in those ala carte one-offs, all of that type of thing. Well, this is great. There's so much more I want to ask you about these books, because I really enjoyed both of them. I think they're both really great, very thought provoking pieces of work. So congratulations, and I know that The Forever Transaction came out this year, right? I think this is cutting edge. This is bleeding edge stuff. And that's, that's how we know it's a great idea. It scares people, right? Anytime you're out there scaring people, you know you've got a great idea.  

Ed’s Questions: Segment Three

  • We are back with Robbie Kellman Baxter, author of The Membership Economy and The Forever Transaction. Robbie, I wanted to ask you about something that you said during an interview with Singularity University. You said, “In order to move to a subscription model, the company needs to have developed a competency in innovation.” And first of all, interesting verb tense. So that needs to have developed a competence in innovation, so is an innovative thinking style a prerequisite to the membership economy?

  • That's hysterical. One of the things I want to ask you about is, I know you've done some work with Netflix, and they are very tied into the fact that they have one choice. It's this, here's your choice, this is what you do. But I know that a lot of folks are saying, and when we teach value pricing, we have always talked about giving at least three choices to the customer. What is your thought with regard to subscription in regard to offering choices? And also, what have you learned about creating what we call fences between those choices, to make them optimized?

  • And what has been helpful with regard to more than one choice, about creating clear differentiation between those choices. One of the things that I see oftentimes is people don't have enough distinction between those choices, and I’m wondering if you had any thoughts or insights on that?

  • You brought up the all you can eat. In the Brazilian steak house, I'm always a fan of that the salad bar and the bread that they give you, which is absolutely delicious, that's just a diversionary tactic to get you not to have the meat. So avoid that. Don't let them distract you. I wanted to ask you about something that Tien Tzuo has written recently about, the author of the book Subscribed. He says that freemium is dead, and long live the free trial. Do you have any thoughts on that? Or, if you have that mindset now? Or are you still, freemium still has its place?

  • That's a great answer, and a great example. I love the way that you give the example of the meat, and all that, that was perfect. So I had a question. You talk a lot in your courses about ethics and trust being an important thing. And I'm going to put you on the spot here a little, I think. What about the ethics of the subscription model for, say, a pharmaceutical company? Should we be able to subscribe to say, Moderna, for early access to future vaccines?

  • Yes, I did. I only have one more minute with you. So I figured I had to go.

  • Sure. And the argument on the other side would be, is that if people are on a subscription, they're helping to fund future vaccine development.

  • I think that from the ethical side, my argument would be, well yeah I get early access, but I helped fund the development of the vaccine. Anyway, great answer. I know that was a sharp left, but I do really appreciate that. Yeah, it's a lot of fun to think about all of these different models.  

Ron’s Questions: Fourth Segment

  • Welcome back, everybody. We're here with Robbie Kellman, Baxter, author of The Forever Transaction. And Robbie, you wrote something in here that I absolutely love and I find very incredibly thought provoking, especially for one of our VeraSage colleagues, Tim Williams, who works in the marketing and advertising space, as a consultant. You say a forever promise is different from a brand promise. How so?

  • It goes all the way back to the relationship, doesn't it, there's just something about putting the relationship at the center of the business. And I know you talk about this as being more than just a pricing model. It is a business model change. I'm kind of a student of business models. And I've learned two things about them. At least two things change when there's a new business model, the pricing strategy changes, you know, we go from buying CDs to buying 99¢ cents a song, and now we're subscribing, right? But the other change that always happens, and I can't find a single solitary exception to this, maybe you know one. But the other thing that changes is your dashboard. Your KPIs are completely different. Airbnb has a different dashboard than hotels, and Uber has different dashboard then taxicab companies. And you say, some companies think of themselves as product companies, we all say we're customer based and relationship based. But our measurements don't reflect it. Our measurements track transactions. So how important is changing those measurements internally?

  • I think a lot of even a lot of accountants don't understand the income statement for subscription business with that rolling forward of the annual recurring revenue, and the calculation of customer lifetime value, and all of those things. This is all new, and GAAP doesn't deal with this very well. And so a lot of companies need some help thinking about the metrics, because we're so used to that transactional mindset.

  • We interviewed Joseph Pine, he's the author of The Experience Economy [Episode #34], and his highest level of value is the transformation. And I just think this fits so beautifully with having a business model that puts the relationship at the center, because when you provide customers with transformations, the customer is the product.

  • What's higher than actually transforming the customer from where they are to where they want to be. You know, we try and keep track of every subscription based business, as I'm sure you do, and you probably do a better job than we do. It's inundating just how many things you can subscribe to, all sorts of things now. Has there been something recently that's really excited you or impressed you? I mean, I see Rome, where you can subscribe to houses, you can subscribe to a boat now from Brunswick with sailing lessons from a captain, and all this kind of stuff. Is there anything out there that you see that's really novel and new?

  • You have also started thinking about the Internet of Things. That's going to be just an effervescence of all this, isn't it?

  • The other thing you point out, and I love this, that many companies prioritize acquisition over retention. But that's a misplaced mindset. And we see this all the time, your cable company gives somebody six months free, and you've been a member for 15 years, and they give you nothing. How do you coach your people through that?

  • Awesome. Well, Robbie, this is great. Any new books in the works?

  • That's going to be in my feed. So I look forward to that.

  • Thank you so much, Robbie. This has been fantastic. We knew it would be, and congratulations on the books. They're really, really good, and we recommend them highly. So, Ed, what do we have coming up next week.

Ed Kless: Next week, Ron, we have Peter Robinson, host of Uncommon Knowledge.

Ron Baker: My hero, and the author of Ronald Reagan's “Mr. Gorbachev, tear down this wall” speech. I’m really looking forward to that. See you in 167 hours.


Bonus Content is Available As Well

Did you know that each week after our live show, Ron and Ed take to the microphone for a bonus show? Typically, this bonus show is an extension of the live show topic (sometimes even with the same guest) and a few other pieces of news, current events, or things that have caught our attention.

Click the “FANATIC” image to learn more about pricing and member benefits. 

This week was Bonus episode 319 - “The C-19 vaccine and the FDA”. Here are some of the links we discussed:

Episode Reprise — Scroogenomics: Why You Shouldn’t Buy Presents for the Holidays

[Editor’s Note: Some things are just too good not to share again. While our most ardent listeners are familiar with Episode #22, Scroogenomics, many may not be familiar with this specific show. This past Friday was Black Friday in the United States which means it’s time - once again - to talk about why you shouldn’t buy presents. Bah, humbug!!!]

On Black Friday, and right before Cyber Monday—the biggest shopping days of the year—Ed and Ron thought it would be fun to discuss the interesting, funny, and thought-provoking book by Joel Waldfogel: Scroogenomics: Why You Shouldn’t Buy Presents for the Holidays.

The author makes the case that the deadweight loss to the economy from gift giving, in 2007, totaled $12 billion, out of approximately $66.5 Billion spent (about 12%). Citizens Against Government Waste would classify Christmas as a wasteful government program.

Gift giving severs link between buying decision and item’s value to its user—the transaction actually destroys value. To add insult to injury, we are obliged to pretend to be grateful!

His complaint is not the level of spending or the consumption, but the waste.

We discussed the four ways you can spend money in the economy:

 

Former Congressman Dick Armey pointed out how difficult spending is in Category II (Gift), let alone Category IV (Government):

Every year, I worry and fret select the right birthday gift for my wife, Susan. Every year, try as I might, I manage to choose the wrong thing. If I can’t figure the needs and desires of the one person who is closest to me in the world and who I deeply love and care for, how can we expect the government to do a better job?

Three groups spend other people’s money: children, thieves, politicians. All three need parental supervision.

Hierarchy of value of gift giving

  • Aunts & uncles & grandparents = 75%

  • Parents = 97%

  • Friends =91%

  • Siblings =99%

  • Significant others = 102%

Further, we spend approximately 2.8 billion hours shopping in December. To put that number in context, the old USSR—before it imploded—spent 35 billion hours annually standing in line for everyday products and services.

Infographic from Deloitte’s 2018 annual holiday survey

Economist Ian Ayres said this about Waldfogel’s book:

Joel Waldfogel is one of the smartest and funniest economists on the planet. I think of him every time I start to unwrap a present. Buy Scroogenomics for your friends and family. It makes the perfect Christmas gift.

Episode #318 - Fourth interview with Father Robert Sirico

father robert sirico.jpg

Ron and Ed were thrilled to have one of their favorite guests back on the show, Fr. Robert Sirico of The Acton Institute. He along with Rabbi Lapin inspired the name of our show. Among the topics we discussed were an update on the situation in Hong Kong especially Jimmy Lai, The Economy of Francesco, and the new papal encyclical Fratelli Tutti.

A Bit More About Fr. Sirico
Rev. Robert A. Sirico is the president and co-founder of the Acton Institute and the pastor of Sacred Heart of Jesus Parish, both in Grand Rapids, MI. A regular writer and commentator on religious, political, economic, and social issues, Rev. Sirico's contributions have been carried by the New York Times, the Wall Street Journal, Forbes, the Washington Times, CNN, ABC, CBS, NPR, and the BBC, among others. In his recent book Defending the Free Market: The Moral Case for a Free Economy, Rev. Sirico shows how a free economy is not only the best way to meet society's material needs but also the surest protection of human dignity against government encroachment.

Segment One: Ed’s Questions
Here's some good news, Father Sirico is ready to join us. Let me see if I can get him here and jump right in. Well welcome! We are live and on the air; we started without you father.

Fr. Robert Sirico 
They never do that at Mass. 

Ed Kless 
That's true. No matter what you go on, because three weeks ago, our my pianist didn't show up. And I had to do acapella, Father, as the cantor. 

Fr. Robert Sirico 
That was fun. I've done that on my own. 

Ed Kless 

  • It's great to be with you. For those of you who are joining us, Father Sirico has been on three-and-a-half times, because one time he was on with Rabbi Lapin [Episode #226], and you should know Father, we told him that he was now one up on you and he was very happy about that. 

  • If you want to hear father's bio, we'll print it in the show notes. But let's get right to the topics at hand. Ron and I are both following the story of Jimmy Lai in Hong Kong with much interest, and I know you happen to be personal friends with him as well. I know you interviewed him recently when you had an Acton Institute event. What's the latest Father, what's going on?

  • Absolutely. He’s a hero of mine, and Ron's as well. And we have Peter Robinson coming on in a couple of weeks [December 11th]. And Ron and I were both moved by Peter Robinson's interview with him as well. At the end of the interview he asks him, “Why don't you just leave, Jimmy? Why don't you just leave?”

  • Yes. And his family seems to have rallied around him as well and says we're with you. It's a very, very moving story. 

  • Well, I've only got about 90 seconds or so left with you in in this segment, and in my next segment I want to talk more about the papal encyclical, but one of the things in the interview that you did with Acton Institute, you talked about how the pope refused an audience with the cardinal from China? I had not heard that.

  • That's astounding. It is very sad. And as I said, we'll get back and talk a little bit about Fratelli Tutti – TL;DR in the next segment but unfortunately we're against our first commercial break.

Segment Two: Ron’s Questions

  • Welcome back, everybody. We're honored to be here for the fourth time with Father Robert Sirico. Father, I want to get back to Jimmy Lai with you, but before that, how have you been holding up under COVID? I know you've got your church and you run a school too, right? How's that been going?

  • Excellent. Well, you soon will have a vaccine, hopefully. 

  • Yes, it is a triumph of free markets, isn't it?

  • I'm here in California, Father, so you could imagine.

  • We can't have Thanksgiving, without a mask and we're not supposed to sing, it's just crazy, really is. I heard you the Acton Line podcast several times. And by the way, great podcast, I'm really enjoying it. I heard you talk about the school. And I'd never heard you tell that story before. But you really grew that school, didn't you?

  • That's incredible. What grades?

  • And Father, back to Jimmy Lai, in the last two minutes that I have in this segment with you. What should we do, but what can we do, about the situation other than perhaps offering Hong Kong residents citizenship [in the USA] like Great Britain and Australia?

  • I would love to see that. I just don't know if we have the political will to stand up to China. I mean, our companies are caving under their pressure, the NBA, Disney, the movies, we just don't seem to do anything.

  • Yes, I couldn't agree more. Well, Father, this has been great. We're up against our next break.

