How to Improve Society

0:00How many of you during the recent election knew somebody with a political yard sign advertising a politician or had one in your own house? So it was the same thing in my neighborhood. I don't keep up with politics that much. So everybody in my neighborhood had these signs, vote for this guy or vote for that guy. And it's a little puzzling to me because I live in one of these subdivisions with extreme rules, It's like, you know, if you paint your door the wrong color or something, they come and tell you, you have to change the color, this is not right. If you put up a fence, you have to go appeal to the special governing body or whatever and they have to debate your fate, you know. And so one of the things that in my neighborhood they'd really discourage, I presume, is any kind of commercial advertising, right?

0:49You can't put up like a big sign up in your front yard for anything. But politics somehow has always made this exception, that it's okay to advertise a politician that's not tacky. But I find it just incredibly tacky, you know, once a year, once every couple of years, these signs strewn all over the place, urging me to vote for these guys. I don't know who they are, really. How am I going to find out? You know, what, read their, go to their websites or something? Read the campaign propaganda? You know, I mean, I believe in, you know, the future. Oh, okay, you know. I can't tell the candidates apart really. The only thing I really want out of a politician is to leave me alone, and none of them really sort of promised to do that. And even if they did promise to leave me alone, chances are they're not going to do it, and then what am I going to do? You know, I've voted for the guy, I've supported him, he's bugging

1:40me with taxes and regulations, you know, scanners at the airport or whatever, I'm stuck. So So I'm wondering, why is it that people go out of their way to advertise these politicians, you know, it's very strange. So I began to think about it, what's something that I love in life, that I think that other people ought to join me in celebrating as they celebrate politicians? I'd like to persuade them to join me in my favorite thing, and it just so happens that one of my favorite things, Bob Murphy talked about today, and it's McDonald's. I am wild for McDonald's. Every time I go, it's tremendous. Half the price of Starbucks, you know, for a cappuccino or you can get a great hamburger. These days, you know, they take, one of the things that can be terrible about hamburgers is the buns are too big, if the large buns get on your nerves. Now they put them inside little tortillas or something and sell them for half the price of the hamburger and call them a wrap, you

2:47The people that are always very nice, they're desperate to serve me, and they say hello to me, they call me the bow tie latte man, they don't even know my name, but they've got a name for me, so I'm pretty wild for this place. The company has been around since about 1940, still reinventing itself, always coming up with new products that persuade you to go there, appealing to every class. You know, you notice this, the advertisements, you know, they tether the advertisements to appeal to certain demographic groups and, you know, always coming up with new products, even products that appeal to a little niche. Like, one of the worst things I ever had when I was a kid This is so-called McRib, right? Did you ever have McRib?

3:43It's the least successful thing that Donald's has ever done. Horrible. I mean, it's not even, it's not even, there's not ribs. I mean, you wouldn't want to bite into a rib sandwich anyway, right? Because you'd be biting through bones. Okay, so they just kind of take this pork and shape it with like a bone shape or something. I don't know how it works. But there must be some people in the world that like the McRib. So they don't just have one product and sell it to everybody. They cater it to certain people. This is completely unlike politics, where you vote for a candidate and he promises you one thing and he gives you something else. There's nothing you can do. I mean, if I order an egg McMuffin, they give me a rib, I can complain and we make the switch. Everything's great. So I'm thinking really the kind of sign I would like to put on my front yard is a McDonald's sign during elections.

4:30So I desperately tried to look for one of these in this most recent season. I went over to McDonald's. I said, do you have a sign that you can give me? What do you want to use the sign for? Well, I want to put it in my yard. Well, I don't think we really have anything. And, well, they didn't even have signs. They were startled that anybody would want to do advertising. Well, I want you to advertise them for these people. These are good people serving wonderful food at very cheap prices. I want to help them out. And it strikes me that they do a lot more for society than all the politicians being advertised and all these signs all over my neighborhood, you know, so between the two, who should we be supporting, who should we be promoting? I really want to promote McDonald's. So, well, they never got me a sign, so I thought, well, one thing I can do is wear a McDonald's bow tie, look for one of those, couldn't find one.

