Greg Tirico

January 31, 2021

Episode 325 - Interview with Virginia Postrel

Greg Tirico

January 31, 2021

Ron and Ed were honored to welcome Virginia Postrel, author of The Fabric of Civilization: How Textiles Made the World. Virginia is also a columnist and speaker whose work spans a broad range of topics, from social science to fashion, concentrating on the intersection of culture, commerce, and technology. Writing in Vanity Fair, Sam Tanenhaus described her as "a master D.J. who sequences the latest riffs from the hard sciences, the social sciences, business, and technology, to name only a few sources."

Ed 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 folks on today's show, we are honored to have our interview with Virginia Postrel. Let's do the formalities here and welcome Virginia Postrel, who is an award-winning journalist and independent scholar, a columnist for Bloomberg Opinion. She previously served as columnist for The Wall Street Journal, the Atlantic, The New York Times, and Forbes. She has authored highly acclaimed books, The Substance of Style, The Power of Glamour, The Future and Its Enemies, and the book we're going to talk about mostly today, The Fabric of Civilization: How Textiles Made the World.

Welcome to The Soul of Enterprise, Virginia Postrel. I became obsessed with this book around Thanksgiving. And I'm going to tell you a story. We have at Thanksgiving, we were able to go over to my in-law's house despite COVID which we're very excited about. And we have a tradition in the family that everybody goes around and says something that they're thankful for, which is very nice. Usually people say the usual, family and all kinds of stuff like that. Well, I said fabrics. And that got uproarious laughter from the dinner table. But Virginia, I really want to know, I think we should be. Why should we be thankful for textiles?

And later in the book, you have one of my favorite quotes, which is “We suffer textile amnesia, because we enjoy textile abundance.”

It really starts with thread, doesn't it? That's kind of the basis for it. So talk a little bit about the origins of thread.

And it's so interesting, you wonder what possessed somebody say, “If I do this, I'm going to get this long piece of whatever, right? I mean, where do we even start with that, that's the thing that amazed me?

And that's unbelievable. At one point you say a queen size sheet is 37 miles worth of thread. Stretching you from the Washington Monument to Baltimore.

Quickly, I wanted to just tell you this, I actually worked for a sheet producer at one time, I did their software installation. And one of the things that these guys told me was always buy irregular [sheets]. And the reason is, there's actually no difference between irregular sheets and regular sheets, except every so often we put like on 20% of them, we just say they're irregular. And those never come back. But the other ones we guarantee. But there's no quality control.

So I have so many questions, we’ve only got about two minutes left in this segment. What's the relationship of textiles to mathematics?

And the really fundamental algorithms built in the looms. So the first algorithms, you say, were those that were produced at the loom?

Which is actually the same way I believe that computers ultimately do division. That's how it works out in machine language. Anyway, we're already done with our first segments, it’s flying by.

Ron’s Questions: Segment Two

Welcome back, everybody. We're here with Virginia Postrel, one of my favorite authors, and Virginia, if you would have told me at any point that I would read a book about sewing and weaving and fabrics, I would have said you're nuts. But your book just held my interest the whole time. It's just a great, great story. And you're so right that we take this for granted.

Well the link between dyeing and chemicals was absolutely fascinating. Just by itself. You're right. This is a business book, really. In many dimensions.

Your discussion about how textiles were used for money, and the sumptuary laws, ff course, were absolutely fascinating, too. I love the line about how husbands used them as an excuse not to buy a nice wardrobe for their wives.

That's awesome. Well, you've convinced me that we should no longer call it the Stone Age, it should be called the String Age.

One of the most fascinating stories in the book, it just blew my mind. Ed and I have done a few shows on the history of medicine, surgery, anesthesia, and germ theory. Explain the link between silkworms dying which led to germ theory.

It makes sense because so many other things came out of thinking about all of this, such as dyeing and chemicals, polyester and nylon, and all of that.

That was an incredible story. So unfortunately, we're at our break, this is just flying by, Virginia.

Ed’s Questions: Third Segment

We are back on The Soul of Enterprise with Virginia Postrel. Her book is The Fabric of Civilization: How Textiles Made the World, and folks, I can't recommend this book enough, please go get it and read it. It's a great story. And we're only scratching the surface with Virginia today on what's in this book. And Virginia, I want to ask you a little bit about your process of writing this book, because it is so deep and so rich, was it like a term paper, like note cards? I have this vision of you having note cards all over your dining room table to try to put this together?