Segment Three: Ed’s Questions

  • We are back for the fourth time with our friend, Father Robert Sirico, from the Acton Institute. And Father, I want to talk to you about the papal encyclical Fratelli Tutti – TL;DR. But first, I have a question for you about last week's Gospel. I hope that if you feel your ears burning on Saturday, about five o'clock, it's because I'm thinking of you when I'm hearing a Gospel: “I wonder what Father's Sirico would think of this one,” because I know you are writing a book on the Parables. And last week, there was the Parable of the of the talents, one of the most well-known and beloved stories. I love this time of year just before Lent, especially with Matthew's Gospel, we get we get a run of them. And so this is the line that struck me: Should you not then not have put my money in the bank so that it could have gotten back with interest on my return? And what came into my mind was, there were banks? I thought banking as an institution came later? I’m sure the word “bank” wasn’t around?

  • I thought that was interesting. I guess it wouldn't have the same ring if he said, “Could you not have put my money with the loan sharks to earn interest?”

  • The encyclical issued by Pope Francis in early October [Fratelli Tutti – TL;DR]. And as a lay person who has slogged their way through it. And it was a slog. It was all over the place. And quite frankly, I'm used to a language in encyclicals that, even if I don't agree with it, is inspiring, is helpful. This just seemed to be a mishmash of like terms that the Holy Father just kind of threw out at us, with no real cohesiveness about it. Did I miss something?

  • Along those lines, it’s interesting that you bring that up. And by the way, I thought throughout reading the whole thing, I was saying “hashtag straw man, hashtag straw man.” We had Gary Hamel on recently who's written a book called Humanocracy [Episode #313], which is about getting rid of bureaucracy in business institutions and replacing it with humans. The institutions should be as human as the people who are in them, is his argument.

  • I mentioned Sage is the company that I work for, and the coming together that we have seen as a community, and I've been a 17-year remote employee with this organization. So I've never really been fully kicked in. I've always worked from home. But the coming together of the community that has happened inside this organization has been phenomenal. And I hear that over and over and over again from other people in business that they were missing the fact that their company was not a replacement for the family, but another institution that they could rely on, and I think that most people miss that about the places where they work. And in a way, I'm glad we've had the opportunity to experience that.

  • Along those lines on the institution, one of the things that struck me, and I hope I have this wrong, and I need to reread Fratelli Tutti again, but it almost struck me that Pope Francis has almost a lack of faith in the Church as an institution. Now he doesn't call for social programs, I get that. But he doesn't seem to say what he does want? He just doesn't seem to position that the Church could be the answer here.

  • I agree. I, I may have mentioned this to you in a previous conversation we have had, but I have a friend who has passed away, a libertarian, who wrote this fantastic song, a country song. It was called “Let's get Caesar involved.” And what he did was he took a couple of the Parables and it tells them in a country music way. And the response from Jesus in this this song is, well, sorry, we’ve got to get Caesar involved, and one of them is the Good Samaritan. It's hysterical because his point is good. The Good Samaritan didn't say, “Oh, there's a social program available for you.”

  • Anyway, we're up against our last break, Father. I could, as you well know, have talked your ear off at some events here in Dallas, and we missed you this year. Hopefully we'll be able to get back to normal on this.

Segment Four: Ron’s Questions

  • Welcome back, everybody. We're here with Father Sirico. Father, we're coming off a political election that looks like it's been settled. I guess my question is, do you think character is destiny? We used to have a certain standard for politicians about character and morality. And then of course, we’ve got the current person that's in there, do you think character will return? Or will it just be this pragmatic, transactional relationship with our politicians, as long as they do a few things that I like, or several things that I like, I don't care about their character. Where's character fit in, in all this?

  • I can't even imagine that.

  • Do you think we'll survive it? Adam Smith, didn't he say “there's a lot of ruin in a nation?” Do you think we will survive?

  • Michael Novak, who I absolutely loved, though I never got to meet him or even talk to him. But I know you knew him, he was just a wonderful thinker. He said something in one of his books that envy destroys civilizations throughout history. And when you think about all the talk about inequality, Piketty, and all these other people, they rarely mention poverty, but they talk a lot about inequality. Is inequality just disguised envy?

  • It's one of the seven deadly sins, right?

  • Father, I'd be remiss if I didn't ask you how your brother is doing, Tony. Has he been in anything we might have seen? I know he was in the Sopranos.

  • Beautiful. Last time we had you on you. You said here that you were working on a book on the parables. But you also had mentioned two other books you were working on, one hundred and one questions, and then your memoir.

  • Excellent. Well, Father, we'll have you back on. Thank you so much for appearing on The Soul of Enterprise. It’s always such a privilege to be able to talk to you.


Bonus Content is Available As Well

Did you know that each week after our live show, Ron and Ed take to the microphone for a bonus show? Typically, this bonus show is an extension of the live show topic (sometimes even with the same guest) and a few other pieces of news, current events, or things that have caught our attention.

Click the “FANATIC” image to learn more about pricing and member benefits. 

This week was Bonus episode 318 - “C-19-alifornia”. Here are some of the links we discussed:

Episode #317: Subscription Economy Update

317 10.42.20 AM.png

After the plethora of interviews these past few months, Ron and Ed return to their examination of the subscription economy. They looked at new subscription offerings they have collected including some in professional firms as well as the overall state of subscriptions in the face of C-19.

Subscription Economy Update

  • Ron’s sees his recent webinar audience moving beyond the “how to” questions about the subscription economy. These ideas are resonating.

  • Ed ran a CPE webinar called “Sell your brain, not your time” and the questions were more about the implementation of subscription pricing as opposed to a defensive posturing.

  • People are starting to go beyond the three choices for subscription. It starts to get confusing around 5 and you’ve lost them at 6 or 7. There is a propensity towards moving towards 3 subscription prices but with a toggle like annual vs monthly.

  • You can’t have a $50,000 a year customer and a $500 a year customer at the same time. This is obvious with subscription pricing but, honestly, you shouldn’t do it anyway!

  • A lot of the questions implicitly imply that their firms don’t have anything of value in which to compete. But how do they compete now? If you have customers now, you obviously have a value proposition. You just need to tease out the value proposition.

  • Jody Grunden, Summit CPA, removed growth constraints with a subscription model. He grew the firm from $600,000 in revenue in 2004 to $7,000,000 today! https://www.thesoulofenterprise.com/tsoe/subscription-pricing-summit-cpa

  • Can you have value pricing 1.0 (pricing the customer) and value pricing 2.0 (pricing the relationship) in the same firm? Ron’s long term answer is no. So is Ed’s. Maybe you can have one-offs, but the ultimate goal is to have a relationship with the customer, not a transactional relationship.

  • Areas of specialization in larger firms provide an opportunity for various subscription offerings. The Apple One service is a great model for professional firms to leverage.

  • Recidivist guest Rabbi Daniel Lapin has a subscription pricing option now at WeHappyWarriors.com

  • Tien Tzuo has been talking about freemium vs free trial in his newsletter: When it comes to freemium vs trial there is a clear winner. It’s a free trial. Freemium users have not bought into the value of your services.

  • Something that feels obvious but needs to be said: Psychology and behavioral economics play a big role in subscription pricing. 

  • A question to ponder: Would you subscribe to a pharmaceutical company? Yes, and we may start to see experiments in this area.

  • Americans tend to underestimate their subscription spend by 1/3rd according to a new study by The Atlantic

  • Tien Tzuo has also been writing about how “every day is prime day”. Here is the full post: https://medium.com/@tientzuo/every-day-is-prime-day-2322a6867d0

  • Unbundling of the automobile: https://medium.com/@tientzuo/the-unbundling-of-the-automobile-8a43bad390d3


Bonus Content is Available As Well

Did you know that each week after our live show, Ron and Ed take to the microphone for a bonus show? Typically, this bonus show is an extension of the live show topic (sometimes even with the same guest) and a few other pieces of news, current events, or things that have caught our attention.

Click the “FANATIC” image to learn more about pricing and member benefits. 

This week was Bonus episode 317 - “Non-POTUS election results”. Here are some of the links we discussed:

Episode #316: Interview with Jay Nordlinger

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As expected, the timing from Ron and Ed could not be better for this post-election episode. Thank you to Jay for being a wonderful guest!

A Bit More About Jay Nordlinger:
Jay Nordlinger is a senior editor of National Review and a book fellow of the National Review Institute. He writes about a variety of subjects, including politics, foreign affairs, and the arts. He is music critic for The New Criterion. Since 2002, he has hosted a series of public interviews at the Salzburg Festival. For the National Review website, he writes a column called “Impromptus.” With Mona Charen, he hosts the Need to Know podcast, and he also hosts a podcast called “Q&A.” In 2011, he filmed The Human Parade, with Jay Nordlinger, a TV series bringing hour-long interviews with various personalities. His latest book is Children of Monsters: An Inquiry into the Sons and Daughters of Dictators. He is also the author of Peace, They Say, a history of the Nobel Peace Prize. Some 100 pieces are gathered in Here, There & Everywhere: Collected Writings of Jay Nordlinger. A native Michigander, Nordlinger lives in New York.

Ed’s Questions: Segment One

  • Ron, I remember sending you an email and saying who would you like to have on the Friday after Election day and you said Jay Nordlinger. And I said, well go after him. And you got it. And here he is. Welcome, Jay.

  • Jay Nordlinger : I'm so easy, guys. If only you’d have known. I'm delighted and flattered to be here with you. And I love that Reagan quote. It reminds me, I believe, Warren Brookes, the great Warren Brookes, wrote a book called The Economy in Mind, right? It was wonderful to hear Reagan's voice.

  • Ed Kless: Believe it or not, in order to make that quote work in the segment with the music, I actually had to edit out his name because Reagan actually does mention it in the speech. Let's do the quick bio, so we can dispense with that and get right to it. Jay Nordlinger is a senior editor and a fellow at the National Review Institute. He writes about a variety of subjects including politics, foreign affairs, and the arts. He is the music critic for the New Criterion, and for National Review’s he writes a column called impromptus, and hosts a podcast called Need to Know with Mona Charan, and he also hosts a podcast called Q&A. His latest book, which Ron is going to talk to him about, is Children of Monsters: An Inquiry into the Sons and Daughters of Dictators. Officially welcome to The Soul of Enterprise Jay Nordlinger. What the hell happened this week? What's going on?

  • They will probably write opera about this at some point in the future, won't they?

  • Well, I'm thinking of yet another retelling of Romeo and Juliet with the Dems and the Repubs or whatever. Not many people know this, but the reason for Romeo not making the rendezvous with the person passing the message on to Juliet was because he got stuck in a quarantine. So it's perfect.

  • I was listening to John McWhorter’s podcast, Lexicon Valley. I don't know if you get a chance to listen to that? And he did a whole show on the word “why.” And one of the examples that he brings up is the “wherefore art thou, Romeo?” She he was not asking where he was. He was right there. It meant, Why are you a Montague? That was really the rationale behind it. Anyway, let's get back to this crazy election story. Is it best to describe you as an anti-Trumper? I know you're not a never-Trumper but sort of anti-Trump, but you really felt the office was far above him, he really should not have ever even been ascended to the presidency?

  • Yeah, it been interesting. I've been unfriended on Facebook from a number of people already this week because I'm a Libertarian; I should say staunch, dyed-in-the-wool. I was at the Joe Jorgensen campaign event here in Dallas to celebrate the end of this nonsense, which we never got to, and what people are saying is, “Well, you Libertarians, you stole this election from us.” I'm like, “Oh, no, it couldn't have been that Donald Trump couldn't have done like maybe one thing that was like a regular human being that would have probably turned the election completely over to him.” If he had just came out and said, “You know what, let's put some masks on. Let's just protect ourselves.”

  • I have heard it said that if Nancy Pelosi and Chuck Schumer had decided to just bend down and kiss the ring, maybe in the first year, he would have given them anything they wanted because he's not really ideological.

  • In a recent column you brought up the fact that one of the things that really set you off about Trump was his calling of Joe Biden in a tweet with the dictator from North Korea, Kim Jong-Un, and Trump piled on, on the side of Kim Jong-Un [Kim Jong-Un had called Joe Biden a fool of low IQ].

  • Yeah, pretty easy one. I think there's certainly starting to be some cracks in the veneer. I read an article earlier today that Marco Rubio said something to the effect of counting votes is not fraud.

  • Yeah, I had I posted exactly that on Facebook about a week before the election. Countdown to Republicans gaining fiscal responsibility once again, it begins. This has been fantastic.  

