 Now, when I put out a previous video where we talked a little bit about most recent elections coming up in the United States and sort of discussed politics and basically sort of introduced a topic that politics cannot be separate, cannot be thought of independently from economics, right, where politics and economics have to be considered and spoken in one breath really, because it's one system, there is no such thing as politics by itself and economics and once we accept this, once we realize this, then the world, our present society and where we come from and where we're going, sort of there's a lot of light that shines on what's happened in our society and what is happening in our society and right now the present system that we're in is sort of a system where economics is trumping politics and we talked a fair bit about that in the previous video who talked about politics and what not connecting up politics, economics and really looking at our system and defining what it is, right. Now what I want to do in this video is present some kind of visualization where it sort of should bring things into light. For me anyway, when I think about our present economic system, our present political system, this is the graph that constantly I envision that comes to my mind when I'm making either business decisions, education decisions or what not, right, because this graph, this sort of presentation is what you should have in mind when it comes to thinking about what type of career path you're going to take, what you're going to study in school, how much in debt you're going to be, where you're going to get a job, what type of field you're going to work in. And it's something that I talk to my students later on when they're in general later on when they're going to be graduating high school and they have to make some decisions of what they're going to be doing, right, or if they're going to go into the trades, if they're going to start your own business, if they're going to go into post-secondary education, or if they're going to take some technical training, or whatever it might be, right, or go travel, right, whatever it is, I sort of talk to them about this, okay. Now do we have to sort of think about how our present economic system is set up, is basically, if you can think about it in the following sense, okay, let's draw a graph, okay, we're just going to make sort of x-y-axis, right, Cartesian coordinate system, so we're going to draw a y-axis and an x-axis, right, and what we're going to do on the x-axis, we're going to put time on here, right, and in mathematics, in a lot of graphs, economics, and not economics, anything that you're, a lot of things that you're studying, what you end up doing is putting time on your x-axis because time is an independent variable, time changes no matter what, right, you can't prevent time from changing, okay, so anything that is independent of your control, you usually put on the x-axis, and what we're going to do on the y-axis, we're going to put percent market share because what we're going to do is we're going to look at how our present system functions, okay, how certain companies functions and what they have to keep in mind and how new companies coming up into the industry, how they can be represented, right, so what we're going to do, we're going to consider this to be percent market share, okay, so percent market share, now, we're going to draw two lines here, we're going to look at the extremes and that's one thing that mathematics does, mathematics, the power of mathematics comes from, you know, creating models and quantifying those models based on some kind of, you know, looking at the world situation, whatever we're looking at analyzing, right, we create models and we quantify whatever system it is that we're looking for, right, and what we have to do is look at the world, look at everything really in times of a system, in terms of a system, right, and that's something I really try to push for the language of mathematics and what we're doing, you know, we're still in series four, we've been in there for a while, but one thing I did in the first few videos for series four of the language of mathematics, I really try to emphasize the point that what we're dealing with is a system, right, and mathematics was basically created for this to look at any type of system, whatever it might be, and quantify that system and that's the way we have to look at politics and that's the way we have to look at economics, everything in politics and economics is a system, it's based on a model, right, that might be valid or might not be valid, some of the models throughout history that we thought were valid were invalid, they've collapsed, right, some of the models that we thought were invalid, they become more valid, right, they become more prevalent within our society, so what we're going to do is look at everything as a system and what we're going to do is look at right now, if you consider percent market share versus time for certain companies, right, and we're going to look at two different types of companies, companies that are established and companies that are emerging, okay, so what we're going to do, we're going to assume that companies that are established have a higher percent market share than companies that are not established that are emerging, right, so let's put companies that are emerging in the bottom here, right, they have a small market share, usually when they're just starting off, they're at zero, right, but we're going to put this at, you know, a little bit above zero, assuming they've done some marketing and they're starting localized, right, companies that are established are going to have a higher market share, right, and we're not putting any numbers on here, we're trying to do this as a visualization, right, so companies that are established in general have a high market share and over time they usually retain that market share unless there's some kind of new innovation coming up from the bottom, which is making some of the technology that they have here, some of the products that they produce here, some of the services that they produce, you know, provide here if they're established companies, makes them obsolete and this example occurs everywhere, it's continuously changing, it's continuously in flux, right, one of the examples would be, you know, taxi cab drivers, right, that has been established market share for a long time and then we have new technology coming up such as Uber and other types of technology, which are making, you know, life for taxicabs a lot harder, right, where a license in my part of the world anyway, a license to drive, to have a cab company