 Welcome to the Reason livestream. I am Zach Weissmuller. I am joined today by two esteemed guests, Dr. Samuel Gregg, a distinguished fellow in political economy at the American Institute for Economic Research and a contributing editor at Law and Liberty as well as author of the new book, The Next American Economy, Nation, State, and Market in an Uncertain World, as well as Russ Green, a senior fellow for economic progress at Stands Together, a former CrossFit employee, which is actually how I first got to know him and which I think we'll talk about a little bit later, and also husband to a great former and hopefully future Reason TV contributor, Nora Green. Thank you both for joining me. You've both done some really important work on today's topic, which is environmental, social, and governance, or ESG investing. Here is Samuel's contribution to a recent Law and Liberty forum on the topic, why business should dispense with ESG. This is Russ's contribution, what are the aims of business. And I want to start with you, Sam. You've elsewhere contemplated whether the rise of ESG, also known as stakeholder capitalism, is a threat worse than socialism. So let's start by defining terms as best we can. What is ESG in the broadest terms possible? And why is it a potential threat? Well, thanks for having me on. Zach, it's great to be with you on Reason TV. It's also good to be here with Russ, whose contributions to this debate I think has been very important. ESG, as the an acronym suggests, environmental, social, and governance, is the idea that businesses, private businesses, whether they're single owner or whether they are publicly traded companies, have a responsibility to include among other goals, at least among which of course is what I think is the tea loss of business, which is of course profit and shareholder value, that they have an obligation to be pursuing other goals that are deemed to be important for the overall well-being of society. And that's typically broken down in terms of environmental issues, social issues, which includes any number of particular causes, almost all of which I think would be fairly described as progressive social causes, and then governance issues. And the governance issues can range from things like just good corporate governance that we would normally expect from publicly traded companies, to the idea that other entities, other what are called stakeholders, have a role in shaping the agenda and goals of a given set of businesses or corporations. So that's broadly speaking what it's about. And in many respects, it's not a new thing, because there've been lots of attempts over the past 30, 40 years to try and move business in a direction whereby profit and shareholder value become one of just many particular goals that people think businesses should be pursuing. Corporate social responsibility was another of these movements right back in the 1980s and 1990s. So this is not a new phenomena. But it's taken on a much bigger profile, I think, because so many very large publicly traded corporations have signaled very publicly their adherence to this as a sort of worthy thing that business should be pursuing. Now, we can get into the details of whether businesses who adopt this rhetoric actually pursue that type of internal policy when it comes to how they actually manage themselves, because one of the things I've discovered there's often a big gap between the rhetoric and the reality of these things. But the prominence that it's been given by very major business leaders, and of course, the business roundtable statement of 2019, which was all about stakeholder capitalism represented a shift away from the BRT's traditional focus upon shareholder value. And this movement of it, at least in the direction of saying, well, stakeholder capitalism is here. We have to pay attention to it, et cetera. It adds up, I think, to a broad attempt to try and shift business away from what it's supposed to do, what it's really defining purpose is. And my fear is that in the long term, it's going to end up with a lot of businesses understanding themselves as being something between a commercial enterprise and a type of mildly left-wing NGO. So that's a sort of broader problem, I think, that's going on with this particular movement. And Russ, do you broadly agree with that characterization of what ESG is? Would you add any modifications? And what do you view as kind of the most concerning things about this development? Yeah, Sam primarily focused on the firm level at a single corporation, and that, for the most part, is accurate. But there's also always been a systemic side to this. ESG began as a United Nations hosted and convened endeavor in 2004. And from the beginning, you can read their original documents. One of them is called Who Cares Wins. It was always understood that ESG would necessitate globally coordinating financial allocation and regulation towards the UN's sustainable development goals. So, you know, why that is, why it requires that sort of coordination should be sort of immediately obvious based on what Sam said, right? Because if you have just individual companies deciding not to invest in things for ideological reasons, you're really just creating opportunities for other people, you know, that, you know, in economics that's called an arbitrage opportunity, right? So, you know, that's a problem because really you're not advancing the political and social goals that you're supposed to be advancing. So what they've always recognized from the beginning is that this required changing not just single firms' behavior, but coordinating among firms, which of course raises anti-trust concerns, and also coordinating government policy, right? So public pensions would have to be managed differently, and financial regulators would have to prioritize ESG goals over their traditional scope of practice. So it, and it's really astounding if you look at these original United Nations documents and everything that's contemplated way back in 2004, so much of it has actually happened. I mean, I think it's the first United Nations plan that's actually worked. When I studied them at Georgetown, like, we would always laugh at the UN, like, they've never done anything like, well, well, you know, they finally did something, so good for them. But, you know, unfortunately for us, it's economically destructive. Well, I want to talk about, you know, what some of those mechanisms for coordination are, because that kind of gets to the root of one of the issues here, which is how much of ESG, you know, is a market phenomenon, and how much of it is, you know, being imposed by some sort of either government or, you know, international body, you know, the way, one of the ways I started getting interested in this was I read the book written by Klaus Schwab, the head of the World Economic Forum, The Great Reset. He's also written a book about stakeholder capitalism. I pulled a clip from him being interviewed about his book and talking a little bit about it. And I think this clip might be able to get us into a conversation about how this all works. The COVID crisis has shown us that companies which were committed to the stakeholder concept have performed much better, because they have invested into the long-term vitality of the company. So what we have to do now and what is very important is to walk the talk. And walking the talk means not just to talk about stakeholder capitalism, but also to establish a framework of metrics which allow everybody to see that the company is performing according to the ESG criteria. So there's two components there to what he's saying. First is that ESG through the pandemic proved to be a good thing because it incentivizes companies to think longer term. And so he's making an assertion that companies that committed to ESG fared better throughout the pandemic. I would be curious if you have any thoughts on that or have seen as the empirical data related to that. The other part of his claim is that, you know, or what he's calling for is some sort of mechanism to better be able to either rate or coordinate whether companies are actually complying, like setting some sort of, I guess, global ESG type standard. So let's take the first part of that first. Is there evidence that ESG was actually a good practice for companies to make it through an unexpected global event like the pandemic? Well, if I can, if I'll go first before us, one thing I'll say is that in the article of mine that you put up at the beginning of our conversation, I went through and actually looked at some of the measurements, not both the measurements that were being applied by different ESG ratings agencies. And what you discover is they're all over the place. There's very little consistency in terms of what they're