This week, we're joined by Rory McElroyal to talk about the perils of having no white people in your ads, and why it's a good idea to have a mix of different ethnicities in your adverts. Plus, Neil Diamond's new musical, A Beautiful Noise, is coming to Toronto.
00:00:51.780Broadway's smash hit, the Neil Diamond musical, A Beautiful Noise, is coming to Toronto.
00:00:57.180The true story of a kid from Brooklyn destined for something more, featuring all the songs you love, including America, Forever in Blue Jeans and Sweet Caroline.
00:01:06.700Like Jersey Boys and Beautiful, the next musical mega hit is here.
00:01:10.760The Neil Diamond musical, A Beautiful Noise.
00:01:13.540Now through June 7th, 2026 at the Princess of Wales Theatre.
00:15:14.280So it pays you to be, so there's a double whammy there where it pays you to be experimental in youth and slightly conservative with old age.
00:15:22.040And that's why having teenage children when you're about 50, which is kind of the age at which people tend to have teenage children nowadays,
00:15:30.820is particularly maddening because just as you're getting to, let's go back to Madeira for the fourth time,
00:15:37.640your kids are going, I want to go to the Rio Carnival, okay, which sounds to me like a living nightmare.
00:15:42.960But so marketing people, Madison Avenue doesn't understand Main Street brilliantly well in some ways.
00:15:50.360It doesn't matter with certain brands, which are also targeting those people.
00:15:54.900But advertising has probably served mainstream brands less magnificently than it has kind of what you might call prestige brands.
00:16:04.220Or in other words, there are those two human motivations, which is the urge to stand out and the urge to fit in.
00:16:09.620And I think people in marketing understand, Kevin Chester's a planner in advertising who's written about this a little bit,
00:16:17.820which is advertising people tend to understand the urge to stand out, to do something different, you know, to be the first in your street too, okay?
00:16:27.440They're not so good at understanding the concomitant human urge, which is I just want to fit in.
00:16:33.360Well, this is something that actually I was going to talk to you about that you've perfectly segued us into because I was driving through London the other day and I saw Jaguar.
00:16:41.900Now, Jaguar obviously had this ad that everybody thought, I don't know what everybody thought, but many people thought was terrible.
00:16:47.220And then they had the slogan on one of the advertising hoardings, which I thought was very interesting and very telling in a political context, which was copy nothing.
00:16:55.140By the way, by the way, that phrase...
00:17:13.640And you might argue that Jaguar at its absolute height with the XK120 or the E-Type was a staggeringly original, you know, extraordinarily revolutionary car brand.
00:17:30.540I'm much more sympathetic to that campaign than many people.
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00:18:57.080I'm much more sympathetic to that campaign than many people.
00:19:02.040And the reason is that what they're doing is not good brand management by the standards of someone who has a great brand in a growing category which they want to maintain.
00:19:13.840So it breaks all the rules of what you might call brand consistency if you were tied to detergents.
00:19:24.220However, and this is important, I think there are cases where you do break those rules, one of which is challenger brands.
00:19:32.100OK, in other words, if you're Octopus Energy, for example, you don't behave in the same way that you would if you're British Gas or BDF.
00:19:41.300OK, and secondly, brands where their category is undergoing enormous kind of cataclysmic disruption.
00:19:52.320And in this case, first of all, I think it's quite important, by the way, that one element of Jaguar, the Jaguar brand, which should be important, is a large part of the cars should be manufactured in the UK.
00:20:02.300OK, consequently, they're going to be expensive.
00:20:07.400Consequently, you are not going to be a volume carmaker.
00:20:10.940You're going to be much closer to Range Rover, if you like, or even more expensive still.
00:20:16.520If you want to maintain that kind of element of where your cars are made.
00:20:22.200OK, but it's fair to say that the coming of electrification is a little bit like the coming of the iPod in the music industry.
00:20:31.020OK, the usual assumptions and therefore the usual brand hierarchies no longer really apply.
