0:33 Intro. [Recording date: September 18, 2015.] Russ: Now, you've had a very interesting career, all of it with a front row seat, or at least a lot of it with a front-row seat, watching the Internet revolutionize our life and so many things. You started off as a publisher. You still do that. But you do lots of other things--conferences, investing, so on. Let's start by talking about your career. How did you build your publishing business and how did that have to change as the world changed? Guest: I started out as a contract technical writer. And in fact that was a little bit unusual because I was thinking of myself as a writer about other topics, and I got my first technical writing job the same day I saw my first computer. I had a friend who was a programmer who got asked to write a manual, and he was desperate for work; and he couldn't write to save his life. But I had actually backed him up by doing some editing of a previous project, and he said, 'Hey, why don't we go in and apply for this job together?' And that was the beginning of a partnership that lasted a few years. I did learn about computers; I got excited about them. He moved on to other things. And I basically had this contract writing business. And then I sort of realized that people were looking for the same kinds of manuals. So, in today's parlance, I pivoted. We ended up starting to create manuals that we thought would be useful for other people. We licensed them to companies. And then we realized that in fact we could just publish them on our own. And then, some years later--a couple of things happened that were really big for us. We published the first popular book about the Internet, called The Whole Internet User's Guide and Catalog. We published it in 1992. And at the last minute we added a chapter about this new thing called the 'Worldwide Web' [WWW]. There were only about 200 websites at the time. But we thought, 'This is really what we've all been looking for.' We've been working on electronic publishing and the notion that there should be a standard format to read electronic content and it really excited us. And as we were working on this, my co-conspirator on this, Dale Dougherty, who has gone on to found Maker Media, which we spun out a variety of last year--I'll come to that later. He had discovered this guy at U.C. Berkeley, a student who had created something called Viola, which was a graphical browser for the WorldwideWeb (WWW). And anticipated everything else that really came along. Was amazing prior art[?] for a lot of the modern world. And, we hired, Pei--his name was Pei Wei--and we hired him to work on this project. And as we published this book, The Whole Internet User's Guide and Catalog, he said, 'You know, I can build like a browser version of that catalog in the back.' He was sort of a catalog of various websites, that if you calibrate this quake server[?] you'd get information about earthquakes; there were a few worldwide websites that were websites, gopher sites. And so he built this sort of graphical front end to the Catalog in the back of the Whole Internet User's Guide Catalog. And, I looked at it, and I said, 'That's not a demo. That's a product.' And Dale Dougherty had had this idea--he wanted to do a magazine--not like magazine--about the people behind the worldwide web. We put those ideas together and we created what was really the first commercial website. It was called the Global Network Navigator [GNN}. It predated sites like Yahoo or any of the other portals. And it was actually the very first site to have advertising on the Worldwide Web. And in fact the web was so early when we launched it in early 1993, that the advertisers actually were also hosting their content. So, they didn't actually have their own websites up and running yet. And it was before the days of the banner ad. The idea that I had was that we would--that effectively, hyperlinks, and effectively commercial content on the Web would replace sort of the whole direct mail infrastructure that most people have forgotten. It used to be that when you read a trade magazine of some kind, a computer magazine or really any magazine, and you wanted more information about the products and saw advertised, there was something called the Bingo card in it--you know, like you circled number 131, and you'd get the grocer from [?]. Russ: Right. I remember that. Guest: And I realized that that [?] was a perfect application of the Worldwide Web. And that was really the kind of advertising that we were trying to do, which is to say, 'We are going to build commercial websites. We are going to link to them. And it's going to be this amazing, you know, utility. Because people want commercial information.' So, we were really pioneering that. We grew it for about three years. And the web really started to take off. And I was determined to keep my company private. In my consulting days, I'd been around a lot of startups. And I watched them go from being really interesting companies to becoming just like everybody else. And I thought, 'I don't want to do that.' So, I resolved I didn't want to take anybody's money. But I also knew that the web was growing so fast that if I didn't take other people's money, we'd be [?] Russ: [?] yeah. Guest: So, we sold GNN to AOL [America Online], who promptly screwed it up. We did very well out of the transaction, but we went on from there. And built our publishing business through the 1990s. Russ: Which was--just real books. Just plain old books. Guest: Yeah. And in fact they were very, very influential. We've had more than one Internet billionaire say, 'I started my company with a couple of O'Reilly books.' And that actually, incidentally, is what led to our slogan: Create more value than you