went from $100,000, $200,000 down to, you know, $5,000, right, and the money that people were making, driving taxicabs becomes harder and harder because new types of innovations coming up, they might be Uber, they might be car share, they might be more bike lanes coming up, they might be more localization, right, where higher density cities are becoming more high density, where people are living closer to work, so they need less cabs, or they might need more cabs short term, right, they're driving less, that all affects established companies and this occurs everywhere, another model would be media, right, news outlets, print news, right, as soon as the internet came on the scene, print media was the first, one of the first places start getting hit, right, as soon as streaming video came on to the scene, broadcast media started taking a serious hit, right, and this is everywhere and it's occurred throughout history as well, right, one of the most, you know, greatest inventions in human history, in current civilization anyway, is the printing press, right, which is, you know, compatible to what the internet is, right, but the printing press, initially when it came up, Gutenberg's printing press in the Western world anyway, I believe China, Asia had that a long time before we did, but in the Western world we industrialized it, they automated it to a certain degree, right, but the first printing press came when it came up, came on to the scene, established companies, established individuals and organizations really didn't like the printing press when it came up, and the first company that came out with the printing press that tried to get a certain market share went bankrupt, right, just imagine the first printing press in the world, the first company, printing press company in the world where there were printing books and literature, newspapers and news and making it accessible to the general public went bankrupt, right, because of a lot of pressures put on by established industries, okay, so now that we think about it this way, basically the way things work in our current economic system is established companies only stay established for a certain period of time, sometimes they're very short, sometimes they're extremely long, some of the longest living companies that have been around are education systems, right, universities and they've been around for hundreds of years, right, but what we're seeing right now is because of the internet, because of education available online, because of cost of going to universities, because of the job market, because of automation, because of a lot of factors involved, universities are losing market share and this is basically the graph you should have in mind. Established companies have market share, high market share for a certain period of time and when innovation comes onto the scene, this innovation might take a while to get a foothold into the market, but what happens is this new innovation, which is, this is referred to as disruptive innovation, starts to gain market share and established companies start to lose market share, okay, and this is the model that you should definitely keep in mind, this is the visual you should keep in mind and what happens is, and this happens, you know, not on a broad scale across every industry, this happens in certain specific industries and it happens also in, on a broad sense as well, maybe because of technological advances or because of policy changes, because of the way society is moving, the direction in which society is moving, and what happens is slowly disruptive innovation picks up, all tech, all the established industries start losing market share and the new companies that were just barely getting their foothold at the beginning of coming onto the scene are now moving up to become these establishment, right, established industries, and one of the places this has happened is, I mean, one of the largest companies the world has, which is Google, which isn't really Google anymore, it's called Alphabet Inc, right, so if we change this model, change this graph and go on a longer time span, right, if you want to think about it, Google came onto the scene and was basically starting off at zero down here, right, but we'll start the clock a little bit forward, right, at the beginning they didn't really have too much of a footprint into our society, if you know a little bit of history of how Google came to be, at the beginning I believe they went to Yahoo and offered Yahoo, I believe it was Yahoo, a fair chunk of Google for I think it was $150,000 and Yahoo being established because they were the first on the scene with their search engine, right, they had a huge portion in the market, they invested $150,000 into Google, right, which was one of the worst business decisions the world has ever seen, right, and what happened was basically when Google came onto the scene, if this is let's say print media, not Yahoo, right, so let's say Google comes onto the scene, the internet comes onto the scene, the search engine mainly focused on Google let's say, and this is more print media publishing and whatnot, right, newspapers and media, and these guys were established at the time, for Google it took a certain amount of time, they couldn't even convince Yahoo to invest money in them, right, and slowly, not even slowly, there's probably jumps here that occur, right, there's part of you know Google's history that they had, Google video I think it was two years before or a year before YouTube came online, and when YouTube came online I think a year later Google bought them out, right, and there would have been a huge jump, right, but let's make this a smooth curve, and what happened? Google started picking up and print media started losing a huge percent of the market, we're right now, they're not down at zero, you know they're down here, and it's slowly going to disappear or consolidate into you know smaller and smaller what do you call it, newspapers and it's reached a level where there's only a handful of people who control a lot of print media, right, on a large scale, a handful of organizations, and Google has you know taken on a huge percent of the market share when it comes to Google news, anyway when you're doing search, and that kicks off into other news sites, right, because Google is really just a holding company, and at some point Google has become establishment, but it hasn't become an establishment because they focused just on a search engine, right, it became part of establishment controlling everything, right, based on acquisitions, right, they acquire different companies and they expanded their footprint into fiber optics and video streaming with