AI Will Change Social Class: How To Position Yourself

In this episode, Simone and Malcolm dive into the dynamic shifts in social class due to artificial intelligence. They explore historical social disruptions, from the plague to the industrial revolution, and the internet age, to predict how AI will transform social hierarchy. The conversation covers key areas such as technological advancements, new economic opportunities, education, and the importance of elite and entrepreneurial networks. They examine potential winners and losers in this revolution, providing insights and strategies for those aiming to position themselves favorably in the rapidly evolving social landscape. Join us to understand how to navigate and thrive in the era of AI-driven social class changes.

Malcolm Collins: Yeah. Anyway I will let you start. Today's episode is Simone. I'm very excited.

Okay. Okay. Okay, Simone, don't screw this up. Don't, don't screw this up. Okay. Got

this. I'm gonna include all of that, by the way.

Shut. Ah,

Simone Collins: God. Okay. I, how am I? You get to take your pauses and your breaths and you get to cough and drink something.

And I don't get to do anything. I just have to your

Malcolm Collins: cute

hand sign

again.

No, I'm not gonna, no, you don't get anything. You don't get anything. Okay. I'm gonna go, I'm gonna go. Okay. 3, 2,

Simone Collins: 1. Hello, Malcolm. I'm so excited to be speaking with you today because today we are talking about social class changes in how social class works and how obviously as parents who want to engineer the next ruling class of humans, who of course work in concert with AI, can make sure that our kids in the next period of social class disruption.

End up at the top. This is also for our Patreon supporters. They requested this, so also we're gonna get them to the top. Okay. They deserve to be among the ruling class. But I, it, we need to be aware of the fact that throughout history periods of disruption have enabled clever people to climb social class ranks.

And I mean, consider the plague like from the one from 1347 to or 1352, which killed half of Europeans in, in existence. But that also caused a severe labor shortage and that produced higher wages and better working conditions. So like the right clever kind of person who used to be under the foot of the elites in that society suddenly had this upward mobility they never had before.

They, they could move to different estates, they could demand higher wages. And then I think the last two global events where social class really was disrupted were the industrial revolution and then the internet. And AI is the next big global event to do this.

Malcolm Collins: Well, I think there's been others. I think the rise of TV and radio disrupted social class pretty significantly, where you had this new class of movie stars slash radio stars Yeah.

Which held a position in society. That's interesting. Is that it's sort of degraded into nothing. I mean, we're seeing it rot, we're seeing this yeah. Class that so many people fought to be a part of. So extremely hard. Their entire, you know, lives were fought fighting to become the television star. And now they are finding, or the, the, the news anchor that, you know, they get fewer views than like random internet people and stuff like that.

Yeah. Well that's

Simone Collins: why I see it more of a short-lived thing. It didn't really create, it didn't create, for example Rockefellers. It didn't create you know, the same kinds of. F like the internet, I would say is a bigger one. 'cause that created just huge amounts of wealth creating. Well, I disagree.

Malcolm Collins: I think if you're looking for Rockefellers and people like the, the moguls of that period.

Mm-hmm. The rotter barons. Yeah. I would see that as less of a class mix up than something like the TV star. And what I mean by this is when you're talking about like the history of the robber barons and the ways that they would, for example, have parties where children would dig in like sandboxes for party treats.

And the party treats would be diamonds that were hidden in the sandbox. And so you'd go and you'd look in the sandbox and, oh, look at my, my, my kids would love this. They love little shiny fake diamonds. Yeah, we should, yeah. Give on that. They'd be, they'd find it so, oh, look at the shiny little diamond that I got from my sandbox.

But the, the point here being is these communities were never that large.

Simone Collins: You had

Malcolm Collins: maybe Oh, so you're more

Simone Collins: interested in, in where Huge, like thousands of people? No. Yeah. I mean you had

Malcolm Collins: maybe like 25 families that were like involved in like these entire cultural networks. Maybe, maybe like a hundred folks.

Right? But

Simone Collins: that we're talking about the 0.001%. Who were affected in this way, there were still huge other right? But the thing thing about the

Malcolm Collins: Robber Baron social mix up is that it applied to so few, so few were risen in the ranks by this. If you look at the age of the movie star it applied both to a fairly large community, but also a community that the rest of society observed and understood as a new social elite.

Oh, people

Simone Collins: absolutely in the guild age understood who these. Nova Rich and also old. Re like rich.

Malcolm Collins: Yeah, I guess, I guess, but I'd say that it's equal. Okay. And so now we're in this age where I, I think one of the things we can look at is how's things changed in the, in the internet boom. Because one of the things that happens when you have social disruption is there is a denial by the old social classes that new social classes exist or that disruption is happening.