capture. I was reflecting on this, you know, this fact; and Brian Erwin, who was my VP [Vice President] of Marketing at the time, said, 'Well, we create more value than we capture,' because of course we got $35 bucks or whatever--and Pierre [?], you know, got billions. Russ: [?] accounts. Guest: Yeah. It really made us feel good. And we actually had the cover of Publisher's Weekly at some point in the late 1990s and it said, 'The Internet was built with O'Reilly books.' And nobody would think anything of that. It was true. But anyway, somewhere along the line, I realized that--our best-selling book in 1996 was the 2nd edition of Programming Perl. Perl was a programming language beloved of UNIX administrators; and people building the Worldwide Web, a lot of the early dynamic content on the Web was built with CGI--the Common Gateway Interface. And it connected, basically, what were originally static websites to dynamic programs. And it was sort of interesting: Perl had really taken off. The prior orders told us that it was one of the top 100 books in any category in all of 1996. And so it bothered me--it started to bother me that no one was talking about Perl outside of this underground community. And so I decided I was going to put on a conference to promote Perl, which we did in the middle of 1997. And it was really just to market the fact that nobody was paying attention to this superimport, influential technology. And then I realized that all of my best-selling books were about these technologies that nobody was talking about. Not only had we built a whole program about the Worldwide Web, but there were other programming languages like Python and JavaScript--you know, HTML itself. All these things had something in common, which was they were free; they were given away; they weren't backed by a company. Databases like MySQL were coming on stream. Linux, of course. And so--and I also realized that many of the creators of these programs didn't know each other. And so I decided to bring them all together in a meeting. And there was a free software movement that was focused very much on Linux and editing tools like Emacs and the GNU compiler. And it was very much a political movement about the idea that software ought to be free. Russ: Correct. Guest: They left out of their narrative a huge swath of the world--the fact that the Apache web server was probably more important than any of those things except Linux. The fact that SendMail was routing all of the world's email at the time. Perhaps most important of all the fact that BIND--the Berkeley Internet Name Daemon [Domain?]--was basically helping redefine websites. If you had a domain name, you were using BIND whether you knew it or not. And so, I realized that sort of the universe of free software that had come out of Berkeley UNIX rather than Linux was being ignored. And so I kind of tried to bring these two worlds together. And in the course of that, you know, one of the people I invited, Eric Raymond, had been doing some great writing about this new world of free software, or sort of the theoretical underpinnings of free software. And he'd had a meeting just a few weeks before mine. And at that meeting, Christine Peterson, of the Foresight Institute, had suggested that there was a problem with the name 'free software' and suggested this term, 'Open Source.' And so at my meeting, we actually, yeah, had a spirited debate about this. And eventually it would be decided that this was a good name and we were going to get together and use it. And because I had learned, early in my career, really from my early Internet activism around the Worldwide Web, that's really a piece of the story I'd have to go back to tell you. This guy, Brian Erwin, who was my VP of marketing, had originally been the director of activism for the Sierra Club. And when we published that book, The Whole Internet User's Guide & Catalog, he said, 'Nobody cares about your book. What we ought to do is go out and market the Internet.' And that's really the path that led us to GNN. Russ: Yeah. It's a good idea. Guest: That every member of Congress, we kind of went to and pressed[?] the Internet is coming. And so we really had done this sort of activism as marketing. So then this sort of Open Source story was sort of a second opportunity to do this activism as marketing, to tell a big story. So the end of this, what I had originally called the 'Freeware Summit' but came to be called the 'Open Source Summit,' as the big news added it where we came up with this new name and everybody agreed to use it, I had already planned a press conference. I told the attendees, at the end of the day we are all going out staging; we've the New York Times and the Wall Street Journal, and what are we going to tell them? And you know, the essential message--one was, you know, the Internet is built on this software; you know, if you route email, it's this guy; if you have a domain name, it's this guy. You know. And we eventually got all the way to Linux. But it was really eye-opening for people. And I still remember, within a space of a couple of weeks, it completely changed the narrative from, you know, free software as the self-start thing that is a cancer on-- Russ: Fringe-- Guest: software industry, going to destroy the ability to create value, to: This is actually the centerpiece of the next wave of innovation in software. And, you know, we were really able to change the narrative. Russ: How many people were at that conference? Guest: Oh, it wasn't really a conference. It was literally, only 25. It was what we call a 'summit,' where we just got people together in the room to discuss issues. Russ: So-- Guest: The actual press conference at the end of the day was probably 30, 40 people.

