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.
00:58:39 · Casey Handmer, Ty Morse
So you have to have a natural mechanism for sunsetting this. And in in the capitalist system, this happens naturally. Most businesses don't last that long. And the ones that do, sometimes you wish they hadn't. They kind of have a a full life cycle. The resources get recycled. [00:58:53] S0: I do find the government kind of fascinating because you have this organization that over time just grows and grows and grows and grows. It's just a corporation in the limit. It's revenue sources, taxes, or, like, printing money. And then it's [00:59:07] S1: like taxes by disguise because if you're just diluting everyone else's money supply, you're just stealing wealth from them. [00:59:12] S0: Yes. And they're they're... You know, like, effective output is, like, rules and regulations from what I can tell for the most part. [00:59:18] S1: Okay. Well, some some agencies make things as well. I mean, like, be clear, like, NIST outputs, you know, standards. Right? And NASA outputs rockets and space probes and they build things. And and actually, some of these agencies, you know, Department of Transportation, like, outputs roads that generate economic value, and you don't have to pay a toll when you drive to Vegas. So, like, I'm not trying to say here that, like, agencies just can... They burn money up on a... In a in a a a in a furnace. Right? [00:59:40] S0: But if we got 40,000,000,000,000 of value is the question.
00:59:43 · Casey Handmer
[00:59:43] S1: The question is, do these agencies operate with equivalent efficiency or productivity of the private sector? And the answer there is no. Absolutely not. Like, not even close. Not even within a factor of two. In some cases, not even within a factor of 10. And given that... You know, I read the math a couple of months ago. I took out financial data and plugged it into an LLM and and said, hey. Figure out what's going on here. So I don't know. In the grand scheme of things, like, Collisons have put a few million dollars into this business. Okay? That's that's public information. They wouldn't mind me saying that. I'm proud to be associated with them. Whether they're proud to be associated with me, one can never tell. But the Collisons have put some money into this business. And the Collisons are very wealthy. How do they get the money? They built an extremely valuable business themselves. That business is a huge benefit to this country in particular, right, and all the other businesses. Like millions and millions of businesses depend on They're probably responsible, I think they tried to estimate this at some point, for measurable amounts of GDP increase are attributable to Stripe decreasing friction on transactions. Okay? We should throw these guys a parade. Okay? Pin a metal on them and make statues in Silicon Valley of them, you know, a 100 feet tall. Okay? But like any business, they pay tax. They pay a shitload of tax. They pay all kinds of tax. They had to move to South San Francisco because San Francisco was like, we're gonna charge you a transaction tax. Genius move. Okay. So they had to pay... They pay a shitload of tax. The Collisons, like most rich founders, are probably not paid much in the way of salary, but they have equity and they can borrow against the equity. They still pay tax on that. Then in addition to payroll income tax on, some of that money gets invested in companies like ours, and then we pay tax. Okay? So I ran payroll on Monday, and I'm paying on the order of $354,100,000 dollars a month in payroll. And of that payroll, almost half of that goes into either payroll tax or income tax. So the actual amount of like... And then when my employees go out and like try and rent a building to live in around here or buy food or something, they're paying tax on that as well.