This Week in Startups - All-In E5: WHO’s incompetence, kicking off Cold War II, China’s grand plan, 100X’ing America’s efficiency

Episode Date: July 11, 2020

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Hey, everybody, welcome to the All In Podcast. This is our fifth episode. As you know, we regularly publish this podcast, well, every two to four weeks, something like that. And just to give you a little idea of how well this is going, the podcast peaked at number 10 in tech podcasts, even though we never publish it. And we're only four episodes in. So tell your friends about the podcast so we can be number one and just dunk on traditional

media, which is full of people who have us as they. guests. Jason, number 10 on what? Apple? Apple technology podcast. We literally raced. I mean, it went from like, we debuted in the 20s, then the teens, and then boom, we hit number 10. And I was talking to somebody in media who has us on as guests. And I was like, listen, I formed a super team and we're now getting more traffic. I'm sorry, who are you talking to just like a mirror where you were just looking at yourself? I mean, you are so fucking arrogant after that shitty video. What video are you referring to? What video? Oh, my God.

Oh, look, you want me to say it to all the listeners. You want me to say it. Let me just. Somebody made a cut of the billion times Jason mentioned he was an early investor in Uber. All right. Take it easy version Galactic slash slack investor. I don't say anything. I know.

They put it on the Kairon, the lower third every time you're on. CEDBC, everybody. My problem is I have too many unicorns to mention just one. Right. So they just go with, they just go with PayPal and knows Peter Thiel. David, David,

I have a question. Why is there a picture of two pregnant men behind you on Zoom? We now have the technology for men to be impregnated. This is a recent picture of Jason and I on the golf course. And I'm not sure who's more out of shape. People could decide for themselves. You look like you're about to collapse. In fairness,

in fairness, It's 1006 degrees. Put his hands under his shoulders and holds him up. It's 106 degrees at 80% humidity. And I kid you not. This was the second and third time I played golf. This was the third time. And I'm going to just ask David Freiberg is here.

Of course, he's our science friend, buddy, and Chimov Polya Hoppetia is here. How many holes? I want one of you to set the over under on how many holes we complete it each day. the maximum number of holes we completed. Four? Okay. Shemot said the line of four and you're taking the over. It was, Sacks?

Five. Five. And actually, and there's a red door every five holes. So that may have had something to do with it. I took nine because I figured Jason was on his rush to the hot dog stand. Well, that's where the red door is where the hot dogs are. Yeah. You know why?

I said these two dorks with ADHD. can barely make it an hour doing anything. And so if you think an average round takes four hours, then basically you know, you get through four holes in about an hour and then you want to give up. We got to the fifth hole. I am addicted to golf now. I don't know if you guys know this.

You can gamble on golf. Jason, I, the biggest match I ever played was a $500,000 million NASA. I don't know what a NASA is. I lost one and a half bets. I lost 750K. What is a NASA-type bet? NASA is just basically a gambling bet on a per hole basis. Got it.

We had just a ton of fun, and it was great because this was the first time I've ever... It's the single best aspect of golf, in my opinion. If you gamble, it makes that game one of the most incredible games because people with mental fortitude who cannot play at all can show up and literally make hundreds of thousands or millions of dollars. Yeah, we were playing for hundreds of dollars per hole. So let's just leave it at that. In fact, we're playing $100 a hole.

So it was just for fun. But man, I don't know about you guys. Do when do we have some, if we know somebody who's got a membership in one of these places, I'd love to go back out again. But it was great fun. And it was fun to Shadow Creek. Come to Shadow Creek in Vegas. We can play.

It's probably the best gambling golf course in the world. Okay. I'm in. So let's get to business for those of you who are tuning in for the first time. Chimoth Pollyhappatia is my co-host. here on the podcast. We've been friends since we both did a very brief tour at AOL. He then went to work for Mayfield, which is a venture firm you might not have heard of. He stayed there for about 27 weeks before going to work for Mark Zuckerberg. He secured the bag, then started his own

venture firm. It grew way too big, and he kind of got bored having to manage 100 people. So now he's running his home office venture firm and doing two deals a year. The one you've certainly heard of is Virgin Galactic where he's taking people to space and he did a SPAC for that. IPOB and IPOC are lined up from what I understand. He'll correct me if I am wrong and he'll be spacking two more companies once a year. I guess will be the pace. Is that correct? Chimoth. Among other things, but yeah. Yeah. And then David Sacks has now become, and David Freeberg have become regulars. We've decided we're going to stick with this foursome as it goes because we're getting a really nice passing of the ball around topics.

And David Sacks went to Stanford with folks you know like Keith Rabeau, Peter Thiel, during an era where they were a bunch of huge nerds who created a way to transfer money on Palm Pilots called PayPal. it didn't work until they decided to move it to email. I'm not sure whose idea, who gets credit for moving it to email, Sacks? Sacks. Who decided like, hey, I don't know. Sacks of silence is his way of saying me. Because it was an abject failure when you tried to send money between Pompile. It's Peter Tiel's original idea.