looking for, how they measure, how they assess, how they align different numbers. It's really very, very messy. And anyone who knows anything about statistics would recognize that the very low rate of correlation across ESG ratings agencies suggests that there's a problem just with measuring these things in the first place. And the second thing is that there's also, and I also talk about this in the article, there's also a fair amount of evidence that suggests that ESG funds don't actually perform better than, let's call them non ESG funds. And even worse, the makeup of ESG funds, what distinguishes an ESG fund from a non ESG fund, can be something as little as the ESG fund puts 2% of its investment in something like, I don't know, wind energy or something like that. And that qualifies it as an ESG fund. So you start to see that there are serious definitional and measurement issues associated with ESG, which again, I argue goes back to the, I think, the blurriness of the concept, which is problematic. But the other thing which I think is important to keep in mind with Klaus Schwab and his particular vision of stakeholder capitalism, my argument is that he's basically advocating for what we would call corporatism. This is the control mechanism that he has in mind. Corporatism in the sense that there's a coordination between business and government and NGOs and unions that seeks to sort of pursue particular goals, more or less at the expense of profit. So markets are not pushed out of the picture altogether. Private property isn't abrogated altogether. But everything is much more subject to a top-down focus upon stability and the realization of goals that are marginal to the purpose of business. And it's also, the other thing to keep in mind, I think, is that some of this is already starting to be regulated through things like the SEC. The SEC under its present leadership has pretty much made it clear that they're going to try and push companies down this particular path. And that, I think, is very worrisome because it goes back to something that Russ said, that this stuff is starting to get legal and regulatory traction now. And once that happens, it's really difficult to reverse it. And how much of it at this point in time, Russ, is, do you think, due to regulatory efforts or is this pretty much a market phenomenon at this point? There's this one chart I wanted to bring up that you referenced in one of your articles. And it's showing investment that adheres to this UN standard called Principles for Responsible Investment. And you can see it's gone up, up, up over time. That might be one proxy for how influential is ESG. But maybe you could just explain what you think that this chart means and why it is that so many firms are converging on this. Yeah, so going back to what Sam said about corporatism, one of the defining features of corporatism is it becomes increasingly difficult to actually delineate between the public sector and the private sector. And that means that answering your question is very hard. So one example of that would be, if you'd listen to Larry Fink, who's the CEO at BlackRock Speak, he'll say, look, at the end of the day, I'm really just responding to what my customers want. So if you just hear that right off the bat, you think, oh, okay, he's just responding to basically what private sector customers want. But that's actually not the case, right? Because if you look at who BlackRock and not just them, any large asset manager, who many of their largest customers are, we're talking about public pension plans, CalPERS, CalSTRS, the New York State, and they're run by governments. And then in addition to that, obviously, BlackRock has very significant dealings with the Chinese government as well. So there are very significant levers of power that are being exerted to push ESG. And then even beyond explicit policy, there's also implicit threats, right? That if you think of the period during which ESG was really rising fast, two things were happening. One, and this goes to your earlier question, markets are cyclical, right? So there was a period of time where tech companies, which tend to do better on ESG, were doing really well in sectors like mining or energy. What sometimes referred to as the old economy was underperforming. So it actually made sense for that very specific period of time to favor ESG allocation. At the same time, too, if you recall, there were proposals like Elizabeth Warren's Accountable Capitalism Act. And the progressive wing of the Democratic party was really on the rise. Like if you think back to the primaries of 2020, the proposals that were being discussed prior to Biden becoming the nominee were really out there. So corporations were looking at that, like, oh, that's the future. And we have to prepare for that, right? So there was a policy risk and reputational risk angle to this, which is that ESG, by committing to ESG, they're not just responding to existing demands from governments, but also anticipating future policies. This Accountable Capitalism Act that you mentioned, one of the components of it is that U.S. corporations would be required to allow their workers to elect 40% of the members of their board of directors. And it's not just kind of the Elizabeth Warren wing of the Democratic party that's talking about this. Our president ran kind of echoing that message, kind of incorporating that into his rhetoric. I've got a clip from Biden talking a little about this that I'll play real quick. It's way past time we put an end to the era of shareholder capitalism. The idea, the only responsibility a corporation has is with shareholders. That's simply not true. It's an absolute force to have responsibility to their workers. Their community, to their country. That is a newer radical notion. So I mean, he says it's not a new or a radical notion, and this kind of goes back to a debate that has been raging for a long time. This article I just brought up is the so-called Friedman Doctor and Milton Friedman's famous New York Times essay saying that the social responsibility of business is to increase its profits and to increase shareholder value and that anything beyond that is kind of a distraction. And this is kind of like an unwinding of that over the following decades. But what would be, what are the possible downsides of something like increasing worker power, the power of labor to determine the composition of a corporate board? It kind of sounds, I'm sure to a lot of Americans, that sounds like a good thing. It's like sticking it to the powerful billionaire CEOs who are hoarding all the money. But what are the possible downsides of that? Well, there are quite a few. And we know this because of the model that's being proposed, literally having workers elected to boards. What they really mean, of course, are trade union officials. That's who the people are that would be elected under this scheme. And we know this because this is precisely what happens in, for example, contemporary Germany and even to a certain extent, Austria and some other European countries where some of this is already mandated by law. And it's a classic, it's called work and co-determination. And this is a classic corporatist mood. If you look at most corporatist regimes, this is one of the things they stress over and over again. And of course, work, it really means trade union efficient. We need to be clear about that. And one of the things that it results in is that remember that the trade union official is not so interested in things like how entrepreneurial the company is going to be, whether it's going to seize advantages, whether it's going to be nimble and to adjust to new circumstances. The trade union official is interested in stability of employment. Stability of currently employed employees. What this means is that anything that comes along, whether it's new technology or a change in market conditions or a new entrepreneurial invention that challenges a particular way of doing things in a given industry, the trade union official is not going to be saying, well, we need to take advantage of that. And maybe that means we need to fire some people and bring some people on if we're going to maintain our existence, let alone profit as a company. They'll say, no, we want the status quo to stay in place. And that's one reason I think you find average levels of productivity in so many of these particular countries considerably lower than those countries that do not have these types of arrangements. And at its worst, it facilitates outright corruption. The Volkswagen corporation in the 2000s is a classic example of that. It needed to make some adjustments to change market conditions. They found that the union officials on the board and the work, what's called the work council