13:50 Russ: So, I want to hear about the transition from paper to something else. You mentioned Borders a minute ago. I'm sure there are people listening who don't know what Borders was. It was a book store. A brick-and-mortar bookstore. A really nice one, too, for a while. It's possible that there will be people listening to this some day who won't know what a bookstore is. I guess it's conceivable there will be listening to this someday who have never seen a book. Your publishing career started off with paper books--regular, old-fashioned books. There are still some. Do you think that's going to stay? Do you think paper books are going to make it? Or are they are going to become an antique collectible that people keep just to see what they once looked like? Guest: Well, first off, I think it's really important to realize that books were always limited to a relatively small segment of the population. And even when we got universal literacy. I remember back in the, probably in the 1990s, there were various studies, and it was at most in the teens of the population who read more than one or two books a year. So, it's always been a niche activity. I think it will become more niche. The good thing is that more people are reading today than have ever read. And they are reading all kinds of content, and there's a rich array of business models to support the creation of that content. And I think we should be very happy about that. But yes, will books go the way of the vinyl record? Probably. That is, they'll be prized by collectors; there may be various kinds of renaissance of books--and in fact, there are people now who still will say, 'I will prefer a book.' Russ: Yeah. I go back and forth. But I just wonder if our grandchildren, our great grandchildren will have that feeling. It just could be--I mean, I like a fountain pen, too. Guest: Yeah. Absolutely. I think it's very, very likely. I find myself, despite being a lover of books and somebody who owns about 10,000 books, at least, I find myself increasingly resenting the space they take up. Russ: Yeah. It's hard. Guest: I find myself increasingly resenting the fact that most modern books are really badly manufactured in the sense that they are big and ugly and heavy. It's so funny--I am a book collector and one of the things I collect are these beautiful little bound volumes from the 1860s through the 1890s. They were actually originally paperbacks published by a company called Tauchnitz, which did, for example, the great British authors. So, they are English language books. But because they were paperbacks, people took them home and bound them. So every one is unique. They are not mass produced. But they are beautiful little hardbacks the size of today's paperback. They are beautifully made. That's what a printed book should be. Instead of these big, honking volumes that nobody could ever want to carry around. Russ: Yeah, the competition is cleaning up on that dimension. Although, it's a crazy thing--I have thousands of books; I don't have 10,000 but I have thousands. And I look at them like--I feel guilty that I resent how much space they take up, because I do. And I go through them, and I find a handful that I can sell at a used book store to clear up some space. But it's only a handful. I always think, oh, someday I'll want to reread that, or my children to read it. It's going to be interesting to see how the next generation feels about it. My daughter is anti-Kindle and anti-ebooks. So, she's persisting. And lugging around dozens, hundreds probably of books around the world as she gets older--it's going to be a challenge. Guest: Yeah. We sell printed books and downloadable e-books from oreilly.com, our website. And I would guess that 90% of what people buy are the ebooks. And we also have an online subscription service to buy books online where you can have all you can eat for a monthly fee, and it has--if you added that in, you know, the balance would tilt even further. Russ: Of course, your audience is fairly specialized. Guest: Yeah. Russ: My last book--I think it's about 50-50 e-books and hard books--real books, whatever you want to call them. Brick-and-mortar books. I don't know what right title is. I have a quote from you--I want to jog your memory. This is an old quote, an old story; but I found an article about you where you were--it's an "early company manual" where you said, allegedly, There is a wonderful rigor in free-market economics; When you have to prove the value of your ideas by persuading other people to pay for them, it clears up an awful lot of wooly thinking. And then the author of this article about you said that you then went on to reassure your employees that you hadn't lost your touchy-feely touch; and you compared free-market economics to the poetry of Alexander Pope. Do you remember what Alexander Pope had to do with free market economics? Guest: Yes. He said that--he was talking about rhymed couplets, and he said that writing and--I think, what did he write in? Russ: Probably iambic pentameter. Guest: No, I think it was hexameter. Russ: Really? Okay. Guest: But whatever--rhymed couplets: like the narrow aperture of a fountain it made his creativity spurt out a little more forcefully. And that was sort of the notion that I have about the rigor that you get from actually having to sell products to real people. And I actually contrast--that idea is very, very relevant today in this era where startups are having cash thrown at them. There's a lot of bad ideas being funded. Russ: Oh, no doubt. Guest: My partner at O'Reilly AlphaTech Ventures, Bryce Roberts, has started this project called Indie.vc where he's really trying to find companies that need the guidance of a VC (Venture Capital), because a VC can really bring a lot to the table besides money, but who fundamentally have a business model that involves selling things to customers as opposed to, 'Our business model is to get funded and eventually we'll get enough users and then we'll get acquired by somebody who has a business model.' And there are a lot of companies like that. And we don't celebrate them enough. And we don't value them enough. We are so caught up in this model that you are going to grow to massive scale, and then it will be funded by enterprise or more likely it will get acquired; maybe it will get acquired and shut down. Russ: That's the best. Guest: The business model never really has to face the rigor of: Would somebody pay for this? And every business that I've built has been based on: Will somebody pay for this? And we've built a couple hundred million dollars worth of revenue based on people paying us for things.