But then somebody woke up and said, well, why don't we just do this over email? What he hasn't said, let me tell you the names at PayPal he has not said yet. Musk, Teal, Hoffman, Levchen, silence. Radio silence so far, David Sachs. Jeremy Stoppelman, Chad Hurley from YouTube, Jerry Stottman from Yelp. Anyway, he was part of that cohort. Then he made a movie called Thank You for Smoking, which was Jason Reitman's first film. Jason Reitman then went on to great success.

That film actually made money. Sacks was so absolutely depressed by how long it took to make one film and how painful it was. He then decided to go create a billion. dollar company in under three years called Yammer, which Chamoth made a ton of money on and he cackles about regularly. And then David Freeberg is with us. He is just the smartest kid at the table, but somehow figures out how to lose tons of money to us in poker. He created climate.com and sold it to Monsanto. He created Metro Mile and he created Itza, which felt horribly. But that just goes to show you. Nobody even remembers what ETSA is, but they do remember his giant

multi-billion dollar companies and he now is running his own startup studio, which is making incredibly interesting companies. Can I talk about the one that's related to beverages or not? Not yet. Okay. Anyway, there's a company related to beverages that is so game-changing. I just said, no. You can't say it. He showed it to us under Friendie. I just said, can I talk about the beverage company? Yes or no. I'm trying to give the guy a goddamn plug here. But he said, he said no, so you can't do a plug. I'm not doing a plug, but I'm teasing it.

And I think he's literally sitting on what could wind up being the greatest, most successful company of the entire group, period. Okay, let's jump in. I want to talk about, David, you sold climate to Monsanto for a billion dollars back in the day when it was shocking to people, that amount of money. Still is. But, you know, you were one of the first sort of quote unquote, unicorns. And then you, you know, were right in the front seat in Monsanto, probably could have

been CEO if you wanted. I want you to talk to me about what is going on with Bayer, Monsanto, Roundup, and I want to use that as a jumping off point to talk about the World Health Organization. So Roundup is a molecule known as glyphosate, and it's been used as an herbicide for decades. And for decades, it was very well studied. The U.S. EPA and the FDA and global health organizations have studied it carefully because of its incredible use. It biodegrades, the core molecule glyphosate biodegrades in a couple of days. And it is a very effective herbicide. So when farmers grow stuff, they don't want weeds growing in the field.

And Roundup was a pretty effective way at getting rid of weeds. so you could get more crop per acre, more yield per acre. A long time, people thought that Roundup, like many of the traditional persistent chemical herbicides, was carcinogenic, and people were concerned about that. And as a result, there was a lot of studying done. In fact, before I sold my company to Monsanto, I spent a lot of time researching Roundup and Glyphosate to make sure that it was safe that I wasn't selling my company to what everyone was saying was the devil at the time.

And from a scientific basis, I felt pretty comfortable about the data, the studies, the research that had been done. When I was at Monsanto, there was a bit of a political event that took place at the World Health Organization. The World Health Organization runs a group called IARC. It's a cancer research institute that's part of the WHO. And there was a gentleman who was politically trying to get himself on that counsel to make the case that glyphosate was carcinogenic. And years later, a Reuters reporter identified how he was able to get this counsel to disregard a number of scientific findings and studies. including the US EPA and other very wide, broad-ranging studies by international organizations

showing that Roundup or glyphosate was non-carcinogenic. But the political process by which he was able to get on the council, get that data excluded from a study, and then get IARC to declare Roundup or glyphosate a possible carcinogen or probable carcinogen, then triggered a bunch of tort lawyers in the United States to start suing Monsanto and now Bayer, because Bayer bought Monsanto a number of years ago, for causing cancer. And the data is absent, but the way the U.S. court system works is if you have some probable definition and you can get a jury to say yes. And the probable cause was there's a probable carcinogen label applied to it by IARC. And this Reuters reporter years ago did a great job

highlighting how this whole thing was kind of politically motivated and the data and the science from a broad range of scientists, including the AAAS, a lot of scientific membership organizations, very definitively and clearly show that glyphosate is non-carcinogenic. But, you know, it was super troubling and frustrating. Now, look, this doesn't bother me personally anymore. I have no interest whatsoever. But it turns out that these lawsuits are now going to cost Monsanto and now Bayer, which bought Monsanto, somewhere between $10 and $15 billion to settle this.

And this is all a function of some political hacking that took place at the WHO. So for a long time, I've had a bit of a concern about how the WHAs. WHO operates and the process by which they do scientific assessment and validation. And a lot of this has obviously become much more apparent with the coronavirus crisis and the response with respect to masks and treatment and so on. So that's a little bit of the background. I think you're referring to, Chimov. And so go ahead, Shemoth, if you want to.

