What if the future of capitalism isn’t about tearing down the system but about reimagining who gets to own it?
Writer, editor, and Elysian founder Elle Griffin joins Infinite Loops to explore how shared ownership, creativity, and reputation could form the foundation of a fairer, more human economy. Elle argues that broad-based equity is a cultural revolution. We discuss why employee ownership could spark a new middle class, how imagination fuels progress more than ideology, and why optimism is an act of rebellion. From utopian economics to AI-driven work, Gothic novels to meliorism, this conversation is a reminder that the world can, in fact, be made better through human effort if we have the courage to design it that way.
I hope you enjoy this conversation as much as I did. We’ve shared some highlights below, together with links & a full transcript. As always, if you like what you hear/read, please leave a comment or drop us a review on your provider of choice.
— Jim
Links
Our Substack is growing! Subscribe below for more brain-tickling content designed to make you go, "Hmm that’s interesting!
Highlights
Predicting My Critics with ChatGPT
Elle Griffin: Yep, I love that. I upload my entire essays to ChatGPT and I’m like, “Tell me what all the commenters are going to say about this,” and it’ll nitpick everything I say. I love it; it’s great.
Jim O’Shaughnessy: And are you finding that it’s generally accurate?
Elle Griffin: Yeah, I mean, it is funny. I feel more confident in my pieces going out now than I did before ChatGPT because before I would just not know where my holes of understanding were. And I might write something about climate and then somebody who’s been researching climate in academia for 20 years would pop in the comments and be like, “You’re basing this off of this study which has been widely discredited and we don’t really use that anymore.” And I was like, “Okay, so just ignore everything I just said.”
Jim O’Shaughnessy: The dreaded “actually” guy. Yeah.
Elle Griffin: But now I feel like that doesn’t happen as much, or at least I have a better base understanding that there are no holes that I’m just completely missing here. So I really like that.
Jim O’Shaughnessy: Yeah, so do I. Because I think that obviously we are blind to our own blind spots. And having the large language model point them out is incredibly helpful from my point of view. Let’s jump into what you’ve been advocating, which is basically a revolution in the way we do capitalism. You advocate for broad-based ownership being the single best way to rebuild the middle class. Tell me about that. What’s the famous movie Margin Call where Jeremy Irons says, “Explain that to me like I’m a golden retriever.”
The Most Equitable Way to Share Equity
Elle Griffin: For example, I think some companies do this well. Some companies do this with synthetic stock. But I think there are a lot of interesting ways that you could create… For example, one cool thing about the ESOP is that it’s relevant to your salary. So if your salary is $100,000 and somebody else’s salary is $50,000, then you’re getting twice the amount of stock than the person with the $50,000. I think that’s awesome. It’s equitable. It’s based on your salary and there’s a cap. If your salary is over $350,000, you’re not going to make more than that amount more in stock than the next person. So it’s pretty equitable.
Elle Griffin: If you could apply that same model to RSUs, like the traditional tech-company model, so that the stocks are more equitable and you could pair that with profit sharing, for example, or even regular liquidity events—like, “Okay, I work at this tech company. It may or may not go public, but the company is doing well now. And the company says, ‘Hey, we’ll buy back some of your stock. If you want, you can cash out some of it and earn some money for that.’” Right now, you could have these regular liquidity events every couple of years during times when times are good, rather than waiting for this future exit that may or may not come—and in a more equitable distribution like an ESOP is. So I think things like that could be very interesting.
Why the ESOP Model Is Broken
Elle Griffin: I think the impediment is—well, the reason why ESOPs even became a thing in America was from the ERISA Act in the 1970s, which was a retirement act. And that was great because it was like, “Okay, let’s incentivize people to have 401(k)s and retirement accounts.” And that really did work. A lot more people have retirement accounts today than they did then. The downside of that being a retirement account is exactly that—it makes a bunch of people rich for retirement, but they still can’t compete with, you know, the founders and executives and the wealthy who are just owning Amazon stock today and can just instantly access those funds and go on and start another business. I mean, if you think about the Silicon Valley model, why did that proliferate? Because you had this one company, Fairchild Semiconductor, make chips, and then they all sold and became wealthy. And so then they started new companies, which then sold and then became wealthy, which then started new companies. And they all had this equity model of these RSUs for employees. You can’t do that with the ESOP model. It won’t proliferate the same way because no employee can get wealthy off their current company and then go start another company with those funds. They get them when they turn 65.
Pragmatic Altruism
Elle Griffin: And so I think that we can create — if we think about it that way, like one company created today could create the entire new model for capitalism 75 years into the future — then what companies should we create today? I think that’s the challenge for every founder today.
Jim O’Shaughnessy: So, but you lose there that spectacular advantage that you mentioned earlier with the tax-free sale to employees. And it does sound a little bit more like a co-op structure. If you are here in New York, you understand that co-ops have a lot of benefits, but they also have a lot of downsides — so much so that the real-estate market in New York City changed to mostly being condo as opposed to co-op. And I wonder if people hearing that version of it is like, “Oh, so you’re asking me to be an effective altruist philanthropist.” How do you answer that?
Elle Griffin: I mean, no. And in the US, it honestly doesn’t even make sense to be a cooperative if you have less than 30 people. It’s a small-business thing. But that’s because of the way the regulatory structures work in the US. They’re much more widespread in Europe and that’s because they’re baked in. There are a lot of large companies that are co-ops in Europe, but that’s not true in the US and it won’t be true. So that’s why I think the employee-ownership, founders-selling-to-employees model is probably more realistic. You’re right that it requires altruism right now.
When Companies Run Themselves, Who Owns Them?
Elle Griffin: I think I’m interested in some crazier ideas too. You always hear about the concept of a fully automated company that is taxed and then distributes a UBI. Well, in that vein, you could theoretically have companies that are owned by a lot of people, but they barely work at the company because the company doesn’t need much to run. So I think that there are some interesting models there that you could explore.
Elle Griffin: One of the things you mentioned — that Ford wasn’t operating out of altruism — well, I think that’s true. That is true for employee-owned companies today. We know that employees are way more engaged at employee-owned companies. They’re very active in strategy. They work for — they’ll work long hours sometimes. And I think we’re overall just seeing this apathy with work where you have these really driven founders and people at the top who are like, “Yeah, we’re going to change the world.” And then you have these employees who are quiet quitting and are just sitting on meetings all day and not very engaged in their work. Well, if you want to engage the whole workforce, then give everybody the carrot, not just the people at the top, and then they’ll be engaged because they stand to benefit from it. So I don’t think this is a pure altruism play. We just need more models that companies can enact and it would be good for everyone to get everyone involved in making the company great.
🤖 Machine-Generated Transcript
Jim O’Shaughnessy: Well, hello, everyone. It’s Jim O’Shaughnessy with yet another Infinite Loops. I was so excited when I saw who my guest was today. Elle Griffin, the writer, editor and builder of the newsletter the Elysian, where she discusses the future of capitalism, governance, work and culture. With over 20,000 subscribers. You’re also the 2023 Roots of Progress fellow. And I love this. The author of Obscurity, a serialized gothic novel. Welcome, Elle.
Elle Griffin: Thanks. You forgot to mention I’m also an O’Shaughnessy grantee.
Jim O’Shaughnessy: I buried the lead.
Elle Griffin: I’m gonna see you in a couple weeks for the fellowship gathering.
Jim O’Shaughnessy: Oh, we’re leaving this in guys, which is fantastic. I love that. Well, now I feel extra special that you’re also one of our grantees. Okay, okay. All of the steel manning against your arguments, I’m just not going to put in. Do you do that, Elle? I have gotten into the habit, and before we get to your absolutely fascinating ideas, many of which I share. Ever since we have an internal AI lab because we anticipated that they would nerf the commercial models and, you know, hard code. No, you’re not supposed to know this particular thing. So anyway, we built an on-site AI lab with all of the large language models, modifications to the same, et cetera. But one of the things that I’ve loved with it is I steel man all of my own arguments against and if you do it as well, you must have had the moment where you’re like, oh, I didn’t think about that.
Elle Griffin: Yep, I love that. I upload my entire essays to ChatGPT and I’m like, tell me what all the commenters are going to say about this and it’ll nitpick everything I say. I love it. It’s great.
Jim O’Shaughnessy: And are you finding that it’s generally accurate?
Elle Griffin: Yeah, I mean, it is funny. I feel more confident in my pieces going out now than I did before ChatGPT because before I would just not know where my holes of understanding were. And I might write something about climate and then somebody who’s been researching climate in academia for like 20 years would pop in the comments and be like, you’re basing this off of this study which has been widely discredited and we don’t really use that anymore. And I was like, okay, so just ignore everything I just said.