Ron’s Questions: Segment Two

  • Welcome back, everybody. We're here with Jay Nordlinger, the senior editor at National Review. Jay, it's not every day you get to talk to one of your favorite writers, but I have to ask you: in your book, Here, There & Everywhere: Collected Writings of Jay Nordlinger, which was published in 2007, you cite Natan Sharansky. And he talks about totalitarian, or what he calls “fear societies.” And he thinks there's three groups in those societies: 1) true believers; 2) dissidents who are in open opposition; and then 3) the double thinkers that talk one way and act another, which he thinks is a large and vital group. We were just talking about North Korea. Do you think there are enough of the third type, the double thinkers, in North Korea to cause change?

  • Do you think it will peaceful?

  • I know you've had the opportunity to meet some of the defectors [from North Korea], and actually interview them. I've read a lot of the books by the defectors and have watched their TED Talks.

  • Yeah, he's the one that met with George W. Bush in the White House.

  • You also cited in your book, Andrei Sakharov, who said he didn't want to talk about human rights. He wanted to talk about specific cases. And, Jay, I’ve got to ask you, what's your take on Hong Kong, because we keep an eye on Jimmy Lai, and I think he's another one of these incredible men that just amazes me. How do you see Hong Kong unfolding?

  • I know you probably know Peter Robinson. He constantly interviews Jimmy Lai on his show, and he keeps asking him, “Why don't you just leave? You’ve got billions of dollars.” Do you see people leaving Hong Kong because the UK is granting them citizenship, per Boris Johnson, and Australia, too?

  • I know you admire Ronald Reagan, as do I. In fact, I shouldn't say this, Jay, but I was named after him. My mom actually loved him as an actor, if you can believe that. All I can think of is the scene in Airplane when the woman who eats the bad fish or whatever, and says, “I haven't felt this awful since I saw that Ronald Reagan movie.”

  • He had this simple way, but not simplistic. Like I love his idea on the Cold War: We win, they lose. You know, he didn't like Détente and said, “Isn't that what the farmer has with his turkey until Thanksgiving?”  Did you ever get a chance to meet Reagan?

  • Well, I never got the chance to meet William F. Buckley. I was at an NRI conference, it was after Clinton won. And so they were trying to calm everybody down. I don't think he made it to that one because he had some type of conflict. Got any good Buckley stories?

  • That one line he had about Oprah, the woman who's alternatively skinny and fat.

  • So I have to ask you this for my dad, Jay, because he's big golfer, and you write about golf a lot. And you quoted a columnist from the Washington Post that wrote this terrible article about Augusta. And she called it the most famous tree house in America—it’s Spanky and Our Gang for millionaires. Have you ever played Augusta?

  • Have you gone to a Masters there?

  • No, but my dad's gone to a few masters [actually, just one]. That's his big dream in life. What did you think of Jack Nicklaus coming out for Trump in the last 30 seconds that we have?

  • Like you say, calling balls and strikes. You know, how do you Ump Trump? It's really interesting.

Ed’s Questions: Segment Three

  • And we are back with Jay Nordlinger from National Review. Jay, you quite publicly left the republican party when Donald Trump got the nomination in 2016. And I guess we're thinking it's a 95% chance that Biden is going to win. Donald Trump would really have to pull not only an inside straight but an inside royal flush, in order to pull this out. I’m wondering what you think the future of the Republican Party looks like sans Trump? And is that something that you envision you might be a part of?

  • And now we measure stuff in the trillions, we've moved on from the billions to the trillions. And there's a great cartoonist, and he talks about how for most people $900 billion is more than a trillion, in their head. I honestly do think that now that we're in this trillions. We spent $2 trillion, what's the big deal?

  • I want to turn your attention to journalism. I saw a speech that you made where you were talking about one of your books. And in it, you talked about yourself as a journalist. And one of the things I want to ask you about journalism is what do you think the state of journalism is today? True journalism?

  • We had author Warren Berger on the show [Episode #302], not the Supreme Court Justice, different guy, with an E. He’s written a wonderful book that Ron and I both love called A More Beautiful Question, referencing the E. Cummings poem. He thinks that journalists just have gotten lousy at asking questions. They just don't know how to ask questions anymore. As silly as that sounds, they just like to talk about themselves.

  • Well, it’s totally okay for you to be the hero of that story. I asked you the question.

  • I love that. That's fantastic. I heard you use that in the speech that I was watching to prep for this. It's a great, great quote. The example that I was thinking as you were talking is the Bob Woodward situation with his book coming out, where he revealed that Trump thought that the virus was worse than he led on. Didn't Woodward have a responsibility, if thousands of people were dying, to come forth with it instead of waiting for your dang book to come out?

  • It's all just a blur. The whole Trump administration is. Ron and I were joking, what's the Presidential Library going to look like? His twitter feed?

  • Well, thanks. We're honored by that comment. But we are unfortunately already against our last break.

Ron’s Questions: Fourth Segment

  • Welcome back, everybody. We're here with Jay Nordlinger from from National Review, and Jay there's so many things I want to say about your segment with Ed, but I want to jump to your book, Children of Monsters: An Inquiry into the Sons and Daughters of Dictators that was published in 2015. You focused on 20 dictators, most of whom ruled in the 20th century, except I guess Fidel Castro did make it into the 21st. What motivated you to write that book? Because when I saw it come out I said, “Do I want to read this?” And then something in me said “Yes, I do. This is interesting.”

  • You say something in there that I just think is so profound, you say, “We sometimes grade on a curve.” Franco, and maybe Pinochet, I rather live under them than Stalin, or Mao, or Pol Pot.

  • For sure. Because isn't this the point that Jean Kirkpatrick made in Dictatorships and Double Standards?

  • And Jay, I’ve got to ask about this, even though I know it's probably not true, but it just blew my mind when I read it in your book, that Hitler, we think had no children. But some guy's mother said, “Oh, no. This is my son [by Hitler]. And you have a picture of him in the book.

  • You go through 20 dictators, and you lay out their kids and tell their stories, and the one that's fascinating is Stalin's daughter, because she defected. Thanks to you, I went out and read one of her books. And it was just fascinating.

  • Didn't she say also that she wished her mother had married a carpenter?

  • You write in there, and I found it interesting, too. She said she was a registered Republican and a National Review was her favorite magazine.

  • Did she get hooked up with like Frank Lloyd Wright, and his wife, and live somewhere in Phoenix?

  • It's true, the sins of the Father, right?

  • I have to ask you, Jay, because we've been talking about this, too. What's going on with China and the NBA over there, and even Disney, giving credits, and even changing their movies, self-censoring. I think back 20 or 30 or maybe 40 years and ask, Would the NBA or Disney had done business with South Africa during apartheid?

  • You know, those of us who believe in free markets really got this wrong. We thought that if we traded with them and opened up, let them into the WTO, they would become more like us.

  • What are they supposed to do in the meantime? It's just an intractable problem, like Hong Kong, in some ways, isn't it?

  • Jay Nordlinger: Ron, do you think that do they have proper markets? Or is it more kind of mercantilism?

  • Ron Baker: You know, George Gilder, who I love and has been a mentor for years, came on the show [Episode #257] and said they're [China] more capitalist than the United States. This was during the Huawei kerfuffle. And that line from George killed me because he's been anti-communist his whole life. His conservative credentials are as good as yours or anybody else’s.

  • Very true. Well, Jay, unfortunately, we're at the end of our time. And I just want to say thank you so much for coming on. This has been a great honor to be able to chat with you.

  • Thank you very much. We'd love to have you back. Thank you so much.


Bonus Content is Available As Well

Did you know that each week after our live show, Ron and Ed take to the microphone for a bonus show? Typically, this bonus show is an extension of the live show topic (sometimes even with the same guest) and a few other pieces of news, current events, or things that have caught our attention.

Click the “FANATIC” image to learn more about pricing and member benefits. 

This week was Bonus episode 316 - “Rank Punditry”. Here are some of the links we discussed:

Episode #315: Second interview with Dr Jules Goddard

dr Jules Goddard.png

Ron and Ed welcome back Dr. Jules Goddard, author of Uncommon Sense, Common Nonsense: Why some organizations consistently outperform others (co-authored with Tony Eccles). His brilliant observation that "Strategy is the rare and precious skill of staying one step ahead of the need to be efficient," continues to inspire us. We will continue to unpack this statement and more.

A Bit More About Dr. Goddard:
Dr. Jules Goddard earned his MA at Oxford, an MBA from Wharton, and his PhD from London Business School. He's a Guest Lecturer at INSEA and formerly Gresham Professor of Commerce and Mercers School Memorial Professor at The City University. He is currently Research Associate of the Management Lab MLab at London Business School. He's a teacher, writer and consultant in the areas of business creativity, strategic thinking, leadership and corporate transformation.

Ron’s Questions: Segment One

  • Jules, you were on back in January of 2015 (Episode #27). It seems like eons ago. How have you and yours been holding up under COVID this year?

  • That's excellent. How about teaching, you said you were still teaching, would that be remote or live?

  • That's interesting. You know, you wrote in Uncommon Sense, Common nonsense: Why Some Organizations Consistently Outperform Others, your book from 2013, which Ed and I just absolutely loved. You said in that book, “We believe that most enterprises today are insufficiently entrepreneurial.” Do you think COVID might be changing that?

  • I love that point, and it anticipates my next question. And I know this is incredibly subjective, and very anecdotal. But have you seen innovations, or new ventures, or just new ways of doing things? Like maybe knocking out some of this bureaucracy or these old management ideas that have impressed you?

  • Well, we're Austrian economists, Jules, we have to be optimist by definition. I think back to the Great Depression, and just the flowering of innovation that took place in that horrific decade was kind of amazing when you go back and look at it.

  • I'm sure you've read Matt Ridley's book, How Innovation Works. That was just a great tour of how innovation works. And what a surprise it always is, and we can't plan it. It's an act of creativity.

  • Jules Goddard: Have you had Matt on your show yet?

  • Ron Baker : No. I would love to get Matt on the show. We've had Dan Ariely on the show, too. And I remember, I think Tim's got some debates with Dan on YouTube, he challenges on certain things, and I just found that really refreshing as well. Brilliant guy. You wrote something in the book, too, that I just think is profound. You said “Businesses decline as the production of new insights dries up. A theory of business, therefore cannot be a substitute for insight.”

  • I think you quoted Russell Ackoff, who said, “The future is best dealt with using assumptions rather than forecasts.”

  • Great point, I mean, could this be why, despite all this move to remote work—because we have to—but if you listen to outfits like Apple and Google, they want people in the office to bang together and talk and meet in the hallway, because they think that's where innovation comes from. They're not big fans of remote work.

  • We've been saying since this COVID crisis, with people predicting the decline of cities, and we've been trying to make the point for the last few months on this show that says are you kidding, cities outlast governments.

Ed’s Questions: Segment Two

  • Our guest today on The Soul of Enterprise is Dr. Jules Goddard from London Business School. And Jules, I wanted to ask you a little bit about a session that I saw you deliver, I guess it was remotely since it was during COVID, a xmonks. The title of your talk was about the 4D model of Leadership. And you talk about destiny, drama, deliberation, and development. Can you expand on that if you would?

  • So true. In the book, The Coddling of the American Mind, one of the things that the authors point out in that book is that in a lot of ways we're doing a lot of harm to society, to ourselves, by coddling people, and I think we've seen a shift in leadership from command and control. But then over to this, what I'll call the white knight leader, the one who comes in and saves everyone. And that's, I think, just as damaging. Because it's just you fixing the problem for people, they're not able to fix it for themselves and be able to get out of the situation.

  • You know, during World War II, they didn't say you must go into the tubes, right? That was not a mandate. What I think is so interesting is that we have folks telling us that what came out of the College in London, that 2 million were going to die because of this model. And I see so much of this happening, this is this what's happening in governments, but I equate it to businesses as well. They're obsessed with this model. Ron says, I love this quote, he says, “All models are wrong, some are helpful.”

  • Wow. One of the things I talk to my mentor an awful lot about is this concept of leadership, where what we're concerned with is regulating the level of anxiety in ourselves and also in society. Anxiety and creativity are always inversely proportional to each other, right? The more anxious you are, the less creative you can be. And we can't turn on creativity, right? We have to do is as how do we lower our anxiety level? What's happened with leaders, not just in business but also in government, is they're feeding this anxiety. They're stepping up the level of anxiety like a transformer does with electricity. And I just don't think it's healthy for us as individuals nor for society. I mean, our response has been positively medieval to this COVID situation.