No, I mean, to me, I think that this is such an interesting thing. I wanted to use it as this en route to the WHO largely because it's like the ineptitude keeps compounding in that organization. I just read that we still don't have a definitive posture on masks from the WHO and that they are finally seeding ground to the idea that the coronavirus could partially be spread in air. I mean, this is so bizarre because it's the middle of July. There are three million cases and half a million people who have died. And we are still there. And so, you know, when I saw that Trump pulled out of the WHO, you know, in this weird way, the way he did it was kind of cartoonish and stupid and, you know, kind of an insolent child. But the reason he did it was

actually pretty reasonable because this organization is not a scientific or health body. It's an academic body. And, you know, you can see this in universities where all of a sudden things tilt away from facts and it tilts towards, you know, all kinds of very, very, very, very small points of sort of like political capital that people fight over. And so these politicized organizations are incredible. And to the point at which we saw, you know, this past week, the report that well over 250 of their own scientists who they rely on said, hey, it's very clear that this is an airborne phenomenon, aerosol, tiny microparticles of aerosol, when people talk, when they sing when they cough, when they sneeze, all this obvious stuff, floats in the air. And if you

have a closed air conditioned, you know, location like, say, a church in the South or a hotel or a casino, it's not a good idea to be in there. And it's especially not a bad idea to take your mask off. So now the WHO is 0 for two. And Trump, as you said, in his just horrifically comical way, can't explain, as we're very clearly explaining, that this is a political organization that is funded by a duopoly of superpowers that have many issues which we're going to get into today. And we, they're not able to say who the duopoly is. Sacks, when you look at this, being our token conservative here and you see the Trump win, how frustrating is it for you that Trump's delivery and his persona when he is right and a person can't be wrong all the

time, I'm proof positive of that, you have to deal with the fact that he doesn't in such a stupid, inane way that you don't actually get credit for the win. Well, you know, Trump is often the bull in the China shop and, you know, kind of disrupts the status quo by throwing a grenade into it. But frequently, there are good reasons why the status quo needs to be disrupted. And the New York Times laid out the case and, you know, a news story on who the, the one that reported the, the scientist complaining that you were talking about. It was just a straight news story, but it almost came across as an expose because whose incompetence was laid out so starkly. The fact that they were slow on mass and opposed them and

I think kind of lied about them. And then, and then to be downplaying the airborne nature of the virus in favor of maintaining this narrative that it's spread through touching surfaces or fomites, which I think people are realizing now is much, much less likely. And so, yeah, you do kind of have to wonder whose side is who on. And the New York Times article kind of suggests why they do this, which is when they issue a declaration, they have to think about the ramifications in all of their member countries. And so what ends up happening is they sort of, of start with the policy implication or political result that they are thinking about and they

kind of reverse engineer the science. And, you know, the article talks about how, you know, if who were to come out and sort of be very clear about airborne transmission, that could affect spending or, you know, political budgets in all these different countries. And so they've been reluctant to do that. So, yeah, it's a, it's a organization that's sort of political first and then reverse engineers the science to fit that. And you know what this reminds me of? It's like when you have giant investors on the board of a company, the management team comes out and now they've got to present like a pivot or an acquisition or whatever it is.

And they're thinking, well, okay, we've got this funding source. These people own 26% of who. This person owns 22%. We've now got to present it to them. And what are the downstream ramifications? Luckily, there's an alignment in a single company. The alignment is we all want the company share price to go up. But here in the world, it is not equally aligned. What is in China's best interest, what's in the EU's best interest,

and what's in America's best interest might be radically different. And they are literally funding them, correct, Schumov? Well, there's a, there's a thing called Sayers Law, right, which many of us kind of have seen play out, which is that academic, the saying is something like academic politics are so vicious because the stakes are so small. And it's a, in this interesting way, the WHO has lost the script because they fight over politics. Who gets to say what? Who's being positioned? And they lose sight of the real downstream.

In my opinion, the downstream implications of the things that they have. Because if they actually just thought from first principles and tried to be a truly independent body that said, we are going to take the capital we're given from the countries that are supporting us and actually do the best and actually publish like what. is the best thing to do. For example, in the case of coronavirus, and be definitive and iterate, we'd be in a much better place. But a lot of what is allowed the posture around coronavirus to transition from a health issue

to a political issue in many ways has been because organizations like the WHO and the CDC are political bodies and their academic bodies. And so the incentives of the players within these organizations are not to necessarily, you know, project the right public health positioning. They are at some level to think about their own career trajectory and the political machinations that happen within the organization that are blind to normal citizens like us that just consume the output. And so when you see something like an inability to give a definitive ruling on things like masks or, you know, other things, you just kind of scratch your head. wonder, is it that they're dumb? And the answer is, no, it's not that they're dumb. They're just motivated by very different things than public health all the time. Which might be including keeping their jobs. And the fact that we had David Friedberg on this podcast and then Sacks,

