 So, if someone asked me what I am, I would say I'm an entrepreneur. I started a little company, perhaps you've heard of it, it's called Facebook. Anybody? A couple of you actually bought it, you were like, wait a minute, is that the guy from the movie? But I wasn't always an entrepreneur. I used to be that thing, whatever that is. You know, back when they had like, I don't know if they still do. I had braces and you could get the different colored rubber bands. And for some reason, you can tell in this picture, I picked alternating light and dark colors, and it just looks like I have like broccoli in my teeth, it's really weird. But I was just a kid with bad braces who, I want, somewhere in my mid teens maybe, I wanted to make the world a better place, right? Who has, who's ever had that feeling? I want to change the world, right? Yeah, yeah, hold hands and make the world a better place, right? I wanted, I wanted to make the world a better place. So what do you usually do? If you want to help people, if you want to improve people's lives, what's the first thing people do? The first thing I did, which I think is relatively common, I thought, well, I want to go to the countries where people are really, really poor and I want to help them. And so I did a lot of kind of humanitarian missions. I went to a lot of very poor countries. I did medical clinics, I helped teach English, anything I could. Doug Ditches did, you know, with various groups. And these are really enjoyable experiences and I will tell you they have tremendous psychic benefits, right? No one is ever going to criticize you for doing this kind of work. So it feels really good and it's nice to kind of see in the short term someone being helped sort of right there on the spot, maybe you serve a meal to someone or whatever. But I began to see you after doing this basically all through my teens. This was like a band-aid, but the wound was festering, right? This is a short-term fix. And a very small number of people are impacted by in a very short-term sort of way. In fact, I would argue that most of these kind of short-term missionary or humanitarian efforts are actually more beneficial for the people who go than for the people who are sort of receiving the help. It's really beneficial in terms of like changing your perspective and seeing more of the world. So I realize all of these places, no matter how many times I go, no matter how many summers I spend, I'm not changing the underlying causes of their poverty. What are those causes? And so I started to read, I started to dig in, I started to study, and I came to the conclusion that it was largely the lack of freedom they had. Like we talked about yesterday, the economic freedom that people have is really, the more freedom you have, the more opportunity you have to overcome all of these problems. So I wanted to go and effect the freedom of the world. I wanted to help make places, make people more free economically. So what do you do if you say, hey, I want to make the world a free or better place? I want to reduce the size of government. You go into politics, right? That's the next logical step. Yes, I know, that's why I never wear ties anymore. Look at that, it looks terrible. Baggy shirt, what was I thinking? Anyway, I went and worked in the state legislature in Michigan, and I thought, okay, this is the way to make change happen. I'm going to go work here, I shudder to even think of this now, because of how many things have changed as I've gone sort of grown through this, but I moved to a certain area in the middle of a really rural part of Michigan just to be in a certain district so that I would have a high likelihood if I wanted to run for office that I could get elected as a state representative, because I thought politics was the way to change the world and make it more free. While I was there, I had sort of two things happen. One, I saw how ugly the process was, and I saw how inefficient it was, and I saw how really non-idiological it was. I went in there expecting it to be a fight between some lawmakers and lobbyists who wanted bigger government and some who were fighting for small government, and they're always debating, no one cares about any ideology at all, except for winning, right, except for winning reelection. So I saw it with my own eyes, and I came across public choice theory, which we've talked about here, and sort of my four really quick bullet points of the insights that I take away from public choice theory are that, just like when people go to the grocery store, when they go to the voting booth, they're self-interested, or when they're a politician and they're voting or a lobbyist, people are self-interested. Because they're self-interested, it benefits them to concentrate the benefits of government and disperse the costs. So you have all kinds of things like tariffs and subsidies that are very small individual costs, but a huge benefit on one group. People are rationally ignorant, as you can see from this woman who's struggling to decide what is George W. Bush's first name. Tough question, tough question. I don't know if that has anything to do with rational ignorance, I think it's just maybe something else going on in that case. Right, people are rationally ignorant because it's not worth the costs to them to become informed because the benefits, the odds that your vote is going to change an election are basically zero, so there's essentially no chance of a benefit and the cost of becoming highly informed in politics is very high. And finally, this is something that Hayek writes about in The