Jim O’Shaughnessy: The dreaded actually guy. Yeah.
Elle Griffin: But now I feel like that doesn’t happen as much, or at least I have a better base understanding that, like, okay, there’s no holes that I’m just completely missing here. So I really like that.
Jim O’Shaughnessy: Yeah, so do I. Because I think that obviously we are blind to our own blind spots. And having the large language model point them out is incredibly helpful from my point of view. Let’s jump in to what you’ve been advocating, which is basically a revolution in the way we do capitalism. You advocate for broad-based ownership being the single best way to rebuild the middle class. Tell me about that. What’s the famous movie Margin Call where Jeremy Irons says, explain that to me like I’m a golden retriever?
Elle Griffin: Yeah, well, I guess I think about it like the GI Bill right after World War II was one of the best things America did. We were like, okay, everybody’s coming back from war and what do we want these people to have access to? Education, we want them to have access to assets in the form of homeownership. And we create a massive homeownership and education of the population because they had these low interest loans. And what does that do? That creates generations of people who have not just a salary but an income-generating asset in the form of real estate, their house. And we have a well-educated population that’s working and building companies like IBM and GM and all these big companies that established the American economy.
Elle Griffin: And I think now we’re kind of reaching this place where we need another GI Bill, but this time not for homeownership, but for stock ownership, for the equity in our companies. Because now we have this sort of wealth inequality again. But this time it’s not that we don’t all own homes, although now it’s much harder for people to own homes, but we have all of these people who own stock. And it’s something like, I think the stat is 93% of stocks are owned by the top 1% of wealthiest people. Which means that just as the stock market is growing and getting bigger and the value of our companies is increasing, then the vast majority of people are just missing out on that wealth gain. And there’s just this small group of people who are already wealthy gaining a lot more.
Elle Griffin: So to me the obvious answer is create more owners of that equity, don’t just save it for some people, but cut everybody in on the deal. If companies are owned in a more equitable way so that it’s not just the small group at the top gets the vast majority of corporate capital, but everybody at the company is being cut in, then everybody gets richer as our companies and our corporate value expands. So that’s, and this was just, I had started to write an essay about this topic and as I was accumulating the research it just became longer and longer. And I was like, oh my gosh, there’s so much here that we need to kind of unpack to even make this a reality. And so I just uploaded the outline to my Substack.
Elle Griffin: And I said, hey, I have this idea for a book. If you want to read it, fund it and I will share the profits with you when the book eventually sells. And we pretty quickly raised nearly $70,000. And now I’m writing the chapters live and kind of researching this idea live for my readers who are also the investors in the project. It’s been a very interesting project so far.
Jim O’Shaughnessy: So take us through how your ideas would differ from the standard ESOP arrangement. Employee stock ownership programs, which aren’t terribly broad right now in the US. I think there’s like six and a half thousand plans with 15 million participants covering about $2 trillion in assets. But then there’s also the 401k where many companies offer the opportunity to put your 401k into the company’s individual stock in addition to broad indexes and managed portfolios. How does your idea differ from what we have right now?
Elle Griffin: It doesn’t really, except that we need to drastically change all of these structures if we want broad-based ownership. Because let me just pull up some stats here. Like the ESOP structure, employee stock ownership programs are great, but there’s two problems with them in my mind. One, they’re not very scalable. You basically have to be a very steady revenue generating company like manufacturing and construction to be able to afford to pay out your employees the ownership of their stock value in the company 30 years from now when they retire. Most companies could not do that. I actually have, let me just pull up that stat really quick. If we converted 30 to 100% of every possible ESOPable company, that would create $2 trillion of revenue for workers. But that is still 10% of the economy. It’s less than that.
Elle Griffin: We still have the vast majority, 90, 95% of the economy that can’t be reached via an ESOP. I think the traditional RSUs done by tech companies is a very interesting structure and the fact that it’s like, okay, we can’t do that. We’re a small startup, we can’t guarantee we’re going to be around in 30 years to pay off your retirement plan. And that was the second part that I think is wrong about the ESOP is that it comes in the form of a retirement plan which I think is hindering wealth equality because we have 90% of ESOPs also have a 401k. So people just have two retirement accounts at those companies. And I just think people should be able to use that wealth immediately like you can at a traditional tech company RSU.
Elle Griffin: So where I see the value of the RSU then is, okay, your company can’t afford to pay off an employee in 30 years. You don’t even know that the company is going to be around 30 years from now. But you can at least say if this company is worth something someday, I want to cut you in on the deal. Here’s some stock. We’ll let it vest over the next four years or whatever. And that will possibly create wealth for everybody. The problem with those are that they’re not very equitable. It’s like 60% of the value of the company usually by the time of exit is going to investors. 20% is split between the founders and early employees. And that’s five to 10 people.
Elle Griffin: And then the other 20% that goes to employees is split between hundreds if not thousands of employees. So everyone’s getting this really tiny sliver. If you have a traditional, like say if you have a billion dollar exit, that’s like $200 million for the founders and like $200,000 or less for the employees. That creates a huge wealth gap. So ESOPs don’t do that, but not every company could do that. And tech companies do that, but inequitably and not, you know, exit events like that are rare. So my kind of idea is if we want to make this broad-based, then we have to kind of create other structures that kind of marry these worlds together to create better stock options for the future.
Jim O’Shaughnessy: Take us through one example of how you would make these structures better.
Elle Griffin: For example, I think some companies do this. Well, some companies kind of do this with synthetic stock. But I think there’s a lot of interesting ways that you could create. For example, one cool thing about the ESOP is that it’s relevant to your salary. So if your salary is $100,000 and somebody else’s salary is $50,000, then you’re getting twice the amount of stock than the person with the $50,000. I think that’s awesome. It’s equitable. It’s based on your salary and there’s a cap. If your salary is over $350,000, you’re not going to make more than that amount more in stock than the next person. So it’s pretty equitable.
Elle Griffin: If you could apply that same model to RSUs like the traditional tech company model, so that the stocks are more equitable and you could pair that with profit sharing, for example, or even regular liquidity events like, okay, I work at this tech company. It may or may not go public, but the company is doing well now. And the company says, hey, we’ll buy back some of your stock. If you want, you can cash out some of it and earn some money for that. Right now you could have these regular liquidity events, you know, every couple of years during times when times are good, rather than waiting for this future exit that may or may not come and in a more equitable distribution like an ESOP is. So I think things like that could be very interesting.
Jim O’Shaughnessy: Yeah, I agree, particularly on the ability for workers. And let’s stay with the tech company example. Right now they have no liquidity, essentially. There is no secondary market. In fact, one of the things that I looked at was trying to, what it would take to create a secondary market in private companies where people could in fact transact, but with private equity or privately held equity, as opposed to public equities. But one of the basic tenets of entrepreneurship is the willingness to take on what many people see as absurdly high risks with your capital. And generally it’s the founders where all of the risk is placed. Right. And so how do we square that with the idea that, let’s say that as the founder, you go all in. You go all in with your family and friends and your own money and you’re putting stuff on your credit cards and you are suffering what many people look at as unbearable risk. What about the argument that is it really fair to require the people, and 90% of those people don’t succeed. Right. The company fails. So for the 10% that succeed, are we putting an unusual burden on those founders who took all the risks selling it to employees after the company has, you know, retrospectively become highly de-risked?
Elle Griffin: Yeah, I think there’s a couple routes that could potentially work here. Either one, the founder is taking on all this risk and continues to. We just do it though the way that founders do it today. Accept that selling to employees becomes a more default option than selling to PE or selling to other companies. Tax incentives could make that very likely. Where, I mean, if you spent all this risk capital and you made this incredible company and sure, you own all the equity in it, but if you eventually want to exit or do some succession planning, I think a lot of founders would happily not sell to PE if they could avoid it. And they would happily not even go public if they could avoid it because they want their company to be in good hands.
Elle Griffin: They don’t want to just dilute it all and give it all up to investors. They’ve built something that they think is meaningful, so why not sell it to your employees? You still get your big cash out and your employees get to participate as owners just like you have. I think that’s the easiest on-ramp to this, and I think that’s a win. And we’ve seen that Canada and England have both experimented with saying, okay, if you sell your companies to your employees, you as a founder don’t have to pay taxes on that, on your big win. You can take all that home with you. And that makes them more likely to sell to employees because they’re like, wait, I would earn more money selling to my employees than I would selling to PE even if the rate overall that I would get is higher. So for the company, I think that’s a great way to do it.
Jim O’Shaughnessy: Yeah. I think that is the exit ramp that really does make this very attractive. But you’ve got to get governments to agree that they’re going to forego all those very, maybe certainly billions, maybe trillions in tax receipts. And I would, in a perfect world, the government would say, yes, of course, because that makes much more sense. But that’s going to be a challenge. But it’s a great idea because you should look at everything after tax. Very few people do, but we’ve always looked at everything after tax, after inflation, what are your real gains?
