Dwarkesh x Patrick Transcript

**Patrick** *0:00:00* Some explanations around the effects of [shareholder capitalism](https://en.wikipedia.org/wiki/Shareholder_capitalism) and the idea that it has some consequence with respect to the incentives of organizations and their long-term fates hold credibility. It's plausible that shareholder capitalism even attenuates the duration of some of these organizations. While it's not definitively true, the idea is intriguing. However, it's not necessarily bad, even if true. The question arises: are we on the side of the humans, the aggregate innovation in the world, or the corporation's legal entities? It's unclear if the answer should favor the latter. In Europe, particularly in Denmark, due to reasons related to the tax code, many organizations are either controlled by or substantially held by nonprofit foundations. For instance, [Novo Nordisk](https://en.wikipedia.org/wiki/Novo_Nordisk), the GLP company, [Mersk](https://en.wikipedia.org/wiki/Maersk), the shipping company, and even [Lego](https://en.wikipedia.org/wiki/Lego). These corporations are usually controlled by foundations, which often hold a significant amount of their stock. This often results in these corporations embedding their mission in a legally binding constitution. Take Novo Nordisk for example. I'm not an expert, but I happened to read a book about it over Thanksgiving. It's enshrined in their constitution that they have to make insulin broadly available at a low cost, at least in Scandinavian countries. They can charge market prices elsewhere, and they are legally obligated to reinvest the rest of their profits in R&D. Could this be a factor in their invention of one of the most remarkable pharmacological discoveries of the last 20 years in these GLP-1 agonists? It's plausible. The questions around why the median age of organizations and corporations is what it is are definitely interesting. I suspect it's a somewhat contingent aspect of how we've chosen to organize large corporations in the US today. **Dwarkesh** *0:02:43* The point you're making about this firm appears very similar to the [export-led growth](https://en.wikipedia.org/wiki/Export-led_growth) in Asia. Are there [tariffs](https://en.wikipedia.org/wiki/Tariff) involved? This particular company is tasked with [car production](https://en.wikipedia.org/wiki/Automotive_industry). However, it's crucial that the cars are of high quality. **Patrick** *0:02:54* You have no competition, but you had to invent the best car in the mean. We are all fans of [Smith](https://en.wikipedia.org/wiki/Adam_Smith), [Ricardo](https://en.wikipedia.org/wiki/David_Ricardo), and all these characters. Even they are less dogmatically attached to free trade than people today interpret them as being. People like [Friedrich List](https://en.wikipedia.org/wiki/Friedrich_List) and those other not quite contemporaries, but quasi contemporaries are, on a relative basis, underrated. In as much as you believe the sociological, cultural skill, or even vague alignment, not in the [AI](https://en.wikipedia.org/wiki/Artificial_intelligence) sense, but in the more interpersonal sense, these are important and explanatory. Then, you end up thinking about some of the things you just raised. **Dwarkesh** *0:03:43* It's really interesting to hear you say that. When considering [Stripe's](https://en.wikipedia.org/wiki/Stripe_(company)) mission, it's to facilitate global trade. It ensures that a firm from [India](https://en.wikipedia.org/wiki/India) can compete with any firm in [Nigeria](https://en.wikipedia.org/wiki/Nigeria) or elsewhere. Therefore, the room for a learning curve, where you're less efficient than the global competition, should be minimized if Stripe exists. Isn't Stripe the anti-list company? **Patrick** *0:04:06* It depends on the version of the list. To clarify, I'm not endorsing these [tariffs](https://en.wikipedia.org/wiki/Tariff) and [trade barriers](https://en.wikipedia.org/wiki/Trade_barrier). The history associated with them is checkered at best. It's possible that if a specific sector has clear goals and a credible path to achieving substantial success, along with some more conjoined propositions, then some degree of activist trade policy might be beneficial. However, this doesn't describe most sectors in most countries, most of the time.