The joint-stock company made large-scale innovation possible

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

1. 12:10

   Charlie Munger has this awesome line where he's like, every time I've thought that I understood the power of incentives, I've underestimated them. How do you successfully align all the incentives of the different partners as well as the people inside of OpenAI? why well companies are amazing vehicles for this to start um the you know as a kid i was like very fascinated by the industrial revolution and i understood it as a bunch of technologies that happened to come around the same time and for some puzzling reason happened to scale it around the same time um and you know i would like talk to my friends or my parents or whatever about whether it was like this technology was the most important invention or this one or that one and my read of it from my current lens is like someone who has now spent more time

2. 12:55

   thinking about business is that the the important invention was the joint stock corporation and before that was invented and you know you had these like kind of family businesses that ran on trust and you had to know everyone and you didn't have the idea of a corporation you didn't have the idea of like stockholders really and then all of a sudden this new thing was invented countries like the sovereigns of the world granted this sort of a new kind of status really a thing that didn't exist before this very powerful thing that we're going to let these new entities emerge and not give them the power of a state but give them like much more than the power of a person and fundamentally this was about you know incentive alignment liability protection which is another kind of incentive alignment um the ability to like amass capital and all of a sudden

3. 13:52

   you could do things beyond what a family business could do and that environment let people raise money to develop technologies very speculative nature uh pool capital figure out ways to get different companies to sort of specialize in different ways and interact with each other serious financial systems and new kinds of instruments this was really an incredible thing uh and and the idea of a company has done a huge amount to align incentives of very large groups of people now you know millions of people can be shareholders of a company there's a bunch of other things we do but i don't want to diminish what has been this incredible invention and like the the just ridiculous overperformance of capitalism in human society like a chart that i think people should look at much more than they do is the like fall of extreme

4. 14:47

   poverty over the last hundred years like infant mortality and all the other things any of them any of the associated things um you know if you like kind of look back at that that's like the most zoomed interview of the last hundred years but if you look back at kind of economic growth quality of life improvements uh all these things and you just like drew out all of human history and you put the line when like the company was invented you would see like a really quite interesting change in the shape of that curve after it beyond that i think we have a mission that transcends any amount of economic power anything else could ever do uh and that's probably more important one of the things that i've thought is the most interesting