Do you use Microsoft Word, type it out, and then edit from there?

It’s just a fantastic book. And I love the fact that you include links to YouTube videos, because in many cases. I must have watched half a dozen videos that you recommended in your book, because you want to see, okay, this drop spindle thing that you're talking about, you really have to see that to fully appreciate it.

Well, I've got about five minutes left, I want to ask you a very specific question. And that is did you come across a song called “The work of the weavers” in your travels?

The Clancy Brothers did a version of it. It’s actually a Scots tune. I'm going to give you a little bit of a sample right now, are you're ready?

[Ed sings a part of this song. The printed word can’t do it justice—a must listen!]

And of course the weavers got themselves into a pinch, because…tell that story…

And maybe this is apocryphal. But the saboteurs, wasn't that a similar story, the sabo, with the shoes and such.

I think Don Boudreaux has something on it and that's where I remember reading it. But the last question I have for you is about your Afterword, which is really an essay that can stand on its own. It's just such a great piece. I'm curious, was there a rationale for putting it as an Afterword versus a Foreword, because you could almost argue that it would have set you up for the whole book? I was just curious about that.

It's a magnificent piece. But it can stand on its own as a tease for the book, because it really leaves you with all of these dangling questions. Well, Virginia, thanks so much for appearing. Ron is going to take you the rest of the way home the last 15 minutes. But I just want to thank you for coming on the show today. This is just a great honor for me. And as I said, I was obsessed with the book. So just a lot of fun to talk to you.

Ron’s Questions: Fourth Segment

Welcome back, everybody. We're here with Virginia Postrel, and Virginia, another book of yours, I absolutely loved was The Substance of Style, which came out in 2003. In there, you talk about Maslow's hierarchy of needs. And everybody talks about this like it's Gospel, the Oracle of Truth. But you don't think it's a good explanation?

It’s like you say, you don't have to wait to have a full stomach or until your roof doesn't leak. The poor built cathedrals, and made pottery and jewelry. It's a really, really excellent point. The other thing I wanted to ask you, and another book of yours that I absolutely loved because, well, for one thing, you signed it for me, it's behind me, is The Future and Its Enemies. And we're going to link to all of your books, and more, on our show notes. But you write in the Introduction to that book, “The central question of our time is what to do about the future? And that question creates a deep divide.” Is that still true?

No, that's really true. It reminded me very much, the whole theme of the book, of Jane Jacobs. She wrote a lot about that bottom-up, trial-and-error process. Hayek, obviously, and George Gilder was another one who I thought of a lot. It's a fantastic book. The other thing I liked that you pointed out is Al Gore wrote Earth In the Balance but the earth doesn't have an equilibrium. There's no static standard for natural.

You wrote very eloquently articles in The Atlantic and on your blog about donating a kidney to an acquaintance, I think back in 2006. And I am, of course, interested in your ideas about the waiting list, how many people die waiting for a kidney and what a tragedy that is. But just that whole process, you talk about how the process is really difficult for the donor?

“Here’s Looking at You, Kidney,” June 2006

“The surgery was simple; the process is another story,” October 23, 2006

“With Functioning Kidneys for All,” The Atlantic, July 2009

It’s laparoscopic surgery, right?

I take it you support a market for kidneys?

I think Iran is the only country that allows that legally?

Well, Virginia, thank you so much. This has been such an honor to be able to talk with you. I'm really excited. And love your books. And we'll put up full show notes, where to contact you, and all the other stuff that we talked about. Ed, what do we have on store for next week?

Next week, Ron, we're going to be talking about our Best Books of 2020. And you may hear about this one again.

Ron

Excellent. 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.

This week is Bonus episode 325 - GameStop, Please STOP!. Here are just a few links discussed during the bonus episode:

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

Greg Tirico

January 24, 2021

Episode 324 - Interview with Anne Janzer

Greg Tirico

January 24, 2021

On Friday Ron and Ed were pleased to welcome to the show, Anne Janzer, the author of Subscription Marketing, and four other books on writing. In addition to being an award-winning author, Anne is an armchair cognitive science geek, nonfiction author coach, marketing practitioner, and blogger. She’s on a mission to help people spread important ideas through writing.

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, and on today's show, folks, we are honored to be talking with Anne Janzer, author of Subscription Marketing. Hey, Ed, how's it going?

Ed Kless

It's going great, Ron, I mean, who would have thought that the nation would come together so quickly? On Wednesday, and of course, I'm not talking about the inauguration, I'm talking about over the Bernie memes that we all seem to have united around.