you know, chiming in after it, surely after just definitively saying first principles, why wouldn't you wear a mask? What is the possible downside? And Friedberg saying, hey, I'm getting some testing equipment. We should just be doing mass testing. Friedberg, when you look at this, and how when we started the podcast, I think, in March or April, we were very clear as people not in the, with the exception of herself, not in the healthcare space in any way. Why can't they, what would be a better structure for the who? Or is there a better structure than just a bunch of, you know, randos like us on a podcast very easily seeing through first principles that a 79 cent mask is a no-brainer, that getting

testing, mass testing and recording it every day and doing San Francisco. sampling, what is the better solution here for governance or for dealing with these type of, you know, really large problems? And ones that kind of have a clock. That's the other thing about this problem is this problem came with a countdown clock. You had to make a really fast decision in order to protect yourself. And we made a really drawn out decision. Now we're paying the price. I mean, I think under the circumstances you outline, you know, you need to need leadership, right? So you need probably a country or some entity to step forward and lead with respect to being proactive and aggressive with action. Because any multinational oversight

body or political body is going to be kind of, you know, molasses out. It's going to be stalled out with the processes and the competing interest, as you guys have highlighted. So the libertarian argument would be let the free market drive outcomes and, you know, some folks will succeed and some folks will fail. If we want all of humanity to succeed, then, you know, the likely scenario is what we've seen with with world wars and such, which is you need leadership. You need one organization or one entity or one national body to step forward and say, this is what we're doing, and we're going to lead. And the world was absent leadership over the last six months. Historically, the U.S. has filled that void, but that certainly wasn't the case this year. And so, you know, it seems to me

like you're not going to find a political governing system, multinational governing system that's going to be successful in solving these kind of existential global problems overnight. You really need someone to step forward. And the U.S. is kind of leaving a bit of a gap. This might be a good segue because the question next is who's going to fill that gap going forward. Yeah. So let's make that segue.

When you look at the duopoly that currently is, I would say, on par now, I don't think we can say we're the superpower anymore. and that China is an up-and-coming superpower, it's pretty clear they are an equal superpower. I don't know if anybody here disagrees with that right now, but if we have an edge, it's a very minor one at this point. How do we look at health problems with an authoritarian country where individuals do not vote and there is a god king who has recently said, I will be the god king for the rest of my life for sure?

How do we manage this relationship with China, Friedberg? and then we can pass it over to Sacks. From a healthcare perspective? Let's start there, for sure, and then whatever other major issue you would like to then segue into, climate change comes to mind, trade comes to mind, human rights comes to mind. I would imagine the biggest, the argument that your geopolitical commentators would make who are probably more experienced and experts in this than any of us would probably relate to the degree of influence.

you know, the question of who has the most influence globally may be kind of the way that you define who has the most power globally. And so, you know, in the current circumstance, you can look at trade balance between China and other nations. You can look at trade balance between the U.S. and other nations, and you can look at the balance sheet, the assets and the debt owed. And you're right. I mean, a lot of people are making the case that we're kind of reaching a point of parity through some metric of some set of equations here. And at this point, there's, uh, there's going to be a jockeying for, for leadership globally in terms of influence. Um, and so that will have ramifications with respect to things that are global in nature like global pandemics. Um, and I think this is a,

a really, uh, kind of, uh, key flash moment, a flashpoint moment for us, um, because we are facing that sort, you know, we did face that circumstance this year. And obviously we took the, the wrong of a deal. We failed most. I mean, we all concur on that. We did, we did worse. China is just like an extremely good example of focusing on strategy while the rest of us focused on tactics. You know, the last 20 years have been punctuated by the United States spending literally trillions of dollars on endless wars and unnecessary military infrastructure and all kinds of wasted pork barrel spending and programs that just have resulted in zero ROI for, the United States and its taxpayers and citizens.

And instead, what did China do? They basically went around the world and they used the equivalent amount of dollars and they said every war that the United States fights is a war that we can essentially be silent on. Let them do that dirty work. And what we will do instead is we will go and basically buy and own large swaths of Southeast Asia, large swaths of Africa, which is, you know, the emerging labor pools that will drive GDP forward for us.

And what they've essentially created is not necessarily a voting block, but a productivity block. And that's what's so, you know, interesting and also really important to understand, which is that China is fighting not an ideological war. They're fighting an economic war. And it is one where they are buying, you know, member states to join them with their capital. And so we've kind of like not seen it. unfortunately happened right under our nose.

So now what we need to do is we need to sort of wake up to this reality and have a very aggressive point of view around what, you know, matters. So by the way, this is also why, and I'll hand the mic to David after this, but this is also why I think like we have completely wasted so much time focusing on, you know, all these other countries that just don't matter anymore. And, you know, I don't say that emotionally. I just say it practically like every single minute we spend on Russia. is just a wasted time.