22:03 Russ: Well, I'm in the ironic position of being a very hardcore free market person and yet this podcast is free of charge to users, funded by a wonderful non-profit foundation, Liberty Fund. So--it's voluntary; it's consistent with my worldview that way. But I find it interesting that I don't "put it to the market test" and charge for it. Partly because the competition, of course, is out there, mostly at zero. So it's an interesting phenomenon for me. Guest: The thing I would say on that front: There are a lot of business models [?] for content. One of the earliest pieces that I wrote in terms of advocacy for ideas was a piece called 'Publishing Models for Internet Commerce,' back around 1994. And I made the argument that publishing was really a better template for how to think about the evolution of the Internet than other media. A lot of people were thinking about it like television. Russ: Correct. Guest: In fact, there were elements obviously from television. But, publishing has this rich array of business models--by the piece, by subscriptions, ordered by advertising. There's even crazy business models--you know, as Ted Leonsis at AOL (America Online) said when I was explaining this to him after he sold GNN[?]--he said, 'I get it. You are saying, where's the Publisher's Clearing House for the web?' Because, here's this crazy company that would sell books to kids, you know, with the promise of a contest, or magazine subscriptions to kids through their schools--it's just complicated. And I said, 'Look. For the web to take off, there's going to have to be a rich ecosystem of intermediaries.' And it's going to evolve and look very, very different than this sort of single-point, centralized model that you saw with AOL or with the early Microsoft network. And of course I was right. We ended up with SEO (Search Engine Optimization); we ended up with web hosting firms; we ended up with new kinds of intermediaries like Google. And it became a much, much more complex ecosystem with a lot of different ways to make money. And that's good. So, in some ways I guess all I'm saying is, what you're doing is entirely consistent with everything else in that marketplace of ideas. You have a business model that's just fine. Russ: Yeah. We've thought about adding more content for "members." I don't know if I have the bandwidth to do that. So right now we're sticking with what we've got. Which is trying to maximize how many people listen and not charging for it out of pocket. Which I'm sure many people appreciate and like. So that's a good thing. By the way, I have to say: You mentioned Borders. Now you are going back a generation to Publisher's Clearing House. And I'm just going to mention Ed McMahon for people over the age of 50 just to enjoy it. Okay. [ahem].

25:22 Russ: I want to shift gears. I want to talk about your upcoming conference; about what's happening to work. And I want to look at some issues you wrote about in an essay at Medium, the interaction between technology and labor, particularly in the sharing economy. You wrote the following: There are two different approaches to using technology to manage labor. One provides data and control solely to managers, disempowering workers and minimizing their costs to improve company profits; the other offers data to both managers and workers, giving workers agency, the freedom to work when and how much they want. Talk about that distinction and why it's important. Guest: Well, a lot of what I do in my work is to frame things that ought to go together that people don't put in the same picture. And so, when I've been hearing all this notion that, you know, workers in the on-demand economy--people who drive for Uber or deliver for Instacart or work in any one of these other on-demand companies--have no stability, no security; and if only they could be made into W-2 [U.S. Federal tax form for wages] workers--traditional employees here in the United States-- Russ: With benefits, Social Security-- Guest: all would be well. This completely ignores a lot of that needs to be brought into the picture. Because in general, low-wage work in America is also on-demand, with no stability, with no predictability. And yes, it happens to have W-2. But if you work for, you know, McDonald's or The Gap or Walmart-- Russ: Or a landscaper who drives by every morning and picks up people off the street corners sometimes. Guest: Yeah. You are managed by an algorithm, just like you are when you are working for Uber or Lyft. And those algorithms are very, very different, though. The scheduling software that's used by these large, low-wage retailers and pass-through[?] companies is a program to basically optimize the workload for the company. As I wrote facetiously in that same piece: We used to think we needed people for 8-hour shifts, but now we are so smart with big data that we can actually make real-time predictions, we know that we now need people for these two hours, and this one hour, and these three hours. And we're so real-time that we can tell them, today that we need them this afternoon. And you know, no one's thinking about what does that mean in the lives of the workers. And so, for me, part of what I was trying to get across was that, you know, all the people at the Department of Labor who are starting to look at, 'Well, should we be cracking down on this on-demand economy?' you know, actually should be looking at the regular wage economy and noticing that the things that they thought were workplace protections have been routed around. Because one of the things in that scheduling software is that it makes sure that nobody gets more than 30 hours a week, so they are not eligible for health benefits, and other rich benefits that they pay to their core employees. And so you have this sort of underclass. And because those people have no visibility into their schedule, or very little visibility, they can't actually find other work at all. Versus, on the sort of what people call the on-demand economy--the Ubers of the world--if somebody wants to work 50 or 60 hours, they can. And in fact-- Russ: Or zero. Guest: Or zero. Russ: This week. Guest: That's right. Russ: Because your sister is in town, or whatever. Guest: You can adjust your schedule. So, in one case, you have--people are more and more cognizant, a vast machine. And in the other, this sort of 21st century machine, they've actually made a real-time market in labor. And there are problems with that. I don't want to deny that. Particularly, there's a lot of debate about, you know, can you make a good living on Uber? They've had the theory that as you lower prices you'll get more utilization and it will balance out. There's a lot of anecdotal accounts of drivers that make the claim that it used to be easy to make a good income and now it isn't. Because there's too many drivers, because Uber doesn't set any limit, unlike taxi medallions. Russ: And their rates are lower. So there are 75% doesn't go as far as it did . Guest: Yeah. You know, that being said, the economists at Uber say they've looked at the data in aggregate and it's just not true. So, it may be true in individual cases; maybe not in others. But I haven't actually seen the data myself. But I certainly know--I know two things: the first is that, in the same way that Google search algorithms got better, the algorithms that companies like Uber and Lyft and Instacart use are going to get better. And as they get better, I think it would be very easy for them to take into account factors like how do we maximize worker income? Not easy; and they have to focus on it. But, in the other model, as the algorithms get better, it can only get worse for workers. Russ: The other model being the top-down, large corporation-- Guest: Well, again, it has to do a lot with what your objectives are. I suppose you could use, you know, automated scheduling software to take into account, you know, affordances[?] for workers. And in fact there has been a lot of movement as there has been more attention for this issue, for these people, to you know, ban some of the most egregious practices. You know, one of them something that most people have never heard of called a 'clopen', which is when you are called on, say, to close the Starbucks, 7-11, and re-open it, you know, showing up at 4 the next morning. And that was a shift that was routinely being [?]. And Starbucks, Howards, great humanitarian maker obviously wasn't aware of this, once this became clear this was an issue; Starbucks was the first of these people to ban that practice. But, you know, you really--I think we have to understand that we are living in a world increasingly that is managed by algorithms of various kinds. And rather than saying 'We don't want to be managed by algorithm,' we have to say, 'How do we take control of those algorithms? How do we make them work for us?' And work for us as a society, not just, 'Oh, I want to maximize the profit of my business'?