were not amenable to these changes until the Volkswagen corporation decided to start literally bribing to change their position on these sorts of things. So, and I talk about this quite a lot in my book, The Next American Economy on the chapter on stakeholder capitalism, because it shows again that what's behind this are not new ideas. This is very much a type of corporatist mentality under a different lexicon that's being brought to bear upon the way we talk about these questions today. Right. So that's something actually that Biden's right about, that it's not some new and crazy idea. It goes back over 100 years. We've been having this sort of debate. One thing I would add though is I think when the stakeholder capitalism advocates speak, they make sort of a false equivalence, which is that sort of they say, well, you know, now we have shareholder primacy and we need to move to a system of stakeholder capitalism so that companies can put stakeholders first. You know, as if right now we have a top down mandate that everyone's got to do shareholder primacy. And, you know, really, we just have to move towards a freer system so they have the option to do stakeholder capitalism. That's completely false. Just completely false. Right now, if you want to start a company that is 100% committed to stakeholder capitalism, you can incorporate as a benefit corporation, which most states have that option. And it will be in your charter for the lifetime of your corporation that you can put your stakeholders first, right? You can do that right now. You can do that. When you see that most companies, especially the highest, most valued companies are not doing that, that's due to a choice that they made, right? Because you have a choice not just how you incorporate in this country, but also where you incorporate. And it turns out that most, not all, but most publicly traded companies are incorporated in Delaware, which tends to be more of a shareholder primacy friendly state. So it's not at all the case right now that you're forced in to shareholder primacy. It's simply the case that that's where, you know, markets over time have, you know, favored things to go. But again, if you'd rather do business a different way, you have that option. I'm curious, Russ, like, what you think about, you know, to that point, going back to the the Friedman doctrine that the social responsibility of business is to increase its profit. So he's making a declaration beyond, you know, what government should do. He's saying, actually, this is just what any businessman should be focused on. And he goes so far to say that businessmen who talk about things like, you know, social responsibility or, you know, social conscious are unwitting puppets of the intellectual forces that have been undermining the basis of a free society these past decades. Do you buy that or is there actually room in a free market for, you know, different forms of business or different objectives to be sought by a firm? Yeah, I mean, I understand where he's coming from. You have to put this in context, right? I believe that was published in 1970 or 1971. You know, that's a period of inflation and economic stagnation. And also, you know, I would agree with the point that many business leaders who talk about ESG and stakeholders do so in a way that it is absolutely undermining the pillars of a free and open society. Because, you know, very often it's intertwined with this idea of public-private partnership and even corporations basically becoming cartels. So that's bad. But I do not accept the point that any corporation pursuing any objective, you know, that's different than shareholder value maximization is just per se wrong. You know, you mentioned my experience at CrossFit. You know, so actually, before I talk about CrossFit too, I should highlight a key difference between privately held and publicly held corporations, right? And in actually, in some ways, I feel like freedom was being overly broad. Right now, there's about 6000 publicly held corporations in the country. But there are millions of privately held ones. And if you're a privately held corporation, you know, with just one owner or several owners, it's fairly simple if you want to prioritize something other than shareholder value, you certainly have that option. And you don't have to ask, you know, your thousands of shareholders for permission, because they don't exist. Right? So that, you know, that was my experience at CrossFit. CrossFit most of the time I was there was owned entirely by one person, you know, Greg Glassman. And, you know, he explicitly said like, you know, our priority in business is not making money. You know, we think that making money is a reflection of the value that we're creating for other people, you know, so he defined business as the art and science of creating uniquely attractive opportunities for other people. And this is a bit of a sidebar, but it's really interesting because we would go up every fall to Harvard, Harvard University, over the course of about five years, and Greg would present there. And he would speak to two schools, the business school and the Divinity School. So I'm going to get to put the Divinity School to the side for a second, the business school. When he first went there and started speaking, this was maybe like 2013, 14-ish. And he would say like, look, business isn't about making money. It's about, you know, creating value for other people. The students were like shocked and appalled and they were just incredulous, right? But towards the tail end, you know, by 2018, 2019, when he would go and speak, they would, you know, still be arrogant, of course, the Harvard students, but it was the opposite, right? They were like, of course you're saying that. We all know this, right? Like business isn't about making money. So we saw that switch happen in real time at, you know, America's elite business school. And so in some sense, I think it's a good thing. You know, I obviously am very proud of my time at CrossFit. There are thousands of independently owned businesses, you know, that still exist to this day due to CrossFit. And I think it's improved the lives of millions of people. And I don't think it would have been effective if it had been a publicly held corporation, really prioritizing, you know, how do we maximize our stock price or our quarterly earnings. It certainly would not have had the same community spirit that it had. It always felt like it was more than just a company, right? And it's hard to do that if it's, you know, immediately apparent that, you know, management is trying to squeeze you out of every dime. And another example of, you know, someone who has taken a slightly different philosophical approach to running his business is John Mackie, the outgoing CEO of Whole Foods. And Nick Gillespie interviewed him earlier this year. I'm going to play a brief fight from that interview in a second where they talked about ESG because Mackie was one of the most kind of outspoken proponents of this idea of conscious capitalism, which is the idea that you can harness the power of capitalism and profit for some positive social good, which obviously has an intention with that freedman doctrine we were just talking about. But at the same time, he has a deep suspicion and critique of ESG. So I just like just to play this bit from Mackie and get your reaction to what he's saying. Worries me right now is that me, conscious capitalism is a management philosophy. It's a way you should manage your business. You should figure out what the higher purpose of your business is. And that's always going to be in value creation for other people. It's about whatever it is. You're creating some value for other people or you wouldn't have a business in the first place. Whole Foods is higher purpose just to nourish people in the planet. Secondly, it's about the stakeholders that they all matter and they're interdependent. And then it's about creating, you know, leadership that's more awake, more conscious, and then cultures that where people flourish. That's the four pillars of conscious capitalism. But I'm very concerned that people are that it's being co-opted. That it's a management philosophy. It's not a governance system. So ESG, and I'm oftentimes being having to defend conscious capitalism, which is being conflated with ESG thinking, which is basically a political philosophy that's trying to force corporations to adhere to their particular political philosophies and taking away power from the shareholders. That's really what it's about. That's not what conscious capitalism is. Conscious capitalism is a philosophy, a way to think about your business. That is just a little bit more enlightened, a little more, and I think it's going to be a more successful way