This is a, you know, country that just won't fundamentally matter in the world over the next 15 to 20 years. Large swats of Europe, you know, they're ideologically aligned, but they just don't matter. The United States has to develop a really specific strategic viewpoint

on the fact that it is us versus China, whether we like it or not. And it starts in things like public policy, but it stretches to every, Everything including capitalism, technology, intellectual property, healthcare, and this war will not be fought on the ground with guns. It'll be fought with computers and it'll be fought with money. Yeah, loans.

We need to realize that. Loans and joint ventures. Sacks, what are your thoughts here on this coming Cold War? You know, we beat the Russians in the last Cold War. And to Chmott's point, the only thing they have really going for them is they're incredibly sinister KGB style information warfare and the decreasing value of their oil and irrelevance, which is why they have to do things like mess with us on social media. I mean, literally, I feel like it's like the last couple of dying techniques they've got

in their playbook from the 80s as the KGB. And they got a KGB agent running the country. When we look at China, how do you frame? our relationship with them and what would be the best practice for the next 10 years, midterm. Well, I think what you've seen just really in the last couple of weeks is a critical mass of scholarship and punditry declaring that we are in a new Cold War with China. And I think, you know, of all the momentous news events that have happened this year, from COVID to, you know, the riots and protests, I think that the most,

newsworthy and historically important event will be the beginning of this and the recognition that we are now in Cold War II. So TikTok. TikTok is part of it. I mean, COVID. It's paradoxical about a dance app is literally the tip of the spirit. I mean, I think TikTok is sort of at the fringes. I think the Cold War II to David's point started when the United States basically

embargoed Huawei from getting access to 5G technology. And I know that sounds like a very sort of like thin thread that most people don't understand and we can unpack it in a second. But in my opinion, that sort of, you know, at the beginning of this year was when I started to pay attention and try to understand this issue more because it seemed like, wow, that's a that's a shot across the bow and declaring China as the clear, you know, sort of the clear and present danger for American sovereignty. And the NBA and TikTok being cultural ramifications of that, which are a difference. TikTok's irrelevant. Who cares? Well, it's... Is it irrelevant, sacks?

Well, what TikTok and Huawei have in common is that the, the sort of proxy battles of Cold War II will be fought between these sort of client corporations, whereas, you know, Cold War I, you have these, you have sort of these proxy, these sort of client states fighting these proxy wars. Cold War II, you have more of these like client corporations fighting these proxy wars. So, you know, it's, that's the sense in which I think they're related. What TikTok shows is a company that's desperately trying to maneuver so they don't become one of the first economic casualties of Cold War II. They appointed an American as CEO. They've pulled out of Hong Kong so they're not subject to those regulations. And they're desperately maneuvering so they don't get banned.

in the United States. They want to preserve their market access. But I think there's a very good chance that they will get shut down in the U.S. They've been shut down in India. And today is July the 10th. And right before we went on, the breaking news was that Amazon basically asked all their employees to delete TikTok because of a security threat. So it's happening. I think that TikTok, unless they basically have bite dance sell under 20 or 30 percent of the company and get it into the hands of Americans, it will get banned. And I think that there will be a massive destruction and enterprise value. But can I tell you why TikTok doesn't matter or doesn't matter as much? I think, David, you're right, that it's sort of like collateral damage. It almost is like,

you know, it'll exist, but whatever. The Huawei thing, in my opinion, is so important because it shines a light on two things. The first is that, you know, what happened essentially as the United States told TSM, you know, you cannot basically give. Huawei access to the 5G chip sets and the 5G technology that they would use to essentially kind of like, you know, implement their spyware and then sell it into Western nations, effectively. And so then what it does is it puts China in the posture of having to figure out how do they get access to this stuff. And, you know, the most obvious answer is to invade Taiwan and take over TSMC. And, you know, why would they do that? Well, obviously, that has huge

geopolitical ramifications, but they could only do that again, going back to the first comment, is because they've already bought so many nation states into their productivity block that it's still on a balance, a worthwhile trade. And it allows them to solve their version of Taiwanese sovereignty completely and definitively and basically say, look, we've now solved Hong Kong. You know, Macau was already solved and now we're going to solve Taiwan and put the whole thing to bed. And now we have access to this critical technology that we need. So that's why I think sort of like what happens with Huawei, sort of what happens with the TSM, what happens on 5G is so important.

Because if you're going to force China, you know, to basically have to buy Western technology in order to get access to a critical piece of, you know, internet infrastructure, they're going to be put to a very, very difficult test about what they have to do. And then they will have to be much more transparent on the global stage about what their ambitions really are and how far they're willing to go. And I think that's, you know, that's a lot more important than, you know, you know, you know, a bunch of kids dancing to short videos. Well, and just to add to that point, you know, so I think Jamath is right that these

sort of chips, the 5G chips and these other chips, they're the new oil, you know, in terms of their geopolitical significance. You know, obviously all of our technology, our iPhones, our advanced weaponry, it's all based on these chips and 70% of them are fabricated in Taiwan. And I think, you know, one of the huge blind spots of American trade policy over the last 30 years is kind of not to notice that this key technology, that's really the substrate for all of our technology, for our economy, has now been, it's now been moved and it's manufactured, you know, in Taiwan, whose sovereignty China does not recognize and is constantly,

you know, threatening with the risk of being annexed. So, you know, we have a tremendous vulnerability there. And, you know, at the same, you know, we finally, after about 40 or 50 years of declaring that we'd be energy independent, we've achieved that. But now we have this new dependency on these chips that. And pharma and manufacturing. I mean, and we, and we, it seems like now manufacturing, we're starting to realize, hey, Elon was right. We need to be able to build our own factories. And guess what? American spirit, American ingenuity, American focus, American capitalism.