You know, there's also a

Simone Collins: denial about the proper way to do these things. So we really should talk about how social class worked pre-internet and then post-internet. Well, but the change that's important

Malcolm Collins: to note is because sometimes your average idiot who is still admiring the people who they were told they should admire when they were a child.

Yeah. They listen to those people without understanding. When those people say, oh, these tech nerds are really just like nerdy tech a bros. They're not real upper class. They don't really have influence. Mm-hmm. They're not, they, they don't understand the ways of the blue bloods and stuff like that. Yeah.

They, they say this out of fear. They create these distinctions so that they will say, oh, well, you know, Novo ish, and this has always been the case where the old college would say Novo re have no understanding of, of, of style to try to point out like, well, when the Novo Reese are instantly, well, it's in an attempt to

Simone Collins: continue to grasp at their status, which is beginning to erode.

Malcolm Collins: Yes, yes. What you're really seeing is somebody grasping to eroding status. You are not seeing a and and any, if you believe them, you will make terrible mistakes and you will lead your children to make terrible mistakes in terms of their career, their education, their decisions, and in terms of decisions you make with your career.

Yeah. So go, go further, Simone.

Simone Collins: Yeah. No. So that's, that's what we need to kind of break down so people understand how things have been, how they have changed in the past, and how they're gonna change. So we're gonna recap the post-industrial revolution norm. Since a lot of people don't wanna admit kind of how it works, recap how the internet changed things, highlight the major changes we anticipate from ai, and then outline class, upgrading tactics and careers as AI hits.

And we're gonna go for like the easy, lazy. Coward version, and then also the, like, if you have balls and actually wanna go for this like really tank and win version. And then given our knowledge of winning tactics, we'll we'll talk about potential winners and losers. You know, sort of like who, who is gonna be wiped out by this change.

And I think there are like large swaths of both types of workers, but also types of people who are going to be kind of screwed by ai. Well, I, I think there's

Malcolm Collins: more to it than this. And it's something I wanna talk about in regards to social class because it's a point that I think people aren't paying enough attention to.

I

Simone Collins: might be addressing this if you're talking about the different types of social class.

Malcolm Collins: Well, so I grew up, like I've, you know, I went to Stanford, NBA, I've been a venture capitalist. I have been at the height, it's been leaked in the New York Times. Like we hang out with Elon, right? Like, I have been at the top of the tech bro social world, right?

I have also grown up in a family where my dad's dad was a congressman. You know, the family was one of the most prominent families in Dallas, Texas, which is one of the, the, a city where they still had the degree of aristocratic culture. You know, and my family has had considerable wealth for multiple generations until my generation, I got nothing, just so you know.

Like I, I inherited $30,000 when my mom died. It's, it's not nothing, nothing, but it's not like I'm, I'm not sitting on intergenerational wealth here. Mostly because the secretary's still little you can read all of this. They still like what was it, like 2050 3 million or something like that.

I dunno. Well, what's

Simone Collins: worse is she like, blew it on an investment. Dumb stuff. Like at least, like, at least get an ROI if you're gonna steal money.

Malcolm Collins: Please. But what it means is that I have had a pure insight into both the tech elite social world and the blue blood elites within a part of the Americas where you still had an aristocratic class system, right?

Yeah. And what a lot of people don't realize is how quickly an entire aristocratic class structure can erode and degrade. And I'm talking within a generation.

Simone Collins: Yeah. And this, we're gonna, we're gonna talk about that in a little bit because it was really striking when you and I saw when it happened to the children of the blue blooded Texan families that

Malcolm Collins: Okay, so you, you've got this in the script, so we're gonna talk about that.

Okay. So before we talk about that Yeah. What I wanted to point out about the rise of ai mm-hmm. Is maintaining family systems and elite classes requires more than just maintaining. Attention, power and status. It means reproducing at something that's not an abysmal rate.

Simone Collins: Yeah, no kidding.

Malcolm Collins: And one of the biggest problems with the elite classes in our society today is outside of the Tech Bros.

And elite Mormons actually. They have tons of kids very few of the elite communities have anything close to replacement fertility rates. Mm-hmm. And they're going to go extinct very quickly as a result. Yeah. And I mean like within two generations as a result. Yeah. So anyway, continue Simone. I just wanted to get to that, that important part as well.

When we think about the future.

Simone Collins: Yeah, no, absolutely. But we'll, we'll start with the past. So as you know, I'm obsessed with that 1957 McGraw Hill text films, instructional video called Social Class in America where there's it, it follows the lives from birth of three American babies who all start out in the same.

Maternity ward next to each other in those little plastic baskets. There's David Benton, he's the poor one. There's Theodore Eastwood, he's the middle class one, and then there's Guilford Ames ii for which one? It's great. So if you're Guilford Ames, I love their names. It's, you have to watch this. I will make sure I include a link in it in that top pinned comment that you make.