32:21 Russ: Well, let me push back for a minute. To add one more obscure, 1950s, 1960s reference: When I was a teenager I worked at Howard Johnson's--which, there might be one or two left. But it's not what it once was, which was a very common restaurant all over the country; and we called it HoJo's. And I once worked an 18-hour shift. I don't know if it was against the law. It was incredibly challenging. And I was really exhausted and beat when it was done; and I probably didn't do very well in school the next day, whenever it was. And I'm glad I did it. I thought it was great. And my parents encouraged me to do it. And I asked them. At one point, the boss asked me, did I want to go work a second shift over at a second HoJo's that had somebody call in sick? And their attitude, of course, being good 1930s-born people, was, if the boss says so, you do it. So I did it. And I'm glad I did. And of course, I wouldn't want to do that all my life. I wouldn't want to clopen. I think that's probably pretty brutal. But I think when you say we have to worry about the impact on society or somebody has to look out for the workers: competition is what protects the workers. It doesn't protect them very well in this case--and we should talk about why. But in general, McDonald's has to care about its workers, or they will have trouble attracting them. They have to treat them well enough to get them to come to that job as opposed to something else. The same is true of Uber. You know, the only thing I know about Uber is that if they really abuse their drivers, they'll have trouble attracting drivers. They may attract some for a while, because they don't realize it's abusive or they can't make the money they thought they could. Uber can take advantage of them in the short run. They can promise them a lot of money up front, early on, that they deliver on and then change the prices on them and they can be less attractive later on. We all understand that. But if they do that, they systematically make it harder for themselves to attract workers. Guest: But that's the theory. And there's this great line that I encountered on Usenet; and I forget who originally said it. I tracked it down, and it was: The difference between theory and practice is always greater in practice than it is in theory. And, the theory of free market economics is, yes, the invisible hand will take care of all this. You know, we've all read Adam Smith. Russ: Most people haven't-- Guest: Just look around. You know, we don't have a free market. We live in a market in which there are a lot of biases in the system. And just for example: one that for me, I've been thinking a lot about is the increased financialization of the economy, where, for example, CEO (Chief Executive Officer) and top management pay is largely driven by stock price. And therefore, any choice, that, you know, you can make to cut cost, drive the bottom line, is better for you. So the rational free market actor who is actually in control does not actually have the same interest as everyone else. And in fact, may not even have the same interest as real share holders. Because you can manipulate the stock price very easily. Russ: But if I abuse my workers, if I lower my wages, if I treat--let's take Uber. If Uber does a bad job-- Guest: I understand the theory. Russ: Forget the theory. There's a cost. I'm not going to say it's going to be perfect when it's over. It has nothing to do with theory. Unless you don't think people don't pay attention to what their options are. It's not a theory. It's I think a reality: that if you take money away from people that you used to give them, they are not going to be as interested in working for you. Will they continue to work for you? Yes, if they have no alternatives. Guest: That's right. And that's the point. Do we as a society--we have great--through a set of aggregate decisions, we've created a set of very, very poor alternatives for a lot of people.

36:19 Russ: So, that's what I want to talk about. So, I would argue that rather than trying to figure out how many angels can dance on the head of a pin--which is the equivalent of asking, 'Should Uber employees be 1099 workers or W2 workers?'--because there's no correct answer to that question. It's not a question of definition or measurement. It's a question of policy. It's going to help some people and hurt others. My worry is that if you make them employees, you are going to hurt the workers, the people you are trying to help. Guest: Oh, I'm totally with you on that one. Russ: So, then the question is: What do we do? To me the underlying problem is, that the workers we are talking about--I hope this is a major issue in the next set of elections that America faces, because people don't talk about it, I think, very thoughtfully. But the issue is you have a lot of people with low skills. Who had bad education, or whose education doesn't fit with the current demands of employers. So, the way that most people want to fix that is to pass a higher minimum wage or to change the rules of the game--like, call somebody, a contractor, an employee instead of a contractor. Or, to say, 'Forget this 30-hour minimum. Any of your employees over 10 hours have to have these benefits.' And I think all those things have unintended consequences to the people they are trying to help. So, to me, the issue is: What can we do policy-wise, and what can individuals do for themselves in their own choices, to give themselves more alternatives than this current generation of low-skilled workers has? Do you agree with that? Guest: Not entirely. I do think that there are enough distortions in the market that I think some improvement to the minimum wage is a good thing. I think that the idea of portable benefits--not tied to employment, to a single employer--is a good thing. I do think, at the same time--and particularly that latter thing--would actually be supportive of a truer free market economy. Where you, for example, have--when Uber needs more workers, they do surge pricing. They say, 'Okay, we are going to try to get more workers in at this time.' And that's very, very different, you know, if in fact people are not bound to an employer by, if you get benefits here and not there. That's actually a good thing in terms of allowing them more choice and makes the market look more like a proper free market than one with some built-in biases and distortions. Russ: Yeah. It would be a good idea if we could get rid of the barriers that make it hard for health insurance to cross state lines; to get rid of the government subsidy to employer-provided health insurance--which is something we just take--right now, we just write that into stone. Which is, I think, a tragedy. It's part of this problem.