to manage your business as well. It's not about distorting the governance system to take away the power from the investors. That will screw up capitalism. And maybe I think that's the intention all along. So what do you make of that, Sam? Because he's saying there that that there's a difference between a management philosophy where you're kind of weighing these different concerns versus a governance structure. Is that legitimate or does one kind of necessarily lead to or flow into the other? Yeah, he's making some, I think, important distinctions and nuanced differences, which I think if you look at it closely, it sort of adds up what he's trying to do. I mean, one thing I do think is important in this discussion is that in a free market economy, if a business wants to set itself up along the conscious capitalism lines of John Mackey, then, you know, if it's privately owned and it's, if everyone knows what they're getting into when they invest in their company, that's fine. But what he's, because I think that's that's part of the freedom that markets give you is you can experiment with different types of business models and different types of business philosophies if you want. But what he's pointing to, I think, is this problem of ESG being effectively mandated, because that I think is really what the long term objective is, is to mandate this stuff. And even if you go back and you look at, say, Friedman's article, Friedman does not say that business is free to just simply ignore the social environment around them. He doesn't say that business has a license to engage in willful destruction of the environment. He doesn't say that businesses shouldn't be conscious of the type of communities they're working in. He's very clear that any sound any saying business leader is going to pay attention to those sorts of things. But that's different from making those sorts of things part of the actual objective and then mandating it for the rest of society. But because I and I think this is another point which it's worth keeping in mind here. And I say this in a lot of different contexts. Being pro business and being pro market are not the same thing. They're generally not the same thing. And what Friedman is pointing to in his article is business leaders, many of them looking for opportunities for pollution, for cronyism, for ways of protecting themselves against market pressures. And I would argue that in some respects, ESG is operating in some of those in a certain way like that now. So for example, in my article on this subject, I quoted from a McKinsey article, McKinsey is woke management on steel as far as I'm concerned. They really are. But if you look at what they say, so they acknowledge that there are lots of critiques now coming out about ESG. And they even say some of these critiques are accurate. But then they go on and say, well, basically, if you don't accept ESG, then you endanger your quote social license to operate. So I don't know how to interpret that as anything else, but a sort of implied threat that if you don't embrace these ideas, then somehow you're going to be pushed out by regulation or other different forms of coercion from being able to operate in the marketplace alongside other companies. So this is this is the sort of insidious side, I think, because I think that there are many respects, they're misrepresenting what Friedman said, but also they're getting to the point now whereby they're using ESG. A lot of businesses are starting to use this as a way to invoke regulation against actual competitors and potential competitors as well. Well, just to try to make and I almost hesitate to do this, but to try to make the case for that or this being put forth for stakeholder capitalism, just to have you respond to what they're trying to achieve here, which is that we in the 21st century were all interconnected to a degree we never have been before. We've got global problems. They're recognizing that markets are good and that markets can achieve goals. And so the best thing we can do like they're moving beyond something like communism and saying that the best way to address these externalities that result from a free market like environmental degradation or kind of the effect on local communities and health and so forth is to just integrate that into the market system. So this is in a way, Elizabeth Warren who we talked about earlier frames it as she's trying to kind of fortify or save capitalism so that it can continue in this global economy. What is wrong with that reasoning? Or what would be a better way to address the externalities that I think we all would agree occasionally sometimes do arise from market transactions? Is that for me, Zach or is that for Sam? Yeah, why don't you take that, Russ? And then Sam can jump in if he has anything to add. Yeah. So first of all, it's that argument usually insinuates that ESG is just a private sector action. And as we've discussed up to this point, that couldn't be further from the truth. There's always been a policy side to it. And especially in recent years, that policy side has gone from 0 to 100, frankly. And to Sam's earlier point, it's not just the SEC. There's a whole of government push to basically incorporate ESG into everything the government is doing. So if you want to look into that, there's Executive Order 1430 on climate risk. There's another Executive Order on racial equity. And essentially what they're saying is again, not just the Securities and Exchange Commission, but every organ of government needs to be prioritizing these objectives. And that inevitably comes at the expense of other things. But even if we were to accept the point that, well, there are externalities, which of course, there are externalities. But even if we were to accept that point, the question then becomes, is ESG the right way to respond to them? I would say no, absolutely not. For a couple reasons. One, as we've discussed, ESG pressure is primarily exerted on Western publicly traded companies. In order to even be effective on ESG's own terms, it would need to be applied globally. But it's not. So what happens when you're exclusively applying ESG pressure on American and European companies, and not say on Chinese companies, is you're creating economic opportunities for other countries. Because if we zero in on energy, for example, since a lot of the interest in this is around climate change and carbon emissions, when ExxonMobil, for example, decides that it's cutting its investment in future production, and as a result of that, it's pulling out of a field in the south of Iraq, that field's not going to lie fallow. Another country is going to invest in it. And most of these other investors are sovereign firms. So it's not even a privately held, to the extent that's even a thing, Chinese company. It's a Chinese state owned company, or it's an Iraqi company. So basically, it's OPEC plus, which is all the OPEC nations plus Russia, or it's China coming in. So you're not actually creating any environmental benefit. You're really just transferring value from the West to the rest. And very often, these new investors actually have lower environmental and social standards. So it's a national security problem, but it's not even good for there's no benefit. It's just cost. And even further than that, it's hard to imagine how any of this could be fixed because is anyone going to trust China to comply with ESG commitments against its own national interest? They would never do that. Only a Western country would be stupid enough to do that. You know, just to add on that point about, I'm very glad that Russ mentioned China, because it points to what I would call the selectivity problem that a lot of ESG has. So for example, I remember debating back in January, a Stanford professor who's a proponent of ESG and she was making some interesting points and I just responded. I said, well, you know, I find it interesting that I hear a lot from ESG advocates about different human rights abuses around the world. And this is a problem. Private companies and shareholder owned companies shouldn't be in any position whereby they're helping this happen, et cetera, et cetera, let alone profiting from it. But I said, I haven't, I don't notice ESG funds talking very much about China and the gross abuses of human rights that are going on in China. I didn't notice ESG funds and outfits talking very much about Russia until Russia invaded Ukraine. Now, the Putin regime was in place a long time before the Ukraine invasion. The Chinese Communist regime has been in place a long time before it started behaving the way it's been behaving for a while. And the response that I got was, well, businesses have to deal with reality, they have to deal with these different circumstances, they can't