Okay. Because you guys gotta watch this. It's just amazing. But like, basically it, it, it is literally, it was an instructional video that was played in high school classrooms to explain to people how social class worked and how in America, since there was a pretty large middle class at that time, and social mobility was frankly a little easier.

You. You could, as a middle class person move up. But it requires some sacrifices. And this is kind of an important theme that I wanna keep throughout this whole discussion, but basically they're like, okay, if you're poor, you stay poor, though, maybe you do marginally better. So, so Dave, he, he gets a job at the local gas station with aspirations to become an auto mechanic.

All right? So he's doing a little better than his dad and like his whole family has like a celebration. They have a party when he graduates from high school. 'cause that was like a big deal for someone to graduate from high school and his family, that kind of thing. And then if you're middle class per this video, and, and I think, you know, this is an accurate reflection of how things worked at the time and worked after the industrial revolution.

You can move up. You can't expect your original networking community to accept your new status. Like you have to leave. I really loved this part of the film. Yeah. 'cause it's so effing real. Yeah, it's so real.

Malcolm Collins: It's, it's really great. And if you, if you will, so, so no, what happens? You've gotta explain.

So he goes to the city Okay. And he makes a lot of money. Yeah. So, yeah. No, no.

Simone Collins: Yeah. So the, the, the middle class kid, he goes to New York after, well a, after actually working at the Nepo babies, the rich kids factory just a little bit after high school where he's like, I'm, I'm not going anywhere here. He goes to New York City and, and gets a job, and then goes to school and gets a degree and gets married out there and, and is able to move up.

And, and he, he gets a higher class job and he develops much more wealth and he does better than anyone in his family has done before. But then he comes back home. Everyone still treats him like he's this middle class kid.

Correnet film: Newborn American babies, newborn citizens of these United States, free and with rights guaranteed by the Constitution. But let's take a closer look. These new arrivals in a typical American town have equal legal rights ins class. They are not equal at all. Each has a social status handed on to him by his family, ascribed to him at birth, meet Guilford Ames.

Third, the latest edition to one of the town's upper class families.

Guilford Ames. Second is the wealthiest man in town. He owns a large factory. The Amy is one of the oldest families in the community, and so at re prestige as well as wealth.

This is where an Ames family has lived for the last a hundred years, and this is where Guilford Ames third will live, like most of the babies here, this one, Theodore Eastwood by name, has an ascribed status of middle class.

His father is Joseph Eastwood. High school educated and a white collar worker in the ames factory. He has a steady, skillful job and is comfortably off, but the chances are that he will not advance much beyond his present status.

The mortgage on his house is on its way to being paid, and someday it undoubtedly will be.

Although young Ted Eastwood has an ascribed status of middle class, the best status he achieves during his lifetime may be higher than the one he was born with. Could be true. Maybe David Benton, whose ascribed status is lower class.

David's father is Michael Ben, an unskilled factory worker. Who has a meager education?

Mr. Benton rents the upper floor of a two family house in a rundown section of town.

The ability to rise from an ascribed status to an achieved one is called vertical mobility and is particularly characteristic of the United States. There are class lines within each general group, and these vary geographically and in relation to nationality, religion, and race class exists in the United States as it does everywhere,

It is wild we used to live in a world where we just sat kids down in front of videos and told them the truth about how the world worked. The, the number of truth bombs that are dropped in this that would save an individual so much time and heartache to learn young is astounding to me in that this video would be considered deeply offensive today.

You, your Teddy Eastwood. Stuck in a job you'll be in all your life. Why don't you get out? What's keeping you here? Anyway, Mary Blakesley, you thought you'd marry her, but remember what she said that day in the car. Her car, of course, but can't you see?

It's impossible, Ted. It's not just money. We live in different worlds. Sure. Different worlds inside this town, but there are other worlds, bigger towns. You've got some money saved. Go to New York. Give it a try for six months, and if you fail only you are not going to fail.

And Ted didn't fail. He had talent. But when Ted returns to his hometown on a vacation, how does he fare? Has he a new achieved status back there too? When he meets the girl he wanted to marry, have things changed? The town is small enough so that Mary has heard about Ted's success in New York, but this isn't New York.

Mary is married to Gil now. And although they are friendly enough toward Ted, he still isn't part of their world and he never will be in this town. The ascribed status of his parents is still the class to which he belongs.

Ted's mother brings him up to date on all the town gossip, but he only half hears her. The meeting with Mary has stirred old memories in him. He's remembering what she said to him about different worlds. He knows now that to her and Gil, he's still the nice kid from the wrong side of the railroad tracks.