39:22 Russ: People are worried about a bigger issue. We are talking about a big issue, which is: low-skilled workers often have few choices and some of their options are not so attractive. You are making, I think, an important point: that agency counts. Freedom counts. And to some extent, workers will vote with their feet about which kind of economy they want to work in, whether it's the on-demand economy or the other, more corporate, the larger, more corporate model. But a lot of people are worried about a bigger issue, which is that we may be looking down the road to a world where there won't be enough work for almost everybody because of technology. Are you worried about that? What do you think we've learned in the early days of artificial intelligence? Guest: Well, I have a couple of thoughts on that. And the first is that: there is enough work to go around if we allocate it well. I had a very interesting conversation with David Autor, who is a labor economist at MIT. Russ: Sure. Former EconTalk guest. As is Eric Raymond, by the way, who you mentioned earlier. Guest: Yeah. Russ: Carry on. Guest: And we were talking about the difference between Saudi Arabia and Norway. I said, 'What are people studying in places with a guaranteed basic income of some kind?' And he said, 'Yeah. It's surprising, nobody's really written a whole lot about that.' We ended up talking about Saudi Arabia versus Norway as two examples. And he said, 'Look, in Saudi Arabia, 90% of non-government work is done by guest workers.' Because work is looked down on. There's also a huge segment of the population, i.e., women, who can't work at all. And the people who do work, most of them have sinecure jobs in government that really don't do anything. And as a result, it's a fairly dysfunctional society from the labor point of view. In Norway, on the other hand, where there's a lot of payments from, you know, from the oil revenue, people all work. There's a very high labor participation rate. They just don't work all that much. Russ: Hmm. Guest: They've managed to build a society where all work is valued; where you kind of, you know, work has some dignity and people want to do it. But you are not actually on the treadmill. The thing I think about our society here in the United States, is that we have a lot of unexamined assumptions about work. And I think we could in fact all be working a lot less. We could be valuing things differently. And actually, you and I may differ in the sense that, you know, I think that there's a lot of bias in our market that makes it not free. I believe in free markets. Russ: I agree with you, Tim. Guest: And so, there's things that--again, if I imagine a world, again, in which artificial intelligence can do more and more of the work--there's two or three things that I think about. One is, there are big problems that we are not tackling. And this may be a case of market failure where government needs to intervene. You know, you look at things like climate change. Will markets solve that? Maybe. You know. But I suspect it's going to come to a real crisis and we are going to have a lot of public spending because that's the only way we can get everybody marshaled. It will be a WWII-kind of situation where it's like, 'Okay, guys, everybody is going to work on this now.' You know, because we're going to get, 'Holy cow, we've screwed up. We've left it too late.' That's just a very good example. But there are other areas where you look at human caring and education and how these things are going to change. And could we in fact have a better, could we value those things more? Do we need to value those things more? There's a huge amount of unpaid work that goes on that's actually extremely valuable to society. And I think it's also, another class of unpaid work, which is work that people do--you know, really for self-esteem. When somebody waits tables while they are trying to break into Hollywood, they don't say, 'I'm a waiter.' They say, 'I'm an actor.' When somebody is an aspiring writer, they say, 'I'm a writer,' even if that's not the source of their income. And I think that there's a lot of things that we do to entertain each other, to--we're really moving into a very, very interesting era where for example a lot of the media that the people consume is crowd-sourced. Is crowd produced. When people are for any time on Facebook, or Russ: YouTube? Guest: YouTube. Russ: Instagram. Guest: Or Reddit. They are consuming peer produced entertainment for which very few people are getting paid. And in some sense you could imagine--Cory Doctorow did this beautifully I think in his first novel which is called Down and Out in the Magic Kingdom--science fiction book about a future with abundance made possible by [?] and technology. And the currency is something called whuffie, which is a reputation currency. And we are living in a reputation economy today. People work very hard to get likes on Facebook, to get views on YouTube. And the transition between that and today's monetary economy is very shaky; but I think there's something in there that we need to get our heads around--that if, for example, we were all given a guaranteed basic income, which is something that we may get to if there's not enough work to go around because so much of it's done by automation. One of the things we will do is that we will compete to get attention from each other. I think Anne Marie-Slaughter refers to it as the caring and sharing economy--that we'll spend a lot more time looking after each other and we'll spend a lot more time sharing with each other. And I don't think that's a terrible life. And I think it really behooves us to imagine that things could be different than they are--you know, this modern, hyper--particularly in America this sort of notion of work, work, work, work--very, very competitive, very driven, where the good life has been driven really to the margins of our existence--it is something that we did not have to accept as inevitable.