5:18I've been looking for all kinds of McDonald's products, you can't find them anywhere, but anyway, McDonald's has great, you know, like, I want to advertise in slogans for this company. So, you know, here we have a system in which it's widely believed that the state is the thing that makes society wonderful and that we should be advertising as politicians, people should aspire to be politicians more than anything else, you know, when I was growing up, I remember as early as kindergarten, people would say, well, you know, if you manage your life right, you know, we live in a free country, it's a wonderful country, really, America, anybody can be president. and I heard this in kindergarten so I was under the impression that sort of that was the goal of all of life you know if you did everything just right you can be president and then you will have achieved you know the ultimate thing I guess these days you'd say I don't know the general secretary of the UN or I don't know what it is people are aspiring to be now I don't know why anybody would accept the job of president I mean it's an impossible job what a disaster I mean it's crazy I don't know why anybody would want such

6:28That's just a stupid thing. What a waste of a life. And quite often, actually, you see people achieve a certain pinnacle in their business career or something and then decide to run for political office. It's usually always a mistake because they're doing something productive and wonderful for society to go into a kind of a class of racketeers where you tell people you're going to do one thing and you end up having to do something else. You can't actually get anything done. If you want to do anything good, you probably can't Well, what I'm telling you is that the appropriate and best arena for improving society is not politics, really. I mean, if you just like giving press conferences and exercising power and having people dode on you and call you Senator this or Senator that, that's great.

7:17That's what you want. Okay, politics is great for you. If you want to do something for others, however, I think commerce is a great choice for you. And I am very jealous of those wonderful people at McDonald's and all the fantastic things they do all day. I wish I had a second life. I could just do, just work there. I used to be in the fast food industry. I worked in a little fish restaurant. It was just, it was one of the great times of my life. One of the things we did was make hot puffs. You know, like, it's fried biscuits. And we'd serve them by the dozen and people would dump honey on them. Made people very happy. I now do this with my own children. I make lard biscuits fried in lard, it's the favorite thing in the whole world. My daughter moved out, she moved over, she now lives at the Episcopal Church and makes fried biscuits, fried in lard, scandalizing everybody all the time.

8:13In any case, it hasn't always been true in American history that we somehow idolized the political class The other day, I happened upon this wonderful book called, it's really a very charming book, it came out in 1901, called How They Succeeded, and actually somebody emailed me a Google Books version of it, I just snapped it up on some used book site and got it, and I've been just obsessing with it, I think it's a wonderful book, A History of the Great Men and Women of the Gilded Age. How many of you know what I mean when I use the phrase the gilded age? Have you heard this before?

8:59Okay, well, it's the time generally between the end of the Civil War and the turn of the century, or sometimes people date it to the beginning of World War I, which is the end of civilization. So there you have this beautiful period of time when the American economy grew. Now we're talking about real growth, not kind of like phony growth like you have now, Suddenly everybody's flipping houses and then they're going bankrupt and regretting it or something like oh wow we grew 5% this year, well that's regrettable, we shrunk 3% this year, not that kind of you know credit fueled growth, no but real growth of like 5 to 7 and 8% during the Gilded Age in American history, this is a time when the population was rising dramatically unlike we'd ever seen in all of human history and where we saw a level of innovation, and technological innovation and entrepreneurship that we never saw before or since.

9:57And there came about in this time a very interesting theory of public life that was unique to America that we haven't seen since that time. And the idea was this, that in America we had a kind of special aristocracy. They would be the leaders of society, but they wouldn't be the leaders of society by forcing everybody to conform, but rather, this aristocracy would achieve its fame and its status by virtue of its success in the commercial and industrial arts. In other words, by persuading consumers that what they were doing was a good thing. Through pure capitalistic achievement, this new aristocratic class would come to rise and become secure and become the leaders of society.

10:51This is the theory of the Gilded Age, which strikes me as a better theory than what we saw even at the American founding, where you saw an exaggerated attachment to the so-called founding fathers, most of whom were generals and bond dealers and these kinds of things. No, in the Gilded Age we saw the rise of a fabulous whole network of great industrialists, most of whom were born at very humble origins and became extremely wealthy, passing on wealth to their children, who then took over the companies and created a great kind of long-lasting Several generations of well-to-do industrial leaders.

11:39And if you ever go to Newport, Rhode Island, how many of you have ever been to Newport? Okay, so, yeah, just a few of you. I think it's one of the most wonderful towns in all of the United States, because you see there these mansions built, and they're all built with private money, money made through industry, And there's the houses like you've never seen in your whole life. I mean, there's an attempt to replicate a European system of royalty, really, but you see the difference between the European system of America, the European system of royalty and the American system of the capitalist aristocracy, right? I mean, one is connected to the state, one enjoys its wealth and its privileges by having it be at the right place in the right time, having its privileges conferred by the kings, or whatever. But no, in America, we have similar sort of castle-like places and similar high social status, but it was earned through a capitalistic achievement.