Elle Griffin: Yeah, and I think that tax incentive is overall good. And I think that’s why employee ownership is actually a bipartisan issue in Congress. And we keep seeing over and over again Democrats and Republicans pushing these bills forth together, because one of the reasons why this is a particularly American interest is that we’re seeing a lot of foreign owners come in and purchase capital and American companies. So when succession plans happen, it’s crazy how much foreign investment comes in and takes those. And so a lot of lawmakers are saying, we don’t want our American companies to be going to foreign interests. We want them to stay in America for Americans. And I think that’s why there’s more interest in this now. And we’ve even seen.
Elle Griffin: I saw Mark Cuban mention the idea on a podcast just this week. So I think that there’s interest. There’s starting to be more and more interest in making this a thing. And bipartisan interest.
Jim O’Shaughnessy: Yeah, it’s something that has bedeviled me for quite a long time because these ideas aren’t new. Right. And nor are their authors. They come from both sides of the aisle. I think of Milton Friedman, back in the 60s or 70s, was advocating for a similar approach. He also advocated, I believe it was Milton, I’d have to check. But for a, at birth, each child gets a portfolio of all American companies. Yes. I love that. Yeah. So that you create an ownership mentality in society as opposed to a, you know, employee, I work for the man, that kind of thing. But these all have long histories, but they never really tried it. What do you think is the impediment here to at least experimenting with this?
Elle Griffin: I think the impediment is, well, the reason why ESOPs even became a thing in America was from the ERISA act in the 1970s, which was a retirement act. And that was great because it was like, okay, let’s incentivize people to have 401ks and retirement accounts. And that really did work. A lot more people have retirement accounts today than they did then. The downside of that being a retirement account is exactly that. Like, it makes a bunch of people rich for retirement, but they still can’t compete with, you know, the founders and executives and the wealthy who are just owning Amazon stock today and can just instantly access those funds and go on and start another business. I mean, if you think about the Silicon Valley model, why did that proliferate?
Elle Griffin: Because you had this one company, the Fairchild Semiconductor, make chips, and then they all sold and became wealthy. And so then they started new companies, which then sold and then became wealthy, which then started new companies. And they all had this equity model of these RSUs for employees. You can’t do that with the ESOP model. It won’t proliferate the same way because no employee can get wealthy off their current company and then go start another company with those funds. They get them when they turn 65. So I think there’s just that portion that’s limiting it. And then there’s the function that the way that an ESOP is set up is that the company has to be able to buy back those stocks at any time, which means you have to have this very steady revenue stream, which most companies just cannot have.
Elle Griffin: There’s also a lot of tax burdens and a lot of regulatory burdens that mean if your company makes more than a million EBITDA, you have to have more than a million EBITDA to have an ESOP, but then over 5 million or something, it becomes too expensive, the regulatory hurdles are too high. You would never do it if you’re a big company. So it’s just, it’s created this construct that’s too narrow. Companies can’t pick it up. It won’t proliferate easily. And so I think that’s why we need new structures more than anything else.
Jim O’Shaughnessy: So I love the example of the folks who founded Fairchild, you know that they were called the Traitorous Eight. Yes, because at that time the overstory or the general consensus view was very different. Right? Like the corporation was king and you were a serf and how dare you go and try to start your own thing. And of course it started the virtuous flywheel that created Silicon Valley. But what’s interesting to me is if you go back a little further in American history, that was the norm, right? Like the so-called Gilded era of the late 19th century, early 20th century was essentially people were like, hey, sometimes you can just do things. Hey, I want to start a bank, I’m going to put my name on it.
Jim O’Shaughnessy: It’s going to be J.P. Morgan and you know, Carnegie, I really think this steel is going somewhere. And so went from the era of these high risk-seeking founders like Carnegie, like Morgan, like Rockefeller, starting their own company, often putting their own name on it. Which feeds into what we’re going to talk about a little later about your novel and reputation being currency. And yet then went to the, I guess we’d call it the Drucker, Peter Drucker model of professional management. And over that short period of time the attitude changed to where they actually called founders of companies raiders. And so there can be a lot of, you know, the way that society looks at this, the Overton window, right, can shift really quickly. But so we need the new structures. How would you propose some and then let’s take them, how are we going to get them through Congress and with the President’s signature on them?
Elle Griffin: Yeah, that’s what I’m working on with my book. I recently reached out to every organization that’s working on equity ownership and I asked them if you could change the law in one way that would make employee ownership more common, what would you do? And I’m compiling them into a print pamphlet that I’m gonna share with my subscribers. But the idea is, if everybody contributes all these ideas, what would an Employee Equity Act look like? What would the ideal one be? And we have pushed some ideas forward, but they just, they haven’t reached the top. And honestly I don’t think they will currently. So we might have to wait for a next president or something. But the great thing about this is that this doesn’t require the top to do. Any company could do this at their own company.
Elle Griffin: And this is why I’m really interested in the employee ownership trust, because this is a lot easier. It doesn’t have the regulatory hurdles of an ESOP. But you essentially say, I’m going to set up my company so that 30% of it is owned by an employee-owned trust. And every year we look at what we did, we allocate this much money is going back into the business. Here are our profits. Those profits will be split between employees in the amount that, based on their salary with this trust. So they’re just picking an amount each year that is comfortable to share with employees every year they do it. Now it’s not as ideal because these employees don’t earn equity in the company. They’re essentially getting profit sharing.
Elle Griffin: But the bonus is that any company can do this super easily if you’re just an LLC or any structure. And I think this is really where we start. I think that it’s going to start at individual companies saying, okay, we’re going to do something different with employee equity. And I think it starts at states. Colorado has a governor that’s really been backing employee ownership and he founded two companies and made them both employee-owned and is now pushing forward all these bills in Colorado that make it so much easier for you to start an employee-owned business. And so I think that this is something we can do locally and we expand it from here. As I always say with Silicon Valley, Silicon Valley and their stock equity programs started with one company, Fairchild Semiconductor, in the 1950s.
Elle Griffin: And you know, across the ocean in Mondragon, Spain, one company started in the 1950s the exact same way. It was a bunch of guys didn’t like their boss, same thing. Traitorous group went and started their own company instead. Only the difference was in Silicon Valley, the Traitorous Eight needed money for their company. So they go to a wealthy heir to get that money. In Mondragon, Spain, there is no wealthy heir they can go to. So they ask the members of their church and 118 community members all pool their money together so they can start this business. The difference is that 75 years later, Silicon Valley created this employee equity program where the founders and the investors are the ones with all the capital.
Elle Griffin: And still to this day, in Mondragon, Spain we have this 70,500 employee company earning 11 billion in euros every year, where everybody in the community is the owners of the company, not just investors. In fact, there are no investors. And so I think that we can create within one, if we think about it that way, like one company created today could create the entire new model for capitalism 75 years into the future, then what companies should we create today? I think that’s the challenge for every founder today.
Jim O’Shaughnessy: So. But you lose there that spectacular advantage that you mentioned earlier with the tax-free sale to employees. And it does sound a little bit more like a co-op structure if you, yeah, if you are here in New York, you understand that co-ops have a lot of benefits, but they also have a lot of downsides. So much so that the real estate market in New York City changed to mostly being condo as opposed to co-op. And I wonder if people hearing that version of it is like, oh, so you’re asking me to be an effective altruist philanthropist. How do you, how do you answer that?
Elle Griffin: I mean, no. And in the US it honestly doesn’t even make sense to be a cooperative if you have less than 30 people. It’s kind of a small business thing. But that’s because of the way the regulatory structures work in the US. They’re much more widespread in Europe and that’s because they’re baked in. There’s a lot of large companies that are co-ops in Europe, but that’s not true in the US and it won’t be true. So that’s why I kind of think the employee ownership, founders selling to employees model is probably more realistic. You’re right that it requires altruism right now.
Elle Griffin: But my hope is that as we can kind of, if we can create more companies that do it, then we can create more tax incentives for more companies to do it. I mean you have to imagine even the Labor Act when the US was like, okay, now we’re going to have a 40-hour work week, there were already companies doing that. Kellogg, Ford, they were the outliers who were pioneering this model. And then the government was able to say, okay, it works, so we’re going to do it nationwide. So I think if we just have a few case studies of companies doing this and creating unique equity structures, then we can make this the norm and easily legislate it.
Jim O’Shaughnessy: So Ford is an interesting example because Henry Ford himself, if you’ve read anything about him, was a fairly despicable human being.
Elle Griffin: Right.