No matter how successful he is. His achieved status is higher than that of his father's because he has a profession. But that status depends on a place. In this case, New York.

Simone Collins: And what's interesting though, also about the upper class kid, and this is something that has really changed after the internet age, and we're gonna talk about this mm-hmm.

Is your upper class, you're a Nepo baby. So, so Gil, he gets a job at his dad's factory and his dad's like, I'm gonna show you how this is gonna be. And there's this awkward scene where as, as gill's being shown around, because first he goes to an elite university where he's, he's for the first time mixing around with people of his own class.

He's building that elite network. Because you know, before that,

Malcolm Collins: before, before reference, by the way, I went to Stanford for my MBA, my dad went to Harvard for his MBA. Yeah,

Simone Collins: you were Gil. Except that your family wasn't willing to nepo baby you. That's it.

Malcolm Collins: Yeah.

Simone Collins: Your family's like anti nepo baby. They won't like No, no.

They wouldn't help for you. They

Malcolm Collins: won't actually. My dad, I said, well, we've got a pavilion at Harvard named after the family. You know, we've got, it's like some gazebo thing. Like, obviously like we've donated a lot of money there. You went there, my dad went there. Can you like, send them a note like telling them like, Hey, consider this application seriously.

Mm-hmm. And he got mad at me and he said, I don't know if he ever did it, but he'd send them a note telling them not to accept. They didn't accept me by the way, and Stanford did, where I didn't have any connection. So yeah, so there's that. But yeah, which was harder to get into by the way. Harder to get into.

I gotta point that out. But continue.

Simone Collins: Guilford Aimes the third goes to this elite Ivy League university. And then when he comes back, his dad gives him a tour and shows him, you know, very Lion King, like all this domain will be yours. And then there, there is, is our, our middle class Theodore Eastwood sitting in the accounting thing just like, I'm your underling now.

Like, it's great. But things have indeed changed since then. So since the 1950s social mobility has. Kind of actually reduced with the downward, downward slant where upward mobility is harder literally for everyone. So even those who before were the nepo babies. And, and, and we should talk about this, so Nepo baby privilege has absolutely eroded and it's burning away fast.

And I think part of this is because, you know, you and I were sent by someone in, in your, in your family to go to private wealth conferences. I don't know why. I really don't know why, but it was like, it was just all family foundations. And then we went to that, that network for kids

Malcolm Collins: of rich people.

Oh

Simone Collins: yeah. What were

Malcolm Collins: they called? The, they all wanted to be philanthropists. Yes.

Simone Collins: Nexus. Yes. Yes. And

Malcolm Collins: everyone, there was the most progressive communist I've ever met. Like Yeah. And they were dumb ass raw. Well, and

Simone Collins: the other, the thing that, that your family also sent us to was IPI institute for pri for private investors, which was all like family investment cars.

Yeah. None of their

Malcolm Collins: kids went, remember we, no, there were, there were

Simone Collins: like two kids or something. But they also talked in their, like in their sessions about how they were managing their trusts and their family investment firms for their children. And a really big theme of these, and this is I think where the downfall of the Nepo baby comes.

Is you have this focus on happy kids and like, well, you know, I want to make it possible for my child to be a teacher in Africa so they can, you know, do the good work that they wanna do. That was a big theme at Nexus too. It was like, well, I'm just in gonna do good in the world and basically just spend their family's money away.

And this is in, in stark contrast, you have to like, keep in mind that before like the, the wealthy families that maintained impact and that actually were like worthy nepo babies. In my view were like the Kennedy style, like K-pop style, like Disney star management, where like literally you were groomed to be in this leadership position like, you know, Kennedy like President Kennedy wasn't the first in line in that family to be president and his older brother was, and then he got killed in the war.

And it, it's such a ruthless k-pop style management where like if you step outta line and, and your dad thinks you're the slutty daughter and you're gonna get accidentally pregnant, oh, suddenly you get a lobotomy. Like this was intense, right? They were very disciplined and it wasn't fun. And now wealthy families and I think what precipitated the end of this was partially this focus on, I just want my kids to be happy.

But also as you pointed out, and you, I want you to talk about your experience like meeting like your wealthy, like o older money, family, childhood friends, when we were back in Dallas. I think the other element of it was that. Corporate governance also changed. And as the corporations that used to install these Nepo babies that, you know, Guilford ames would have run suddenly receive, they started receiving outside investment, private equity investment, growth investment, and then they had to have boards.

And those boards actually cared about those companies making money and they didn't wanna see the run the ground. Yeah. I pointed this

Malcolm Collins: out about what happened in Texas is that you had many people and families within the Dallas elite ecosystem where the kids expected, they're like, I'm gonna go to SMU, I'm gonna go to like a local institution.