Ron Baker

I just saw him with the guys from the Great White North in Canada, SCTV sketch.

Ed Kless

No, I think that Bernie has been true to his socialist word, he has been a burden on productivity now, this is just what everybody's been doing the last two days? That's all we've done.

Ron Baker

All right, well, let's bring in Anne Janzer, an award-winning author, armchair cognitive science geek (I love that), nonfiction author, coach, marketing practitioner, and blogger. She's on a mission to help people spread important ideas through writing. She's the author of many books on writing, Get the Word Out, Writing to Be Understood, The Writer’s Process, The Workplace Writer's Process, and of course, Subscription Marketing, which is now in its third edition, which we'll talk to her about. Her books have won numerous awards, and they've been translated into Japanese, Korean, and Russian language editions. So that's great news. Anne, welcome to The Soul of Enterprise.

So before we get into subscription, which is why we brought you on, I want to ask you, what's it like to teach writing to business professionals? Have you been able to remove their jargon?

The Economist has this columnist I just love, Bartleby. And he constantly rails on the terrible language and writing skills of most business people. They write memos that are indecipherable, and just full of jargon. And he just really takes them to task. I just love the guy. Anne, what motivated you to write a book on subscription marketing?

I bet, because revolutions always start from the bottom up, right? They don't start from the big companies down. You know, we've had Tien Tzuo on [Episode #230], the CEO of Zuora and author of Subscribed and he is, I would say, one of the chief evangelists for this business model. He wrote in his book that “In five years, you won't buy anything, but you'll subscribe to everything.” And I actually like how you put it in your book, you say, “In five years, you'll have the option to subscribe to everything and every business will have to accommodate that fact.” But what we see, Anne, is a lot of inertia. Why do I have to accommodate it, it’s not going to affect Me? How do you respond to that?

That's a great point. We have a saying around here that you compete against any organization that has the ability to raise customer expectations. And how many of your customers are comparing your experience with their experience on Amazon, or when they visit Disney World? This model requires such a different mindset. We always talk about how difficult it is to unlearn. Sometimes unlearning is harder than learning something new. Like I think about Fender guitar, I don't know if you've run across them, but their Digital Play, and they are just a phenomenal success story during this COVID pandemic. They're not really selling guitars, they're selling you how to play the guitar and how to play it continuously better. And that's just not the same thing at all, is it?

Right, and rather than just focusing on the transaction, I love what the fender CEO said: If I sell somebody a guitar, and they try to play it, and they get frustrated, and it goes under their bad, and then they give it away, that's another sale that I don't get to make in the future. So just that whole mindset of customer success and in the book, you talk about Inadequacy marketing. And I love this idea: The prospect lacks something that only can be fixed with our product or service. This idea that we're selling solutions, it seems to me you have an issue with this?

And [Apple] has done this since day one. They show the one user using their product, and they are the hero. Yeah, it's such a narrow mindset to think we sell solutions to problem. It's broader than that, its possibilities and opportunities as well.

We talk a lot about value pricing, Ed and I are faculty members of the Professional Pricing Society. We teach value pricing, and [what we call] value pricing 1.0 was all about pricing the customer. Now we talk about VP 2.0, which is subscription, where you price the relationship. And people say, “Well, that's just semantics. What's the difference between the customer and the relationship?” There's a big difference. Because with Fender, you have a relationship with the customer, it's a direct relationship, they're invested in your success.

You call it Value nurturing. Can you explain that? Because I love that, too.

You’ll get a royalty when we say it.

Right, and you talk about five approaches to this idea of value nurturing, and I love the content and community. Sometimes just leveraging your community of users or members can make a big difference.

I think about Harley Davidson, that's a way of life. It's not just a motorcycle.

Ed’s Questions: Segment Two

Our conversation today is with Anne Janzer, author of Subscription Marketing: Strategies for Nurturing Customers in a World of Churn, and Anne I want to ask you about a couple of quotes in the book that I've picked out. One of them is this, quote, “I've become convinced of the following truth. Organizational boundaries are the enemies of the subscriber experience.” Expound on that

Ron and I are tied into economics as well. Ludwig von Mises is an economist who said that you cannot parse value, right? You can't break down the difference between the value of the experience in a restaurant of the waiter, the food, or the cleanliness. I mean, if one of those things fails, we judge it all the same. So even if the waitstaff is stellar, but a cockroach runs across your meal, it doesn't matter. I want to just take this to the next level, because later on in that same chapter, you say, “In a subscription based business, everyone is in marketing.” period, really, period, which I loved. But when I read that for the first time, I thought, what is also interesting is how some people in marketing are actually resentful of that.