We can do it. We have the wherewithal to do it. There's no reason we cannot make these ships here. Sorry, I don't buy it that we're going to be this dependent forever. We just need to have the will and the leadership to say, we're going to do this, whether it costs us an extra 50 cents per chip. Well, the fabrication of these chips is incredibly complicated. I mean, they're basically...

So let's buy the companies. They're microscopic. And it takes years, like several years to set up the facility to do this kind of fabrication. Why don't we buy those companies now? Why don't we just take it to Chimot's point, which was very clear, which is, hey, this is an economic, this is a ledger, this is, you know, a change. check writing exercise to win this war. Why don't we take out our checkbook and buy 50% of these companies now and put them on the NASDAQ if they're not already there? It requires real leadership. At the end of the day, it needs to be led by the United States government.

The reality is that lithography has gotten so advanced. I mean, like, look, I have, you know, companies that are, you know, taping out chips at like seven nanometer, and I don't, I don't have supplier diversity. I don't know. I can't. I can't. basically choose, you know, nine folks to bid it out against, of which, you know, five are domestically in the United States. There are two, right? And so, you know, you kind of just deal with the complexity or the lack of diversity that we have. And Jason, your point is exactly right, which is the first and most important decision here is one that's philosophical, which is again saying that era of efficiency at the sake of all else is over. And we are now moving to an era of resilience,

which inherently is more inefficient. But in that inefficiency, we will rebuild American prosperity because it rebuilds American industry and it rebuilds American jobs. There's another example that I want to build on David's point, which is let's all believe and attest

that we all care about climate change for a second. And we all want the world to be electrified. Okay? Well, electricity and electrification requires two very, very basic inputs. Okay? One is a battery, and the second is an electric motor, right?

Makes sense so far? Yep. Well, inside an electric motor, there is one critical thing that you need to make it work, which is a permanent magnet. The permanent magnet spins around, and that's how an electric motor works. Okay.

Why is that important? As it turns out that permanent magnets need special characteristics that are only provided by a handful of very, very specific rare earth materials that we need to mine out of the ground and refine.

Those materials actually exist in many places, including the United States. Yeah, we stopped mining for them. But right now, China controls 80% of the supply of rare earths. They can choose how they price it. They can differentially price to their own companies,

which means that the battery and engine manufacturers inside of China can now lead on electrification, which means China can actually lead on climate change before the United States can unless we have leadership that says at a governmental level on down, we are going to make this a priority,

we're going to fund it, we're going to make sure that they're onshore mines, we're going to make sure that those mines are clean, we're going to build a supply chain domestically, and we're going to subsidize. This is what governments do best. It's not act, it's just incentivized on things like climate.

So, I don't know, Friedberg has spent a lot of time on climate change, so he has probably a lot of ideas on this. But whenever you look at any of these things, health, climate food, it all comes down to the United States versus China, strategy versus tactics. Freeberg? I'm not sure. I'm not sure I think that the Chinese action is as deterministic as we think it is, or as we kind of frame it, where China's got this grand plan. they're going to beat the U.S. and they're going to control things and make decisions that hurt us. I think a lot of this is China, if you think about it, less about black and white, there's a continuum. And the continuum is one of influence and one of creating an environment

whereby these things can happen. So China, for example, made capital readily available for the agriculture industry to be able to buy assets. And so the companies inside of China, which aren't controlled, the Chinese government isn't telling them what to do. The Chinese government has set a policy that enables them to increase their prosperity and as a result increase the prosperity of the Chinese people. When I was at Monsanto, we bid for the largest ag chemicals company in the world based out of Switzerland. It's called Syngenta. And we bid like $44 billion to buy this company. and the largest chemical company in China called ChemChina bid $47 billion and acquired the business, and they now own the largest ad chemical company in the world. China also bought Smithfields,

and they put a bunch of people in Canada. Hey, Freebird, how much of that money do you think came from the CCP? And what involvement do you think the CCP had in putting their thumb on the scale of making sure that transaction went that direction? Look, I mean, ultimately, wherever the capital comes from, it's no less equivalent than what you would see in the United States where treasuries fund the central bank, which funds banks, which fund lending to corporations, which ultimately make purchases. But do you think the leadership said, hey, we're winning this at all costs? So here's what happened. In 2007, there was a CCP