Road to Surfdom, chapter 10. If you never read the book, read chapter 10. You can find it online. It's called Why the Worst Get to the Top. In politics, over the long term, the worst people tend to make it to the top. The very people with the most qualities that you would not want in someone who is leading, who is in control or making policies for an entire society. And Hayek talks about why this is systemic and why this is actually predictable. You can see how and why this would happen. In order to win, you have to be willing to compromise. The more you can compromise, the more likely you are to win. I mean, from its very roots, politics, anything backed by government is ultimately forced. And so you're immediately starting with a pool of people who are comfortable with the use of force to advance their ideas. Even beyond that, and I saw this all the time in politics, think about what it takes to get elected. Let's just say to state office, like, you know, State Senate, State House of Representatives somewhere. You have to give up, let's say, an entire summer and maybe several thousand dollars or raise several thousand dollars, 10, 20, 50, 100 thousand dollars to go door to door to hundreds of people in the area where you live, your neighborhood and around it, and say, hi, we've never met, but I'm better than this other person you've never met. Instead of going and being at your kids' softball games, instead of going and, you know, watching football, doing whatever you want to do, building your business, whatever most people enjoy doing, you have to sacrifice all that to go door to door and tell people that have never met you that they should like you more than someone else. It's kind of an uncomfortable thing that most normal people don't want to do. It's sort of like what a sociopath would do, right? So the first hurdle to get into politics is like you have to be willing to be like really sort of skeezy and comfortable with this kind of self-promotion that most of us aren't, if I told any of you, hey, I want you to just go out in this neighborhood here in Austin and just start knocking on doors and saying like, hi, you should like me, you know, you'd be like, that's weird, right? So it attracts a certain type of person and it promotes a certain type of person. So I came to the conclusion that politics is not the answer, but that ultimately politicians are constrained by beliefs. This is a quote from Hayek. Society's course will be changed only by a change in ideas. Politicians will follow. And I saw that with my own eyes. I saw that all the time. The politicians are looking for where it's safe to go. What can they do that will benefit them? What can they do that they can sort of get away with? There's a great quote by Milton Friedman. He said, the goal is not to get the right people into office because even if you do, they'll do the wrong thing. The goal is to create an environment where it's politically profitable for the wrong people to do the right thing. And so I came to this conclusion, it's ideas. It's the ideas people hold. If they believe that, you know, alcohol should be legal and enough people truly believe that and they'll be really ticked off if a politician tries to make it illegal, they won't, they can't. Right? But if enough people don't care about, you know, corn subsidies, then they'll pass, right? It's ultimately those beliefs. So I went and worked on college campuses across Michigan trying to educate people, trying to help them understand how markets work, the power of freedom, the problems with government largesse. And we bring in speakers, we do all kinds of things. It was a really fun time. I really enjoyed my work there. But I've always been a really big picture person. I want to get to the root. I want to get to the most fundamental level possible. I want to know the cause that causes the cause, right? Like, I want to get meta as people these days say. You kids these days. So I wanted to figure out, okay, what can I do that has even more leverage, right? So I started out to use a common metaphor, a man of fish, right? And then, you know, teach a man to fish. And then I wanted to go further back in the process than that. So I went and worked for another organization that was also an educational organization, but they have a specific focus of trying to educate and identify people who want to go on to become educators themselves, right? Educating the educators, more or less. They want to become professors and journalists and sort of thought leaders. And that even wasn't enough. So then I moved from doing educational programs for them to doing fundraising for them. So in my mind, I went from give a man a fish, teach a man a fish, teach people to teach people to fish, to raise the capital, to buy the land, to build the factory, to make the rope that makes the nets that helps people catch millions of fish, right? Yeah, now we're getting somewhere. So I was in this realm of ideas. And all of this was based on a theory that I had sort of developed over time of how social change happens that looked something like this. You have idea originators, right? Let's take John Locke. John Locke is famous for some of his ideas on property, for example, and the value of private property and property rights. These are a good thing. These are helpful, et cetera. Not many people know John Locke's name today in America, but I would argue his ideas are actually very, very powerful sort of shapers of what people in America believe about property. So someone like Locke maybe originates an idea like this or Adam Smith on, you