12:44To me, this is a great thing. And I adore the time in which this generation came about and all that they achieved. And we're still living off their achievements today. And so this book, How They Succeeded, it was published in 1901, it was published as a kind of series of interviews with the great captains of industry of the time, and also great writers and artists, men and women are profiled chapter by chapter in here, and it tells about their backgrounds and what made them successful in the world of commerce, which to them was the whole world. I mean, there's not one person in here who's a politician. Isn't that great? 1901. you know this is a time when freedom was truly valued this is also before the time when they were being called now everybody learns about this generation people you know what they're called they're called robber barons that's what we call them today robber barons they never robbed anybody most of these guys never robbed anybody I mean they were they were great achievers in industry and as I read the book it struck me that they all have certain character traits that you recognize even today

13:56and great entrepreneurs that are leading the way in digital technology and other areas of life. I saw the movie the other day called Social Network. I don't know if you've had a chance to see it yet. It's about the founding of Facebook by Mark Zuckerberg and his friends. This is one of the most amazing companies really in American history. You went from just a tiny little group at Harvard geeking around and putting pictures online to become, now, the last figures I saw, it looks like we're approaching one billion members in Facebook, a billion people on this remarkable piece of technology. Now, I'm not saying you have to like Facebook to admire it. I'm not a big fan personally of Facebook. On the other hand, I think it's an incredible capitalistic achievement and a real boon to many people.

14:51I have 10 billion people using it out there right now. Somebody wrote me the other day and said, how can you celebrate Facebook? I can't stand it. And I began to think about, how would I answer this? And I began to think about all the things that I don't really like. And it turned out to be a lot of things I don't really like. For example, I don't like any music on the radio. That's a big statement, like you've dialed station after station after station. I really don't like any of it, to tell you the truth. And when I go into Barnes and Noble, I pretty much don't like any of the books in there, either. I like books like this, you know. And I don't like most movies either, and I don't like most things in the mall, and I go to the grocery store and most of the stuff there I don't really want to buy. So I began to think of all the things I don't like, and then the very handful of things that I do like,

15:40and I realized that I can't, you can't possibly support six billion people on a planet, you know just by producing things that I like it's a very small number of things so you need lots of different kinds of things for many different kinds of people to sustain a world economy of this of this size and Facebook is one of those things in any case Zuckerberg has certain character traits that are very similar to what you see in this book how they succeeded I'd just like to talk very briefly about this one fellow who I didn't know that much about his name is uh what I can't Let me just tell you, he looks like a Gilded Era guy, a big tie and a collar that sticks up in the air like that. Men's fashions were different in those days. Philip Danforth, Armour. Now, you might know the name Armour from Armour Hot Dogs and Armour Meats and things like that.

16:32There's a product that Armour still puts out today that's a competitor to Spam. I think it's called something like, I can't even remember the name of it. I don't remember the name of it. Anyway, it's a very old company. He himself was born in 1830. Now imagine this. He's born in upstate New York and one of eight children. And he drops out of school, which oddly is something you often find with great entrepreneurs. And I want to talk to you about that in a little bit. Not to urge you to do so, but to just draw the attentions of a single-minded focus on school to the exclusion of everything else. So in those days, we're talking about now in the 1840s and the 1850s, he went to work on barges going up and down rivers, earning very low wages, During the course of this, he heard about what was then the big gold rush in California, where everybody in those days was headed to California.

17:34So he did. He went with a few friends, and guess how they got there? They walked. Imagine, from New York to California, they walked. It took them six months to get there. He was the only one who made it. The rest of his friends died. These are tough times. These are very different times. By the way, in this book, they say, well, to what do you attribute your sort of toughness of mind, your strength of character? He said, well, you know, he said, look, when I was growing up, we took ice-cold showers every single day. There was no such thing as hot water. He said, you know, that will toughen you up, that will toughen you up, an ice-cold shower. Ever since I've read that, every morning, I'm thinking, you know, as I'm standing in the shower in this warm water, hot water, I think, is this weakening me?