internal doctrine that was published, and it's now reasonably well known, and there was a speech that was given that started this aggressive action in agriculture. And as a result, Chinese citizens started moving to Canada and buying farmland in Canada. They started moving to Australia. buying foreign land in China, they started building these facilities in Argentina and Brazil and Africa. And the Chinese government set out, you know, a strategic objective and provided the capital and enabled industry and people to go after pursuing these interests. But the CCP didn't say, here's the roadmap. It's not like here's the specific plan for what we need to do. They had a general high-level kind of point of view that that I think drove all that action and all of that

behavior. And so, you know, it's, I would say it's not as perhaps coercive as we may I think it is in terms of the CCP wanting to target and attack U.S. They're trying to increase their influence around the world. They're trying to increase their own security and increase their own prosperity. And at some point, there's only so many resources globally. There's only so much land, so much magnets that, you know, they, and they're winning in the markets. And, you know, we're kind of crossing that threshold now where they're actually like a competitive. You know, the only difference between this is, and I couldn't disagree with.

Sorry, my point is I just don't want to frame it as like, I just think it's a, it's a misstatement to frame it as China has this grand plan to come after the U.S. and they're evil and that's what they're doing. I mean, you know, they... Yeah, so this is where I think you're completely wrong, David, respectfully, in that I believe this is an ideological war. And if you, you can't diminish what's happening in Hollywood, TikTok, and the NBA and other sports, where China is explicitly saying, if you put a villain in our, in a movie, if you talk about Tibet in a movie, we are going to not play that movie. And we're going to start funding your movies.

And so they are absolutely using the vector of culture. And Chimot, I think you're also wrong here where you're saying, oh, TikTok's not important. TikTok is something that a generation of kids absolutely are in love with. And those kids are like, hey, boomers, stay out of our platform. And so and the ideological issue here, Freeberg, which I think that you're underplaying is, They want to win and they want to spread their ideology, which is the ideology of authoritarianism. They are not going to win Africa and then suddenly say, you know what, would be great for Africa if we made the entire continent democracies.

That's not in their best interest. How's it different than Trump tweeting? Well, Freeberg, I just think that it's inconceivable to me that the Chinese, when they do this grandiose planning and they do the political theater of having the thousands of people in the Chinese assembly hall once a year, you know, in Xi Jinping talks,

that they haven't developed a multifaceted, multi-layered plan that they're executing. In part, I think this is why Xi Jinping essentially wants to be this ruler for life inside of China because he, I think they have a 20 or 30 year plan.

And I do think it is to disrupt the United States. And I don't think that they believe, though, which is the smart thing, that there's one silver bullet, I just think that they're going to take a thousand shots on goal, whether it's, you know, monopolizing the rare earths

or, you know, figuring out how to basically put spying software in the hands of millions of Americans. That's where I think TikTok is actually really important. It's essentially a vehicle to spy and backdoor into Americans.

Or whether it's, you know, introducing a digital yuan so that we can try to disrupt the, you know, the use of the U.S. dollar as a reserve currency of the world, they probably have a list of a thousand tactics and they're going to go and execute them. And I don't begrudge them that. I just think it's well-organized machine.

I just think we now need to counterpunch. Sacks. Yeah. I mean, so China is on a mission of national greatness. I think the immediate goal is to assert its hegemony over Asia and to kick the U.S. out of that region. But I think ultimately now they see in their sights potentially, being the number one country in the entire world because of the chaos that COVID has wrought over here. And in fairness, David, the incompetence of Trump thus far. I mean, like, you know, it's not fair to think that the Chinese Polyb Bureau versus Trump in his cabinet are an equal match. Forget your political persuasion.

Yeah, I mean, they clearly seem emboldened. And, you know, just in the last few weeks and months, we've seen the ending of the two systems in Hong Kong, which was a 50-year commitment. they made in, I think, 1984. So they abrogated on that agreement, that commitment. They happened to do that three or four months before Trump is looking like he's not going to be in office. So talking about, did Schemont's point shots on goal? This may be their only shot to do this. And does that mean they go after Taiwan? Yeah.

And do they go after Taiwan in the next 100 days where they have a window? I think we have to be extremely clear that Taiwan is a red line for us and that we're committed to the security of Taiwan. Because if we show any hesitation or weakness there, they will seize on that. Would Trump do that? Would Trump put his foot down? Because he did nothing when it came to supporting. I think we need to extract away from any given president of the United States because they change every four or eight years.

And I think we need to have a bigger discussion, which is, like I said, over the next 40 to 50 years, are we comfortable with duopoly power structure in the world, which is the United States and China? because that's effectively what we are today. Or are we the shining city on a hill once again? And if so, what are we willing to do to make sure that that's the case? And I think that's independent of your political persuasion and your party. Right.