That's such an important point. I think that the challenge is, of course, when I read that phrase the first time through the book, you think, “Oh, everybody in marketing wants that to happen;” but they don't, they really do sometimes want to hold on to the different pieces. And it's really up to them to educate out. I think that's a great, great point. I wanted to talk to you a little bit about Amazon Prime, and what a great success story that is. It offers you the discounts to be able to do the “Subscribe and Save” choice. And I just want to get your thoughts on this. I think Amazon has made it too easy to order and messed themselves out of Subscribe and Save. I subscribed and saved to some things and found myself unsubscribing because it was so easy to just order it when I need it instead. That's the bizarre part, right?

Yeah, and I can't believe it won't be too long before it's not just COVID tests, but also COVID vaccines. In my fantasy world we have Amazon doing the distribution and Chick-fil-A doing the actual injections, I think we'd have a much better experience overall.

Apparently, in fact, our social media person, Greg Tirico and I talked earlier, [Dave Clark, CEO, Worldwide Consumer] wrote a letter today that has appeared about that very thing—offering Amazon up to do a better distribution of the vaccine. So we'll see how that that plays itself out. This next topic I know is a passion of both Ron and I, and that is, you're talking about the common adaptation models of subscription: the trial, the segmented approach, all-in approach pivot as a marketing subscription. And one of the things that you say is the low-risk strategy of dipping your toe in the water is, inherently, a lack of commitment, and it may doom the trial to failure? Can you talk a little bit about that because I think that's a critical point for people to understand who are trying to transition, that you can't be a little bit into subscription.

This goes back to Peter Drucker, this inherent tension between sales and marketing. In so many companies people say, “If marketing would just do their job,” and others say, “If sales would just do their job,” this back and forth. And I think part of it stems from something that was a problem that emerged out of the ‘80s and ‘90s, was marketing's belief that they were there to just provide leads, right? In fact, compensation systems were built totally on just delivering leads, regardless of how crappy they were, it didn't matter. And I think subscription just completely jettisons that idea. So expand on that a little bit, if you would.

It was interesting reading through your book, a concept flew into my mind, which was how poorly some companies that were subscription based performed early on in this subscription marketing world. I'm thinking specifically of cable and cell phone companies. These companies had the model but just then performed completely poorly, and today are still recovering, in my view. So thoughts on that? Why did that happen? Where did they get lost? They had it.

One of my jokes is I'm pretty sure I'm still subscribed to Columbia House Records. I'm pretty sure that somewhere, if I combed through all of my credit card statements, they're getting money from me somewhere.

Ron’s Questions: Third Segment

Welcome back everybody. We're here with Anne Janzer, and her book Subscription Marketing, which we highly recommend. Ed and I both loved it, and if you do run out to Amazon and get it make sure you get the latest edition, which is the third edition. Anne, you were talking with Ed about your adoption models: The trial, the segmented approach, and the all-in pivot. And I just wanted to get your take on the news reports in the last week or so that BMW, Audi, and Mercedes, all have given up on their subscription trials. BMW might bring theirs back, Audi has no plans, and Mercedes, they'll probably bring it back at some point. Why do you think they failed? I have strong opinions about it, but I'd love to hear what you think.

The legacy systems with the dealer networks are definitely an issue. But, and you probably know this as well—I learned this from Tien’s newsletter—Porsche Drive has been expanding, they are in six cities now. And 80% of the people that have signed up for it are new to the brand. They're flourishing with it. In my mind, they're no different from BMW, another fantastic brand. They're the two most profitable car companies in the world. I think BMW just can't get out of the mindset that they're selling cars. And Porsche says, “No, no, you're subscribing to Porsche. You have a direct relationship with us.”

Obviously [Porsche’s] regular customers are getting older, they're dying off. And they're going after a younger demographic, which is probably going to really be helpful in the future. I'm so glad I asked you during the break about direct primary care and concierge medicine, because you said you have a DPC doctor now. And when I look at those practices, and I've done a deep dive on them, and I realized that a house can't stand if it's divided. You can't be a DPC practice and still have fee-for-service and take insurance. You've got to be one or the other. It's kind of like the problems BMW is having [with its subscription trial]. How do you advise, especially smaller firms, like Ed said, you can't be half pregnant with subscription. You're either all in or don't do it?