Jim O’Shaughnessy: And yet he started the five dollar pay, which was way above what his contemporaries were paying at the time. But when pressed on it, he basically said, well, I did it so that they could afford the cars I’m making. So he did it for a selfish reason, which Adam Smith would smile and nod. Oh, yeah, that makes a lot of sense. So sometimes these universal goods, like what Ford did by paying his employees much more, the 40-hour work week, etc. But then he also had a lot of really creepy things that he did. Like, I don’t know how familiar you are with history, but he had morality police essentially who could enter the home of any Ford employee to make sure that they were a true Ford man. Because back in those days it was the man.
Jim O’Shaughnessy: Women weren’t widely accepted in the workplace. But it seems to me that what are your ideas about, right, like the idea of restructuring. I particularly like the ability of selling it to the employees with no tax. To me, that’s brilliant. I think you actually get some movement there if that would happen. But like, let’s create you. I’m going to create you. I’m dubbing you just for today the ownership czar in the United States. Okay, what are your three policies that you’re going to decree? Because you get to decree them. What three policies are you going to decree?
Elle Griffin: This is hard because I’m in the middle of writing this book right now, so I can tell you I’m gonna have a way different answer in a couple of years as I’m researching this. I think that...
Jim O’Shaughnessy: Excuse me, but that’s great because you’re doing what a true entrepreneur does. You pivot when new information comes, you change your methodology. So all of our listeners and viewers, remember we’re in media res here and she might change these ideas a lot when she’s done. But just today, let’s give our audience three.
Elle Griffin: Okay. Yeah. I think I would do the tax-free sell to employees. I would change the structure so that ESOPs are not retirement accounts and can come in a wide variety of stock options. I’m interested in, but I need to explore this more. One of the reasons why so many co-ops are created in Europe is that some countries like Italy have employees get first right of refusal, which I think is interesting. So you have to at least say to your employees, would you rather buy the company before you sell it to somebody else? I don’t know how well that works. I’d have to do more research on it. But yeah.
Jim O’Shaughnessy: Please.
Elle Griffin: I think those two are probably my biggest ones. I think I’m interested in some kind of crazier ideas too. You always hear about the concept of a fully automated company that is taxed and then distributes a UBI. Well, kind of in that vein you could theoretically have companies that are owned by a lot of people, but they barely work at the company because the company doesn’t need much to run. So I think that there’s some interesting models there that you could explore. One of the things you mentioned that Ford wasn’t operating out of altruism. Well, I think that’s true. That is true for employee-owned companies today. We know that employees are way more engaged at employee-owned companies. They’re very active in strategy. They’ll work long hours sometimes.
Elle Griffin: And I think we’re overall just seeing this kind of apathy with work where you kind of have, sure, these really driven founders and people at the top who are like, yeah, we’re going to change the world. And then you have these employees who are quiet quitting and are just sitting on meetings all day and not very engaged in their work. Well, if you want to engage the whole workforce then give everybody the carrot, not just the people at the top and then they’ll be engaged because they stand to benefit from it. So I don’t think this is a pure altruism play. We just need more models that companies can enact and it would be good for everyone to get everyone involved in making the company great.
Jim O’Shaughnessy: So isn’t the argument there though that the distribution of risk takers is not a normal distribution? Right. It’s not Bayesian. If you obviously know the traditional Bayesian distribution charts where they’re very neat and tidy and you know you’ve got 63 and a half percent right in that middle one standard deviation from the median. Whereas if you look at a risk appetite distribution, they skew way different than traditional normal distributions. And aren’t you sometimes, by the way, just to answer that question, maybe 10% of the population are aggressive risk-seeking or what we in finance would call go long volatility. Most people are risk averse and that underlying thing has not changed very much.
Jim O’Shaughnessy: Even as we kind of starting in the 80s really began celebrating the entrepreneurs whose Traitorous Eight made everyone else think, oh I can start my own company too, which I think is a great thing. But my own experiences, for example, in several of my companies I offered employees a choice. I can either pay you X in cash or I can give you X percent of equity. But your cash payment goes down because obviously I believe the value of the equity is really high because I founded the company. And guess how many went for the mixture of cash and equity versus cash alone? Not many. Most went with cash. How do you solve that?
Elle Griffin: I mean, I kind of think there’s two things. Sure, some people are risk averse and some people are risk takers, but companies need both of those things. And also the people that are the founders of companies, there’s been so many studies that show that the number one thing that they all have in common is they’re wealthier than the average population. I mean, most startup capital goes to people coming out of Stanford. So I think that it makes sense why there are founders coming out of Stanford who are willing to take on a bunch of risk capital and there are employees further down at your company who would rather take salary. I think that makes sense.
Jim O’Shaughnessy: Yeah, but maybe I’m an outlier here and I certainly came from a very privileged background, but I did go broke when I was throwing everything I had into my first company and literally I went broke and was borrowing money and putting things on credit cards. Now it worked out for me, but even people who come from a privileged or wealthy background are still going to face the vicissitudes of the marketplace.
Elle Griffin: For sure. For sure. But it’s not as scary I think. I would imagine that after you went broke, you were able to either find a job or start another company.
Jim O’Shaughnessy: Actually I made the company. I sweet talked my friends and family and everyone else into making me small loans and continued. So I made that company a success actually. So yeah, I had a ton of people, my father especially, telling me that I ought to get a traditional job suited to my talents and attributes. I got very angry with him for that. And I also just kind of think bringing that up, it’s like the founder personality is very different. It’s a very different profile than your average person. And so I wonder, I agree with you, by the way, that you know, you’re going to need more risk averse people working at a company if it’s a success. Sure.
Jim O’Shaughnessy: But how do we get that mix of the crazy person, i.e. me, who is willing to have his wife look at him, my wife, when all of this was happening, she’s very risk averse, by the way. Talk about a mismatch. But as things started working out, when we did ultimately succeed with the company, she came in and said, what you owe me is an Oliphant individualized cartoon for us. And what it’s going to show is us on a raft. In the background are these horrible rapids and waterfalls. I will be splayed out on the raft and you will be sitting there with a big smile on your face. So.
Jim O’Shaughnessy: Which I thought was really funny. But how do you sort for temperament?
Elle Griffin: I think, okay, well, let’s think this through together. But my perception is that risk takers would do it even without the carrot. I don’t think there are many who are like, I’m only doing this because I have the chance that I might earn $200 million or whatever. I think, and we have experience of seeing that through all U.S. history since World War II, where plenty of people still took risks and did crazy things, even though there was no opportunity for future riches. Like in the 1950s through 1970s, the riches available to you were much less and people still took risks. I’m the huge risk taker in my relationship. I’m constantly saying things to my husband like, just quit your job and let’s go move to Europe. It doesn’t matter, we don’t need much, we’ll just go.
Elle Griffin: I’m not doing that because I might get rich one day. I’m just doing it because I like taking risks and I think it’s fun and I want to take on new challenges. I really do believe that’s true for a lot of the people that are startup founders today. They’re motivated because they want to create something and they want to build something and they want to make something really big and cool. And I don’t think if they make a little bit less money, then they’re not going to be interested in doing it. And they’ll just be like, no, I’ll just get a day job.
Jim O’Shaughnessy: So. But your husband still works at his job, doesn’t he?
Elle Griffin: You need the non-risk. I did convince him to quit his job. We did spend the last 18 months traveling around the world, but he only did it because he has an 18 month non-compete in his industry and he had another job lined up. So he was like, okay.
Jim O’Shaughnessy: The garden leave clause. This has been, this idea has really intrigued me for a very long time. I think that the benefits of an owner mentality over an employee mentality are vast. So let’s stipulate. And I’m sure that a lot of our listeners and viewers are going to say, you’re wrong, Jim, but that’s fine. So, but I keep coming down. So I’m in favor of the strategy of getting more people to be owners as opposed to employees. But what I, where I get bedeviled, if you will, is in the details. The devil is in the details. And so I think that what I loved about your ideas are you put a financial incentive in place that allowed for people who maybe aren’t altruistic at all to be like.
Elle Griffin: You have to.
Jim O’Shaughnessy: I can do that. So I’m a big proponent of the rational side of this. One of my, and it’s only intensified for me because I think that the cognitive chasm that those who use and understand AI and those who do not use nor understand, nor want to understand AI is going to, you think we have wealth inequality now? Wait until that kicks in. And so I’m open to throwing everything against the wall, right? Like UBI, Universal Basic Income. A lot of the empirical research shows that it does not work. And yet I’m willing to say, okay, well, let’s try it anyway.