Google, and you know technology with Android, and all types of stuff, right, they've expanded everywhere, where this company is starting off here, it was called Google, but over here it's no longer called Google, it's called Alphabet Inc, it's now a holding company that you know closest analogy I have would be to Berkshire Hathaway, like Warren Buffett's company where they got their you know tentacles everywhere, right, and they're basically holding company managing all these different types of companies, right, so this is sort of the type of visual visualization you should keep in mind, specifically on what's going on with our political system, what's going on with our economic system, and on a personal level, where you want to invest your money, where you want to invest your time, where you plan on finding work, right, do you plan on you know if you're working right now or you plan to work in the future and you're planning on starting your own thing or working for someone else, where do you plan on getting your knowledge from and investing your time so you acquire knowledge, are you going to be working in a field that is at the beginning stages of its growth, right, which where you can think about this as being disruptive innovation, right, and disruptive innovation is a term that's used, I think it became part of the mainstream where it was defined in mid-1990s, but it's been around for a long time the concept of what happens, right, where new technology comes along and challenges old technology, right, so do you want to invest your time in disruptive innovation, new companies, new ideas that are coming on the market that are challenging established companies, right, or are you going to work in established companies and you know assuming this time frame is beyond your lifespan, right, or your work, your work lifespan, this could be a year, this could be 10 years, this could be 100 years, right, whatever it is, right, if this is 100 years your lifespan might be here, then working in established companies might be a good idea, but if disruptive innovation is coming off fast and taken away from this job, right, from the opportunities of growth, which is really what our present economic system is based on, right, it's all about growth, growth, growth, right, so how fast, what's the time frame here that you're looking at, are you going to be investing your time in established companies and get your foot in the door in established companies or create something that people already know about, that they're going to consume your product and hopefully you stay in this zone or are you working with disruptive innovation and hopefully kicking into this zone, right, and if you get in at the bottom here, usually you have a higher market share when you hit up there, right, so this is something that I sort of talk to my students at Fairbent and I do bring this up during political and economic discussions if I'm having with people where this example occurs everywhere and one of the things you keep in mind is it's not just you know the two extremes here, sometimes there are industries in the middle that aren't, don't have a huge market share, you know, they're here, right, and the disruptive innovation coming that's challenging them is maybe something that was established that's more along the lines of here, right, sometimes these things fluctuate, they're cyclic, right, goes down, comes back up, goes down, comes back up, right, and competes with models that do the same thing, right, possibly, possibly, so percent market share is, it's sort of relative, right, it's sort of, it really depends on your scale you're looking at, are you looking at a small scale or you're looking at a large scale, right, how big do you want to get or are you happy with this type of model or you want steady state, right, model, is a political landscape stable enough to allow you to do this, right, is a political landscape stable enough to allow you to stay contained, huge portion of the market share for an extended period of time and if you, if you look at this thing, there's a lot of industries that have stayed up here, they've had a huge percent market share for multiple reasons, one of them being is because of political landscape, right, politics changes, laws are passed to keep those people in power, that are sort of monopoly practices, right, or these companies up here, whenever they see themselves dipping down, they do a buyout, right, they buy something and that's called mergers and acquisitions and that's something that happens a lot right now, in the last 15 years or so, there's been a lot of buyouts, a lot of companies have folded or sold out to larger companies that have become part of a larger umbrella, Google is one of them, they've been on a buying spree for the last 10 years minimum, right, well since there's since their inception really, they kept on buying smaller smaller companies where they reached a level where they're buying large companies, right, pharmaceutical industries do this a lot, right, they're established, they're established, they're patent laws, right, then give them patents, I don't know how long it is now, copyrights and patents, they used to be very short, now they're 100 years, 200 year patents, right, so they're basically governments passing laws to keep these people in power where prices stay fairly high and if there's any company coming up which is challenging one of their brands, they end up buying it out and up they go and all of a sudden if this company is, if there's a company here, let's assume, oh this guy's dried out, let's put this guy aside, let's assume this is a, let's assume the brown is a pharmaceutical company, right, going this way, they're established market and let's assume the purple here is a new pharmaceutical company that has some kind of product that is challenging these guys, right, if they start gaining too much market share, their market capital, capitalization, they're not worth too much, right, especially if they're on the, if they're a private company, they're not on the markets, they have control over if they can be bought out or not, one of the companies that did this was GoPro, right, when GoPro camera came out initially they were selling the product for you know a few hundred bucks, I think three or four hundred bucks or something like this and I believe Kodak offered to buy them out, right, for a nice chunk of money once they started getting a fair bit of market share and was growing really fast but GoPro decided not to sell out to them, right, so these guys, this company up here, whatever it might be, might start losing market share because of this, right, and what they can do is