One of the things that impresses me about the DPC movement is that they're saying that this is why I became a doctor in the first place, to help people. And the typical general practitioner has 3000+ patients, which is why you can spend seven minutes with them when you have an appointment. And now, because they’ve reduced their panel of patients—like you were saying, not all growth is good growth—they might have 600 patients, but now it's not just about treating you when you're sick, it's also keeping you healthy. And they have the capacity to do that. And, to me, that model just makes so much more sense.

It's really fascinating. Most DPC doctors’ patients have less emergency room visits, less hospitalizations, they even take less drugs, which even the pharmaceutical companies are noticing. It's just like you say, it aligns the incentives, which is great. Greg Tirico actually asked this question, and I thought it was a really good one. He said the number one question he gets, and he's never had an answer for is, “What if someone signs up and then leaves in 30 days with all their stuff?”

One of the biggest challenges, and frankly Ed and I've been working on out on this, and still wrestling with it, is when you convert a CPA firm or a law firm that does litigation, or an IT firm that does massive software installations, they have these one-off projects that are really, really expensive, and loaded upfront with a lot of work. Are you okay with carving out separate prices for large projects, and not having those on subscription, but then the ongoing relationship on subscription?

For projects that come up all the time, then my attitude is you can just bake it in. I think we are really hard on ourselves on this because we don't think we're thinking far enough outside the box. We're still thinking we're selling guitars. We're not thinking like we're helping you play better.

When I when I look at, like you say in the book, even marketing powerhouses like Procter and Gamble and Coca Cola are confronted with these direct-to-consumer brands, like Warby Parker, Casper, and Harry's Razors? Didn't Unilever buy [Dollar Shave Club] for $1 billion?

How do you how do you recommend that firms overcome subscription fatigue? This is another pushback we get?

It comes back to that relationship. And the other thing is the innovation, like you said before about [Amazon] Prime, the innovation baked into this model, which I just love about it. You continuously add capacity but it doesn't change your price, necessarily.

Well, and this has been great, Anne, unfortunately we're up against our next break.

Ed’s Questions: Fourth Segment

We are talking subscription marketing with Anne Janzer, the woman who literally wrote the book on that subject. Anne, I wanted to pick up on another sentence that jumped out at me. At first I had a negative reaction to it. But then over time I've come a little bit more accustomed to what it is that you were trying to say, because I read further in the book. You say, “Upselling and cross selling, these are important results of successful value nurturing.” And here's the thing I objected to, “but never mistake selling for creating value.” Why should we never mistake selling for creating value?

My objection was based on my priors, right, which is this notion that, to me, sales is about what we call the value conversation. It is about having that conversation with a prospect. Keep in mind, we sell large systems to accountants, and also people who need accounting solutions, which is, by the way, one of the few areas that is extraordinarily sticky, and switching costs, even in subscription, are astronomical, because nobody wants to change their accounting system. So it's one of the few exceptions to your rule. I think that was my reaction to it. But I think you make a very important distinction there. Because so many people think that, oh, if I just tell them what the features are, they will miraculously say, “Oh, I get it now.” And that's just not the case.

I want to quickly explore something and I have to set this one up. Ron and I do an exercise that we call the Value Gap, and you write eloquently about economic value. And one of the things that we suggest people do is look at their relationship with a current customer and ask themselves, How much value have they actually created for that customer? And then think, How much value can I create for them in the future? That exercise, to me, has really come home with the notion of subscription, because of what Ron was talking about—the continuous need to innovate. So this idea of what can we do for current customers to create value for them tomorrow? Explore that a little bit with me?

The great example from your book that I love is the MailChimp hang 10 when you successfully launch your campaign, which makes me happy when it happens.

And if they took it away, I would miss it. I wanted to get to this, too. I love your conversations about the launch plan. And by the way, folks, you have to buy this book because it is chock full of not only the great theory, which Ron and I love, but the practical little tips that you can do to make this really, really work. So that's one of the reasons why we love this book, there's a great balance. Back to the launch plan, what I'm finding, and I wonder if you're finding this, and you probably are overly critical of this as well, these email campaigns to get you to use. I'm like, “Stop, please.” They're all the same now. People have to innovate around them now, don't they?

Please, please shut up. If you stop I will continue to subscribe. As long as you leave me alone.

It's like the Brazilian steakhouse with the green and red card that you flip over when you want them to bring more meat? The other thing I want to ask you about is what you call the 90/10 rule that applies to new subscribers. If a customer doesn't start using your solution within 90 days, there's only a 10% chance that they'll become a loyal customer. Is that still true? Is that something that continues to bear itself out in your latest work?