18:26I mean, is my character just draining down, you know, going down the drain here with every, every gallon of warm water that hits me, you know, I don't know. So maybe that's the first step, cold shower, I don't know, I don't know. So he gets to California, and everybody turns out to be sort of digging around for gold, and he tries this for a little while, and he's somewhat successful, I guess in those days you could just sort of lift up dirt in your hand, find some gold and go turn it in, he made a little bit of money, but everybody was digging for gold, and one thing he discovered is that all the gold diggers needed ditches to hold water in, because then the water helps them shake out their pans and find the gold, and they need to wash, they need water to wash things, So he discovered that he could dig ditches for people and make more money than he did digging for gold and then he started a little miniature aqueduct system in California for bringing water to the gold miners and found that he could make a lot of money doing that and he recruited more and more workers to do this and pretty soon he had a small fortune, $5,000

19:40$5,000, which I don't know what $5,000 is in 1850, but that seems like a lot of money, actually. But I thought it was an interesting thing. So he goes all the way to California to dig gold, but instead of digging for gold, he digs ditches and delivers water. Fascinating, isn't it? There's a lesson in this. You don't always end up doing the thing that seems most obvious. Great entrepreneurs find the niche that is not being done by other people. They seize on opportunities and they go for them. Well, he left California and went to the Midwest and started, jumped into the grain business and became just practically a mogul in the area of wheat storage. And there are lots of fascinating stories about how his competitors were constantly trying to put him out of business, none of whom ever succeeded because he was always outsmarting them, because he was faster, smarter, harder working than everybody else.

20:35This led eventually to his great achievement which was in the realm of meat packing and slaughtering, you know, hogs and cows and packing them up and getting them to people for eating. And this was where his fortune was made. Eventually he became a great benefactor to humanity, founding all these technical institutes, dying extremely wealthy in 1901, I believe, I believe, which ironically is the very year that this book came out. Now, a funny thing happened, by the way, all people in human history have wanted meat. Very few could ever have it, because for the most part you could only eat meat if, you know, whatever the chicken happened to be running by your front yard, or there had to be a cow grazing out there, you blast it or hit it over the head with a stick or a rock or whatever.

21:26Most of all human beings in all times and all places haven't had cows just wandering around that they could get to, so most people didn't get meat. So the thing that our friend Philip Danforth-Armer did was discover a way to get meat to everybody. One of the ways he did this was by putting the meat on trains that were refrigerated. And we don't think about this much anymore. You know, look, when you go to the store, you get like a head of lettuce, you don't think anything of it. or you pick up some meat, you don't think anything of it, all of this is made possible through refrigeration. Without refrigeration, you pretty much have to eat what's growing nearby, what you could get, or the things that don't have to be refrigerated. So this is the great challenge. He overcame that challenge and became the great mogul of the great robber baron of meat delivery, a fantastic service to society.

22:21Now, there was a, even in those days, there was a tremendous, very strange, it's a movement I don't understand, opposition to free enterprise and to rich people who do things for others. And the great writer of the time, his name was Upton Sinclair and he wrote a book called The Jungle. Have you heard of this book? The Jungle. Okay. And there's supposedly an expose of the meatpacking industry. I actually recently reread The Jungle. It turns out it's not really an expose of the meatpacking industry at all. It's a kind of a socialist screed against wage slavery, you know, from first page to the last. There's not that much about meatpacking in it at all, but there was one passage which he claimed that some people fell into the vats in which the fat was rendered and they themselves got rendered as part of the of the meat you know well you can and then this was sold now this is probably not true but you can imagine for in those days you know where there weren't a lot of books this is the best seller that was a riveting kind of story you know it's like what's that movie Soylent Green or whatever it's people reading people you know so people imagined at the time that that in fact the meat they were eating it contained human beings or whatever so there's a

23:39It was a tremendous move to regulate the meatpacking industry as a result of this one book, which was, as I say, a ridiculous socialist screed. And that began, really, the first steps towards heavy industrial regulation in America that I think we're still suffering from today. That ends up sort of hampering free enterprise. And he was a terrible victim of this first campaign. The other day I watched this show called Food Ink. Have you seen this thing? Food Ink. It's a very popular show. They do things like they go into grocery stores and have the camera everywhere and play really dark, ominous music. And they say things like, look at this. It looks wonderful, but it's really not.