Mm-hmm. And they'd always say this thing. Which is just not true. Which is, well, SMU is as, it's respected as Harvard or, or Stanford in Texas. And God bless them. Yeah. And I'm like, no, it's not. So first of all they, this was true of their parents' generation because in their parents' generation, the people who were running companies weren't the most competent people.

They were people who had risen through nepotism networks. Exactly. And so they weren't people who had gone to Harvard and Sanford and the top universities. They were people who had gone to the local universities. And note here, the university aspect to the Nepo baby syndrome has broken down. It doesn't matter anymore.

It mattered. In my generation, it mattered in the generation before mine. But it was already breaking down was in my generation. Yeah. Now it's just

Simone Collins: the recreational summer camp that you chose to hang out at.

Malcolm Collins: Yeah, yeah, yeah, yeah. But doesn't matter. But for a while it did actually matter. And you were able to get regional arbitrage opportunities within regions that had these nepotistic old boy networks where incompetent fail sons could end up running major companies like in Texas because the incompetent fail sons would go to SMU.

And then they would, you know, end up they even had a, a, a chant on like their football team about how one day they'd be their bosses or something. Oh my god. Really? They were so known for this. By the way, people are like, Malcolm, why are you being mean to smu? The SMU executive business school is literally named after my grandfather.

I have a lot of connections with this university. I don't have a particular animosity to it.

And I will also note, because I never forget a, a nice deed or recognizing my success before I became successful, , while I got into Everett University, I applied to, they were the only one that offered me a full ride scholarship.

I would just note that I know a lot of people, the other Nepo babies when I grew up who had this delusion they, they were gonna be able to ride these sort of nepo baby pure age networks.

Simone Collins: Yeah.

And, and if they, if they had matured in a pre-internet age and also in a pre businesses widely accepting private equity and growth, growth funds and stuff, and having outside boards,

Malcolm Collins: well, because what happened with their dads or their granddads is, oh, you know, we need a new president of the company.

It's going to be one of the kids or the grandkids, right? Mm-hmm. Mm-hmm. That was just sort of taken as a four granted thing. Yeah. Whereas as soon as you develop the modern board ecosystem, which really developed, while in, in my generation, you're actually at a disadvantage if you happen to be the son or grandson of the last president of the company.

Mm-hmm. Because people are going to be asking. Well, is ageist here because of nepotism or are they really the best person to run it?

Simone Collins: Yeah. This not You have a huge chip on your shoulder if you're doing that. Yeah. Yeah.

Malcolm Collins: This is not something that was done before. You know, you'd actually probably have an easier time if you went to try to start a, a separate company or use family wealth to start a separate company, which totally is actually a lot harder to do.

And so you end up in this situation where an entire generation was raised thinking that if they went to the Dallas Country Club and they played this, by the way, this is a country club that costs like. I can't remember. Hundreds of thousands. Oh yeah. We looked it up

Simone Collins: recently and the buy-in was huge.

Yeah. It was insane. 500 It was, was even more than like the Bohemian grove.

It is 225,000 right now.

Simone Collins: It's it was off off.

Malcolm Collins: Yeah. The Bohemian Grove wasn't that bad. It seemed affordable.

Simone Collins: Yeah. Except you have to like wait 40 years.

Malcolm Collins: Well, yeah, the Bohemian grove's wait time is 20 years and that's what makes it a pain in the butt.

Yeah. And you have to get I don't wanna go too much into that, the way the Bohemian growth structures. But again, these are things that I have. Deep knowledge of that. I think a normal person may not have deep knowledge of. And so, well that's, that's, that's why

Simone Collins: we're talking about this is I think normal people have all these misattributions about how social class works today and how it's going to work soon.

And so they totally are missing the boat. And I don't, I don't want at least start, at least their Patreon subscribers. I don't want 'em to just the boat. They can get on the boat. Okay.

Malcolm Collins: Everyone else there go And entire generation of the elite of the blue bloods have basically been wiped out. I, I'd say it was in two generations.

Simone Collins: Yeah.

Malcolm Collins: The entire concept of Blue Blood Elite Yeah. Has been wiped out. Yeah. 'cause something you need to remember about Blue Blood Elite is they rarely stay elite through just having lots of wealth. Unless you're in Europe and you can be like, why? Unless you're in Europe where you have higher taxes and higher intergenerational taxes.

Because in Europe the tradition is within the aristocratic families is everything goes to the oldest male heir. And actually. It was typically thought of in Europe as this great curse. And this was done in Ireland to sort of break the back of the Irish people where they forced by law after conquering them to split their wealth evenly among sons.