  • Yes, that's a great question. He [Rockefeller] didn't have access to antibiotics either. So, you know, we're talking about a vaccine for COVID being tested in less than a year since the disease has been identified. That is absolutely amazing.

  • Yeah, I think it is going to be incredible. As Ron said the innovation that came out of the Great Depression, I think we're going to find is the innovation that comes out especially in medical and healthcare, not dealing with vaccines per se, but out of healthcare, because of the research that was around it, we're not going to see it for another two, three, or five years, but it's going to be intense.

Ron’s Questions: Segment Three

  • Welcome back, everybody. We're back with Dr. Jules Goddard and Jules I wanted to ask you because I also just love this line. I know I'm throwing lines at you from your book from ten years ago. You say, “Beliefs and assumptions, rather than goals or values, separate winners from losers. Markets are battles between belief systems.” I don't know who said this, it's usually attributed to some Nazi, “That whenever I hear the word culture, I reach for my revolver.” But, how does one work on a culture? I mean, this seems to be the current buzzword, and culture is the sum of beliefs, assumptions, how we do things, our worldview? Is it really possible to change? I know it's possible to change a culture but that doesn't give me insight on how to do it?

  • There's a saying here that politics is downstream of culture. That it's culture, the mass media, Hollywood, that type of thing, but I think it does work in some ways, because you're right, I think a president, somebody like Ronald Reagan, can definitely affect the culture.

  • I think it's one of his best speeches.

  • I would agree. I'm glad you say that. I'm always interested to hear what outsiders think, peering into America, or listening to immigrants who seem to have a real deep appreciation because they know the other side. Jules, I hate to do this, because this is such a lofty conversation. But I’ve got to ask you about this because it's one of Ed and my pet peeves. We just despise the annual performance review process. We think it's Kabuki theater on steroids; it's the most ridiculous thing we subject ourselves to in these organizations. And you even pointed out in your book that the average European company spends 25,000 person days on planning and performance per 1$ billion of turnover. We try to keep a list of all the companies that have moved away from this: Accenture, Deloitte, Medtronic, Microsoft, Netflix. It's now estimated over 10% of Fortune 500 don’t do them or they've gotten rid of them. Do you see that trend in your work?

  • Ed likes to equate it to the self-criticism sessions that you had in the old Soviet Union and at present in North Korea. You probably saw it, but there's a wonderful episode of The Office, the British version, the actual funny one, not the one that we ripped off from you. It's called Appraisal Day. And every time we show that to HR people it just hysterical laughter. One girl actually said, “I peed my pants I laughed so hard.” Yes, we say that laughter is confession. We know this is a ridiculous process. And we still keep it around. It amazes me. So I just wanted to get your take on that.

  • And it wasn't a year after you did the deed. As we said before we went live, we did have Gary Hamel on two weeks ago [Episode #313]. And of course we did talk to him about Humanocracy, a book that Ed and I just both love. What your take on it?

  • I just the love the idea. It's even in the subtitle, “Creating Organizations as Amazing as the People Inside Them.” It's such a great insight.

  • He's right. When you look at bureaucracy in these organizations, it's just takes over, it is insidious. And like he says, it grows faster than the organization is growing. Well, Jules, this has been great. Ed is going to take you home, but I just wanted to say thank you so much for coming back on the show. We will definitely have you back on, if you're willing. We love talking with you. This has just been so enriching. So thank you.

Ed’s Questions: Fourth Segment

  • It is our joy to present to our listening audience our second conversation with Dr. Jules Goddard. We so enjoy our conversations and time with him is flying by, but I want to jump right back into it Jules. In the presentation I saw you give you reference a quote by Tim Ambler from 2003. This is his quote: “On average, boards devote nine times more attention to spending and counting cash flow, then to wondering where it comes from, and how it should be increased.” I can't get through the quote without laughing because of the absurdity of it. But yet that's the case, isn't it?

  • Yes, there was another moment in that presentation where you say zero out of 25,000 companies could point to cost cutting as the reason for driving profitability. Zero of 25,000!

  • At best, he said it was it was two of them. One of the things that Ron and I have been talking a lot about on our show the last couple of months, even over a year now, is subscription pricing. We think that is such a huge innovation because it does exactly what you just talked about. It forces the company to come up with new and better products every single year. Take Netflix, for example, they don't increase the price when the new season of Ozark drops. They constantly have to refresh their product in order to keep the keep the customer happy. So just some of your initial thoughts on that type of thinking.

  • I appreciate that. Because while certainly it's a noble thing to have a local source, the great thing is that the extra 20% can still be kiwi fruit from the global market. And it is amazing to me, and I try to point this out to my kids when we walk into a Target store, we should be amazed every single time. The fact that we were short on toilet paper when COVID first happened, alright, that's still a minor inconvenience compared to all of the things that we still have. And it's the marketplace that got us there.

  • With perhaps with different belief systems, different religions, all of these people somehow figured out a way to cooperate with one another.

  • Yes, well, let's hope that we can begin to get back to this kind of thinking and maybe COVID, as you said earlier, will spur us on to new and better things within our society. What are you working on? We have about a minute left? What are you working on?

  • I'm going to make a note of that and expect the email. Thank you so much, Jules. Ron, what do we have coming up next week?

  • Ron Baker : Ed, I'm so excited. We have one of my favorite writers from National Review, Jay Nordlinger who wrote a great book called Children of Monsters, which I can't wait to talk to him about so I'm really looking forward to it.


Bonus Content is Available As Well

Did you know that each week after our live show, Ron and Ed take to the microphone for a bonus show? Typically, this bonus show is an extension of the live show topic (sometimes even with the same guest) and a few other pieces of news, current events, or things that have caught our attention.

Click the “FANATIC” image to learn more about pricing and member benefits. 

Episode #314: Third Interview with Mark Koziel

mark koziel.png

Ron and Ed are delighted to welcome back Mark Koziel, this time in his new capacity as President and CEO at Allinial Global. Mark is a CPA, CGMA in the U.S. with over 20 years of experience in accounting, management, consulting, and advocacy.

A Bit More About Mark:
Today, Mark Koziel is the President and CEO of Allinial Global. Previously he was Executive Vice President – Firm Services for the American Institute of CPAs. He leads the Private Companies Practice Section (PCPS), Firm Relationship Management, Small Firms, Diversity & Inclusion, Young Member Initiatives, Technical Hotline and Center for Plain English Accounting.

Ed’s Questions: Segment One

  • Mark, I guess we can also say that you are now once again a fellow of the VeraSage Institute. You were a fellow formally but then your duties at the AICPA precluded you from holding that esteemed title but we kept the spot warm for you.

  • Mark, let's start here. What have we learned about the accounting profession in 2020? I mean, we could spend the whole show on that, right?

  • Ron refers to them as the front line, from a business perspective and continue to be. I think it was you who first said that you were having conversations with people as late as February, especially tax partners, who were saying there's no way that I could run my firm remotely and then six weeks later, bang you're all remote, now what?

  • Well, let's back up a second. Tell us about your new role at Allinial Global. First of all, for those of our listeners who do not know what Allinial Global is, tell us what that is, and then why you're so excited to be a part of it.

  • So Allinial actually holds the client relationship in a lot of those case. That's interesting. I wasn't aware of that.

  • Yeah, that does make a lot of sense. Now, where you're going with that. What attracted you to Allinial Global was it the fact that they had some of those things already in place or who were the member firms, that kind of thing?

  • Well that's great. Well we're definitely want to hear more about that, and I'm glad that the conversations that you're having are even to the point of talking about subscription pricing, huh?

  • Yeah, they do have to be the right options. That video, and we've had Dan Ariely on the show [Episode #43], is just jaw dropping every time I play it, and people who've seen it for the first time, you can just see their head begin to explode. Like, wait a minute, you actually changed the revenue mix and the profit because of having a choice that nobody picked, really? Really good stuff. So, what's your first hundred days? Well, not quite 100 days yet. Are you still getting your sea legs with it?

  • Interesting. So I'm curious, from a process standpoint, how did you do that? Did you develop a questionnaire? Or did you just kind of go in freeform and say I'm just going to have a conversation and listen?

  • I like that. Okay, so their dues are based on their revenue. So what you're saying is, “Hey, I'm going to help you double your revenue. Even better, I'm going to double your revenue and do it profitably, so that you grow profit. And even better, you're going to work less.”

Ron’s Questions: Segment Two

  • Welcome back everybody. We're here with Mark Koziel, president and CEO Allinial global, and Mark, you’d probably expect a recovering CPA to talk to you about accounting, but I'm not. I want to take you back to a cigar bar in Indianapolis. I think it was when you dropped on me this entrepreneurial leap that you had in mind. And then I think by the time we met the next time, it might have been New York, you had taken that leap. So tell me about your’s and your wife, Maryann's, leap to entrepreneurship [Craft’d].

  • I bet. Are you able to let people in with masks, social distancing, and all that?

  • How do you decide which wines to carry?

  • That has become the new hip thing to do. You know, sports celebrities, actors, used to buy restaurants. Now they buy wineries. I mean, there's I think there's over 300 wineries in Sonoma, and over 600 now in Napa, which is just outrageous when you think about it, every bit of land here is being turned into vineyards. It's just incredible. So tell me what wines you have run across that you love, or that were kind of unexpected or that you didn't know about before?

  • Yeah, because you did go to Lasseter, Pixar’s John Lasseter. And that's like 15 miles from my house and you liked it. It was a great one, you said

  • Yeah, there's a lot out here that do the blending. And that is really an art, it’s amazing.

  • What's your geographical reach? I mean, do you carry wines from around the world? Are there hotspots that are better sellers than others?

  • Do you guy’s serve food?

  • Yeah, a lot of people don't want to deal with the health department so they don't even bother serving food. You can't even get hors d’oeuvres or cheese and crackers or something. So probably not you because you're a recovering CPA, but has owning a business changed your perspective at all on the CPA/customer relationship?

  • Now, would that be Cuban cigars?

  • That's awesome. So you like being an entrepreneur? It's been fun so far?

  • What's the virtual wine tastings been like? How is that going? Because that seems weird, but I could see how it could be pretty neat, actually.

  • Did you do the Sideways tour?

  • Yeah, that movie killed the sales of Merlot.

Ed’s Questions: Third Segment

  • And we are back with Mark Koziel with Allinial Global, and Mark before we get back to accounting, I need to ask you just a follow up to Ron's question, does your wife's business have a subscription?

  • I may have told you this, we had a local restaurant here, it's called Destinations Wine Bar, they do sell food. But how they really have survived through the pandemic is they had wine storage lockers that they had as part of their subscription. So you could store your wine there. And that, you know, people are like, No, that's okay, just leave it there, even though they were closed for a while. Pretty cool idea. So let's talk a little bit about that. The business model changes that you're trying to implement with Allinial Global, subscription obviously, being one of them. What about things like that have really fallen off our radar, like machine learning and AI? Have they gotten to the point where they are just part of what we know, And we're not talking about them because they're embedded? Or were they pushed off because of COVID?

  • Is there a problem with that? One of the things that I think even Botkeeper got involved with is when you shift stuff overseas, do you have to let the customer know that you're doing that?

  • So as you've said, you're through about 140, or so, of your member firms, about halfway, is that right? What surprised you with those conversations, did anything take you by surprise, like, wow, I didn't realize that so many firms were here or behind or ahead, anything shocking?

  • That is really interesting. And is the timesheet, unfortunately, still universal globally as well, or have people getting away from that?

  • You spurred me on to mention something to you. Ron and I have done a lot of work with the bookkeepers in Canada over the last decade or so. And one of the things that we repeat over and over again, is that we think that the bookkeepers in Canada, first of all, they're far ahead of the bookkeepers in the United States, for whatever reason. In fact, they're even ahead, Ron and I think, of the accountants in the US. What are you seeing with regard to the para-professionals internationally? Are you seeing similar trends like that? Or is it more like Canada or more like the US?

  • Yeah, that's what's so interesting, the bookkeepers that we've taught in Canada do that same thing, they actually are shifting to advisory, which is pretty amazing, at least the group that we have been working with.

  • Yeah, we had a great conversation with the Chief Technology Officer of Sage, Aaron Harris [Episode #306], who I know you know, and he was talking about the same thing, that one of the things that we're learning inside Sage from an artificial intelligence standpoint and machine learning standpoint is the leverage that we can take, certainly keeping the data anonymous so that we're not sharing other people's data, But the insights that we're able to get with regard to transactions in the marketplace, and what's happening in the marketplace, is really incredible. The data is like oil, it's becoming almost as worth as much as the actual service itself.