46:46 Russ: No, we don't have to accept it now. Just a couple of quick reactions. First, a footnote. I don't think we live in a particularly free market economy, either; but I don't think that makes the minimum wage a good idea, unfortunately. Or, say, a maximum 30-hour week, which France tried; I don't think it worked out for them very well, for them to spread the work around. Now, the challenge I think we face is the human challenge that we have had for millennia, which is: Where do we get our meaning? Where do we get our deepest satisfactions. I like to quote Adam Smith: Man naturally desires not only to be loved but to be lovely. And that's always going to matter. That's deep--I agree with Smith; I think that's built into our psyche and our nature, that we want the approval of the people around us. In this particular case we are talking about Facebook likes or Twitter followers or views on YouTube. We're going to be rich enough that we don't have to monetize those things necessarily--they may turn out to be more monetized in the future than they are now. But it's a glorious thing, to me, that people can enjoy and produce and create and consume so easily. And I think it has made the world delightful. At the same time, I get a lot of my meaning--not all of it, but a good chunk of my meaning from my work. I find my work deeply satisfying. I think more people do that today than ever in human history. But it's still a small amount. Still unfortunately there's many people whose work is, they feel it's drudgery or unsatisfying or worse. Dangerous. And as we move toward a richer and richer world, we are going to have more and more leisure time if we want. And I think it would be a great thing to proselytize and preach that work is not the be all and end all; money is not everything. But then people are going to say, for those who like their work, 'What is?' And that's never been an easy question for people to answer. Guest: I think that--one of the points that I was trying to make earlier about social media is that we need perhaps to dignify new kinds of things as work. You know, somebody--again, I think of an incredible social media feed like Brandon Stanton's "Humans of New York." I consider that a work of art-- Russ: Absolutely. Guest: [?] I don't know if you're familiar with it. Russ: Yeah, I've seen it. It's beautiful. Guest: Yes. Beautiful. And he has in fact been able to make a living out of it. But you think of, there's so many people who are working at things that don't get called 'work.' There are people who are, not Brandon Stanton, who are sharing their photos, who are sharing their thoughts with other people. And getting meaning from it. And I think we need to actually go, 'Yeah.' Just like somebody could say, a poet could say, 'Yeah, I have a big Twitter following. And that's what I do.' Russ: That may happen. Guest: Because in fact it is what people do. Russ: It may happen that that produces dignity, that that produces respect, honor, all those things that we care about. It's not something that's going to be easily--it's not a path we can choose, I don't think, as to whether-- Guest: No-- Russ: I think that's going to happen, perhaps; or maybe it won't; something else will. Guest: Yeah. I think there is sort of an interesting question to look at of how people get along in countries whose economies have been decimated. I think there was a recent piece in The Economist about Greece. But I think of a friend of my son-in-law's, former girlfriend who was from Zimbabwe; I just used to think, 'What happened to the economy there when it all fell apart?' She said, 'Well, we built this new kind of barter economy.' You know who had cabbages, and you had this, and we kind of all figured out how to trade in a nonmonetary economy.' And I think there's some interesting things in--both on the high side, where you look at something like Etsy where people are saying, 'Yeah, I've been converted[?] by something unique and handmade rather than something cheap and mass produced.' But also I think on the low side, where people are sort of just sharing what they can. I think the real question for me is, there's this virtuous cycle in the economy and consumers are a big part of it. And so, that's why I have a lot of sympathy for Nick Hanauer when he--his rant about, he said 'I'm a very successful capitalist but I'm sick and tired of hearing that capital produces jobs.' He said, 'Customers produce jobs; and if we screw workers out of a living wage, they can't afford to be customers.' So the whole system is going to fall down. I do think that there's a--in the market there are some real incentives for those who want to sell things to make sure that there are people who can afford to buy them. And we've kind of kicked the can down the road through, you know, two-income households, through consumer debt, through emerging market. But at some point we have to have, you know, circulation of money for the whole system to work. And it has to be--it can't just be a small number of people who--which is why income equality is really I think a defining issue for the next century. Russ: Well, I think it's important. I'm not sure it's important to sustain the circular flow of purchases and sales. Guest: We could have a much smaller, you know, less growth-oriented economy that could work just fine. Russ: Yeah. And with more time to spend with your kids. Guest: Yeah. Russ: Or more time to spend staring into yourself. Because I think the deep challenge is social, spiritual, whatever you want to call it, cultural one. Which is making good choices about how to spend the scarcest thing we have right now: which is our time. Guest: Yeah. I totally agree with that.