know, the power of free markets. And then you have what Hayek called secondhand dealers and ideas, people who sort of spread and popularized these through teaching, for example. Most professors, I would say, are not originating ideas. They're teaching about, you know, the ideas of John Locke or Adam Smith or Aristotle. And these sort of get taken by maybe specialists who are applying these in really specific ways. And like we talked about yesterday with eminent domain, right? You have people in the legal profession who are specializing in property rights disputes and they're talking about how, you know, these ideas of the, you know, the premise of private property should not be violated and they're sort of trying to apply this in the real world. This seeps down into public opinion, right? It's all very nice and neat. It's a nice flow of ideas. And so in my mind, this was kind of what led to the beliefs people have that all goes to shape people's beliefs. And people's beliefs, again, are the ultimate binding constraint to the political world in which they live. So this here is called the Overton window of political possibility. And I think it's a really useful mental tool, conceptual tool. And the basic theory is that any given time, there is a set of options that politicians, a set of policy options that politicians are able to choose from. That's the window of what's politically possible. So to put it in a concrete terms, when I was really young in Michigan, homeschooling was borderline illegal. It was pretty dicey. And at that time, the window of political possibility in terms of school policy options was somewhere that included making homeschooling illegal. That was within the option set. In other words, as a politician, you could run and say, I want to ban homeschooling and you could still get elected. That was within the set of options that the public would tolerate. And all the way up to maybe on the most free level, hey, we should consider some kind of vouchers. That was also within the window and sort of everything in between. Over time, that window shifted through a lot of different educational efforts of homeschool advocacy groups, et cetera. Fast forward to today, in the state of Michigan, no matter what district you're in, you would never get elected if you said you wanted to make homeschooling illegal. People would be freaked out by that. That's no longer among the options that politicians have to choose from. Because people's beliefs on that issue have shifted. And so I sort of saw this is how you kind of determine what's politically possible. And there's kind of two ways, right? You can shift the window or you can shrink the window. So shifting the window requires a change in belief in a more major way. People no longer are willing to tolerate, you know, this level of government. And so the options that shifts. But shrinking the window, this again, applies a lot of public choice insights. It's about shrinking. It's basically about keeping politicians more accountable to what voters actually want. So for example, at any given time, Americans want something, but they're willing to tolerate something else, right? So maybe they want the option in the middle of the window, but they're willing to tolerate deviations from it, maybe a little bit in each direction, or in some cases a lot in each direction. So if you ask the average person, do you want there to be, you know, sugar subsidies? Very few would say they want that. They actually don't want that, but they're willing to tolerate it, right? So to shrink the window, you would do things like lower the information costs to voters to understand what these policies are. And once they find out, if you can lower that cost enough, they'll get irritated. And then they'll say, no, no, no, I don't want you to get away with this much. You know, they'll tighten that window a little bit, right? So these are sort of short-term and long-term ways to alter the policy set. So this was kind of the paradigm that I was operating in. And it's a powerful paradigm. It has a lot of explanatory power. I think the most amazing instance of seeing how ideas change the world is the way that the slave trade ended in Great Britain. There was no war. It was peaceful. But it was essentially a 20-year educational campaign. We went from a time, basically all of human history in every country of the world, everybody thought slavery was either moral or at least inevitable. It's just the way of things. All people through all time have essentially believed that until only a few hundred years ago. This is a radical, radical shift. In the span of a few decades, some educators changed the conscience of a nation. It went from a time where people were willing to tolerate slavery or maybe even liked it or thought that it was necessary to where people were so incensed that the politicians had to vote to put an end to it in Great Britain. This was done by pamphleteering, by going and giving talks, by showing people what the slave ships were like, letting them see how messed up this whole institution was because in England they didn't see it as much. Really powerful example. It wasn't an election of a whole bunch of new politicians who didn't like slavery. It was all the same people. They just changed their votes because the public became more and more upset. Their consciences were pricked. Their preferences changed. They were now willing to endure hardship to forego sugar in their tea and you know how much the British need that sugar to keep their teeth rotting. They were willing to forego that or I hope there's