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Burnham's theory on the managerial revolution discusses how large entities in the 20th century transitioned from being run by owners to being managed by professionals. He highlights the shift towards a class of managers who govern institutions like companies and governments, based on specialized technical and managerial skills. This managerial class gains authority and control over dispersed ownership, leading to the principal-agent problem where managers' strategies may diverge from owners' interests, fostering managerial capitalism.
Venture capital and private equity represent a return to bourgeois capitalism within a primarily managerial economic system. These forms of investment reintroduce the ownership model, where founders or small teams retain ownership and decision-making power in startups. This contrasts with managerial capitalism's tendency towards less innovation and centralized management, allowing for a more agile and innovative approach to business development.
Elon Musk exemplifies a revival of bourgeois capitalism by embodying a hands-on, ownership-driven approach in his ventures. In contrast to the managerial style, Musk directly controls major aspects of his companies like Twitter, emphasizing individual responsibility, accountability, and innovation. His model stands out in a landscape dominated by managerial structures, showcasing a return to the entrepreneurial ethos of direct ownership and control.
The podcast delves into the challenges posed by the modern economic system, where managerial capitalism prevails. It explores the growing influence of a professional managerial class in various spheres, leading to potential disconnects between management strategies and the interests of dispersed owners. The discussion underscores the need for a balance between managerial expertise and entrepreneurial ownership to stimulate innovation and adaptability in today's rapidly evolving business environment.
The podcast delves into the concept of an oligarchical elite that believes it has all the answers to societal problems and therefore feels morally obligated to impose these solutions globally. This elite, influenced by thinkers like Hegel, views progress as a historical process driven by solving problems through a dialectic approach. The belief is that they have arrived at the end of history, having solved societal challenges, and thus must enforce their solutions worldwide.
The podcast highlights that the oligarchical elite, while highly educated and meritocratic, tend to live an insulated life disconnected from the consequences of their policies. They often associate primarily with like-minded individuals, live in secured environments, and follow traditional life scripts. This disconnect from the realities faced by the general populace allows them to champion global governance without experiencing its adverse effects personally.
Exploring the tension between nationalism and global governance, the podcast points out a clash of values where the belief in imposing global solutions conflicts with the diversity inherent in multiple nations. Nationalism, often demonized as anti-diversity, is presented as a potential safeguard for maintaining diverse forms of societal organization and avoiding a homogenized global state.
Providing insights into the intellectual foundation of global governance, the podcast references thinkers like Hegel and Marx who laid the groundwork for the belief in a global solution to societal challenges. The historical process of problem-solving through dialectic methods drives the perception of progress, leading to a moral imperative to enforce these solutions globally.
The podcast explores the moral conviction of the oligarchical elite to enforce their perceived solutions on a global scale. Upheld by the belief in possessing all the answers, these individuals feel compelled to eliminate dissent and impose their visions of progress, even at the expense of national diversity and potential unintended consequences.
In a provocative discussion, the podcast touches on the potential virtues of nationalism in preserving diversity of societal systems. Contrary to common narratives, nationalism is portrayed as a safeguard for preventing a homogenous global state, allowing for diverse social experiments and ensuring a range of philosophical ideas.
The podcast delves into the debate surrounding the concept of having a uniform system of global governance. It questions whether imposing a singular approach worldwide is feasible and highlights the significance of acknowledging the complexities of reality. The episode emphasizes the need for freedom in exploring alternative ways of living and the importance of allowing room for mistakes in a diverse society. By referencing historical debates like that of communism, it stresses the recurring challenge of navigating differing viewpoints and the potential pitfalls of pursuing homogeneity.
The podcast discusses the concept of transitioning from the current elite to a superior one and the challenges involved in such a shift. It explores the notion that in every societal structure, there exists a minority ruling over the majority, referred to as the iron law of oligarchy. The episode emphasizes the mechanical inevitability of an elite group governing, focusing on the mechanisms through which these elites maintain power and legitimacy. It suggests that replacing the existing elite necessitates establishing a new elite with better ideas, a compelling narrative, and the ability to recruit capable individuals for effective governance.
This episode features an interview with a16z GP and co-founder Marc Andreessen, discussing his intellectual influences and detailing his quest to understand how the world works. He covers the authors who have shaped his thinking, the influence of elites on policies, and global governance. This conversation was recorded in late 2022. Since then, Marc and a16z have released “The Techno-Optimist Manifesto".
If you enjoyed this episode with Marc check out episode 1 of Turpentine VC with Ben Horowitz who discusses the how they built the firm and its future plans.
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LINKS:
The Techno-Optimist Manifesto: https://a16z.com/the-techno-optimist-manifesto/
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Recommended Podcast: Company Breakdowns
Each episode of Company Breakdowns dives into S-1s and series B-and-beyond companies, interviewing founders and investors to break down the companies. First episode is on Rubrik - which just IPO'd. Coming up this season: Databricks, Reddit + more,
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SPONSOR: HARMONIC | SQUAD
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Access global engineering without the headache and at a fraction of the cost: head to choosesquad.com and mention “Turpentine” to skip the waitlist.
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Join our free newsletter: https://turpentinevc.substack.com/ -
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RELATED SHOWS: @10xcapitalpodcast
If you like Turpentine VC, check out our show The 10x Capital Podcast with David Weisburd, where David talks to the investors behind the investors: https://10xcapitalpodcast.com/
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X / TWITTER:
@pmarca (Marc)
@eriktorenberg (Erik)
@turpentinemedia
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TIMESTAMPS:
(00:00) Intro
(01:33) How much has Marc changed vs the world changed?
(05:05) How much do ideas matter? Who drives society — the elite or the masses?
(08:07) People respond to interests more than ideas
(10:18) Mental models for the left and the right
(12:54) Sponsors: Turpentine | Squad
(15:12) The road to hell is paved with good intentions
(16:58) Master morality and slave morality
(21:37) Unpacking Elon’s quote “Wokeness is the mind-virus”
(24:17) Is classical liberalism sustainable and how it leads to wokeness
(33:18) James Burnham’s worldview
(41:09) How the left captured the institutions
(43:44) Elon as the return to entrepreneurial capitalism
(46:22) The experiments Elon is running
(53:09) The billionaire mindset toward politics
(55:49) We live in an oligarchy, not a democracy
(1:04:13) Larry Page is the contrarian billionaire
(1:05:48) Effective altruists think they can play God
(1:08:54) SBF’s roll-the-dice philosophy
(1:09:33) Aristocratic vs Meritocratic elite
(1:20:04) Elites are insulated from the consequences of their policies
(1:22:06) Why global governance is a nerd trap
(1:25:28) Global governance is anti-diversity
(1:29:00) Tech people are politically homeless
(1:29:49) Elites can’t be removed, they can only be replaced
(1:33:21) Advice for counter-elites
(1:45:39) Reasons to be optimistic
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This show is produced by Turpentine: a network of podcasts, newsletters, and more, covering technology, business, and culture — all from the perspective of industry insiders and experts. We’re launching new shows every week, and we’re looking for industry-leading sponsors — if you think that might be you and your company, email us at erik@turpentine.co.
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