  • Well, that's great. We're really excited for you, so after you get through this, you're going to put together some kind of a plan to say, and then, you know, here's where you're going to take this long term with Allinial Global, but you’re still in that learning phase. But the next step is to come up with a plan, right?

  • Well, I really look forward to see what you're going to do with that organization. I had some familiarity with them, did some work before you got on board and really like the firms that I did talk to so really looking forward to the next phase, but we are up against our break already. And Ron's going take you home for the fourth segment. But I want to thank you once again for being on the show and hope to have you back at a future point. I'm sure we will.

Ron’s Questions: Segment Four

  • Welcome back everybody. We're here with Mark Koziel. And Mark, you've got a worldwide perspective. Have you seen firms in different countries handling the COVID crisis differently or more innovatively? Have you learned anything about how they're dealing with it outside of the US?

  • Did they make the shift as quick to remote work as a lot of firms here did?

  • Yeah, I'm hoping the Results Only Work Environment comes out of this crisis as a testable, viable model. But the other thing I wanted to ask you about, given the worldwide view that you have, as you know we have a VeraSage colleague, Tim Williams, from the advertising space, he wrote a great book called Positioning for Professionals. He's a big believer in niching. Really putting your firm in a box, if you will; he likes to say, no box, no strategy. Do you see more of a movement towards niching, I mean, really focusing rather than trying to be all things to all people, and not wanting to turn away any revenue, but really just barreling in and just focusing on one particular industry or demographic or whatever?

  • You know, I've been using Peter Drucker's famous question about his idea of systematic abandonment. And the question is, “If you weren't in this line of business today, would you enter it? And if not, what are you going to do about it? And that's a really powerful question.

  • Mark, I have to ask you, and this relies more on your experience with the AICPA, but the Big Four in the UK is facing a split up, a spin-off of their audit and their consulting. The Financial Reporting Council, and the firms, are supposed to issue some reports today on how to do that. How do you see that playing out? And will that come to the USA?

  • So Mark, we've only got about a minute, or a little over. What advice would you give to a young aspiring CPA?

  • Excellent. Yeah, I used to joke that who would you notice first, garbageman going on strike or CPAs? And I have to say CPAs would probably be the right answer this year. So Well, Mark, thank you so much. This has been wonderful. We can't wait to have you back and keep doing the great work at Allinial Global.


Bonus Content is Available As Well

Did you know that each week after our live show, Ron and Ed take to the microphone for a bonus show? Typically, this bonus show is an extension of the live show topic (sometimes even with the same guest) and a few other pieces of news, current events, or things that have caught our attention.

Click the “FANATIC” image to learn more about pricing and member benefits. 

Episode #313: Interview with Professor Gary Hamel on His Book Humanocracy

gary hamel

GARY HAMEL is visiting professor of strategy and entrepreneurship at the London Business School. He has authored twenty articles for the Harvard Business Review and published five books with Harvard Business Review Press, including The Future of Management (2007). The Wall Street Journal ranked Hamel as the world’s most influential business thinker, while the Financial Times labeled him a “management innovator without peer.” He lives in Northern California.

Ron’s Questions: Segment One

  • Gary, I just finished your book, Humanocracy, shortly after it came out, I got it the day it came out. And I absolutely loved it, as I loved your book, The Future of Management book. So I'm going to ask you the cliche question from a host that makes it sound like he didn't read the book. What is your book about?

  • Before we dive in, Gary, I just have to ask you this, too. Is this book a logical extension of The Future of Management? Has your thinking kind of evolved over the years?

  • Because one of the things you say is once a company hits a certain threshold in size, that bureaucracy starts growing faster than the organization itself.

  • You talk about bureaucracy being a tax on human effort and how we need to get rid of this. And I love that you've quoted the late Carl Deutsch, I think, who observed that “[Power] is the ability to afford not to learn.” And I thought that was great. Are you confident this can be done?

  • I love this line, you say “America is a country that was invented by geniuses to be run by idiots. Bureaucracies, by contrast, seem to have been designed by idiots to be run by geniuses.” And I just love that because you're right, creativity is not narrowly distributed. Just look at YouTube, and Wikipedia, and Linux.

  • Excellent. Well, Gary, unfortunately, we're up against our break. This is just flying by. But this is great. Thank you so much.

Ed’s Questions: Segment Two

  • On The Soul of Enterprise today is Professor Gary Hamel. The book is Humanocracy: Creating Organizations as Amazing as the People Inside of Them. And Gary, I wanted to talk to you a little bit about part three of your book, which is the principles over practice. First of all, talk about why it's important that we look at these companies not so much by their unique practices, but by their belief systems instead.

  • Ron and I have this saying can you imagine if you ever described your marriage as efficient? How repulsive that would be? I love Ed, he's very efficient. But I want to ask you, there's so many great things in there. But I want to turn your attention to the power of markets and talk a little bit about this, because I think this is quite fascinating. Ron and I, about 10 years ago, came across the notion of the prediction market, and how that could be used inside organizations. And we did a couple of sessions on it. And I’ve got tell you, it fell completely flat. No one knew what the hell we were talking about, like why this would even be a thing. But the experimentation that you've seen, it's starting to work, it's starting to get some uptick, isn't it?

  • Yeah, that was a pull quote I had from the book as well, that's a great concept.

Ron’s Questions: Third Segment

  • Welcome back, everybody. We're here with Professor Gary Hamel, the author of Humanocracy. And Gary, one objection I can hear and you actually anticipated this in the book. But I can hear somebody saying “How can you have a unity of purpose without unity of command?” What's your response?

  • You know, we hear all the time that people hate change, they're fearful of change, they're against change, and you think that's rubbish. You call us change addicts?

  • Max Planck made that famous remark about progress happens funeral by funeral. Do you think the old guard, the old current command and control will give up the power and allow this change to happen?

  • It reminds me how the two ladies [Jody Thompson and Cali Ressler] who started the Results-only Work Environment (ROWE) at Best Buy. They just went out and did it. They didn't ask for permission. [Listen to our two episodes with Jody Thompson, #24 and #287].

  • Al; right, well, like you say, Gary, we created this bureaucracy and we can we can undo it and replace it with something better. Unfortunately, we're up against our next break. Ed is going to take you home during the last segment, Gary, but I just wanted to say thank you. What an honor to be able to chat with you. As a longtime fan, keep up the great work, please. You're needed.

Ed’s Questions: Segment Four

  • And, folks, while we are doing our best to try to get to some of the great nuggets in Gary Hamel’s book, Humanocracy: Creating Organizations as Amazing as the People Inside Them, we are only scratching the surface. So we really implore you, go buy this book and read it. Don't just buy it, but actually read it, because we think there's some great things that you can do in your organization. I want to turn your attention, Gary, to a subject with regard to the many of the folks who listen to this show. It's more accountants, lawyers, and people in professional services, and even with smaller organizations. What advice do you have for people who are in smaller businesses to avoid some of these traps that the large organizations get ensnared in?

  • All right, well, we've got about 90 seconds left or so and I wanted to ask you where can people get your book—obviously at Amazon, all that stuff—but where can they learn more about what you're doing?

A Note From Gary Hamel:

So certainly, please follow me on Twitter @profhamel. You can find me on LinkedIn for sure. Humanocracy.com is where you can learn more about the book. And I hasten to add there's a free course there, about four and a half hours. And if there's something you want to ask me, I'm Gary@Garyhamel.com, it is as simple as that.


Bonus Content is Available As Well

Did you know that each week after our live show, Ron and Ed take to the microphone for a bonus show? Typically, this bonus show is an extension of the live show topic (sometimes even with the same guest) and a few other pieces of news, current events, or things that have caught our attention.

Click the “FANATIC” image to learn more about pricing and member benefits. 

Bonus episode 313 - California Crazy is a special kind of crazy. Here are a few links we discussed:

Episode #312: Third (and a half) interview with Rabbi Daniel Lapin

rabbi daniel lapin

Rabbi Daniel Lapin, known world-wide as America's Rabbi, is a noted rabbinic scholar, best-selling author and host of the Rabbi Daniel Lapin podcast. He reveals how the world REALLY works and reminds us that the more things change, the more we need to depend upon those things that never change. Everyone needs a Rabbi and he is ours.

A bit more about Rabbi Lapin:
Rabbi Daniel Lapin, known worldwide as Americas Rabbi, is a noted rabbinic scholar, bestselling author and host of the Rabbi Daniel Lapin Show on The Blaze Radio Network. He is one of Americas most eloquent speakers and his ability to extract life principles from the Bible and transmit them in an entertaining manner has brought countless numbers of Jews and Christians closer to their respective faiths. In 2007 Newsweek magazine included him in its list of Americas fifty most influential rabbis. Before immigrating to the United States in 1973, Rabbi Daniel Lapin studied Torah, physics, economics and mathematics in Johannesburg, London and Jerusalem. Rabbi Lapin was the founding rabbi of Pacific Jewish Center, a legendary Orthodox synagogue in Venice, CA. Rabbi Lapin is a noted writer, published in the Wall Street Journal, National Review, Commentary, and The Jewish Press. His books are Americas Real War, Buried Treasure, Thou Shall Prosper, and Business Secrets from the Bible.

Ed’s Questions: Segment One

  • Well, we do have Father Sirico lined up for a couple of weeks from now but you beat him back. You're ahead of him now, technically. Well, just a quick bio for Rabbi Daniel Lapin, known worldwide as America's Rabbi. He’s a noted rabbinical scholar, a best-selling author and host of The Rabbi Daniel Lapin podcast, he reveals how the world really works and reminds us that the more things change, the more we need to depend upon those things that never change. So welcome back to The Soul of Enterprise. First question, how are you and your family riding out with the COVID situation?

  • Fair enough. Well, I'm glad you're well, that's the most important thing. A late report here. I'm in Texas. And you know it's got to be somewhat serious because the high school football team cancelled its game tonight because two of the kids got COVID. So we shall see. Anyway, under this notion of change and relying on ancient wisdom, back when we first interviewed you, we talked about your ten commandments of wealth creation, and number seven is learn to foretell the future. And in your book, you mentioned that the best known Jewish aphorism is “Whatever has been there will be and whatever is done will be done, there is nothing new under the sun.” So, you’ve studied economics, what's not new under the sun with this COVID-19? Because boy, it feels sure feels new to us.

  • As you were talking, I was thinking about a couple of reports that I've read this week about as challenging as it has been for us at least we do have Amazon. I think about some countries in Sub- Saharan Africa and other places that do have despots who are in charge, who are really using this as a way to put a lot of people down.

  • To that end, as someone who has studied economics, even if we snapped our fingers and everything went back to what it was before “The Great Suppression,” as Gene Epstein calls it, I think has really caused damage that is going to be with us for a number of years down the line. That’s one of my fears, that we're only beginning to see the ramifications of this long term. And that's even if everything got better almost immediately.

  • Well, I hope that happens. And as the saying goes, from your mouth to God's ears. Let's hope that that's the case.

Ron’s Questions: Segment Two

  • I listen to you religiously every week, your show is great, and we'll definitely link to it in the show notes. I couldn't go a week without it. As you know, Rabbi, this program we called The Soul of Enterprise because we wanted to talk about more than just the material aspects of business. Because as you taught me, as father Sirico taught me, George Gilder taught me, you guys talk about the spiritual side, and you have lots of fantastic explanations of the difference between physical and spiritual. I love and use your violin example all the time. But I love, maybe even more, because of the visual picture it paints, your pet chimpanzee. Can you explain that?

  • I think that's such a great distinction.

  • I love it. Rabbi, this is totally unfair. We've only got about a minute-and-a-half. But you always say the advice that you get from every commencement speech, “Do what you love,” is bad advice. Why do you say that?

  • Right, serve others and then you'll learn to love it. I love that advice. Unfortunately, we're up against the next break.

Ed’s Questions: Segment Three

  • And we are back with our Rabbi, Rabbi Daniel Lapin here on The Soul of Enterprise. And, Rabbi, I wanted to ask you, one of the things I've heard you say over and over again is that if there's not a Hebrew word for it, there's no reason for it. However, my guess is there's not a Hebrew word for innovation. But that doesn't mean that the Bible can't tell us an awful lot about innovation. So what does the Hebrew Bible have to say about innovation?