And it was seen that this would make the landed classes and the great aristocratic families become poor very quickly because, you know, you have a lot of kids and then you need to split every generation and that family becomes less wealthy. This is never really the way things worked in the United States, even among the elite families.

And so the only way that you got elite families in the United States was if you had a system for intergenerationally transferring. A method for learning to produce and capture wealth and power yourself. And there were many different systems here, but one was this Texas aristocratic old boy system that completely dissolved the functioning system.

And then the few kids of those kids, because I've met them as well where their family has some intergenerational wealth these kids of the kids then come in and they say they get brainwashed into communism. The family was unable to intergenerationally transfer cultural values to them. So they're having very few kids themselves.

They're not developing skills that allow them to consolidate or, or gain meaningful power. And they're not even playing the game anymore. They're playing this weird Hollywood game, which is another social class, which is also dying. So the entire. Blue Blood Network, I think in the United States of the seventies and eighties and, and, and, and maybe going back to the 1920s, when you really see the start of this of, of, the modern context of it is going to completely dissolve within this generation because it's already mostly dissolved.

It's at like 2% of what it used to be.

Simone Collins: Well, they even see it as a feature giving away their wealth, you know, because they, they hate their wealth and they've learned to hate their families and themselves. So, and

Malcolm Collins: so this culture, the American blue blood culture is functionally dead.

And then people can say, well, how did families like yours? Transition so seamlessly, right? Like, because apparently some families made the transition to the VC culture and appear, I hope to make the transition again was the next cultural changeover.

As a note as to why my family culture was so different from the other quote unquote, elite aristocratic cultures within Dallas, it's because they were descended from the backwards cultural tradition, whereas many of the people who took on aristocratic status were from the.

Cavalier cultural tradition of the deep south, , which is much more comfortable being aristocratic in a normal sense, whereas the backwood cultural tradition was never really comfortable with even the concept of an aristocracy. And so there was always this perception of, well, the strong should always survive and you need to prove that you're the strong to inherit this status that you were given unfairly.

And I think it's because certain cultures in America adopted the mindset as my family did, of do not look at what the other quote unquote elites are doing.

Focus entirely on this play and was in my family. The play was always one, don't expect to inherit anything. Actually it's pretty rare intergenerationally within my family. Two people like the fact that I inherited 30 K for my dead mountain, like that's actually been normal for my family throughout history to not inherit large amounts.

And a lot of people can be like, oh, really? Why did they do that? And it's because, well, when you don't expect to inherit money you are much more focused on how do I use the arbitrage that find family's position gives me to create more money or to build stable income streams. The other thing they did was focused incredibly hard on education and, and being more educated than anyone around us, but also on cunning was always really like, always out, out plan and out cu the other people who you are fighting against and always come with the deck stacked in your favor because of education.

And use whatever you can except for nepotism . And always that

Simone Collins: implies cheating. Malcolm, your, your family doesn't actually have a

Malcolm Collins: No, no, no.

Stack the deck in your favor was, was knowledge and plans. Oh. Always, you know, you know, go into any room or any, any knowing everything, and you've even seen me do this when we go into business meetings and people are always surprised. They're like, wait, how do you know everything about my life? You know?

And it's like, well, I obviously created a dossier on everyone I'm meeting with before I got here. Did everyone else in the room not do that? You know, this is an investment meeting of, of course. And I remember at first I was very surprised that other people weren't taught to do this. And this is like a, a family tradition.

And also to never go for, and I remember this was so strongly embedded in me to never go for the jobs that have a cap on the wealth that they generate. So I was told I would be disowned if I would became a lawyer or if I became a politician or if I became a doctor like my mom was because I almost went to medical school at one point and she was rabidly against this.

She's like, that puts a pretty low cap on how much money you could make. To say we don't have doctors in the family, but they're involved in like running large medical enterprises. And my mom thought that if I went into this, I would get sucked into the very narrow world of like actually being a doctor, doctor, which she saw as, as a very low class thing to do.

Would normal people would see this as a middle class thing to do. Anyway, I'm gonna bring

Simone Collins: this back. Hold on Malcolm. Don't go too far. But I do wanna point out, hold

Malcolm Collins: on. You, you forgot something and it's, I need to go into it. Okay. Which is the Kennedys. Okay. The Kennedys actually represent really perfect sub genre of new elites being created.

Absolutely. 'cause how did the Kennedys earn their money? It was a new economic arbitrage opportunity created by. The prohibition where they made most of their money through the mob. And then the father who made the money through the mob basically said, ah, this arbitrage opportunity. And keep in mind, they were Irish immigrant families.

Like they had no chance before this being upper status Americans. They used an arbitrage opportunity to take this chance, and then the dad taught the kids' generation looking at the way culture was changing. You won't be able to achieve status in the way that I did. Mm-hmm. I'm gonna groom you for politics.