53:44 Russ: We're almost out of time. You've had some interesting thoughts on the Internet of Things. Talk about, in our last 5 minutes, what that is: What is the Internet of Things? How is it important? And why aren't we doing it right? Because you've been critical of the current state of things. Guest: Well, I guess I'm not sure I know what you mean when you said I'm critical. I would just say, in general, that we are building a world that is infused with technology. And whether you call it the Internet of Things or something else, you know, our future is full of smart stuff, and dumb stuff made with smart tools. And, you know, everything is connected. Increasingly. Everything is sources of awareness for what is almost a kind of global brain. When you--you know, we are uploading billions of photos. Basically we now have applications that can deduce things from those photos that we might never have expected. Russ: Yeah--can I--one quick comment, which just blew me away this morning. I couldn't believe it. I've started to use Google Photos, which--I don't love, but there's an addictive part to it. I've got a Flickr account; I'm may too photo-involved. But Google Photos tells me who are the 6 most important photo faces in my life. And it is my wife, me, and my 4 children. So I get that right. And then, just for fun, I don't have very many pictures of me--because I'm the photographer in the family. Guest: Right. Russ: So, I punched up, I tapped on my phone, my Google photos of me. And there I am, posing with my children with their graduation; there I am with my wife on vacation, when we went off by ourselves and some stranger took our picture. There's a handful of pictures of me. One of them is a picture of my son. Just my son, at first, is what it looks like. But if you look more closely, I'm reflected in his sunglasses. It's a shot I set up on purpose. But Google Photos didn't miss it. It understood that I was in the reflection of his sunglasses. That just blows me away. Guest: Wow. Russ: It's so smart. But it's not, of course. So, it's all right. I interrupted you. So, we have all these algorithms that are doing these things in the background. Guest: Yeah, I think, but that's actually a great example. Because, um, you know, here are, you know, we have been basically, you know, taking photos now for what, 150 years. They went digital in our relatively recent lifetime. And new things are becoming possible. Because we have this massive amount of information. Recognition of faces, recognition of voices has progressed immensely. So, back to the Internet of Things: people don't think of the cell phone as an Internet of Things device. But it is. It's a connected sensor package. Russ: Yeah. Guest: I guess that's what you were referring to when you were talking about criticisms of the Internet of Things. I think people focus too much on the device and not on what becomes possible-- Russ: Yeah-- Guest: When you have connected data from that device. And so, for example, when I would say to people, the most successful Internet of Things application so far is not Nest; it's actually Uber-- Russ: Correct-- Guest: [?] You know, I mean, Uber[?] as a whole is actually connected that Internet of things. I think, well, wait a minute, what about this ability to call a car in some random location in the middle of wherever and have them show up and know that you are there? This is only made possible because we are carrying around this sensor package with us. You know, if it were a device--if there an Uber device-- Russ: A special thing you had to carry that had GPS (Global Positioning System)-- Guest: But because it's the phone, it just sort of seems-- Russ: It's an App. But it's not. It's magic. It's ridiculous. Guest: This ability to rethink the world, you know, based on, you know, on the fact that we now have sensors everywhere, I think is going to lead to a cornucopia of new functionality. Russ: The thing that fascinates me--I'd like to come back to photos for a minute; I'd be curious what your thoughts are on this. Another thing that the cloud does; and Google Photos--Flickr does it now, too; I'm sure there are other sources that do it--it saves everything. I don't think about--it used to be when you used film, film was expensive. You'd take a picture carefully; you take a roll of 24-36 shots; you'd get a couple that you liked, maybe 3 or 4 if you were really lucky. And you'd kind of be sad that the other bunch you had to throw away because they weren't interesting. Now, you don't care about that. Guest: Yeah. On the one hand, I think that it's kind of wonderful because those pictures are all going to be processed by this global brain that we are building; and that will turn into something rich and strange. But, you know, in some ways it is a--I remember this conversation I had with Freeman Dyson on stage, our Open Source convention some years back. We were talking about the fact that it could be a digital dark age as all this data gets lost. And, you know, the fact that we have incompatible formats and things don't work necessarily, they don't move, it's getting better in the age of the Internet but not entirely. And I remember he just said, 'Forgetting is so important.' Russ: Yeah. Guest: It's how we make room for new things. Russ: Yeah. Well, that was my other thought. We--and I'm 61, so I'm at the end of this, the importance of this revolution. But imagine being a teenager today, where every frame of--so many frames of your life are still available to review. Google Photo sent me a photograph from the other day from a year ago--it's a little feature that they have, you know: 365 Days Ago, here's what you were doing. But the next generation, this generation to some extent, is going to have the ability, if they want--and of course we do--to see so much of what we did. And of course, much of it is not interesting. Which is hard to accept. And I think-- Guest: But the algorithms get better at nominating things. Russ: Yep. Guest: We invested, years ago, in a company called Time Hop[?] which was one of the first to do this. And, you know, it's great because it brings together things that you would have forgotten on an occasion, an anniversary. And some of them are interesting. But the thing that's so amazing, all of these services are getting better all the time. Russ: It's true.