  • Yes, really neat stuff. The other thing I wanted to quickly ask you about, we've got about four minutes left. The renewal of the cities as you see them. One of the things that we've heard recently is that New York is going to die. It's all going to happen. But you have, I thought, a very interesting blog post where you say, Yes, all cities do have a tendency to go through a trauma, a time of trial, but oftentimes they rebound, and they often outlast even governments themselves?

  • Yeah, and I like the tie into the innovation piece, too. It's just great. Well, we're against our last break.

Ron’s Questions: Segment Four

  • Welcome back everybody. We're here with my rabbi, Rabbi Daniel Lapin, and Rabbi you say in [your book] Business Secrets from the Bible—which is a fantastic book and we will post all of your books on our show notes—that ancient Israel prohibited the king from counting the people because it implies that all people are identical. So I have two questions. Do you oppose the census? And, what is the threat from government counting?

  • Right? Kind of like you always say bricks, and [stones].

  • Great. You know, you also say another thing in Business Secrets from the Bible, that Jewish people understood specialization for millennia before Adam Smith? Can you give me an example?

  • Sure. Well, Rabbi, this has been fantastic. Thank you so much for coming back on for the fourth time. We've got to have you back a lot sooner than every couple years or so. Ed’s what's on store for next week?

Next week, we have Gary Hamel, the author of Humanocracy.

But first! A few extra resources for you…


Bonus Content is Available As Well

Did you know that each week after our live show, Ron and Ed take to the microphone for a bonus show? Typically, this bonus show is an extension of the live show topic (sometimes even with the same guest) and a few other pieces of news, current events, or things that have caught our attention.

Click the “FANATIC” image to learn more about pricing and member benefits. 

Bonus episode 312 - Southwest and Pricing during C-19. Here are a few links we discussed:

Episode #311: Second interview with Michael Munger

michael c munger

Michael Munger was an absolute hoot! If Ron had him as a professor in college he might have become an economist!

Before we get to the show notes, a bit more about Michael:
Professor Michael Munger received his Ph.D. in Economics at Washington University in St. Louis in 1984. Following his graduate training, he worked as a staff economist at the Federal Trade Commission. His first teaching job was in the Economics Department at Dartmouth College, followed by appointments in the Political Science Department at the University of Texas at Austin 19861990 and the University of North Carolina at Chapel Hill 19901997. At UNC he directed the MPA Program, which trains public service professionals, especially city and county management. He moved to Duke in 1997, and was Chair of the Political Science Department from 2000 through 2010. He has won three University-wide teaching awards the Howard Johnson Award, an NAACP Image Award for teaching about race, and admission to the Bass Society of Teaching Fellows. He is currently director of the interdisciplinary PPE Program at Duke University.

Ron’s Questions: First Segment

  • Well, Mike, we had you on the last time in May of 2018 (May 2018, Episode #190). So just real quick, how have you been holding up with COVID? How's it affected your work at Duke? 

  • That's great. Well, you know, last time we had you on we talked about your book to Tomorrow 3.0, which had just come out that year in 2018. This time, I'm dying to talk to you about your 2019 book, Is Capitalism Sustainable? Is it true, that’s a collection of different essays you wrote between 2005 and 2019?

  • So before we give the spoiler alert, and you give the answer to the question—is capitalism sustainable?—why did you feel the need to put that book together last year?

  • Right. No, you talk a lot about that. And I want to get there with you. You also gave the definition of sustainability, I think, from the Environmental Protection Agency's website: “the meeting the needs of the present without compromising the ability of future generations to meet their own needs.” Using that definition, Mike, is capitalism sustainable?

  • You call it the road to cronyism. And do you see any path off that road if we stick with democracy?

  • No, that was brilliant. You anticipated my next question, because you said the most important concept in political economy is permissionless innovation. I thought that was a pretty profound statement because we've had Adam Thierer on (Episode #294, June 2020) and he wrote that book, Permissionless Innovation, and he also wrote another one called Evasive Entrepreneurs, how the Ubers of the world go around the regulation. So you're somewhat optimistic as long as we have that constant dynamism, that constant creative destruction, and entrepreneurs, that we can overcome the road to cronyism?

Ed’s Questions: Segment Two

  • We're talking with Duke University's Professor Michael Munger about his book Is Capitalism Sustainable? and other topics. I thought I would be remiss Michael if I didn't ask you about something that has come up in the news lately. I think September 13th was the 50th anniversary of what's known as the Friedman Doctrine and his article The Social Responsibility of Business is to Increase its Profits. And the New York Times had a huge symposium about it. But I wanted to get your thoughts on this, because this is something that 50 years on, we're still talking a lot about. The fact that corporations need to do more than just produce profits, they need to sustain something else, they need to create value for society some other place. What are your thoughts on the Friedman Doctrine?

  • I'm glad I got you riled up on a Friday. Well, if that gets you going, you're going to love my next question, which was an article that came across my desk from, of all places, Teen Vogue, which is now banned in my house by the way. So here's the quote, ready? “Capitalism is defined as the economic system in which a country's trade and industry and profits are controlled by private companies”… Here's the kicker…“instead of by the people whose time and labor powers those companies.”

  • Yeah. And one more we got about two minutes before the end of this segment, but this is one that I came across from an article in a Canadian magazine called Canadian Dimension. The author is Richard Wolff. And he says in “COVID-19 and the failures of Capital”: The result is that neither private capitalism nor the US government performed its basic duty of an economic system, to protect and maintain public health and safety. US capitalism response to the coronavirus pandemic continues to be what it has been since December of 2019, too little too late. It failed. It is the problem. And I look at the world, because you kept Kiwi fruits in all of the stores throughout the entire pandemic, and you but you couldn't buy napkins or toilet paper and you were upset that it's a failure of capitalism. This is absurd.

  • Yes.. And we've been referring to it, I think this was Bob Murphy who referred to it as “The Great Suppression” [it was Gene Epstein who first said that, not Bob Murphy]. I love that.

Ron’s Questions: Third Segment

  • Well welcome back, everybody. We're here with Duke University Professor Michael Munger. And Mike, in your book, you talk about Dan Ariely the author of Predictably Irrational, we've also had him on (Episode #43). But you make a really good point about the behavioral economists in general, that they take a large number of dim bulbs, and they say but once they get together in a mob they can suddenly solve all these problems, and you're talking about by voting. And then they stop there, and they talk about the weaknesses of the market and people's irrationality, but they never apply it to government.

  • That brings to mind the [William F.] Buckley quote, “I’d rather be governed by the first 500 names in the Boston phone book rather than the faculty at Harvard.

  • That's true. You know, another thing you do really well in the book are your chapters on price gouging, and anti-price gouging laws, they’re just brilliant. You lay out the three problems. But give me the best case you can for why these laws are so irrational?

  • Then you make another point that I think is really profound is the guy that comes off of his couch watching the football game in Ohio and brings generators and needed supplies to a disaster area, he gets arrested versus the guy who does nothing.

  • And you also compare it to laying siege to a city. Yeah, that would be an act of war if an army did it. But we call it public policy

  • It’s amazing. You know, Mike, I'm out here in California where we're being just inundated with wildfires. And, of course, it's all blamed on climate change. But the whole carbon emissions “market failure,” we need a carbon tax. I'm sure you've heard this. But you've taught me, and other economists have taught me that prices are not an input to the process, the result of a discovery process. How confident are you that government knows what the right price is to put on the carbon tax?

  • Great, great point. The other part of your book that I really enjoyed was you take on recycling pretty strongly, and you have this acid test for determining whether something is a resource, or garbage. Can you explain that?

  • And as you point out, whether the government separates our trash or we do it, it's a waste of labor.

  • This has been great. I've really enjoyed it. Thank you so much Mike for coming back on. Ed's going to take you home in the last segment. But thank you so much. It's always a great pleasure.

Ed’s Questions: Fourth Segment

  • We're back with Professor Michael Munger of Duke University. During the break, folks, Michael and I found out that we're both running for our respective Texas and North Carolina House. So let's talk a little bit of politics. We talk a lot about business and government but what about this thing called the duopoly? This thing led by that Commission on Presidential Debates, which sounds so official, that is a wholly-owned subsidiary of the Democratic and Republican Party. How do we take down the duopoly?

  • And one of the things I want to ask you about. There's a fairly controversial issue in the Libertarian Party. What do you think about going to rank choice voting is a potential workaround around that first past the post and would encourage more parties; like what they're doing in California, which is the open primary system, and you just have the top two, which of those in your mind the better of the two?

  • Yeah, my favorite this week has been all the people I've had to educate on “A vote for Jo Jorgensen is a vote for”…and fill in the candidate they oppose. By what logic do you get there at all? It really burns me, it is just so condescending to say that my vote on principle is really a vote for something that I detest.

  • Or if you really thought that your vote needed to mean something you would move to Wisconsin, because where you live in California or New York is not going to matter. Well, before we started, I made this joke about the Supreme Court Justice Ruth Bader Ginsburg dying two weeks ago when it seems like it was 10 years with this new cycle. And I know that something that Russ Roberts has talked a lot about is this political discourse is just getting more and more sour and the tribalism. How do you see us emerging out of this at some point, or is this may be going to get worse? Have we reached the bottom of the barrel in your view?

  • All right, well, you got a lot in there. Michael, thank you so much for joining us on The Soul of Enterprise. This has absolutely been a blast. And hopefully we will, one day when all of this starts to lift, my brother as I mentioned to you last time also works at Duke. So I would love to come out and have a beer. Maybe I can sit in between you and Dan Ariely, that would be great. Thanks for being on The Soul of Enterprise.

A Few Extra Links For You…

We had such a wide ranging conversation with Micahel Munger and we didn’t want you to miss these links. They are not endorsements (as you will see from the Teen Vogue link) but they were points of discussion during the show.

  • A Friedman doctrine‐- The Social Responsibility Of Business Is to Increase Its Profits

    “There is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception fraud."

  • What 'Capitalism' Is and How It Affects People

    Capitalism is defined as an economic system in which a country’s trade, industry, and profits are controlled by private companies, instead of by the people whose time and labor powers those companies. 

  • COVID-19 and the failures of capitalism

    The result is that neither private capitalism nor the US government performed the most basic duty of any economic system: to protect and maintain public health and safety. US capitalism’s response to the coronavirus pandemic continues to be what it has been since December 2019: too little, too late. It failed. It is the problem.


Bonus Content is Available As Well

Did you know that each week after our live show, Ron and Ed take to the microphone for a bonus show? Typically, this bonus show is an extension of the live show topic (sometimes even with the same guest) and a few other pieces of news, current events, or things that have caught our attention.

Click the “FANATIC” image to learn more about pricing and member benefits. 

New this week!

Bonus episode 311 - DJT C-19 and more. Here are a few links we discussed:

Episode #310: Live! Well, sorta, from Ignite by CPB Canada

CPB Canada

We couldn’t be happier with the questions that came in from attendees of Ignite 2020 by CPB Canada. It was all about the subscription business model!

About CPB Canada:
Certified Professional Bookkeepers of Canada is a member-based association, a national certifying body and the leading professional and career development organization for bookkeepers in Canada.

So where are the show notes?
For this week’s show, we would like to extend a gracious thank you to CPB Canada for hosting Ron and Ed during their virtual event. We primarily took questions from the audience and, as you would guess, they were mostly about the subscription business model. Show notes could not do these questions justice so you can listen to the episode for the good stuff!


Bonus Content is Available As Well

Did you know that each week after our live show, Ron and Ed take to the microphone for a bonus show? Typically, this bonus show is an extension of the live show topic (sometimes even with the same guest) and a few other pieces of news, current events, or things that have caught our attention.

Click the “FANATIC” image to learn more about pricing and member benefits. 

New this week!

Bonus episode 309.2 - Subscription Update - Apple Microsoft and More. After Tuesday's Wonkfest, we needed to take a break from politics and talk subscription.

Bonus episode 310 - Some free riding including words about words. Featuring discussion about these articles:

Episode #309 - Interview with John Garrett

john garrett - headshot.jpg

Ron and Ed welcome professional comedian and CPA, John Garrett to the show to talk about John's new book based on his podcast of the same name - What's Your And? We were also joined by college football legend, Lou Holtz. At least, that’s what the caller told us in segment three. You really should listen for the details.