Yeah. 'cause that is the next class where we can cheese things, you know, as Kennedy joked about winning the election because of graveyards, right? Like we know that they likely did cheese election cycles. So anyway, now, now bring it back, Simone.

Simone Collins: Yeah. This is important though to talk about how Nepo baby is for the most part.

And there are exceptions here, especially when it comes to the utility of networks that remains crucial. Nepo babies are dead and yet a huge discussion online about social class is, oh, Nepo baby this. And these people will have these privileges because a huge portion of our culture is all about having an, an external locus of control.

And, oh, I can't succeed because the elite are like holding me out. I'm not gonna say though that, you know, since. The fifties. Social mobility has not only gotten worse for nepo babies, but also is, is is rough for the middle class because specifically university costs which started rising in the seventies just continue to rise like through the nineties and two thousands, like from 2000 to 2022.

Tuition at public were public. So the cheap four year colleges in the US rose by about 60%. And the total cost of attendance room and board increased by nearly 40. And the average cost of college more than doubled between 1963 and 2022. So like that is, is huge. And, and the, the, the sharpest increase has been in public four year institutions, which should not have gone up in cost 'cause they're supposed to be like the US.

States providing education to empower upward mobility, what's going on? Also like housing costs not just in the US but around the world. Began to significantly increase in the early two thousands with another really sharp increase. So like, just getting a house is really hard. So I'm not saying it's hard, I'm just saying it's, you know, but anyway, things are about to change with AI and I'm really excited about it.

So let's go through the, the most obvious to most underrated okay. Of how AI is gonna change things. So as Malcolm, you always say it's gonna concentrate wealth. Like we're gonna see extreme wealth disparity. Everyone's complaining about wealth disparity now. They have not seen anything, they have not seen anything close to what you're gonna see.

Wealth disparity

Malcolm Collins: is gonna be so much bigger in the next generation.

Simone Collins: Yeah. What's, what's also gonna happen, and this is something that kind of came up on the pirate wires. Podcast. They were, they were talking about this when we were guests on it that it, it wipes out very specific social classes, so like white collar workers are doomed.

A lot of people who watch this channel also watch feral historian on YouTube who in, in one of his episodes. I think maybe it was on like a, some version of like Star Trek, universal Basic Income. Mentioned that if, if we define employment as those providing a product or service that someone else wants to pay for, we actually have very few people in, in modern white collar jobs or really the eco like modern economies in general who are actually employed.

'cause they're not like, they're in these like weird middle management jobs that do totally abstracted things. You can't really track that to specific ROI, you know, they're not selling bread, that someone's eating, they are not making, and

Malcolm Collins: so much of those jobs are the most replaceable with ai.

Simone Collins: Exactly.

Yeah. So they're, they're gonna be wiped out. And that's really interesting. Because you know, typically they, they, they, I think they're given this impression that they're quite safe. And I think there's this dawning that you're now seeing in headlines that, oh my gosh, the, despite the fact that I'm educated and connected and all these things, and I have my fancy corporate job with all my great benefits, I'm about to be thrown out on the street, but then at the same time at many low skill workers like manufacturing, retail, transportation, then not all things and we're gonna go into this are also super screwed, you know?

Mm-hmm. Like Uber Eats, delivery people, truck drivers, et cetera are, are really, really screwed. But then there are elements of AI that really increase social mobility, which make us so excited, right. Like with education. We're already so deep into AI education for our kids, and that it like, it, it, it democratizes aristocratic tutoring where, okay, Alexander the Great, he could be tutored by Aristotle, but now our kids could be tutored by Aristotle, but better because he knows about, you know, aquaculture, pharmacology and astrophysics and everything.

Like no single human that could tutor a kid knows anything like close to what AI can tutor your kid about. And, and information is profoundly easier to access and parse. So though the university system is broken. It, you know, we, we now have something so much better. Well,

Malcolm Collins: the university system has become irrelevant for a few reasons.

One is the deification, even with the recent court case of the university, no longer makes it a class authenticating mechanism for many people. Yeah. And it almost can become a confirmation of like when university gets to a cost where it isn't a clear benefit, even the elite universities. Yeah. You can begin to look like you have proven your own lack of belief in yourself by paying for one of these elite university statuses.

Simone Collins: Oh yeah. Like you're telling on yourself by going, you're telling on

Malcolm Collins: yourself that I needed to waste however many hundred thousand dollars rather than just using that to start a company because I thought I needed this status authentication. Which is increasingly becoming the perspective of the centers of wealth that need to be able to accurately judge an individual's competence to know whether or not they should invest in something that they're working on.