be too picky about these things. In other words, the double standard that inevitably starts to emerge when you take it, particularly as Russ has pointed out on a number of occasions, from the firm level to the political and global level, you start to see the inconsistencies and the incoherence of the system. Because if you're going to be against companies doing things that might contribute to or at least prop up regimes around the world that you don't like, then you've got to apply that across the board. So that means China, that means Russia, that means all sorts of very unpleasant regimes that a lot of ASG people just didn't want to talk about until it became impossible not to. The last thing I'll say is, in terms of the sort of double standards, we talked a little bit about the business round table at the beginning, right? The 2019 statement. Well, there's been some very good research done by some people at Harvard Business School that both Russ and I have talked about on different occasions, pointing out that if you look at the firms that signed up to the BRT's renewed statement of purposes for corporations, and you look at their internal bylaws and how they operate, very few of them have actually changed to adopt more of a stakeholder model. So that's just an empirical example of the difference between the rhetoric that we hear from a lot of companies about this and the way that they behave. Now that's not to take away from what Russ and I are both pointing to, which is the very dangerous political dimension of this, the way in which this is being used by more or less progressives to try and reshape, re-engineer the way that economies work. But the degree of hypocrisy about this, I think, is worth mentioning because it shows the difference between the way that people talk about this and what they actually do in practice. I pulled a couple of examples of what you're talking about, I think, with the kind of selectivity or the double standards. This is Elon Musk tweeting, he calls ESG a scam. He's mad because Tesla didn't make the list for the best, the top 10 best in the world for environment, social and governance by S&P 500. While Exxon did, there was this report that came from some Utah lawmakers who were divesting kind of state funds from ESG that part of their reasoning was that Russian energy giants Gazprom and Rosnef outscored American energy companies Exxon, Mobile and Chevron on the S&P's ESG scale. That's despite the fact that Putin is the majority owner of Gazprom. There's also some mention of Chinese companies down there, which we all know the government also has a majority stake in. What is the actual reason for that? Why are these authoritarian countries getting higher ESG rankings? What explains it? What's the mechanism? Well, I'll just say one point, then I'll let Russ say something. It's partly because of something I mentioned before, which I talk about in my initial article on this in Law and Liberty about this, which is the incoherence of the measurement system. If you look across the board, there's I think there's only something like 52% correlation between the different ratings that are used by these particular types of agencies. Anyone who knows anything about ratings will tell you that that shows a fair amount of disagreement and dissonance about what counts as ESG and what doesn't, which is just part of the problem because when you can't actually define what it means, and it means whatever you want it to mean. That's particularly problematic for obvious reasons. Yeah, and I would also emphasize again, this started at the United Nations, and that's significant because historically there's been frankly a double standard, which is that if a Western country like such as the United States, which has been decreasing, it's carbon dioxide emissions fairly consistently for over a decade, where the United States is constantly attacked for climate reasons, whereas China, which emits more than the United States, the European Union, and India all combined, and is increasing every year and is investing enormous amounts in coal and natural gas. China is praised for its climate action, which cannot be justified on a scientific basis, and it really comes down to this conceit that essentially China is part of the global south or it's a developing nation, and therefore it cannot be held to the same standard as the European Union and the United States. So this double standard really has been baked into the system from the beginning, and there's another aspect of this, which it should be seen as modifying or adding nuance to what I said about CrossFit earlier, which is that a lot of this is sort of a replacement religion, that when you point out these just very practical and logical objections to ESG, people very rarely change their minds, which suggests that it's about something else, right? There's an invincible ignorance aspect to this. So when we would go to Harvard, us, all the CrossFit people, we would not just speak to the business school people, but also to the Divinity School, and Harvard Divinity School had a group of atheists there who'd put out a report called How We Gather, and it said that there's this whole generation of young people who have no religion, but they're turning to corporations, mostly, as a replacement for religion, and one of the corporations they highlighted was CrossFit, and I was actually, I thought this was very cool at the time, right? That we were such a powerful community, and that's all true, and we're improving people's lives, but the truth of the matter is that corporations cannot replace your family. Corporations cannot replace your church. Corporations can do a whole lot of good in the world, but they have a separate function. Again, I stand by the claim that that function doesn't necessarily have to be shareholder value maximization, but they do have a separate function from a church, or a family, or a community organization, right? And I think confusing those things is actually very dangerous socially, and you can look at examples of that, of companies that really went all in on that sort of corporate religion angle. It's stuff like if you've seen Adam Newman at WeWork, if you've seen the documentaries about him, he was all about that, right? He was saying this new enlightened generation doesn't need property, and don't you want to live in a community? And meanwhile, his whole bet is on him owning real estate, right? Or you've got Sam Bankman Freed, it's the exact same thing, right? Effective altruism in many ways is sort of a new modern religion, and that's of course all covering up for the fact that he's committing fraud on a historically massive scale, and we could list off five other examples, right? And the problem is, is that we have spiritually hungry people, and we also have people who are just lonely, they're looking for communities, and corporations, and other people, politicians for sure, are exploiting them by sewing them on these hopes and dreams. So I think it's not just politically problematic and economically problematic, but I also worry about the long-term social impact. Can I add one thing to that? Because I think this is really important. What's interesting about this phenomenon, and again, this is one of the things I focus on about, that business has a distinct purpose. That's why it's not a family. That's why it's not the military. That's why it's not a religious organization. I tend to think about these things in Aristotelian terms, that the T loss of business is a very specific thing, notwithstanding Russ's point about it can be more relatively expansive, depending on who owns the business. But the moment a business starts behaving like a family or a family like a business, there's bound to be all sorts of social dysfunctionalities that go along with that. The second thing I'd add, though, is that I think it also reflects a lack of confidence among a lot of business executives and business owners about the good that they do precisely by being in business and pursuing commerce. Because, yes, it produces a profit, but think about all the different things that that profit enables, that the company doesn't consciously choose, but which happen as unintended side effects, whether it's more jobs or higher wages in some instances, or giving people capital and financial resources to do all sorts of things that have nothing to do with the economy. And business people, in my experience, are generally not very good at explaining this dimension of business and presenting business this way as a worthwhile, worthy vacation that's just as good as being a doctor or being a professor or whatever it happens to be. And I think a lot of business people, they latch on to these things, whether it's ESG or in the past corporate social