Which leads me to a question that we talked about with Robbie Kellman Baxter as well [Episode #319]. And you do mention this a little bit in your book. I'm curious, and Tien Tzuo is absolutely convinced that freemium is dead—long live the free trial. Robbie says he's a provocateur. What are your thoughts on freemium versus free trial? Has there been any clarity from your perspective on that?

That's a great answer, and this has been terrific conversation. The hour flew by. Ron, what do we have coming up next week?

Ron Baker

Next week, Ed, we have Virginia Postrel, the author of The Fabric of Civilization.

Ed Kless

I can't wait. That's going to be great. I'll see you in 167 hours.

Bonus Content is Available As Well

This week is bonus episode 324 - Bernie memes and more. Here are a few links discussed during the bonus episode:

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

Greg Tirico

January 17, 2021

Episode 323: Interview with Art Carden

Greg Tirico

January 17, 2021

Ron and Ed welcome economist Art Carden, co-author of Leave Me Alone and I'll Make You Rich: How the Bourgeois Deal Enriched the World, with three-time Guest Deirdre McCloskey to the show. He is a Professor of Economics at Samford University’s Brock School of Business. In addition, he is a Senior Fellow with the American Institute for Economic Research, a Senior Research Fellow with the Institute for Faith, Work, and Economics, a Senior Fellow with the Beacon Center of Tennessee, and a Research Fellow with the Independent Institute.

Ed Kless

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 privileged to be interviewing economist Art Carden. Hey, Ron, how are you doing this week?

Ron Baker

I'm great, Ed, this year is starting off with a blast.

Ed’s Questions: Segment One

Well, the best meme I saw was the 2021 saying to 2020, “Hold my beer.” This is where we are. We have a lot to talk about with Professor Carden, so let's do the Bio. Art Carden is a Senior Fellow at the American Institute for Economic Research and Associate Professor of Economics at Samford University in Birmingham, Alabama, and a Research Fellow at the Independent Institute, and he is the co-author, with Deirdre McCloskey—a [two] time guest here on The Soul of Enterprise—of the book, Leave Me Alone, and I'll Make You Rich: How the Bourgeois Deal Enriched the World. Welcome to The Soul of Enterprise, Art Carden.

Well, as I was telling you before we got on the air, Professor McCloskey was our first ever guest [Episode #6, and Episode #293]. And what I want to hear is the story of how your partnership with her came about.

Wow, what brought it about? She wanted a summary of [her trilogy], because that's effectively what you were able to do here.

Yes, a 1700 page trilogy with about 500 pages of endnotes. The first question I have for you coming from the book now is you use the word innovism, if I'm even saying that right, and when Professor McCloskey was on our show, the first time she talked about something called “market tested innovation and supply. Is innovism the new distillation of that concept, or is it a little bit different?

So it incorporates all of those things because I think what a lot of people miss is that the market testing part of it, that's what shakes all of this out.

And then, of course, the supply part is then also important, too. No more interesting than the supply of, let's say, COVID vaccines.

Yeah, it's really been interesting, because I'm sure you've seen this, too. The vaccine from Moderna was developed within 48 hours of them getting the virus genome, and the rest of this time has been delayed from a supply standpoint. Really?

I've said, and you probably have heard this, too, that if we had put Amazon and Chick-fil-a in charge of vaccine distribution, it would be done. And, they would do it with a smile on their face and tell us it's their pleasure.

And then of course, I think it was announced either yesterday or today that Biden has tapped the ex- FDA chief to lead Operation Warp Speed now.

The pigs are now in charge of farm production. Kind of scary. I've got a few minutes with you and I want to get back to the book a little bit. I want to hear your take on this, because I've heard Deirdre’s. What is The Great Enrichment?

I wanted to take a quick side trip on this, because you mentioned this, Thomas Malthus was the one in 1798 who predicted gloom and doom. He does get a particular bad rap, though, doesn't he? I mean, given what he was given at the time, his hypothesis sort of made sense, at the time.

To that end, I want to ask you this. You write in the book, “Will it continue? [talking about The Great Enrichment]. And people are always saying, ‘No.’ Well, you're mistaken. You may be cherishing as you imagine sophistication and good hearted pessimism, more than the scientific fact fullness from realistic [Hans] Rosling, or the historical economic truth of the mindful McCloskey and candid Carden. But let me ask you this, is it in danger with the restrictions that we've seen imposed by what we like to call The Great Suppression that we've seen in the last year?