Simone Collins: That's, yeah, that's a really good point. The other thing too, in addition to education becoming widely accessible is just the ability to start a company. Startup costs used to be a very serious thing for people. Like you had to actually hire if you didn't know how to code yourself or you weren't a very good coder, a developer to help you.

So it, so most of the stuff for which people raised money, like from seed money, even like growth funds, so coders, customer support, intellectual collaboration, you can get that from AI now. Like, that's huge. And, and already venture capitalists. You hear this all the time on the online podcast, they just widely agree that the next unicorns are gonna be founded by single person or just extremely small teams.

And there's already examples of this. So these, there's these, these there's this YouTube channel I can share with you. It's two weeks old. As, as of the time we're recording this, it has 411,000 Spotify listeners and it's entirely AI generated. And this, this is like a, a totally synthetic act that's hitting cultural philosophy.

It, it is, it is insane.

Malcolm Collins: We also seen you know, stars on a number of apps. Like, like, TikTok and stuff like that turn out to be completely automated. We've seen Yeah. Musicians and bands that are totally automated. Well, and also

Simone Collins: major fundraising and like sale rounds. So there's clearly they, they were the cheat on everything company.

That's, that's what Andreessen Horowitz led 15 million in funding for. Which like is is is pretty crazy too because it, it was co-founded by a 21-year-old named Roy Lee. He was expelled from Columbia University after creating Interview Coder, which was an AI tool that helped job applicants cheat during technical interviews.

And. The, you know, the, this is, this is an extremely small team, and also Wix acquired another one of these really small AI assisted startup companies that was totally bootstrapped. It was called Base 44. Wix acquired it for $80 million. So Base 44 at the point of its acquisition was six months old.

It was just a bootstrapped vibe coding startup. It had eight employees who will split 25 million in retention

Malcolm Collins: bonuses, sorry. Vibe coding for people who don't know means that they weren't actual coders. They did all of the code with ai. Isn't that crazy?

Simone Collins: Yeah. But, but like, the thing is, you can, you can, and also like people spend a ton of money on advertising, but in, in the case of base 44, in six months, they massed 250,000 users and recorded 189,000 in profit in May, despite high LLM token costs.

Like, I mean, they, they like, obviously there's there costs that go into running these, but. I'm just trying to give examples of how now completely bootstrapped young teams that aren't necessarily technical. Geniuses are raising $15 million selling their company for freaking you know, $80 million, getting hundreds of thousands of followers in just a matter of weeks on Spotify and YouTube like this is.

Insane because you used to really need, like, if you wanted to start an entertainment thing, like, oh, I gotta get a record label, I'm gonna need a studio, I'm gonna need a LA equipment. It's insane. Well, look

Malcolm Collins: at our podcast, by the way. So when I talk to people who've been podcasting for longer than us, they're like, oh, well, you know, I have my editor, I have my title card creator, I have my, this is all of these, we do all our editing, all our title card, creating all our research.

Like we don't have an external researcher ourselves for a daily show. That targets, I would say, a, a fairly high intellectual audience like that is not something that would've been possible. I know this is having tried to do podcasts before this before this particular era of ai. And. What you're seeing here is it allows one individual, like let's say in podcast creation to do the entire cycle of that creation.

Or it concentrates the wells of entire wealth, of entire enormous bureaucratic fields like say lawyers, right? Like if you can get an ai that is better than 50% of lawyers now you have concentrated the wealth that would've gone to that 50% with, with some, you know, cost saving measures to a small team.

And we are seeing this across bureaucratic industries, which means massive wealth consolidation.

Simone Collins: Mm-hmm. Yeah. We'll, we'll be honest there. There's not, there are some things that AI can't fix and in order to overcome or like actually make the jumps in, in social class, if you wanna make them you are going to need to be very.

Careful and thoughtful about these. And, and you, Malcolm, come in and tell me what I'm missing here. But I think the really big thing is access to networks because. You know, through anything from like your parents to your social network to elite schooling. Like Gil in the video, he, at one point he, he's told by his father how he's going to be introduced to men of his own kind.

That's a big thing. And also access to capital. I was told that

Malcolm Collins: all the time as a kid. Yeah. And I met these people and now they're all basically unemployed losers.

Simone Collins: I mean, there is that, but, but there's a new class of people who will expose you to ideas and opportunities and funding and connections. It does really matter.

And we'll talk about that. And then there's, there's just also access to capital and cutting edge tools, compute power, proprietary data that it's often, it, we shouldn't lie, it, it is often gated by wealth or connectedness. It's, it's not just like, now it's less about family networks, it's more just affiliation, network.

But like, you know, this even happened with, and it still happens with ethnic cartels, where the, it's, it's possible for like Indonesians to own like the donut industry in California be