24:27This is made by large companies that exploit their workers. and you know it's a very it's uncompelling i mean i had to watch i watched about 45 minutes i could find very very little in this whole thing you had to sort of accept the premise that delivering large amounts of wonderful food to vast numbers of people at very low prices is an inherently evil project in order to really believe what this what this film is showing so this whole movement against a mass delivery of food dates way back and it still continues today in any case from From the life of Danforth, of Philip Armour that I studied, I've kind of made a list of some things that you could keep in mind as you approach the whole subject of how to be a success in life, and by life I mean in the world of commerce or in the world of the private sector, because after all you don't have to be in the meatpacking industry or found Facebook to do good for others, there are entrepreneurs right here in Auburn, Alabama who have founded small ballet studios

25:33The key thing, don't let school take you out of the real world. Never lose touch with what's going on outside of the classroom. One of the big problems we face is that kids are taken out of anything resembling a real world for four years for college and stuffed into chairs. And when they're not in the chairs listening to the professors, they're out doing things probably they shouldn't be doing, having the time of their lives.

26:19After four years, they're now 22 years old, they're going out on the job market and they can't do anything. and they've lost that perceptive power of entrepreneurship because they don't have any connection to what's really going on in the real world anymore and spend the rest of their lives just pining for their college years and going back to their reunions and calling up their fraternity buddies or something like that otherwise they're losers in life, you know? So don't let school take you out of the real world. If you can ever work, you should do it because every job you could ever have is good for you, not only right now, but also in the future, in terms of references, contacts, job experience, keeping you alert to the way the world works. Ironically, this is the second principle, you need to forget about money. This is one of the common traits that you'll find in all great capitalistic entrepreneurs, is that they really don't care about the money. Once you get a certain amount of money, you don't have anything to do with it anymore,

27:13there's nothing else you can buy that really thrills you, and it's not the driving fact. Money for great capitalists and for great entrepreneurs is a kind of ratification of a job well done, it's a sign of success, but it's not the key reward. The reward in entrepreneurship comes from just accomplishing great things. Every one of these people, whether it's Zuckerberg or Armour, they have a fanatical level of focus on the task at hand. and they can work 18-hour days and they never stop, they never take vacations and they have a very intense attachment to the job that they're doing. All of these people tended to surround themselves with good people who are smart. They look around for people who have higher IQs than they have, who are more accomplished, who know more than they do and draw them into their circle.

28:07Surround yourself by smart people. That's the key to entrepreneurship. You must always learn from others. Armor himself did not get the idea for the refrigerated meat delivery service. He didn't just invent it de novo. In fact, he took it from a fellow named Gustavus Franklin Swift, who himself had experimented with the technique for some 10 years before Armor himself picked it up. So you can learn from others. You should, quote, steal ideas as often as possible. Find the niche that everyone else is missing, Armour himself discovered that there was a great niche in the area of water delivery to gold miners. Zuckerberg found that there was a niche in finding ways to help people make connections in the online world with each other.

28:57Find the niche that everyone else is missing and focus on that. Improve the world on the margin, don't seek to do big things, just seek to do good things in small ways and let those accumulate as the years go on. Don't plan. That's another principle you find from other other great entrepreneurs. Five-year plans never work. Ten-year plans never work. Big dreams are rarely achieved. Just observe, be very flexible, make progress at the margin day by day and act as fast as you can. Never delay. Never delay your decision-making. Move fast and you will beat others. When When you compete, don't seek to destroy. That's something else you find from great entrepreneurs in the past. They're very fierce competitors, but they don't have that envy that seeks to destroy. They want to learn from others and do even better, but they never want to see others destroyed. And this is part of what the market economy teaches us. In the market economy, there is more than one winner, isn't there? I mean, many people can win. It's not

30:05Not just McDonald's my favorite company, but many people can sell hamburgers and make money. So you want to compete, but you don't seek to destroy. You serve others and give as much as possible. Always be outward-looking. Every entrepreneur has a heart absolutely devoted to giving other people what they want. And you have to be constantly in touch with those facts, with that desire, a genuine desire The final thing I would like to leave you with is that, as much as possible, every entrepreneur, from Armour all the way to Zuckerberg and the whole generation of digital entrepreneurs and all the Guild of the Arab People, in the earliest stages and their highest stage of growth in their lives, they stayed as far away from politics and the state as possible.

31:00They find a realm of freedom and they pursue it and they create within that framework of freedom. That's what gives rise to productivity, it's what gives rise to wealth, it's what gives rise to civilization and it's what will enable you to make your contribution to society. Creativity needs that freedom and the creative people always require that freedom and you can stay away from the state as much as possible and rue the day when you ever have to get close to it. close to it. Thank you very much.