00:52:07 · Ty Morse
[00:52:07] S0: On the same kind of thread of regulation Yes. In America. America. I've never understood this idea that if Elon believes that the kind of, like, American system and all the regulation that surrounds this is basically like this unstoppable, you know, thousand strings, you can't do anything over time situation. Like, he's not gonna import that bad system to another planet.
00:52:33 · Casey Handmer
[00:52:33] S1: One would hope not, and I think that's kind of the libertarian... You know, you need you need one state which tries things differently, does things differently to become competitive. Right? So, like, in some sense, the the the Arab states do this. Like, UAE has radically lower taxes. It's quite attractive to certain areas. And in The United States, the federation, different states are able to compete in terms of their, you know, regulatory approach to various things. So some states have decided they're gonna be, like, business friendly places. Other states are so wealthy through no fault of their own that they can afford to be extremely profligate in the way that they spend money. Cough California. Cough. Yeah. There's never been a really strong forcing function for great governance in any part of The United States. But, yeah, we we need we need one Western liberal, ideally Anglophone democracy to defect and say we're going to adopt a extremely, like, aggressive deregulatory agenda. Like, AI is a great way to do it. You say, like, hey. I I I had Claude 4.6 do this a year ago. Like, ingest the complete corpus of American law and regulation and compress it to 4,000 pages, which is a Mastercard text catalog book. Right? I'm a fit guy. I should be able to fit the laws of land in an overhead locker. Right, in an overhead bin. That should be your constraint. Like, you can't just keep on adding laws forever. How many laws do you really need? You know, we... Anyone who's developed software knows that there's an optimum size. Right? And you should not have too much or too little. You should have an optimum size. But there's no forcing function. There's no process even for the destruction of laws that are, you know, obsolete or no longer needed. In the Reconstruction period after the civil war, I think under Jackson, there was a... An effort to, for the first time, actually get all of US law in one place. So you have the constitution, the founding documents, obviously, but then you had lots of laws in front of the place. It wasn't particularly well kept. It came to 1,700 pages at that time. 1,700 pages. But, like, Lincoln himself was originally a trial circuit lawyer in Illinois, I believe, prior to prior to his election.
00:54:40 · Casey Handmer, Ty Morse
And and so in those days, they're just just, like, terrible lifestyle, just like going from town to town and trying cases and getting to know people. And, yeah, they didn't have, like, a central source of truth for what the law was back then. Kinda wild. Obviously, the federal government was much smaller back then. But, yeah, 1,700 pages seems like a good number. 4,000 pages I could live with. You know, we've got airplanes and stuff now to deal with. 12,000,000 pages is what [00:55:07] S0: the current law? [00:55:08] S1: Yeah. Yeah. Federal federal code and regulations, it's 12,000,000 pages, which is more than than anyone could even read the index for in a lifetime. It's it's absurd. [00:55:17] S0: I I... I've thought a lot about this whole idea of, like, dictatorships. And, you know, companies [00:55:22] S1: How many dictatorships? [00:55:23] S0: Are... Basically, like, especially in founder led companies, they are a mini dictatorship where you live or die based on how good you are at making something that people want.
00:55:23 · Ty Morse, Casey Handmer
[00:55:23] S0: Are... Basically, like, especially in founder led companies, they are a mini dictatorship where you live or die based on how good you are at making something that people want. [00:55:31] S1: A little different, though. Like, the nice thing is in our system, and this is... Ten years ago, I would not not have seen the value of this. Now I do. Is... And I think maybe it Pamela Lucky or someone who was talking about the value of the limited stock or joint stock company as an innovation. Every single company in the entire country is governed differently. Right? You have everything under the sun. And within very broad bounds, almost anything is legal. Right? You can have you can have a company where you've got a constitution and all your employees have proportional votes and they vote on what gets done. Right? And the thing is this works really well because no one's locked in. Anyone can resign and go to another company. Right? So it's not like a religion where if you're an apostate, you get killed. You can always leave. It's voluntary association, but it becomes this this laboratory for experimentation of different governance systems that work better for particular types of businesses and particular types of founders for particular times types... Times in history. Different systems work better. [00:56:28] S0: The other great thing is it's it's kind of live by the sword, die by the sword, and if your system doesn't work, you rapidly get killed. [00:56:34] S1: Oh, yeah. For
00:56:34 · Casey Handmer, Ty Morse
[00:56:34] S1: Oh, yeah. For [00:56:35] S0: sure. And and and this is, like, the difference between, you know, the US government where it can have, like, an
00:56:40 · Casey Handmer
[00:56:40] S1: unfunctional agency nonfunctional system. USAID, but, like, agencies... Like, here's a radical idea. The the executive should be allowed to spool up agencies to solve problems. That makes sense to me. Some of those agencies are chartered in the constitution. Some of them are not. For the ones that are not, they get automatically sunsetted after ten years. That solves all the problems. Right? Because you could then you could then... You could always recharter it. DARPA does this automatically. Right? So whoever invented DARPA was a genius because they knew that the problem of all agencies is that you get a founding team, that team sits in in place, and they hire people like them, and over time it gets captured and sclerotic, and it can't do its job anymore. And we've just seen this over and over and over again. There's 400 something agencies in The United States and their ability... Like, if they were actually independently operated businesses, like, with paying customers, they'd be out of business tomorrow. Like, they just can't... They don't function in a functional way that we'd recognize in the private sector. Okay? They're funded by the private sector. They can never go out of business. Okay? In DARPA, if you're an employee of DARPA, you can only be an employee for a fixed term. Right? And then you're out. And it might even be for life. And so you don't have that problem of, you know, the kind of... I'd say boomer but like there were boomers fifty years ago in these places as well. It's like the people who stay there forever. It's a real problem and this is why in all these agencies, anyone who's got any degree of risk tolerance or labour market value over time will be attrition like a trader from the system because they'll get cross recruited or they'll leave to do something different. And so if you solve for the equilibrium, the people who remain will be the people who either can't or don't want to leave ever. And they might have good reasons not to, but on average, the character of the organization will just trend more and more risk averse and older and older and more and more conservative with respect to decision making. So their ability to actually dynamically execute against their purported and stated goals will diminish necessarily, and their ability to attract new talent to work on them will diminish.