nobody here who's British that I just offended. They were willing to forego that because their beliefs had changed and they felt strongly about this. Powerful. I used to give this talk How to Change the World and this is where it ended, right here. Go out and educate people. After doing this for a couple of years, I started to get disturbed. I had this nagging feeling that I was overestimating my own preferred method because let's face it, I like to talk. I like to write. I like to educate. I was enjoying my work and I wanted to think that what I was doing was by far the most if not the only way to make the world a better place. I got this nagging feeling that I was overestimating it and there were a couple examples that really brought this home. We've talked about Uber a little bit. When Uber came on the scene I observed something amazing. I thought, you know, a lot of think tanks, a lot of writers, economists that I respect have been writing and speaking for 20 years or more about the economic inefficiency of taxi cab cartels and in some cases about the immorality of having a government-granted monopoly. People have been blogging. They've been, you know, testifying. They've been trying to educate people about what's wrong with taxi cab cartels. Nothing has changed, right? Tell your mother-in-law. You guys don't have mothers-in-law yet. You're too young. But when you do, tell your mother-in-law, you know, hey, you know, taxi cab cartels are economically inefficient. They create deadweight losses and they're immoral. So be like, what are you talking about, right? You're boring me. Jump in the taxi. Then compare that, right, to telling your mother-in-law, hey, next time you go into, you know, Manhattan, take an Uber. Oh my God, I love that Uber. It's amazing, right? I don't know. That's how your mother-in-law is going to sound, okay? Now all of a sudden, she's experienced this and when the regulators come along and say we're going to shut down Uber, she's pissed. No, I love Uber. I love that Uber, right? My mother-in-law doesn't sound like that. I don't know where I got that, but that's my mother-in-law voice. So now you've all of a sudden created an advocate and you've changed the beliefs of a huge majority of the public. Same thing in monetary policy. How many people have been protesting the Federal Reserve, inflationary policies, audit the Fed, right? For how long? People will go and, you know, burn their credit card. I don't know what that's supposed to do, but you burn your credit card and protest of the banking industry. Compare that to Bitcoin. Who do you think, what do you think is a bigger threat to the status quo? You're in the Fed poster or Bitcoin, right? If you're a central bank. I know that the FCC is not desperately trying to figure out how to regulate your end the Fed poster, but they are with Bitcoin, right? And all of a sudden, people who have no knowledge of monetary policy are interested. Venture capitalists are pouring hundreds of millions into Bitcoin technologies and these are not ideological venture capitalists. They're not trying to, you know, fight against inflationary policies of the Federal Reserve. They're just interested in something that has this kind of practical benefits and this huge potential. So I see this and I realize that I think I've been missing a huge part of the story and what really, really brought it home, the epiphany, if you will. I was watching this video. It's called The Call of the Entrepreneur. It's a DVD put out by the Acton Institute. It's really a wonderful, a wonderful video. And there's a scene in there. A businessman from Hong Kong, very, very successful in the clothing as well as media industry. He grew up in communist China and when he was a little boy, he was at his assigned job that the communist government gave him. He was carrying luggage at the train station. A business person from Hong Kong came and he took his luggage and the guy said, thank you, and he gave him something and the kid unwrapped it. He'd never seen chocolate before. He'd never heard of it. He had no idea what it was and he said, I had no clue what this was. Prior to that, he had no reason to doubt what he was taught in his communist education, that communist China was the best place in the world. Everywhere else was terrible. He took a bite and he said, all I knew, I didn't know anything about Hong Kong, about chocolate, wherever this came from, I have to go there. If they're capable of producing something this wonderful, it's worth everything to find a way to get there. He did. At age 12 or 13, he was smuggled out, he risked everything, he slept under like a fishing boat to smuggle himself into Hong Kong and he went on to become a very successful businessman there. That story hit me. I thought, wow, this kid didn't read any economics textbook. He didn't understand freedom intellectually. He literally tasted it. This is why Soviet countries just ban tracks about free markets and literature. They banned blue jeans and marble cigarettes. They banned jazz music because they knew that if people in those countries experienced the products of freedom, the tangible results of freedom, they tasted an alternative. They would see, holy cow, there's something a lot better out there than what we're experiencing now. So I came to the conclusion that it's not just ideas that shape beliefs. It's also experiences. Ideas and experiences both shape beliefs. And if you sort of map the same theory onto here, you see inventors, entrepreneurs, investors, and businesses, consumers, that shapes beliefs. That combination