come up here and offer this company, offer to buy out this company and what that does, if these guys agreed, these guys go up here, they retain the market share again, right, and these guys just become done, they got zero market share, right, they're out of the, out of the game, right, or these guys might decide not to sell and these guys market cap collapses and these guys market cap goes up, or goes up to a certain level, stabilizes in the middle until they come up with new technology and boots them up, right, and takes these guys completely out of the game, okay, for me, this is the way I look at our system and extremely important to keep in mind that right now, the present system that we're in right now, there's a lot of monopolies that have, that have a huge percentage of market share and that's because laws have been passed to prevent disruptive innovation from getting, getting a nice foothold in the market, right, there's a lot of rules and regulations possibly preventing from, from the little guy from coming up and getting a fair chunk of the market share here or challenging these people, the companies that have monopolies based on laws passed, right, and that in general is not good for our economic system because it prevents innovation, because as soon as someone comes up with good innovation, if there's too many rules and regulations preventing them from going up and there's too many rules and laws being passed to extend these patents, extend these, extend the copyrights and patents and control of these companies that are established, then these companies can't get off the ground and they collapse, right, so if they don't, you know, let's do this in black, if a company comes up here and they keep on hitting hurdles, right, at some point they're just going to collapse, right, may it be because of patents being extended for the companies that they're challenging, right, and this has happened, copyrights initially, when they came out, they were I think seven years and then they were extended to 14 years, now we've reached a level with a lot of trade agreements, which a lot of those international trade agreements are all about preserving the market cap, the market share of established companies already, all of these trade agreements are extending these copyright laws, right, where copyright laws are now, you know, a life of an author plus 100 years, I don't know what they are anymore, laws track, right, and this also applies to patents and one place a lot of patents come into play is technology and pharmaceuticals and pharmaceuticals are huge, right, there's been patent extensions multiple times, multiple times for a lot of pharmaceutical companies where we reached a level specifically in the United States where drugs that have been in play for decades, right, their patents there are being renewed because of there's new patent laws that came out for new new use patents, right, so if you found out for example aspirin was good for eggs and a new use was good, oh aspirin is good for making your blood less viscous, right, so if you prevent heart attacks or whatnot that's what they say, right, all of a sudden that's a new use and all of a sudden the patent is renewed, right, now I'm not sure if that's the case for aspirin because I'm pretty sure the patent for that came into the public domain a long time ago but there's a lot of companies like that where one of the most recent ones was that injection for allergies, right, where in 10 years the price of that product had gone up 500 fold, a thousand fold, right, because we're getting extended patents, they had a patent for it, right, so new companies couldn't come up and break through this barrier, right, so keep this in mind, this sort of visualization and if you're not thinking about investing in companies, if you're not thinking about starting your own companies, you should keep sort of this visualization in mind if you're going to be working in a certain industry, okay, and this is one place where economics is really trumping politics, right, because a lot of the laws, a lot of our systems right now in place are here to protect established companies and not allow for innovation to come up or make it a lot harder anyway, and that's sort of economics trumping politics because these guys, right, are not just doing one thing in general, there's a lot of mergers, you know, if a company's going down they keep on buying, buying, buying, buying, buying, buying, right, Google, they didn't get up here just because of a search engine, they kept on buying, buying, buying, buying, buying, getting their, you know, tentacles everywhere so they can control many things, right, and they get huge market share and then they layer, layer their products where one is kicking off to the other, kicking off to the other, okay, so this is one visualization I share a lot with some of my students and this comes up a lot and when I talk about politics, economics with people, okay, what I'd like to do in the next video, one other thing I'd like to touch on is the concept of differential accumulation, okay, and it's a really important concept and it's related to capital and specifically capital is power and specifically it relates to it is directly related to this and you should keep this in mind when you go on to the next video, when we start talking about differential accumulation, which is basically the concept, the present concept we have in our economic system, political system, where basically if you're ahead of the game, you get to stay ahead of the game because of, you know, a concept of mathematics which is called compounded interest, okay, and we're going to do a very simple example of this and there are, you know, all, again for this and for other videos, economics that we're going to jump around the favorite, I'll provide links in the description, linking up to some of these concepts and for this one it's basically disruptive innovation and, you know, established companies keeping their control through patent laws and copyright laws and mergers and acquisitions, right, that's what's happening here, okay, but very important, disruptive innovation, that really governs our society, that really decides where we're going to go, okay, and if disruptive innovation is allowed to get a foothold into the markets, then we're going to see changes hopefully for the better coming faster than established organizations being given more control and more say into our society, right, basically become monopoly practices, right, monopolies in general for the most part are pretty destructive to society, okay, pretty destructive to innovation, I hope you liked, I'll see you guys in the next video, bye for now.