responsibility, say, oh, no, don't worry, we are good people. We really are good people. We're not just concerned with this dirty profit stuff. We're concerned with the globe. We're concerned with the environment. And that, I think, it speaks to a problem that the business community has in defending and explaining to people what it does. Well, if we accept that framing that there's a sort of quasi religious aspect to it, you know, the punishment for speaking out against a religion is usually some sort of excommunication. And it's something that seems to have happened occasionally in the corporate world. I know this is something that you've pointed out in your articles, Sam, HSBC's head of responsible investing was suspended and then eventually quit after a speech that he gave questioning some of the tenants of ESG. I'm going to play just a short clip from his speech so people can get a sense of what he was saying. Like it's getting a little bit out of hand. The constant reminder that we are doomed, the constant reminder that within decades it's all over. We've got regulators in the US trying to stop us. We've got the China problem. We've got a housing crisis looming. We've got interest rates going up. We've got inflation coming down the pipes and I'm being told to spend time and time again looking at something that's going to happen in 20 or 30 years. Hence, the proportionality is completely out of whack. And I should have set that up a little bit better. He's talking about kind of all the compliance to, you know, make sure HSBC is meeting climate emissions goals and he, you know, that so much of his time is just being eaten up with this thing when kind of all the market indicators show that he should be focused on much more pressing problems and then after this he's basically pressured out. So are we in danger of kind of a chilled debate around this within, you know, we can all sit here and talk about it on the stream but really it's important for people in the corporate world to be able to talk about it and debate these ideas. Is that open debate happening? Well, I'll go quickly first and I'll say that it's interesting that most of the people who have talked about this in the way that you're describing are usually former executives of whatever the company happens to be. So there's been a number, for example, of former BlackRock executives who have, after leaving the company, publicly stated, this is somewhat of a fuss. It doesn't work. It's misleading. It's distracting us from some significant major problems. And there are also, there are some likes Terence Keely in his recent book, I think it's called Sustainable, who was the former head of this for BlackRock and he's come out and said, now he's not against the goals. So let's be clear about that. He's not against the goals, but he says there's a method and a strategy that it's actually in the long term he thinks very damaging for corporations. And what I found interesting about his intervention is that, first of all, I think it was Larry Fink who wrote forward for the book, which to my mind tells you that there are significant people in corporate America who are now starting to realize maybe we may have wanted to far down this path, and maybe we need to retract ourselves a bit, especially given something that Russ and I have talked about a little bit, which is the deep unpopularity now of corporate America, not just on the left, where it's always been deeply unpopular, but now on the right as well. And the unpopularity of corporate America on the right, so to speak, really started around about 2019. So this is not about Trump. This is not about all these other things. This is, I think in some respect, linked to the fact that business is now seen by many people, partly because of the types of goals that are associated with ESG as hostile, actively hostile to things that at least one half of the country thinks is important. So business is not careful. It's going to find itself beleaguered, not just on the left, which they're more or less used to, but increasingly on the right. And we're even seeing Republican senators now basically saying to corporations that come forward and say, can you give us a break on this? Can you help us out with this? They're basically saying, buddy, you're on your own. As long as you keep up with this ESG woke staff, we have nothing to talk about. Yeah. And just to follow up on that real quick, we've talked a lot about the environmental aspect of this, but there's also the social plank. And I know you've written a lot about the diversity kind of initiatives that are embedded in ESG, Sam, and the fact that their ratings can be tied to the makeup of someone's workforce or corporate board. And again, to many people, maybe that sounds like a good thing. It sounds like conscious capitalism, but what are some of the main problems with implementation? Well, you know, first of all, when they talk about diversity, it's all about race and sex. It's all about race and sex. It's not about religious affiliation. It's not about your political inclinations. It's all about race and sex. So it's diverse in some respects, but it's clearly not diverse in other respects. And if you look at some of the funds or the owning corporations of these funds, and you dig down and you discover this is what they actually mean by diversity. They don't mean viewpoint diversity. That is very clear. They're not into viewpoint diversity. So that's one thing. So that's a problem. So in other words, it's misrepresenting. I mean, I don't even like the word diversity. I think pluralism is a much better word. I think of what America is about when it comes to understanding these things. But the other problem, I think, is that it could easily end up. You could easily end up with people being appointed to positions simply because they are of a particular skin color or whatever it happens to be, but they don't actually know anything about the area. They're not particularly skilled or experienced. They may even have a lousy track record in business, but if they're being appointed, the people are being appointed on the basis of skin color or whatever it happens to be. That suggests to me that there's a serious risk that you will end up appointing people who don't know what they're doing. And that's risky for the company. That's risky for shareholders. That's risky for the long-term sustainability of the entire enterprise. What have been the real-world problems and results on the energy side of things, Russ? Because the ESG investing has just pushed a lot of money towards certain companies and away from or I should even say certain sectors and away from other sectors. And we've seen what has happened in Europe as of late with their dependence on Russian gas and oil. Has ESG, since so much money, as we showed earlier, has been put under its umbrella, are there any measurable real-world effects when it comes to something as fundamental as energy? Yes. So I did want to add on the diversity point before I answer that question. So I highly recommend the work of David Bernstein who's a professor at George Mason University School of Law, the work he's done on racial categories. We had him on the screen a couple of weeks ago, so check that out as well. Racism is absolutely a problem, but race itself is the social construct. When these companies are bragging about their diversity data, they're by and large relying on the US government's diversity or racial categories, which absolutely are indefensible scientifically. They make no sense. So if you are a European person from Spain, you're marked as Hispanic, hence diverse. But if you are a refugee from Afghanistan or from Morocco or the entire Middle East, you are not. And there's no rational explanation for that. And I don't think anyone could believe that someone from Spain is likely to face more racial discrimination than someone from Afghanistan or Iran or Egypt. That's just facially absurd. So these companies that are bragging about their diversity statistics are buying into a broken system that has absolutely no intellectual defense. That's point number one on energy. Yes, this goes back to what I said earlier, which is that when American predominantly public companies divest from oil and gas production, that's mainly just creating economic opportunities for other nations, very often hostile foreign nations. And that's so very often the defense of ESG is, look, we don't divest, right? Like BlackRock and others will very often say, look, we're some of the largest shareholders in Exxon, in Chevron, for example. And the problem with that is what they're doing is actually worse because if they were just not investing in Exxon, then other people would. And there would really be no disruption. But what's happening is that ESG