Yes, and of course, we won't know, right? That's one of those things that's going to be an unseen thing as we approach it. I would like to get your thoughts on this, we have got about a minute left in this segment. What was so interesting, I thought, was the governmental reaction to this crisis treated it as if it were a demand problem, like it always has. But the reality was it was a supply issue, we were restricting, suppressing supply. And that's really, to use a word from to 2020, unprecedented. We've never restricted supply?

I guess you could say it's the equivalent of a war, which effectively creates a supply problem as well. Interesting stuff. Well, we're up against our first break.

Ron’s Questions: Segment Two

Welcome back, everybody. We're here with Art Carden, Senior Fellow at the American Institute for Economic Research, and co-author, along with Deirdre McCloskey, of the book Leave Me Alone, and I'll Make You Rich: How the Bourgeois Deal Enriched the World, which is just a fantastic book, Art, I thoroughly enjoyed it. As you said, as we were talking before the show went live, it's a distillation of Deirdre’s trilogy, which I think you guys just did a great job doing. Towards the beginning of the book you say, “We're not talking about anarchy here. We accept that some government is necessary. McCloskey thinks so at any rate, but [Art] Carden is more sanguine about the viability of a sort of anarchy.” We had David Friedman on [Episode #117], and of course his book, The Machinery of Freedom. Are you an anarcho-capitalist?

I love thinking about those alternate world that David posits in his book. I would love to see it enacted as an experiment. So you talked about The Great Enrichment with Ed, and you made a comment, I just wanted to ask you real quick, you said it was one of the two most important things in history. What was the other one?

The Great Enrichment, just to put some context around it. You cite a statistic that in 1800, worldwide, consumption was about three bucks per person per day. In the United States, Holland, and Britain it might have been six bucks per day. And now we are at $130 per day in the US and $33 worldwide. This doubles every generation. And this is a 3,000% increase. I mean, this is massive. The whole of wealth creation is relatively new in human history.

Right, and I want to ask you about that, because you wrote an article that 2020 was not the worst year ever, not even close. It’s so true when you think about it from a historical perspective. You know, we've had George Gilder on the show, and he's been a longtime mentor of mine as well. And he wrote in one of his books that the notion that people get rich at the poor’s expense is popular in two places: prison and Harvard. And you write in the book that isn't the West rich, because other countries are poor. In other words, we took it from poor countries, we exploited them, colonialism, slavery, whatever. And yet, as you point out, if predation could cause a Great Enrichment, it would have happened millennia ago.

You mentioned Neil Ferguson, the historian, and he talks about these “killer apps” that you need to achieve this Great Enrichment: property rights, work ethic, consumer society, competition, modern medicine, and science. And you guys are like, No, that's not it, you have another argument for why the Great Enrichment took off when and where it did.

And you say what is sufficient to do that is a change in ethics, rhetoric and ideology. I mean, it's ideas, and to some extent, even language. And that's just so powerful. We talk about business a lot on this program, because it's a business show, but we have a lot of economists on. And we talk about how if you want to change something, that all change is linguistic, change your language and you change the conversation, and that can certainly happen inside of an organization. But then the example I love is this happened in the world, this was what caused The Great Enrichment. That's just really powerful.

And innovation was in some respects illegal. The king would shut it down or cut your head off, right? That’s a big deal.

I think it was Matt Ridley who pointed out in his book, How Innovation Works, that one of the reasons they didn't like the coffee houses was people gathered there and talk about how bad the king was doing.

Art, this is fantastic. I can't wait to dive in a little bit more when we go out in the last segment.

Ed’s Questions: Segment Three

And today we are on with Art Carden, co-author of the book, along with Deirdre McCloskey, Leave Me Alone, and I'll Make You Rich: How the Bourgeois Deal Enriched the World, highly recommended by both Ron and I. It's a terrific book, great, great, read, funny, laugh out loud in some places, which is just terrific. And Art I want to turn our attention to the middle section of the book where you talk about the pessimisms. I'll, leave it to the readers to read about the seven old pessimisms on their own, and they absolutely should read through those chapters carefully. But let's talk about the three new ones. And I'll just read them: That environmental decay is an existential threat; that humanity is being ruined by a new era of inequality; and that technological unemployment from artificial intelligence is the general fate. Let's talk first, environmental decay is an existential threat.