Before the show notes, a bit more about John:
John Garrett is a catalyst for corporate culture change. He’s on a mission to help teams break down barriers, foster unity and strengthen bonds. No matter where you are in your career, it’s important to differentiate yourself to achieve your goals. The future professional doesn’t define expertise simply in college degrees and certifications. They have passions outside of work that enhance their ability to develop stronger levels of trust with colleagues and clients. Through hilarious stories and extensive research, John encourages everyone to share their passions because they are the very heart of your organization’s culture.

Ron’s Questions: Segment One

  • I'm really excited to bring in John Garrett. He's a two time Emmy nominee, and is a catalyst for corporate culture change. He's on a mission to help teams break down barriers foster unity and strengthen bonds. The future professional doesn't define expertise simply in college degrees and certifications. They have passions outside of work that enhance their ability to develop stronger levels of trust with their colleagues and clients. John encourages everyone to share their passions because they are at the very heart of your organization's culture. John Garrett, welcome to The Soul of Enterprise.

  • I first heard you on a Sirius [comedy channel], didn't know who you were, but when they introduced you as a CPA, Notre Dame grad, it got my attention. You did this whole riff, I think it was on Willie Nelson. How he was complaining about the war or defense spending. And you said, well, what's the point? You don't even pay taxes anyway.

  • I just remember thinking, wow, this is crazy. You know, a CPA, former PwC. So tell us the john Garrett life story.

  • That's awesome. What I have to ask you, because I think you asked me this when I was on your show, when did you know you wanted to be a CPA? When did that happen for you?

  • Well, this book [What’s Your And?: Unlock the Person Within the Professional] has been a while in coming. We spoke about it a while ago. I remember you were said you were working on it and I said, Oh, I can't wait, when you get it done, we'll have you on the show. But why did you write it and why now? Why is this message so critical now?

  • It is a great message. And before we get into that, how did you get Lou Holtz to write your Foreword?

  • Wow, that's awesome. When I saw that, that gets your attention.

  • Well we've only got a couple minutes John, maybe less, but just real fast—and I'm sure Ed will pick up on this—but you say ignoring your And makes you less successful and less professional and makes your firm less successful. What do you mean by that?

  • You know, that is a profound idea, and I love the way you expanded on it in your book. So I'm sure we'll talk more about that.

Ed’s Questions: Segment Two

  • Folks, the book is What's Your And?, the author is John Garrett and he is here on The Soul of Enterprise this week. And John, before we dive into the meat of the book, I wanted to ask you, what was the process for you of writing? How did you go about writing this book?

  • You know, you incorporate other people's stories and the way I took it is it wasn't necessarily verbatim transcripts of your podcast interviews with them, but certainly those stories were then incorporated and scattered throughout the book. Is that correct?

  • Yeah, and it is really interesting the way the stories bounce back between your voice and then to the person that you're talking about, and you're giving great examples of what you just cited. One of the parts that really spoke to me was this, as you write, “Many professionals feel that keeping their passions to themselves is the safest move and the best as far as their career development. They feel that talking about them will make them vulnerable, and others will perceive them as not being very good at their job. These professionals are wrong, dead wrong. If you want to be staffed on a cool project the manager needs to know who you are. Expound on that a little bit. That really spoke to me.

  • Do you think this, at least where I am at Sage, that this is open and encouraged. But are you still finding that a lot of organizations do not encourage people to talk about their And?

  • They want to hear it and I think that's a good point. And you do make that at another point in the book.

Ron’s Questions: Segment Three

  • Welcome back everybody. We're here with John Garrett, the author of the newly released What's Your And? John, one of the points you make that I just thought was phenomenal was that you say employers look for extracurricular activities, but then they don't give the people they hire the time to continue with those. And then you pointed out that resume writers and coaches and people on LinkedIn are really suggesting you remove these extracurricular activities. Really? That does seem incandescently stupid.

  • As you know, at least in the CPA profession and other professions as well, we have this graying, that a lot of people are retiring. Something like two-thirds of the AICPA membership is eligible for retirement in the next seven or ten years. It's an astonishing number. And you actually blame no activities outside of work for the lack of succession planning in firms. And I thought that was a really interesting link.

 Ed Kless Interrupting… “Hey listen we have got Lou Holtz on the line.”

Greg Kyte… “Hey of course this isn't Lou Holtz. This is Greg Kyte from Utah. Long time caller, first time listener.”

Ron Baker… “Good comedians don't grow on trees. They swing from them.”

[The remaining portion of this segment has been edited out of the show notes. It was hilarious and you really should listen.]

  •  John, this is another thing that I really enjoyed about the book. You give many different ways for firms to disseminate their people's Ands. Toastmaster lunches. You've got your marketing ideas, newsletters. But explain the bucket list idea.

  • No, that was a phenomenal idea. It's kind of like you also talked about newsletters, and I know some firms have put movie reviews into their newsletters or recipes. And that's what gets read not the technical crap.

  • Well, John, this is great. Unfortunately, we're out of time because of Greg.

Ed’s Questions: Segment Four

  • John Garrett is our special guest today on The Soul of Enterprise. His book is What's Your and both Ron and I have had the privilege of being on that podcast. So we will post up notes where you can go listen to the episodes where we were on. I'm a recidivist there, I was on twice, I get to one-up Ron on that one.

  • I wanted to ask you one of the things that you point out, and this is in your section about being not afraid—don’t be afraid to be an original. And you say, “The world is starving for authenticity and uniqueness.” And authenticity is a word that really resonates with me. In fact, it's a word that I've talked a lot about in my professional career. I have a whole section in my consulting course on the notion of authenticity. And I just wanted to hear what your thoughts are on authenticity. When I hear it, what it means to me is not being afraid to say what you see and say what you feel, even more importantly. You can phrase it as “I think” rather than “I feel” because I think that's a better phrase, but we can't be afraid not to, and I have found that authenticity is actually, in my opinion, the most important thing that anyone in a consulting role can be.

  • Yeah, I think that was a super insight. The notion of it's easier to define what is unprofessional, and we can take anything is professional up to the point of well, no, that's gone beyond the pale right. Because David Maister in his books long ago, 30 plus years ago, talks about that's the worst thing that you can say to a professional, is that they're behaving unprofessionally. That really sticks in their craw.

  • But you do admit throughout the book that that line has changed over time. And we're constantly experimenting with it and playing with it. So talk a little bit about that.

  • So talk a little bit about that. Any impact that you've seen on the concept that you put forward in the book because of COVID. Have you seen any impact with regard to that?

  • Our North American Managing Director, Nancy Harris, who I know you know, because you met with her when we were doing the Sage sessions. Whenever we have a meeting now—and this just happened yesterday—it’s almost a riot if she does not bring her dog, Harley, onto the broadcast.

  • So we've only got about a minute or two left John. What's next for you? Is there another book on the horizon?

  • I'll give you a piece of unsolicited advice, and I think Ron will back me up on this. Resist the temptation to provide a checklist.

  • Outstanding. Well, john, thanks so much for being a guest on the show today. Really appreciate it.

[EDITOR’S NOTE: Both Ron and Ed have been a guest on John Garrett’s podcast. Here is a link to Ron’s appearance. Here is a link to the first and second appearances for Ed.]


Bonus Content is Available As Well

Did you know that each week after our live show, Ron and Ed take to the microphone for a bonus show? Typically, this bonus show is an extension of the live show topic (sometimes even with the same guest) and a few other pieces of news, current events, or things that have caught our attention.

Click the “FANATIC” image to learn more about pricing and member benefits. 

Bonus episode 109 - More with John Garrett. We were really fortunate to have John Garrett stick around for the bonus episode so we have another hour with him just for our Patreon members!

Episode #308: Interview with Margaret Wheatley

margaret wheatley.jpg

Ron and Ed were honored to interview Margaret Wheatley

A Bit More About Margaret:
Margaret Wheatley has worked globally with many different roles a speaker, teacher, community worker, consultant, advisor, and formal leader. From these deep and varied experiences, she has developed the unshakable conviction that leaders must learn how to evoke people's inherent generosity, creativity and need for community. As the world tears us apart, sane leadership, on behalf of the human spirit is the only way forward. She's the author of nine books, including the classic Leadership and the New Science: Discovering Order in a Chaotic World, Third Edition (2006). Her newest book, in 2017, is Who Do We Choose To Be?: Facing Reality, Claiming Leadership, Restoring Sanity?

Ed’s Questions: Segment One

  • First question to you Margaret, how are you holding up personally with regard to the whole COVID situation that we're going through.

  • Yes, just this morning I was talking with my mentor, Howard Hanson. And he told me a story about his mother-in-law who is turning 100 next week. And what a great story and I wished him well, and her husband had passed 25 years ago, and he was saying that she could have gone down the path of being depressed about it. Instead, she embraced her new community. She became active in her bridge club and the place where she lived, and I was thinking, I wonder what someone going through that same situation today as his mother-in-law did, would she be able to do that with everything that's happened to us regarding COVID? So what's been your thinking about the impact of COVID, from an ability to build a strong community standpoint?

  • So it is the people stepping up at this time willing to put themselves on the line with regard to being willing to get on Skype calls or Zoom calls as opposed to resisting that technology?

  • One quote I heard was, what are we going to do when we go back to live meetings and can't mute all?

  • Which leads me into the next question that I wanted to ask you. And I mentioned before we started recording that I've been a reader of your books for a couple of decades now. I have physical copies of some of your books as opposed to just Kindle versions. And it was a great treat to go back and re-read some of the works that I had encountered a dozen years ago or more. And one of them was your book A Simpler Way. And the opening in that book reminded me a little bit of Yuval Levin’s new book, which is called A Time to Build, where he's talking about the need to refirm up our institutions, but in a more positive way, because he says they've gone from being formative of the people in them to just being platforms that other people use, and it even allows others who cracked the code to come in. And when you think about what's happened with our political parties, you know, both Donald Trump and Bernie Sanders to a certain extent were outside of the institutions that they rose up in because they just use them as platforms, rather than being shaped by them, or helping to shape them. Thoughts on that?

Ron’s Questions: Segment Two

  • Welcome back, everybody. We're here with Margaret Wheatley, the author of, among other books, Leadership and the New Science: Discovering Order in a Chaotic World. It's out in its third edition as of 2006. Meg that was the first book of yours I read in 1996 or 1997. Because I was introduced to it in an article from an author who I really admired, he was writing about change. And he quoted you and I thought what he quoted was deeply profound. So I ran out and got your book, and it is profound. And I can imagine because you had a business audience somewhat in mind, I can just imagine some people going, “Well, what am I supposed to do Monday morning?” We're so used to checklists and just led by the nose. Did you ever get that type of feedback?

  • I love how you weave in that there's three different areas of science that you are intrigued by: quantum physics, self-organizing systems, and chaos theory. You do such a great job of explaining those, especially to a layman like me. And every one of those that you discuss is profound. But you quote, when it comes to systems thinking, the ancient Sufi teaching that captures the shift and focus of this idea that “you think because you understand one, you must understand two, because one and one makes two, but you must also understand ‘and.’”

  • Do you think this COVID crisis is—and this you explained really well from chaos theory—that you have to go through a period of chaos to emerge in a new way. Do you think this crisis could be that point of chaos?

  • Now, in the book you talked about what biology has taught you, and it taught you that you can have faith in the system. If a system is suffering, this indicates that lacks sufficient access to itself. It could be lacking information or it might have lost clarity about who it is, trouble with relationships. Can you explain that? Because I just think that is so profound, it lacks sufficient access to itself?

Ed’s Questions: Segment Three

  • Back with Margaret Wheatley on The Soul of Enterprise and Margaret during our break one of the things that you mentioned to us is that you really wanted to get an opportunity to address our audience and be present to give them a talk about being leaders as leaders, and I thought that was a really interesting turn of phrase. What do you mean by that, enlighten us?

  • Riffing off of Milton Friedman, he said something in an economic context but when you were talking it reminded me of this quote, he said, “Our job is to keep these ideas around, so that when the impossible becomes the inevitable, the ideas are still around.”

  • So, it's funny, even before we started recording today, we were talking about your books and I said I had them and they were always beautifully done with photo essays, and poetry. Talk a little bit, we have a few minutes before our break, and now I see why you haven't released a new book but instead have posted online Warriors for the Human Spirit, a song line, a guided journey by voice and sound. So talk a little bit about that offering that you've made with Jerry Granelli, is that correct?

  • The last thing I wanted to talk with you a little bit about before Ron takes us home to the top of the hour is, and I've signed up for this next week, you're starting a thing called leadership for a changing world, a program that's being offered. Tell us a little about what you're going to be talking about.