investors have moved from divestment or that's called ESG screening to what's now called ESG engagement. And what engagement means is they, and you have to keep in mind, right, that what's who are known as the big three asset managers, so BlackRock, State Street and Vanguard, generally are going to vote 25% of the shares at any given publicly traded corporation. And then you add the proxy advisory firms who are also all in on ESG. So that's IASS and Glass-Lewis. We're talking about like 50% of the votes at any publicly traded company. So they're very influential and they have a lot of pressure that they can bring to bear on these companies if they do not comply. So what's happening instead of just BlackRock not investing in oil and gas companies, ESG investors invest with them, but then push them towards themselves investing less in future production. So the locus of divestment has shifted from portfolio level to now firm level. And as we discussed earlier, when Exxon invests less, the total amount of oil and gas production doesn't go down, but instead it's shifted to countries that are hostile to the United States and therefore absolutely going to use it as leverage against the United States, whether that's Russia, as you mentioned, or whether that's OPEC or whether that's China. And then I didn't answer one of your questions earlier, which is that if ESG doesn't work, what does? Like what's the answer to this? Because there absolutely are externalities. And I think there's actually, one of the things I'm optimistic about is I think there's an increasing awareness on both the left and right that government is one of the biggest barriers to producing more clean energy and that innovation, not hiring hundreds of thousands of ESG consultants, but actual innovation is going to answer a lot of these problems. But it's very difficult for this innovation to occur because of all the government barriers, whether you're talking about small modular nuclear reactors, or whether you're talking about the sheer amount of permitting that it takes to, for example, create new solar energy or new wind energy. And let's not forget too that ESG very often is biased against this. So ESG will punish utility companies for investing in nuclear energy. ESG investors look at scants, for example, at mining. But the truth is, if you want a whole lot more renewable energy and more electric vehicles, you're going to need tons more copper and lithium and rare earth minerals. You're going to need a whole lot more mining. But environmentalists and ESG investors very often do not want that to occur in the United States. So it's not just the problem with oil and gas that we talked about earlier, where that's being transferred overseas, but also we're increasing our dependence on foreign hostile supply chains unnecessarily due to over-regulation and ESG pressure. Because now when the United States, for example, there's a $2 billion lithium deposit in name that's being held up for mining because of environmental regulation, for example. So when it's too hard to do that sort of activity in the United States, China has no such qualms. So really, the answer here is going to have to be removing government red tape and also technological innovation. Again, I'm optimistic because I think actually there's an increasing bipartisan awareness of that reality. Before we get to solutions to tackle the ESG problem or what could practically be done to unwind some of these mistakes that you're both arguing have been made, I want to go through some of the questions that people have left. And if you're a live viewer right now on YouTube or Facebook, now would be a good time to throw in some more. But this is from Ben. He says, ESG is a threat to capitalism and anyone who thinks you know is a clown. Ask companies that don't want to have an ESG plan will still be able to operate and most people will stop supporting them over time. So he's arguing kind of the opposite of what you're saying that ESG people are just not going to want to support companies that are not conforming to ESG because they're not going to be perceived as socially responsible. Is there any truth to that? Well, I'll go first. And the first thing I'll say is that there are significant numbers of Americans who actually believe in this stuff. If you look at things like particularly those who sort of came of age in 2010, there's a lot of people say they want their investment choices to align with what they call their personal values. And that goes on the left and the right. So that's a phenomenon. The ESG people are picking up on that. That's a type of market signal that's going on. And many of those people may well invest, despite the fact in some of these funds, despite the fact that it's not actually in their long-term interest. People will do a lot of things that have nothing to do with their economic self-interest because they're ideologically convicted of certain things. So I think we need to keep that in mind. But it's also very clear that there's certainly on significant sections of both the progressive wing of the Democratic Party, but even the non, let's call it the more moderate wing of the Democratic Party, there's a lot of pressure now to regulate this stuff into place so that it gets harder to sort of opt out of all this. It's harder for companies to opt out of these types of situations because if you try and opt out, you will lose your social license to operate. And that's a serious threat. There's a couple here that I'd like to throw to Russ because I think they're somewhat related. This one is from Fear the Honey Badger. ESG is classic fascism. And then the Republic of Texas says eventually to have a high ESG score, they will have to have customers that have high ESG scores, bam, backdoor social credit scores. I think what both of these are kind of getting at is like, where does this lead? You know, I don't want to be too paranoid about this, but you can kind of see where people are coming from, where what, say, the composition of a corporate board should be. Well, the path that that leads towards is something like China's system where they actually have government representatives on the board and suddenly you have an all out, you know, corporatist state where it's, you know, the blending of public and private. Is that a serious concern when we think about ESG and stakeholder capitalism or is that kind of just, you know, overblown libertarian paranoia? It's absolutely serious. And one thing we haven't talked about, and this is probably my fault, but the banking side to this, right, because, you know, I don't have shareholders. I don't have to worry about activist shareholders the way a publicly held company might. But, you know, I do use banking services, right, and banking companies. And, you know, again, to Sam's point and my point earlier, they're not these CEOs aren't just waking up one day and deciding to do this out of the goodness of their hearts. You know, they're realizing that the whole of the federal government, you know, as well as the Federal Reserve, right, is basically saying you guys have to start doing ESG. So they're not crazy, you know, they're going to do what the regulators want them to do. But that being said, what that means is effectively they are allocating capital, they're making loans now, incorporating ESG criteria into the decision, right. And, you know, that means that if you are a small business owner and something you do is perceived as ESG unfriendly, it might very well be more difficult for you to get a loan or you might have to pay a higher interest rate. You know, that's a very real concern. And if you look at, you know, again, other countries such as China, this is very much happening, right. So the technology exists for this to be done. It's a question of whether we're going to let it happen. I think that's very unlikely, frankly, in the United States. And, you know, and I do want to say too that there have been some proposals from the right to essentially just ban ESG outright. And I do not support them. And I will explain why. Because, as Sam mentioned earlier, you know, this stuff goes back a long time. And, you know, it's not new per se for someone making a loan or someone evaluating an investment to consider an environmental or social factor, or especially not a governance factor, right. In fact, I would argue that they probably should be considering these things. So that by itself, if you start banning that, that becomes a massive imposition on these bags. And it's really going to discourage economic activity and access to financial services in your state or in your country, where that happens. So the issue is not that they're, you know, considering these factors, it's that they're being pressured to do so in a top-down