Ironically, part of that is the people who were No Nukes back at the time when you and I were growing up that scared the crap out of us because of nuclear weapons, and we won't allow nuclear power plants to be built, which is one of the answers to the problem. I'd love to go down that path, we could spend a whole hour on that, but I want to get to other topics. You write in the book that “material equality is not an ethically relevant goal.” What do you mean by that?

Absolutely. And by the way, the math doesn't work even if you do just redistribute it anyway, right? It's not even close. Lastly, turning our attention, this is something our audience is particularly attuned to, is this whole artificial intelligence argument. And here's from the book again: “But artificial intelligence is different, you say, stupid technologies like railways always replace sweat and manual labor. But smart technologies are going to replace the problem solving and mind work, my work,” we're all going to die, Art.

Because the artificial intelligence doesn't ask new questions, right? It just helps us answer your questions. It doesn't come up with new and better questions.

There was a big over the summer with that Netflix mockumentary-documentary kind of thing on artificial intelligence, and how it was manipulating us, and I just thought it was a load of garbage. George Gilder, who Ron mentioned earlier, in his book, Life After Google, talks about how the fact that all of these things might come to pass, we might have driverless cars, and drones, and people that do accounting bots, and all of these things. But, the human species is incredibly adaptive at figuring out ways to serve one another. And this gets back to your Baptist line that you said during the break. There’s a marriage there, which is one of the reasons why this show is called The Soul of Enterprise because we believe that business has a spiritual component.

That's right. As Gilder puts it, innovation always comes as a surprise to us. Art, thank you so much for appearing today. Ron's going take you the rest of the way home on the fourth segment. But thanks again, I want to say for me, hopefully you’ll come on again sometime. There's so much more in this rich book that you have. The book again is Leave Me Alone, and I'll Make You Rich: How the Bourgeois Deal Enriched the World. But right now a word from our sponsor and my employer, Sage.

Ron’s Questions: Fourth Segment

Welcome back, everybody. We're here with Art Carden, the co-author of Leave Me Alone, and I'll Make You Rich: How the Bourgeois Deal Enriched the World. And Art, Ed and I are big fans of Charles Dickens’ Christmas Carol and his other books. He was a fantastic writer. I just read an article in The Economist that he developed over 1000 characters, if you look at his Wikipedia page, and we're still talking about these characters. Yet, he was a lousy economist. You talk about one of his books, Hard Times, as muddle-headed in its understanding of industry and capitalism. He really didn't get it, did he?

There's a defense of the miser. I think Walter Block wrote the book, Defending the Undefendable. Another question I have to ask you, because this certainly has become, I think, more salient during COVID. This whole movement of eating and buying local. I think about even my local coffee shop, say as opposed to Starbucks, buys internationally. I mean, I doubt their espresso machine was made within 100-mile-radius, or even the coffee. And you guys quote a friend of yours, “What will be next, 100-mile-sourced medicines, 100-mile-sourced ideas. I mean, this is a ludicrous idea and movement, isn't it?

You were talking about jobs and artificial intelligence with Ed, and we all know that jobs isn't the right way to measure an economy—it’s not about producing jobs, right, otherwise, Milton Friedman’s line about give everybody spoons. But, are you in favor of a universal basic income, or some type of adaption thereof?

So you would support more of the Charles Murray idea where he gets rid of everything, including Social Security, Medicare, and gives everybody 12 grand [per year], and he even wants to pass a Constitutional amendment to make sure that all this other stuff goes away.

Right, I couldn't agree more. They should apply that same logic, I think, to the distribution of this vaccine. They seem to be botching that up as well. Art, on December 19, I think it was for the Independent Institute [and AIER], on their websites, you wrote an article, “2020 Was Not the Worst Year Ever. Not Even Close.” Would you defend that.

You guys quote Thomas Babington Macaulay in the book, and he says, “On what principle is it that when we see nothing but betterment behind us, we are to expect nothing but deterioration before us.” That such a good point.

Like you said, we've eliminated poverty and wealth creation did that because it's the only antidote to poverty. Art, this has been fantastic. Again, thank you so much for coming on. We love the book and we’re going to recommend it highly all over the place. And folks we will post full show notes. Ed what do we have up for next week?

Ed Kless

That's a great question. I do not have my spreadsheet open. So…

Ron Baker

Well, I'll tell you, it's Anne Janzer, author of Subscription Marketing.

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Greg Tirico

January 10, 2021

Episode #322: Interview with Kevin D. Williamson

Greg Tirico

January 10, 2021

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.

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