  • Margaret, I am going to say goodbye to you now because Ron is going take you the last 15 minutes. But I want to thank you so much for being a guest. This has been a real thrill to meet one of my heroes from a business author standpoint. So thanks so much for being on the show.

Ron’s Questions: Segment Four

  • Welcome back, everybody. We're here with Margaret Wheatley, author of Leadership and the New Science: Discovering Order in a Chaotic World. Meg I have to tell you; you had a section in the book, I forget the chapter, but you talked about Frederick Taylor and Frank Gilbreth. And you said, “I still find this early literature frightening to read.” You'll be happy to know that our very first show on this program was bashing Frederick Taylor (Episode #1). [Meg: Yeah, but he's alive and well]. He is. And that was my question, we call it the cult of efficiency but why? Why is his allure so powerful

  • We've created organizations that are less creative and adaptable then the people inside of them. Gary Hamel, his new book, Humanocracy is just a screed against bureaucracy, and how we need to kill it. And he gives lots of examples of companies that have. Do you see us overcoming bureaucracy?

  • We've done a few shows on organizational change management and you quote in your book studies that show 75% of these initiatives fail, or at least don't live up to the people's expectations.

  • You wrote, and I just thought this was lovely. You said, “I was well trained to create things, plans, events, measures, programs. I invested more than half my life and trying to make the world conform to what I thought was best for it. It's not easy to give up the role of master creator and move into the dance of life.”

  • Margaret, it has been an honor to chat with you. I just I love the book. Highly recommend that everybody read Leadership and the New Science: Discovering Order in a Chaotic World, and make sure you get the third edition. It's absolutely profound. You'll think your way through this book. It'll give you new words to use, new models to think about, and new ways to see the world. It's had a profound impact on me, Meg, thank you so much for being on The Soul of Enterprise.


Bonus Content is Available As Well

Did you know that each week after our live show, Ron and Ed take to the microphone for a bonus show? Typically, this bonus show is an extension of the live show topic (sometimes even with the same guest) and a few other pieces of news, current events, or things that have caught our attention.

Click the “FANATIC” image to learn more about pricing and member benefits. 

Bonus episode 109 - COVID Update, Mulan, and Subscrptions. Here are a few stories we discussed during this episode:

Episode #307: Interview with Ronald Bailey

ronald bailey.jpeg

Ron and Ed are fired up to welcome Reason Magazine science editor, Ronald Bailey to the show.

A Bit More About Ronald:
Ronald Bailey is the science correspondent for Reason, where he writes a weekly science and technology column. From 1987 to 1990, Bailey was a staff writer for Forbes magazine, covering economic, scientific and business topics. His articles and reviews have appeared in The New York Times, The Wall Street Journal, The Washington Post, Commentary, The Public Interest, Smithsonian, TechCentralStation, National Review, Reader’s Digest and many other publications. In 1993, he was the Warren T. Brookes Fellow in Environmental Journalism at the Competitive Enterprise Institute. In 2006, Bailey was shortlisted by the editors of Nature Biotechnology as one of the personalities who have made the “most significant contributions” to biotechnology in the last 10 years. Prior to joining Reason in 1997, Bailey produced several weekly national public television series including Think Tank and TechnoPolitics, as well as several documentaries for PBS television and ABC News. He’s author, along with Marian Tupy [See Episode #304 for our interview with Marian], of the newly released book: Ten Global Trends Every Smart Person Should Know: And Many Others You Will Find Interesting.

Ron’s Questions: Segment One

  • Ron, welcome to The Soul of Enterprise. I've been reading you for a long time. I first read one of your first books in 1993, Eco-Scam: The False Prophets of Ecological Apocalypse. You have a very impressive career, and have changed your mind, and evolved your thinking, so we'll talk about that for sure. But I have to ask you, did you know Warren Brookes? [Author of The Economy in Mind].

  • Brookes had a powerful impact on me with his book The Economy in Mind. One of the reasons we use the Reagan quote, which is the Moscow speech he delivered written by Joshua Gilder, George Gilder’s nephew, is that he quotes in there the economy in mind. When I saw that you were the Warren Brookes fellow so I had to ask you. Ron, how have you been holding up, personally, with all this COVID and all this other craziness going on, we're in the middle of an election?

  • And I want to ask you about that. But first, how would you grade the government's response to this pandemic, both at the state and federal levels

  • Was that just the FDA, just bumbling the whole thing, or just trying to keep control?

  • I am going to make a confession to you Ron. I haven’t received the book yet. As a result, I am going to stick with COVID and climate change with you. I've been reading a lot of your posts and articles and you wrote one a few days ago about a vaccine, and how Americans are worried that the approval process is being driven more by politics than science. And that's on a bipartisan basis, both sides, but yet 62% said they would they would take the vaccine prior to the election. [Source: “Poll: Americans Worry COVID-19 Vaccine Approval Is Politicized,” Reason, September 1, 2020]. Would you take the vaccine?

  • Your co-author, Marian Tupy, we had him on and he made that point about how we're just accelerating vaccines, which is fantastic. And you actually anticipated my next question. I was going to ask you about all these regulations that have been removed or relaxed during this crisis. Do you think it'll stay that way? Or will those come back?

  • I hope you're right on that. And you know, I re-listened to a broadcast you did with Jonah Goldberg, because we love The Remnant podcast. And you were on May 7, and you guys were talking about the lock downs. Do you think the cost of the lock downs exceeded the benefits from an economic perspective?

Ed’s Questions: Segment Two

  • And the book is Ten Global Trends Every Smart Person Should Know: And Many Others You Will Find Interesting, by Ronald Bailey and Marian Tupy. Marian was a guest of ours about a month ago. First, I want to congratulate you on the book Ronald but also to say it's beautiful. It's just a beautiful book.

  • Well, I'm thinking honestly several copies of for people at Christmas, because it's something that needs to be distributed among my family members. And not because they're anti this, but because I think they are often misinformed. Let's open with a question that you asked in the Introduction to the book: Why do so many smart people wrongly believe that, all things considered, the world is getting worse?

  • I haven't read every word of it. I perused through the whole thing, and I'm about halfway through the full book. But one thing I wanted to know, thousands of years from now people are going to dig up our stuff and wonder why many of them have an apple, half bitten apple on them, right? They'll be able to figure it out from our records, not just that. So let's talk about the Ten Trends. The first trend is the Great Enrichment, and we've had Deirdre McCloskey on [twice, Episode #6 and Episode #293] Trend Two is the end of poverty.

  • I want you to take it even a step further. Because you do mention this, at the very end of the section, you say the Intergovernmental Panel on Climate Change, expects the economy will grow by $600 trillion by 2100. What will that mean for our children and our grandchildren and even the grandchildren of those in Sub-Saharan Africa?

  • I've said there are people worried about future shock. I have future glee. And I want to be around for some of this stuff. All right, well, trend number three asks a question. So I'll just ask it: Are we running out of resources? 

  • And then I hear this, “but what about the rare earths that are all in China? What about the rare earths?”

  • So Trend Four is a peak population. Shorter answer is we haven't reached it, but we're getting close. But my question to you is what happens when the population starts to decline since we've not experienced that, except for tragedy. This would be a situation where it's not tragic?

  • Well, let's try to get another: Trend Five in here before our break, and that is the end of famine, which is just amazing. But the question that I hear after I mentioned this to people that famines have gone away is, “Oh, but what about GMOs?” But that is what has prevented famine.

Ed’s Questions: Segment Three

  • Ed Kless here again with my friend Ron Baker, and we have today the author of the newly released book Ten Global Trends Every Smart Person Should Know: And Many Others You Will Find Interesting and I love that subtitle, too. Unfortunately, we're probably not going to get to the many others that you'll find interesting today but let's talk a little bit more about Trend number Six. You alluded to this in the last segment toward the end, which was the end of famine, and Trend Six is more land for nature.

  • Trend Seven is planet city. We all remember the planet city in Star Wars fame. I think this is an interesting trend. One thing I did want to ask you about this, though, is do you still feel the same in light of COVID-1—that we are going see this trend continue towards cities?

  • Outstanding. Trend number Eight is democracy on the march. The chart really shows the incredible increase in democracy across the world not since like the 1940s when you would think it is, but actually since the 70s is really when the switch began to occur. And yet again, there's still fear, just today I had a friend post on Facebook if you vote for x you are voting for the end of America as we know it.

  • Trend number Nine is the long peace. I felt very personally connected to this one, because both my grandfather and father—I can remember conversations with them—who said, “You know, Ed, it’s likely that you or your brother will end up going to war at some point.” I grew up in the 70s and early 80s. And it was still the belief among that generation that this would happen. But this trend shows the number of wars and interstate wars have just been trending down and that's been a wonderful thing. So talk about the long peace.

  • Let me just give you an opportunity on both democracy on the march, and the long peace, something that's been in in the news lately. China, and maybe specifically comment on Hong Kong, is there a concern there?

  • Just quickly as follow up, are you concerned about that at the government level or more at the private sector level with say, Facebook, Twitter, that kind of thing? It's convoluted.

  • Yeah because the private sector is like the government could take that over. Well, the last Trend in the top 10, as I said, I think there are 78 total trends in the book, and maybe we'll get to one or two of the others. But number 10 is a safer world. And by that you mean the significant reduction in deaths from natural disasters from 1900 until the present. Talk a little bit about that.

  • Great stuff. Well, that rounds out the top 10. Now, I'm excited to have about three minutes to get to some of the some of the other trends and the one that jumped out at me is Trend number 14, which is global inequality is falling. And then the response is always “But what about local inequality?” And Ron and I like to ask this question, “Is it fair that Jeff Bezos is so rich? And what's my fair share of his money anyway?”

  • All right, well, let me see if I can sneak one of the later trends in on you, because this is one I think that most people would not even get close if you asked them what the percentage was that have access to electricity. Trend number 60 reveals that 86% of the world has access to electricity. I don't think there's anybody that I know would get that right at all.

  • No, I don't want to camp one night, 100,000 years of human civilization means I sleep inside. Unless you want to great but I don't want to. Well, the book again is Ten Global Trends Every Smart Person Should Know: And Many Others You Will Find Interesting by Ronald Bailey and Marian Tupy. We highly recommend it.

Ron’s Questions: Segment Four

  • Welcome back, everybody. We're here with Ronald Bailey, the science correspondent for Reason magazine. And Ron, I know that your first article in Reason on global warming was back in 1992. And you thought back then that the threat was overblown. And you even published a book, Eco-Scam, in 1993, I believe, which I read—I think that was the first book of yours that I read—and it really had a big impact on me. But you've changed your mind. And now you think it could well be a significant problem. What changed your mind? [Source: “Climate Change: How Lucky Do You Feel?,” January 2020, Reason].

  • No, that's a great point. And I also want to ask you, I just finished reading, about a month ago, Bjorn Lomborg's new book False Alarm: How Climate Change Panic Costs Us Trillions, Hurts the Poor, and Fails to Fix the Planet, what's your take on that?

  • Like you said, take [econometric and computer models that project one hundred years into the future] with a vat of salt, not a grain of salt. I love that.

  • We've only got a couple minutes. But I’ve got to get this question to you too, because you probably know this guy, Patrick Moore. One of original founders of Greenpeace. I also just finished his book Confessions of a Greenpeace Dropout: The Making of a Sensible Environmentalist. Why the hostility to nuclear power from those most worried about climate change? China Syndrome?

  • Yeah, you know, Michael Moore's new movie, Planet of the Humans, apparently blasts solar and wind power as really expensive, but he's reverting back to the population problem. It's too many people. We have too many people.

  • Excellent. Well, Ron, thank you so much. It's been such an honor having you on long, we are longtime fans. Keep up the great work. And Ed, what do we have coming up next week? 

Ed: Next week, We're going to welcome Margaret Wheatley to our show, author of Leadership and the New Science, and some other really wonderful books.

Ron: Fantastic. All right, I'll see you in 167 hours.


Bonus Content is Available As Well

Did you know that each week after our live show, Ron and Ed take to the microphone for a bonus show? Typically, this bonus show is an extension of the live show topic (sometimes even with the same guest) and a few other pieces of news, current events, or things that have caught our attention.

Click the “FANATIC” image to learn more about pricing and member benefits. 

Bonus episode 107.1 — “Conversation with Robert Wood” AND 107.2 — “DOJ moves against Google” — features our new partnership with 90Minds and an amazing rant from Ron about the DOJ.