Right. Well, the good news here is that both Trump and Biden are basically racing to sort of position themselves as the more hawkish candidate on China, which is to say that this recognition of Cold War II is now, I think, bipartisan, which if you want to sustain, which if you want to sustain a policy in this country over, say, 40 years like we did in containing the Soviet Union, you have to have bipartisan support for that. And so it does seem like, finally, as a country, I think we are kind of getting our act together on China. I mean, obviously, there will be disagreements within that larger context, but it seems like now people are waking

up to the threat that China represents to, you know, to America being the number one country in the world. And I think... Yeah. By the way, I agree with... I agree with Sacks. I mean, I think that's exactly what's happening and what will happen here. And it'll certainly, it'll be a big hill to climb. I'll just highlight, and I'll ask the question of Chmoth, you know, per his point earlier. Let me ask you guys, how many factories do you think exist in China? Take a guess. 11 million. 2.8 million. Now, how many do you think exist in the United States? States. 150,000. Close, about 250,000. And China has about 83 million factory workers and we have about 12. So, you know, Chamaath, if we do end up in Cold War II, where, you know, we escalate the tension

and escalate the divide, how do we end up, you know, avoiding $2,000 or $3,000 iPhones, how do we get all the televisions we want for $500? How do we do that, given that, you know, to cash, up with this production capacity will end up costing many tens of trillions of dollars of invested capital that China's invested over decades. Well, this is such a brilliant, this is a fabulous question. And I think I don't have the answer, but here's the way that I think about the solution. You know, the thing that we had before was in my way, in many ways like this kind of like perverted sense of globalism.

And I think that we, you know, we thought that globalism equals utopia. And that's not true. actually more like a chess board, which means you have, you know, two different sets of colored pieces competing against each other. And each piece on the board in many ways is a country. So, you know, we can look at that as a geographic skew and say, like, we need to really consolidate, you know, north, central, and South America as a block, as a productivity block. And so, David, that's where we need to have more trade within those areas so that we can

actually build up production capacity in places that can absorb and produce low-concative labor or low-cost items to compete with the China block, that may be a solution. I mean, that is an incredible point, Shemoth, which is why the rhetoric with Mexico, which would love to have a deep relationship with us, is so dumb. We're talking about factories. They would love for us to put more factories on there. And whatever countries, let's work our way down the peninsula. Yeah, go to go down the peninsula.

Go to Honduras, go to El Salvador, go to Guatemala, where the people are. Paraguay. They want work. Yeah, are screaming for work, which is why they're trying to enter the United States. The best ways to not build a wall, take all that money and fuel it into production and manufacturing and warehouse capacity in those places in which they're leaving in the first place. And if we thought like China, we would, go ahead, do it at Freepard. No, you can't successfully sustain a Cold War with China without global partnership. And I think, you know, this notion of nationalism and isolationism in the United States will not work in a world where we are also trying to compete globally with China and are raising the stakes in a global Cold War. You can't have it both

ways. So, you know, either the current administration policy needs to change. I'd love to hear Sax's point of view on this. Or, you know, or we need to have a change in administration and actually, you know, re-engage on a global basis with partner states. Well, okay. So I think the point about about, well, I think what some people on the right would say is that being able to buy cheap goods at Target is not worth the hollowing out of the American industrial base that happened over the past 30 years, and that was a catastrophic mistake. And, you know, this is what got Trump reelected was shattering that blue wall in those Rust Belt states. So I think we can kind of look back on that and wonder whether that tradeoff was really worth it. But moving forward, I think the balance is going to

to realize that trade does create wealth. You know, all wealth, in fact, comes from trade, whether at the level of individuals or nations. If it weren't for trade, all of us would be subsistence farmers or something like that. But we also have to realize that trade creates interdependence because I stop making certain things in order to buy them from you. And so in order to engage in trade, we have to trust each other. I have to trust that that you.

one day won't decide that your ability to manufacture antibiotics is strategic and you might deprive me of them in order to facilitate some geopolitical interest. And so I think what we're waking up to with, you know, production of, you know, pharmaceuticals or N95 masks, you know, PPE, and now chips, is that we've had this real blind spot with respect to trade. We've basically offshoreed so many of the elements that are necessary for our national survival And I think those elements have to be brought back so that America is safe and independent. But with respect to, you know, so many other things, I think it's fine for us to get them through trade, whether, you know, it could be apparel or toys or so many other goods that, you know, we do want cheap goods.

I want to do a mental exercise. We all, for our living, try to come up with 100x, 1,000 X solutions, whether we're creating the companies or betting on the companies. I want everybody to just think for a second. of the United States as a startup company and a 10x, 100x idea for how we can not only maintain our position, but maybe become the shining hill where we actually lead the world towards democracy, towards human rights. I'm going to start with one that I just happened to hit me while you all were talking, which is why I love doing this podcast because I get such inspiration listening to you guys

you know, pass the ball around. To hear the gang's ideas to 100x America's efficiency and run it like a startup, search for All In with Chumath, Jason, Sacks, and Friedberg in your podcast player, or go to all-inpodcast.com.