way, which is really leading to prejudicial decisions. It's also reflective of, I call it Schwabian stakeholder capitalism, because what you just described is this sort of subtle blending and sometimes not so subtle blending of public and private. That's corporatism, baby. That's what it is. And if you look at the things that Schwab has written, like the book that you mentioned right at the beginning, Zach, that he wrote on this subject, he literally talks about 1950s Germany as the model that he has in mind for this. And this is very much, now, of course, Germany has this sort of flourishing liberalized economy, but it also has this very strong corporatist side to it. And that is, when he made that reference, I said, yeah, this is really just corporatism geared up for 21st century challenges and then moved on to a global scale. Now, I'm not a conspiracy theorist. I don't think that there are people out there plotting to do nefarious things in the way the conspiracy theorists typically do. But it is very clear that there are significant portions of political leadership around the world who do see this as a way of, they would call it reimagining capitalism. I would call it emptying out capitalism leaving a sort of market facade, leaving a sort of private property facade, but underneath, everything is really about collusion. Just to wrap up here, I want to talk about what are some ways to combat this or, you know, keep it at bay. Russ mentioned some of the efforts that have come from the right. This is the text of a Bill Marco Rubio advanced called the Mind Your Own Business Act, which is kind of an anti ESG bill, which you said you oppose these kind of efforts, Russ, because I assume that it's kind of trying to dictate in the other direction that you're not allowed to have, you know, environmental related goals in your company charter and that's kind of equally intrusive. Is that a reason for finding, you know, what Rubio is trying to do there misguided? Yeah, also, you know, generally corporate law is a matter for the states. I don't like the idea of federal government getting more involved in it, you know, for a variety of reasons. But, you know, also, I think the Marco Rubio example is interesting. I wrote an article for the National Review about this which is that Marco Rubio, despite that Bill, has also positioned himself as one of the foremost critics of shareholder primacy. And in fact, an advocate of right wing stakeholder capitalism. So he wants to mandate shareholder primacy, but at the same time, he hates it. I can't figure that out. But I think it's just indicative of, you know, a basic fact, which is that the right of center, you know, which I count myself among them, is late to the party here. And we're just sort of scrambling around trying to figure out what's going to work. Now, I'm actually still nonetheless optimistic because we have facts and economics on our side in the law. But, you know, we are late. So not too late, but late. And then, you know, another point here, though, is I have concerns about specific policy responses to ESG. But I do think that there are appropriate policy responses to ESG. You know, just to begin with, I do not think that the SEC should be imposing ESG on anybody, nor the Federal Reserve, nor anyone else. So, you know, obviously, to the Syntheter's legislation to prevent that from happening, I think that certainly makes sense. You know, also, a big piece of this is state pension allocation, right? That is certainly an item for policy. So, you know, there have been proposals to just clarify that if you manage a public pension, you should be putting the beneficiaries of that pension first, and not some side social or political call that you have, which shouldn't even need to be said. Utah and Florida are two states that have done that? Yes. But, you know, again, we're late to the party here because that solves one problem, right? Which is, you know, how essentially your money is being allocated. But then, there's also the question of voting and engagement at corporations. And in Ryan Zorn, who's a researcher on this issue, he actually found that Florida and Texas have been nonetheless voting in favor of ESG proposals at corporations, right? So, even once you've solved one problem, only a new problem pops up. So, absolutely, there is a role of government here. I just think that we need to be careful and strategic about how we approach it to avoid self-contradiction and avoid things that are going to have unintended consequences. And I would agree with everything just Russ just said. And I'm a set of right guy as well. So, and I think we're absolutely late to the party. And the only thing I'd add to what Russ just said is that the proposals of people like Rubio and others to sort of use law, to sort of forbid companies from doing X or Y, it sort of reflects a more general problem on the right, right now, which is wanting to use the state to hit back against the left. And to my mind, when you start getting into that mode of thinking, you sort of become a bit of a progressive. And I think maybe the best way to finish up here, Sam, is for you to offer kind of an alternative vision or strategy to that, since you've written a whole book about the future of the global economy, the conversation talking a lot about the dangers. What would a course correction look like? What is a more optimistic future for a 21st century economy? Well, certainly in the context of the United States, I think it's a future that takes entrepreneurship a lot more seriously, free competition a lot more seriously, and embraces dynamic trade a lot more seriously. But also even beyond all that, which of course involves pulling back regulation, all the things that we tend to be in favor of, those of us who believe in markets and believe in capitalism just have to get a lot better at making stronger normative cases for these things. I mentioned before the problem a lot of business people have in explaining what it is, why they do, why it's good, it's more than just profit, it's good in itself and all the good things that it enables. If those of us on the free market side don't get better at that, because we're good at economics, we're great at policy, but I think we've often fallen short when it comes to the normative side of things. And the left are very good at that. The left are exceptionally good at that, whether we like it or not. And until we get better at doing that, and that's one of the things that I've tried to do in my new book, I think we're going to be on the back foot. And what about, sorry, this last question came in, I think might be an interesting one to kind of contemplate on our way out. Would someone like Elon Musk coming out against ESG and declaring that, well, as we saw earlier, he did come out against ESG, but declaring that he and his companies will not do business with ESG companies be enough to stop the central planning in its tracks? And that kind of harkens back to earlier in the conversation when we were talking about all these ex executives being willing to speak out against ESG, but not a lot of people that are currently in the corporate world, they kind of got to walk on eggshells. Could some high-profile people like Elon Musk and other CEOs kind of change the tide here? Is that kind of a potential path out of this? Yes, it's necessary, but not sufficient. And Elon's statements about it have been great, but he's not the only one. Jamie Dimon, some of you may recall his response to Rashid Eslaib, which he asked why he's still investing in oil and gas, and he said that to stop investing would be the road to hell for America. So it certainly helps to sort of break the taboo for more business leaders to start talking about it, but I would also say that I think it's important that it not just be politically charged or politically aligned business leaders that are taking it, because the concerns we have with stakeholder capitalism and ESG aren't strictly partisan. They are things that a Democrat just as well, or a nonpartisan, nonpolitical CEO, should understand. And every company depends upon America's free enterprise system in order to succeed over the long run. So really, it should not just be an issue for right-wing aligned people like Elon Musk. It's great that he's doing that, but it should not just be Elon Musk speaking up against this stuff. And it cannot just be people like Elon Musk speaking up against it if we're actually going to be successful here. I think that's a great place to leave it. I want to thank both of you for joining me on the stream today, and thanks to everyone who tuned in and who will watch it later. I'll be back next week. Nick Gillespie will be back as well. Thanks again, guys. Talk to you later. Thanks, Zach. Great to be with you.