Jim O’Shaughnessy: And you know, because one of the things that really does grab me is this is a different situation because this group of people includes probably a pretty big group who through no fault of their own, that’s key, through no fault of their own, are just not going to get it. They’re not going to see all of the changes. And since 2018, I’ve been on this theme of the great reshuffle. The innovations of AI and connectivity and everything else are literally going to rewrite playbooks in every industry, in my opinion. So actually, when you put your goal to AI and ask it to help you design a model that would get you where you want to go, are you seeing anything good?
Elle Griffin: I mean, this is where I really think we have the opportunity to create the Jetsons future with AI. And that’s why it’s so frustrating to me to see us not take these routes, because what does George Jetson do? He flips switches and stuff. But it’s only nine hours a week. And I think that, and actually the article I’m writing for you right now is about that we’ve kind of already sort of created a UBI with salary jobs because a lot of people I would say are not working 40-hour work weeks and yet they have this good paycheck and yet the company still keeps turning or, you know, keeps going and doing well. And I don’t, you can say, oh look this is bureaucracy, all the fluff, all the bullshit jobs, whatever.
Elle Griffin: But you could also look at it and say are these companies funding all these people to have side hustles that are other things that are also important for society that they wouldn’t be able to do if they didn’t have this well-paying job with plenty of room and flexibility to knock their work out before noon and still have time to, you know, start this other startup on the side. We’re creating parallel economies even within our current 40-hour work week. And whether, I don’t necessarily think that’s the ideal, but it could be the ideal that we’re all owners of the companies and it’s not a salary we’re getting but dividends from the company. And it’s still in our interest to make the company successful and for it to be really doing well.
Elle Griffin: And if we can do that in 40 hours or 30 hours or 20 hours, doesn’t matter. But we’re earning from the company’s success so it makes sense that we work hard for it and do a good job at it, even if we don’t do it as many hours in the work week. I think that there are pathways where we all own the means of production even as we fully automate. But the challenge is can we actually get there? Or will the people who own AI right now just own those companies and none of us will work for them and we won’t get any money.
Jim O’Shaughnessy: So you use the term that I always bump into, own the means of production. Good old Karl Marx. And as a theory, actually, as a theory, if you actually read his Das Kapital, it’s not even a very good theory, but theory versus practice, right? So wherever there was so-called proletariat revolutions, we all know how those societies looked. I mean, the simple thing that you can refer to is when they have to build walls to keep their citizens in their glorious country, that’s probably a big problem. And so I’ve always kind of looked for this third way of an ownership society, which I really very much believe in. Right. And I think it should be broad. And I think the more of that, that’s why I’m so intrigued by your ideas, because I want to see every idea. But human nature.
Jim O’Shaughnessy: People say, is there any edge left in public markets? To me, and my answer almost always is markets change zeptosecond by zeptosecond. Human nature barely budges millennia by millennia. Arbitraging human nature is the last sustainable edge. Human nature when we look at the experiments of the idea. And maybe it’s unfair of me to just use Marxism here as the example, but honestly, how do we maintain a free, secular, pluralistic society, kind of the humanist goals that you and I share. How do we maintain that kind of society and then also turn it into a much more broadly ownership society? Now we’ve sketched some good ideas. I think, you know, the tax preference, that’s a great idea, in my opinion. Getting past this idea where each child born in the United States gets that portfolio at birth. I love that idea.
Jim O’Shaughnessy: And then the others that you’ve highlighted here. But we also have to design this for human nature.
Elle Griffin: Okay, let me, all right, you’re going to force me to go into my utopian side.
Jim O’Shaughnessy: I knew I’d get you there.
Elle Griffin: I think very few people and only very fringe people would argue for pure Marxism today or even pure socialism. I think I am a huge fan of old socialist novels. I have a ton of them in my library. You can see all, they’re utopian novels and a lot...
Jim O’Shaughnessy: Edward Bellamy, Edward Bellamy.
Elle Griffin: Charlotte Perkins Gilman. I love the socialist utopias. I don’t think anybody, very few people would say that’s what we should do today. We’ve debunked the pure idea that the utopians had back then. I think it was a great idea to have back then because industrialization was not working for the common man. And everyone was trying to come up with solutions for that. And that was one of the solutions. Give control to the state. Just like we joined the military today, we’ll join the economy. It seemed like a great idea. You know, we learned that was not a great idea. We saw that Soviet Union and everywhere that it was ever tried was bad. But we were like, okay, well, we still want to solve this problem.
Elle Griffin: And we saw the Nordic countries be like, okay, well we’ll still tax oil and gas and we’ll still use that to provide social services for people that live here. But we’re still going to have a privately owned economy. And we saw the US be like, okay, we’ll pass the Labor Act and we’ll raise the minimum wage and we’ll have a 40-hour workweek. And that will help everybody to benefit from this economy. We tried different variations to get to the same goal. And I think now where we need to come up with new versions, new utopian visions where we don’t go back to Marxism, we don’t go back to socialism, we say okay, based on what we have now. Like in my purest utopian sense, I would say that I live in the state of Utah.
Elle Griffin: I happen to think that all U.S. states should be independent, have their own, and be able to tax their own economies. Let’s just imagine in this circumstance that the United States of America, a bunch of the states are autonomous. They’re still part of the United States, but they have full control over taxation. My state of Utah, which has one of the eighth richest economies in the United States, would suddenly, instead of getting 10% of its GDP in taxes every year, maybe get 20% or maybe 30%. And it could do a lot of things with that. Imagine everybody at birth gets access to exactly what you’re saying. Baby bonds. We all get access to the Utah stock market the second we’re born. We have a little index fund of all the companies based here.
Elle Griffin: If I grew up and I have a lot of money in that account, I can use it to start my own business and I can grow it and nurture it and eventually I can sell it to some of my employees. If I eventually want to go public, then I go public to the state of Utah. And maybe as a tax incentive, I get additional tax incentives. If 10% of my company at the time that I go public goes to all Utahns, they get access to that in their little index funds immediately and automatically. I think there are ways that we can take the companies that we have now and by exiting to founders, by creating an IPO where more people benefit from it, not just the top who’s scooping up all of the investments.
Elle Griffin: I think we can create something within our existing capitalist structure that benefits more people. That’s what I’m saying.
Jim O’Shaughnessy: So that was the way the United States was literally originally formed. Yeah. A confederation of fairly independent. That’s why every state has its own constitution and it was a huge fight among the founders. You had Hamilton who wanted to federalize everything, and you had Jefferson who wanted everything to be at the state level. And then historical conditions let the federalists win, but couldn’t we also look at that as current countries today, for example, on a global level, that’s kind of what we have if we had free immigration. So it wasn’t limited by all of the roadblocks and everything else that people are throwing up back to, you have to build a wall to keep your citizens in. Right. Basically everyone would move to America.
Elle Griffin: And there’s a fascinating map about this that shows where everybody would move. And I love it because it’s like a very high percentage of Mexico would move to America, but a very high percentage of America would move to Canada and Europe. And the migration patterns are really fascinating. You’re like, oh, the whole world would change if borders...
Jim O’Shaughnessy: I would love to see that because all of the things I’ve seen have basically shown, you know, people if allowed to vote with their feet, at least all of the stuff that I’ve reviewed, maybe this is something that I didn’t find, but showed that a vast majority of the world’s population, especially the clever and talented part of that population, would move to where they had the greatest opportunity set. And again, that makes total sense. And so one of the things that I keep searching for is a model that doesn’t build morality into it because there’s always this idea that the difference between people who don’t understand the difference between is and ought. Right. Ought. Well, ought gives you all of those utopias. Right. It ought to be this way. It ought to. And like, yeah. Have you studied human nature? Right.
Jim O’Shaughnessy: I remember, and in fact I looked it up because I hadn’t seen the quote recently. But I’m sure you’re familiar with Will Durant and the story. Yeah. Okay. So he and his wife Ariel wrote a great series, the Story of Civilization, which I love. And we’re actually going to experiment with turning it into a podcast. And we’re experimenting with should it be AI because it’s very dense material and breaking it down might be difficult for a host. But Will Durant, after, so he and his wife Ariel were really well known as maybe the best observer historians, etc. And they wrote a very compact book called the Lessons of History. And here’s his quote, and I’m, I didn’t jot it down word for word.
Jim O’Shaughnessy: But he essentially says history reports that people, and I’m changing that because he said men. And so I’m trying to do my part here because the world has changed even since this, right? Like back then he was right. It was 90% men in the workforce and very few women. I think our far more equitable distribution today is progress. So he says history reports that people who can manage people can manage only two things, whereas the people who can manage money manage all. What do you think of that quote?
Elle Griffin: I guess it really depends on how you interpret it.
Jim O’Shaughnessy: How would you interpret it?
Elle Griffin: He’s basically saying if you’re a good money manager, then you’re good at everything.