of telling people, there's only so many people you'll be able to convince, to argue into changing their beliefs. It's really hard to do. And the older people get, the harder it is. There's a small percentage of people who are going to see a great talk on the economic freedom of the world and say, oh my gosh, everything I believe is wrong. I'll change it. But a lot of people, if you let them experience something better, they've never imagined an alternative to a public school or to a government taxi or to the post office. Their beliefs have changed. They no longer think it's necessary for government to do that thing. And the political window shifts. The worst part about fighting the battle purely on the front of ideas of arguments is that you get really angry. How many of you, if you value economic freedom, have ever found yourself being like, I hope you've never said the word sheeple, but being like, oh, this stupid people just don't understand. People don't get it. Someone on the internet is wrong. I've been there a lot. I realized in all these efforts to educate, I was getting so angry and I was trying to convince people and when it didn't happen, I would get frustrated, I would get impatient with them. That's not very fun. And I kind of think you're going to be less effective if you're not having fun. When you're trying to convince people all the time, there's a lot of name calling. This is what's so detrimental about politics. It's like, you know, you're going to get into enemies, right? Imagine if there's going to be a vote on whether or not Walmart should come into town and your neighbor works for a small store that sees Walmart as a competitor. And the vote's going to determine whether or not this happens. Maybe you guys are perfectly good friends, but he puts a sign in his lawn that says stop this and you put a sign in your lawn that says, no, I like Walmart. I want to get my cheap flip-flops now all of a sudden there's tension between you. Politics, the political environment, it's binary. It's a yes or no. You have to believe this or that. Who's side are you on? Contrast that to the marketplace where you can go out and buy goods all the time. You're probably buying goods from the competitors of the companies that your friends work at all the time. And nobody cares. It's pluralistic, right? Because it has these wonderful built-in features of sort of the anonymity, anonymity, that's a tough one. Anonymity, right? And the ability to pick multiple choices to do things more than just on a binary scale. There's not a once and for all vote. You don't have to fight and convince each other. It's so much more peaceful to create new experiences and just let people try them out. So I was tired of this. I was tired of arguing and talking and trying to convince people alone. I like to educate. I like to talk to people who are interested. I don't like to try to convince people who are totally uninterested. It makes me unhappy. But I was tired of just doing that. And I had some ideas about things, about different areas where I thought there was opportunity for innovation. Where I thought the status quo was stagnant. There was too much regulation. There was too much subsidization. Things were inefficient. And I decided, you know what? I've come to this realization that there are so many different types and therefore the incentives politicians face and therefore the world and the institutions we live under. I don't want to just talk about it anymore. I want to do something. So I did the scariest thing I've ever done. I quit and I launched Praxis. And there was something so liberating because I had debated people with people about the higher education industry which is what Praxis is sort of, you know, sort of the industry, trying to convince people of different things. And it's just a lot of yelling and a lot of talking. And there's something so liberating about saying, look, I don't have to convince anybody to agree with me. I don't have to win you over with argument. I'm going to create something. I'm going to put it out there and the marketplace will tell me if it's valuable. My theory can be tested not in a thought experiment, in a field experiment. And we can see if this improves people's lives. If this alternative actually and enhances people's freedom and enhances people's value. Nothing I've done has ever been harder and nothing I've done has ever been more fulfilling. Truly, truly amazing. And this was all sort of the culmination of this lifelong journey to try to discover what is it that helped change the world and make people more free. The world is a blank canvas. People's beliefs are limited by what they think is possible. Whether you want to deal in the realm of ideas or experiences, I implore you help people imagine alternatives. If you're an ideas person, help people experience those alternatives. If you're an entrepreneur, if you want to take action. Rather than debating about what's wrong with the status quo, criticize by creating. Show people. Tell them about what's possible and show them. Let them taste it. The world has enough socially conscious do-gooders, paper pushers, politicians, people who want to divide up the existing amount of wealth and distribute it around in different ways. People who want to create winners and losers. The world needs more creators, innovators, doers. More people who say the status quo is boring. I don't want to fight about it. I want to show you something better. I want to build something better. What will change comes from? Be unafraid. Create alternatives. Change the world. Thank you.