Jim O’Shaughnessy: I take it a different way. I substitute the term symbol manipulators. Like one of the biggest changes in the economy in my opinion has been if you look at the Forbes rich list, right, which I think started in 1982. In 1982, if you looked at that list, guess who was on it? Almost all people who dealt in the world of atoms, right. So steel, oil, real estate. Okay, so those people, but the majority of the list were heirs. There was this great family fortune and they became heirs. And the world was pretty stratified and movement between social groups even in so-called freedom-loving America was not that great. Look at the list today and it’s almost exclusively entrepreneurs. So that underlines your point. Right.
Jim O’Shaughnessy: But what changed was the people who were getting rich are what I call symbol manipulators. What do I mean by that? Like I’m a symbol manipulator. I didn’t produce anything, I didn’t make cars or widgets or any of those things. I essentially manipulated symbols. What are all those tech multi-billionaires? They’re symbol manipulators. What are the other people getting super rich in finance and entertainment? Symbol manipulators. So we’ve moved to a more abstracted economy I think. And I wonder, first off, let me ask for your opinion. Am I right or am I just full of it with that whole symbol manipulator thing?
Elle Griffin: Yeah, I think that makes sense. I think whether that means, whether being a symbol manipulator means that you are far more deserving of your wealth than everybody else or that you’re therefore good at everything, a bunch of other things, I don’t know that I wouldn’t agree with that.
Jim O’Shaughnessy: Okay, so you used that, you used an interesting and loaded word there. Deserving.
Elle Griffin: Yeah, I shouldn’t use that word. But I think that the problem with the word deserving is that you can’t possibly answer what somebody deserves. You can’t argue what’s fair. You can’t say what they’re worth. The best thing you can say is how much value did they contribute to a company? That’s maybe the best thing you could say. And did they contribute a thousand times more to the company’s value than the next person? Then maybe that’s the best way you can determine whether that salary is worthwhile. But even then, you have to consider the societal effects. Let’s say the person who earns a thousand times the traditional employee really does contribute a thousand times more to the company’s value than the next person, a thousand X down on the income.
Elle Griffin: Then could they do it without that person or without all the other people that are a thousand times down? No, they couldn’t. And then you have to say, okay, well, could they do it if that person at the bottom wasn’t rich enough to buy their product or contribute in the economy in a way that they can buy things and keep our market going around? Well, no, they probably couldn’t. So you have to look at, the best, if the best thing you can say is how much value does a person actually contribute to the economy or to a company’s value? Then you still have to say, but there are societal effects to that that would make them not worth that because that economy wouldn’t exist or the business wouldn’t be able to exist to cater to it. So it’s a hard question to decide what people are worth.
Jim O’Shaughnessy: Very, very hard and a very hard question, which is why you are an O’Shaughnessy grantee. We are trying to find, I’m serious. No, but that’s fine. We are trying to encourage thinkers like you to grab onto this problem because I think what keeps me up at night is exactly what you just said a moment ago. What happens when that person who, for whatever reason, has a thousand times more? I would argue that they do primarily not, because if you, again, back to the Forbes list, it’s not inheritors on that list anymore. It’s all the innovators. It’s all the, but then, I’m very guilty because my entire asset management strategy was very algorithmic and empirically derived. And so I’m always building algorithms in my head.
Jim O’Shaughnessy: And as I was listening to you, I was thinking, well, okay, now we’re back to risk taking. We’re back to things that are very difficult to quantify. And so I think that your ultimate answer there, hey, it’s really hard to determine in a top-down way who’s worth what. That’s why I’m in favor of open and free markets where all of that stuff works its way out. Right. Like Kenneth Stanley, who’s an upcoming guest on the book or on the podcast, wrote an incredible book called Why Greatness Can’t Be Planned essentially. And I’m sure he will correct me when we’re in discussion, but he essentially says that economies are complex adaptive systems and in complex adaptive systems, top-down mandates very rarely work. All emergence of good new ideas comes from below. Right. Thus why you’re an O’Shaughnessy grantee.
Jim O’Shaughnessy: I want as many smart minds working on this problem as possible because out of that will come hopefully something that we can actually test. Because one of my worries is are we going into a world where that person, that thousand time person doesn’t hire the person, they just have AI workflows.
Elle Griffin: Exactly, exactly.
Jim O’Shaughnessy: And so this is a problem that is very easy if you think about it, to see the second and third order effects on society. And in my opinion, if we just keep going the way we’re going, they’re not going to be good effects. Right, exactly. And so that is why I am very much in favor of all of the arguments, the research, etc. being done. But again, it does kind of bum me out because coming back into it is that God damn human nature. Right. Like hierarchies. Hierarchies are a great example. It’s not just humans that operate in hierarchies, it’s every living organism essentially. Even spores have hierarchies. And so I always believed, well no, I’ve managed to stand outside the hierarchy and I’m person X until Will Storr and some others convinced me, you’re only fooling yourself here, Jim.
Jim O’Shaughnessy: You are signaling all of the time until I finally had to admit, God damn it, they’re right. And if you haven’t read Will Storr’s book on status, I would highly recommend it because it’s another, it’s a non-cash thing that he establishes. And Rob Henderson is another great author on this idea that that’s more important to us than money. And so I’m just, I’m totally in favor of trying, throwing everything we can against the wall. And let me again underline. I love the idea of getting a tax benefit. Because there’s no moral thing hovering up here saying you should. It’s just like, why wouldn’t you?
Elle Griffin: You know. And I think, I think one interesting way you could solve the UBI problems that they currently have right now is just like it’s distributed to everybody in the same amount or whatever. You could say and it’s allocated to you based on how much you contribute to the system. You know, you can earn more if you contribute more and you can earn less if you contribute less. I think there’s opportunity to. And Edward Bellamy, the way he solves the socialist problem back then was through status. He was like giving people different statuses for different jobs that they took to encourage them to work.
Elle Griffin: The more ambitious jobs there were ribbons that everybody got and they wore them on their clothes depending on how distinguished they were because they have certain jobs or whatever. And everybody was, you know, fighting to do those, do those more prestigious projects and take those on. Like I think you’re right. Like, I don’t think, whether or not, you know, whether a company distributes $200,000 to the founders and $200,000 to the employees or the founder gets, you know, $20 million and the rest of the company gets $1 million.
Elle Griffin: I don’t know the right answer of ratio of people, but I think you can definitely stand to spread it out a little bit more and have everybody contributing and make it a little, you know, better somehow through, you know, how hard you work and through status. And I don’t think people are gonna, I don’t think if you change the ratio of top to bottom that people are gonna just stop doing innovative things or they’re gonna stop, you know, trying to get status or they’re going to stop trying to do crazy risk-taking things. It just helps other people to be able to do it too.
Jim O’Shaughnessy: So yeah, I think that we need to do everything we can to work on every conceivable solution and then we ought to try them. And that was one of the motivations for the fellowship and grantee program, I feel. But again, I don’t want to impose this on anyone else. I believe that in a world like the one we live in, I can see everyone around the world can apply and I can see all of the talent that got missed before interconnectivity and before the ability to find you, to find our other grantees and fellows. And so in my instance, it’s kind of like, hey, if I have the opportunity to give and find bright people like yourself and give them some funding to work on, it’s almost required. Right.
Jim O’Shaughnessy: And will I wish that there were other people in my circumstances who were doing the same? I do have this reflexive anti-authoritarian gene that immediately does this to me. Like, no, you can’t inflict your ideas on other people. The only way you can maybe get people to think, hey, that looks like a good idea is to do them.
Elle Griffin: Yeah.
Jim O’Shaughnessy: And then you get into that whole status and everything, which kind of leads me to, we’re going to switch gears here and talk a little bit about Obscurity. Because in Obscurity, reputation is currency. Tell me again like I’m a golden retriever. Just tell me the basic outline for.
Elle Griffin: Obscurity, the plot of my novel.
Jim O’Shaughnessy: Yeah, yeah.
Elle Griffin: I wrote a Gothic novel and I was very interested in the Gothic novels of France and Europe in the 1700s. And I was reading them all like crazy. And what I think is so interesting about that period is they were wrestling with big ideas like Catholicism as morality and the government, these kind of structures that are causing poverty in Europe. Back then, you just see these, Les Misérables, you see the Count of Monte Cristo, you see Dracula, you’ve got these kind of Charles Dickens and the poverty of Oliver and A Tale of Two Cities and kind of all these writers sort of rebelling against their times with these kind of dark tales. Frankenstein, which is exploring human nature to your point. And so I wanted to explore my own Gothic novel.
Elle Griffin: I completed my graduate studies in Mariology, which is the study of the Virgin Mary. And I wanted to write a modern Gothic from the American perspective. So it takes place in 1700s New Orleans. And it’s about this widow who arrives on the scene fresh off the convents in France and is looked upon by the town as this mysterious, almost Dracula-like figure where they’re, all these bad things start happening in the town and they’re trying to attribute it to her. And we kind of see her from the town’s perspective the whole time. And at the same time there are these reflections from her.
Elle Griffin: The whole kind of morality centers on this one portrait of the Virgin Mary weeping and she stares at it and brought it over from France and kind of wonders about who she is to herself, not just the town and whether she is the cause for all this evil that’s happening. So, so yeah, that’s my own interpretation of the gothic novels and written for modern times, I guess, and still an ode.
Jim O’Shaughnessy: See, I personally think that fiction can really inform the general consensus reality. I could really shake it up. That’s why I’m interested in bringing up your gothic novel. But also the idea that reputation is the currency. Right. And so, how would you respond to this whole idea, you know, if reputation ends in myth, why fight the rumors? Right? What does good myth-making look like for institutions?
Elle Griffin: It is interesting because I do think a lot of our modern times and even the struggles we’re facing relate to just this huge predominance of dystopian sci-fi novels. Because we create these dystopian sci-fi novels which have been all the rage for decades now. And all these tech founders are like, cool, I want to build the car from that or the AI from that or the, they’re pulling out all these technologies from these sci-fi novels and being like, we’re going to build them and those technologies go horribly wrong in the books. So that’s why I’m like, okay, I think we need some better sci-fi here. I mean, remember when Jules Verne wrote 20,000 Leagues Under the Sea and the submarine was seen as this kind of utopian project? And then we made it. It was great.
Elle Griffin: It was scientific advancement. I feel like we need more like that that are like, okay, well what if things go right and how would we design things in that world as opposed to, it’s not hard for you to figure out, like, oh, to create a bad world, why don’t we create mind control or mass surveillance? That’s a great way to get a dystopian world. And I think it would be really cool to see what kind of future we would create if we had a bunch of utopian novels or better sci-fi futures we could think about as options and how we get there. We literally don’t have any. It’s like, oh, they all end in total control by the people that own AI.
Jim O’Shaughnessy: So we’re making an effort there too.
Elle Griffin: Yeah.
Jim O’Shaughnessy: My publishing company, Infinite Books, has a positive sci-fi book called White Mirror, obviously.
Elle Griffin: I know.
Jim O’Shaughnessy: Oh, you do? Have you read it?
Elle Griffin: No, it’s on my list sitting right there.
Jim O’Shaughnessy: Okay, so what I will tell you is read that book because it does exactly what you ask for. It envisions not a utopian society. I’m very Deutschian. Are you familiar with The Beginning of Infinity? Highly. Maybe one of the best books. It’s way up there on my foundational book list. And what he does is he builds a beautiful scaffolding for the idea that advancement, innovation, etc. does not come without problems. Yeah, problems are always going to be with us. And what we have to hope for are better problems. Right. And so, he looks at second, third and with David Deutsch, fourth order effects of things happening. And you’ve got to understand that with all of this advancement are going to come vexing problems. And it’s like fire is very dangerous. Right.
Jim O’Shaughnessy: And we could be, you know, very much, we’re going to embrace the precautionary principle here and we are going to ban fire. Well, we wouldn’t have a prefrontal cortex because that’s how it grew out when human beings started cooking their food. And so we’d still be, if we didn’t do it. So the precautionary principle leads to stasis. And by precautionary principle, meaning if there’s anything that could potentially go wrong, we’re going to ban it. We’re going to say you can’t do that. That leads to a society that if not already dead, will soon die. And what you need is the idea to understand of course we’re going to have problems. But you don’t ban fire. You create fire departments, fire extinguishers, fire alarms, fire warnings, all of those particular things.
Jim O’Shaughnessy: And so when you do get around, I would love to hear what you think of White Mirror after you get around to reading it, because that’s another thing. I firmly believe that everything is downstream of culture. And you are absolutely right. We used to write Jules Verne. The whole ethos of at least America was can-do from the late 1800s through the, maybe the beginning of the Depression where everyone was like, wait, what? Yeah, but I definitely think that’s why I was so intrigued by your book, your gothic novel, because it does sort of seem to imply that reputation. I mean there’s a real world analog here. I don’t know how much you know about Warren Buffett and I love the guy, but for very different reasons than most people love him.
Jim O’Shaughnessy: I love him because he’s kind of a stone cold killer, but he’s got a reputation that I call the Warren Buffett advantage. So his reputation is so good, it allows him to get deals that even other highly ethical, highly principled investors could not get. And one, two examples a while back, Salomon Brothers, which doesn’t even exist anymore, was a huge investment bank, and they were faced with a Treasury price-fixing scandal. It would ruin, the government does not like that. And literally they were just going to shut Salomon Brothers down. And Buffett called the Secretary of the Treasury at the time and said, if I become chairman of Salomon Brothers, will you let us work out this problem? And the Secretary of the Treasury said, if you become the chairman, yes, we will allow that.
Jim O’Shaughnessy: So literally, it was Warren Buffett’s reputation that saved a company that literally would have been dead on arrival under any other leadership. And then when you go up to the financial crisis, it’s not as noble there, because Buffett got deals from the big investment banks that no other individual can get. Because signaling, now we’re back to signaling and all those kinds of things. What is the best way to have a sound currency? The best way to have a sound currency is that everyone believes the signal that there’s people in charge, there’s people paying very close attention to this. I was just reading about how they ended the hyperinflation during the Weimar Republic in Germany. And it was, they had their own Paul Volcker. That’s how we ended inflation here.
Jim O’Shaughnessy: Like when I was getting married in 1982 at the tender age of 22 and buying a house, do you know what my mortgage rate was? Like 16.5% because we had incredible inflation. Then you had Reagan, with great political risk, put Paul Volcker in and said, kill inflation. And he did, causing one of the deepest recessions that we’d had since the Great Depression. But when you look at it in context, the same thing happened in Weimar Republic Germany. Inflation was so bad there that literally people had to wheelbarrow the old currency to buy a loaf of bread. And then the new guy came in and he’s like, that’s all done. Here’s the way we’re going to do things. And people believed him. So at the bottom of everything is belief. If like currency, just the very idea of currency, it’s just a belief.
Jim O’Shaughnessy: I don’t, I don’t think I have any money here. Yeah, I do. Okay, so what is this thing worth? I’m holding up a dollar. For our listeners who are not watching, this is worth nothing. It’s a piece of paper. But because consensus reality believes that this is worth something, it’s worth something. If you’ve got consensus reality suddenly says, you know what? That piece of paper that Jim has is not worth anything, it’s not going to be worth anything. And so at the bottom, I think, is our belief, collective belief, right? So I think that there is collective consensus reality and it’s formed by every sentient being on the planet, what they are giving their attention to and saying, yeah, that makes sense. Right? And that’s how you got things like suddenly big leaps and changes in society.
Jim O’Shaughnessy: Enough people collectively believed we got to change things. Is that what’s going on here right now with your ideas?
Elle Griffin: I mean, I think it’s actually a very big lack of belief overall, lack of imagination. I think that it is crazy to me how many people, how many writers are reporting on the by-the-minute political whatever that’s currently happening, and everybody’s just watching everything possibly bad that could possibly happen in the world being reported on in minute detail and you’re like, okay, well then how come in the 1700s we had all these thinkers publishing pamphlets on every corner for a penny with crazy ideas like, why don’t we give the whole, you know, why don’t we give the whole economy to the government? They’re coming up with crazy ideas and some of them didn’t work. But they were coming up with crazy ideas to solve the problems of the day, like industrialization.
Elle Griffin: Every writer was tackling that, trying to figure out the ideal. And nobody was getting it all right. Nobody’s gonna get it all right today. Like, I can’t be like, oh yeah, we should definitely, Utah should be its own country and have its own tax holders with baby bonds and fully automated and taxed of the entire economy is like, it has a UBI. I can say all of these things. That’s great. It’s just an idea. And it’s worth having the ideas. We won’t know which ones are right until we try them. And it’s worth trying every possible idea and having every possible idea because without them, we’re just in a stupor just watching what’s happening. When journalists are just reporting on it without doing anything about it.
Elle Griffin: I think we would need our writers to be thinkers again, not journalists. And this is the very key foundation of my work. Come up with the ideas, give us something to think about and solve the problems.
Jim O’Shaughnessy: Bingo. And that is why you were a grantee from us. I could not agree more. What we need is, we need everybody, no matter how crazy they might seem, to throw to, what’s the old metaphor? Be in the arena. Right. I had a guy who worked for me once, whose wife was Cuban and her father was a wonderful guy. And he had this great saying that I learned of when he started. And I’m like, so, you know, you’re taking a risk here. This is a startup company. Why here? And he quoted his father-in-law, which was, why cheer from the sidelines when you can play in the game?
Elle Griffin: Yeah.
Jim O’Shaughnessy: And that’s what you’re doing. You’re playing in the game. And we need more players, less spectators.
Elle Griffin: Yes.
Jim O’Shaughnessy: Okay, so now I’m gonna really put you on the spot. How do we do that? How do we get more people to do what you’re doing?
Elle Griffin: Like, I mean, that’s why I do what I do with my newsletter. What I do is I come up with these topics, like, all right, everybody, let’s solve, what is the ideal way for companies to get funding? What is the ideal amount of wealth inequality we should have and how should we solve it? And then I put it to a bunch of writers and say, hey, let’s all write about this topic. We’ll all come up with a bunch of ideas. Each person will write their own, and then we together create a print pamphlet of all those ideas in one, and we sell them together and we profit share on it. So we all earn for selling it.
Elle Griffin: And we did one this year that was called City State, and it was seven writers exploring autonomous governance. We did one this year called Terraforming, and it was six writers exploring the future of our planet. We’re doing one coming up called New Republic, which is for thinkers recreating Plato’s Republic of creating the ideal city-state. We have a bunch of projects coming up that are like this, but the concept is take advantage of people that they want to think and they want to think up solutions. And let’s do it together. Here’s the prompt. Come up with some solutions and we’ll all write about it. We’ll all share all the ideas. We’ll all have very wildly different ones. We’re not after a particular ideology. We want to explore all of them and let the readers explore all the ideas.
Elle Griffin: I think that’s the way, writing is how we think. So let’s not use our writing skills to, let’s use them for solutions. And I’m trying to, you know, encourage people to do that through our community, so.
Jim O’Shaughnessy: As are we. That’s again, why you are a member of our group of fellows and grantees. I love that you’re doing that. I think the more ideas, the better. And you mentioned Plato. Right? My view of the Republic is that it turned kind of Plato into a reactionary, the loss of the war with Sparta. And if you really read it through that lens, the Republic becomes a very reactionary book. And I mean, I’m not, I’m not going to ask you to comment on that right now. But the more of that, the better. I completely agree with you. Like, if I was one of the people writing this, I’d probably write this tome about how Plato himself was so bummed out about losing to Sparta and the Athenian dethroning of Athenian ideas and, you know, all of that stuff.
Jim O’Shaughnessy: But I think that’s how synthesis works. Right? Because so many of us are just captives of our priors and we never really think, how did we get those priors? Right? A lot of our priors are bullshit. And if we take a moment to truly investigate them, we’re like, why the hell did I ever believe that? Right. But what I’m trying to get at, and it’s a vexing problem, I’m trying to get at how do you instill that kind of nature into a broader portion of the population? And what we’re doing is what we can, right? So we’re funding people like you. We’re publishing books like White Mirror, we’re making movies. For example, I don’t know if you saw Jason Carman’s Planet A, but he told me that he spent all of his fellowship money making that movie.
Jim O’Shaughnessy: And I’m like, bravo, good. Because the more we get. And I think what I am truly inspired by are young people like you and the idea that, you know, what was the quote about science advancing one funeral at a time? And I think it was, I think it was Max Planck.
Elle Griffin: Yeah.
Jim O’Shaughnessy: Who said that. And I don’t necessarily want the funerals, but I am delighted to see young people like you doing what you are doing, what Jason did. And it’s all over the map, right? We have artists, we have innovators, we have scientists, all of that. And just the only way you can tell is to try. Yeah. And I think that’s also the difference between what I call a rational optimist and a pessimistic point of view. But the challenge is, I steel man my own stuff. And one of the things that I had a blind spot about is pessimism is an evolutionary trait. And if you think about it, it makes a lot of sense.
Jim O’Shaughnessy: We are all descendants from the people who, when they were on the savannas of Africa and they saw a bush moving, didn’t say, I wonder if that’s a lion, they ran the hell away. So we are essentially all the descendants of the people who ran away. And the way our minds and brains work is we are highly attuned to novel dangers because for most of our ancestors’ life that was a really good skill to have. Right. I’m not gonna, I’m not gonna just assume that’s the wind over there. I’m gonna run like hell away from it. And so, you know, that’s a hurdle, right. If that is in our base code. I think one of the things that I deeply believe is that examples like you are really great because they can become beacons. Yeah.
Jim O’Shaughnessy: And then you can have other people like, well, you know what? I’m going to try that. I think that’s a really great idea. So for founders listening today, what is step one? Going back to your arguments that we began our discussion with, what’s step one that they can accomplish this week towards a worker ownership exit?
Elle Griffin: Towards a worker ownership exit. Well, here’s what I have to say is I would first just imagine that anything is possible. The company you work at doesn’t have to be structured the way that it’s working the way that it’s structured. The company you founded doesn’t need to be structured the way you founded it. I think that you just said, I have to steel man myself, which I love. Because that was basically what Plato was doing. Plato’s device was using dialogues. And it makes so much, it’s so annoying to read the Republic because they’re like, I know what a just city would be like. It would be like if the leader was doing this and then they spend a whole chapter, a whole book talking about, would that work? Would that not work?
Elle Griffin: And at the end they’re like, okay, so that wouldn’t work. So what should we do now? And you’re like, so the first three quarters of the book, you’re, all the things that don’t work that they talk their way in circles around to try to think through. But that’s the thing that we’re not doing now. We’re just like, that won’t work, that won’t work. And we’re not thinking like, okay, but what will? And so I think everybody has to think that way about wherever they currently are and whatever they’re currently doing. It’s like, how can we create more opportunities for ownership? How can we, I think about this even just in the context of a writer, how can my work be owned by my readers and not just by me?
Elle Griffin: Because ultimately they have to like it for me to have an audience or earn a living. So I think that, I think wherever you are, you can first imagine that things can be different and can be anything. And two, then think, okay, if it could be anything, what should it be? And then three, okay, how do we create that? And there’s so many ways you can do that. I’ve had people contact me being like, your article just inspired me to start transitioning my company towards employee ownership. Or you just encouraged me to use this profit sharing platform, or you just encouraged me to realize that even I can write to think, to think of solutions rather than writing journalism. I think there’s so much we can do and it’s just imagining what we can.
Jim O’Shaughnessy: Elle, I love what you are doing and please continue doing it. Do more of it. Put more ideas out there. Because that’s the only way, I think, leading by example. And I think that I applaud you heartily for leading by example here. Well, if you’ve listened to the podcast in the past, you know that our final question is we are going to make you empress of the world. We have rules. You can’t kill anyone and you can’t impose anything in a draconian fashion. You can’t put anyone in a re-education camp à la Mao. But what you can do is we’re going to hand you a magical microphone and you now have the ability to say two things into that microphone that are going to incept the entire population of the world.
Jim O’Shaughnessy: Everyone in the world is going to wake up whenever their next morning is and they’re going to say, you know what? I just had two of the greatest ideas. And unlike all of the other times, I’m actually going to act on these two. What two things are you going to incept into the world?
Elle Griffin: So they’ll just wake up believing that whatever I brainwash them with.
Jim O’Shaughnessy: You will incept them, my preferred term. And they will find these ideas so compelling that they’re going to be like, yeah, you know what? I’m starting today. I’m gonna work on both of these ideas to make them real.
Elle Griffin: The first one would be solidarity. So everyone’s important, not just you. And the second one would be meliorism. The world can be made better through human effort. So if you first believe that everybody is, you want everybody to do well, and then you second believe that you can make that happen with human effort, then those two things will make the whole world like that.
Jim O’Shaughnessy: I love number two especially because that attitude was a relic, what serves at the core of the American contribution to philosophy and psychology, which is pragmatism. William James and he was like, I can’t believe it took that long for people to say, hey, you know what? We human beings, we might be able to make the world a better place.
Elle Griffin: Yeah, we can do something about it. It’s so crazy, but meliorism is my creed. When I stopped being Catholic, I started being humanist. And the only creed of humanism is meliorism. The world can be made better through human effort. If everybody just believed that.
Jim O’Shaughnessy: Well, I am not traditionally a religious person, but it sounds like we are in the same parish because I cling to those humanistic values as well. Elle, tell everyone listening or watching where they can find all your stuff.
Elle Griffin: Subscribe to my Substack, it’s www.elysian.press. And join us as a writer to help us think through ideas that will make the world a better place.
Jim O’Shaughnessy: Hear, hear. Elle, this has been a great delight for me. I hope you had fun too.
Elle Griffin: I had the best time. Thanks. That covered so many things, I had no idea what to expect.
Jim O’Shaughnessy: It was super.
Elle Griffin: Thank you.