00:20:39.180So we are seeing people who migrate from an Audi to a Skoda.
00:20:43.320In other words, they migrate from a petrol Audi to an electric Skoda.
00:20:47.380Quite a common pattern of behaviour, by the way.
00:20:50.460OK, both of them by the same company, actually.
00:20:52.500I know. Yeah. So it doesn't actually make any difference.
00:20:55.000But it's something that no one envisaged would happen.
00:20:58.540Yeah. OK. And so consequently, you have, you know, for example, German brands which have built an enormous amount of heritage around their competence in manufacturing, in particular, the internal combustion engine.
00:21:40.140OK, so in the end, I got to replace the cabin HEPA air filter because I felt sorry for them and wanted to give them something to do.
00:21:48.000Because I suddenly realised these poor garages who once made a, you know, a fairly pleasant living replacing your air filter and tweaking various, you know, parts of your car.
00:21:57.860Now, effectively, you know, I mean, I'm sorry, but Faraday kind of wins this one just on the basis of simplicity.
00:22:04.800Once you have reasonable battery energy density, you can't compete.
00:22:12.360And so you have this very interesting position where what is the standard hierarchy in, you know, the automotive world, which has been pretty, you know, it's pretty stable.
00:22:26.740And it's one of those it is one of those cases like the music industry where, therefore, doing something completely radical because you're going to need a completely different target audience.
00:22:36.600You cannot survive an electric car maker, particularly selling low volume, super premium cars, selling to people who are highly nostalgic about, you know, driving gloves.
00:22:48.860OK, so to some extent, you have to acknowledge that the the market is going to move very dramatically.
00:22:58.720And therefore, you have to do something which seems, you know, in some ways, it seems slightly counterintuitive.
00:23:04.820You have this amazing heritage. Why would you turn your back on it?
00:23:08.360But it's a little like the problem of red telephone boxes.
00:23:12.580OK, everybody loves them, but nobody uses them.
00:23:15.600And it's no good as a brand being widely loved if people aren't prepared to pay for the thing you offer.
00:23:22.620But surely there is a market, Rory, for the nostalgic experience in which you have the battery powered car, but you have it with the Jaguar wood paneling where the moment you get in, it evokes George Best, the 1960s, the type, blah, blah.
00:23:41.160And it feels like heritage, which is completely different to sitting in a Prius, for example, which is utterly functional, does the job.
00:23:53.940And certainly the early prototype had really interesting use of things like stone within the car.
00:24:00.220It's going to be a craft built car, given the price point they're envisaging.
00:24:04.320OK, but you've got to remember that the Jaguar XK120 was a supercar at a bargain price, 120, because it could go 120 miles an hour, which at the time was serious shit.
00:24:18.080OK, and the E-Type was they were modern cars.
00:24:23.160OK, I mean, I don't think, you know, you can you can argue.
00:24:31.640It's completely wrong to say, you know, I mean, undoubtedly, by the way, there is a very, very interesting business which takes old classics and electrifies them.
00:24:40.980Fascinating business, because in some ways it's a gorgeous car because you have all the reliability, quietness and everything else and performance of an electric car.
00:24:50.780I mean, there's someone who makes electric classic Range Rovers.
00:24:54.200I mean, literally from the 70s, they take Range Rovers from the 1970s and electrify them.
00:24:58.720I think it's a fantastic business, but I don't think I don't think it's where where JLR should be.
00:26:40.180I also accept the fact that, you know, people like, you know, I respect greatly Byron Sharp, Mark Ritson, sort of marketers get very cross about it because their whole point is how you effectively stay true.
00:26:52.380To to long established brand values that have been bought at great expense over time.
00:26:57.460But you have to acknowledge the fact that those values were making a lot of people love Jaguars, but not many people were buying them.
00:27:05.260But what I'm asking, Rory, is something else, which is you talked about how people in advertising and marketing are disproportionately young, disproportionately open to experience on the trades, etc.
00:27:14.700And it just I think what a lot of people sense is that they're really talking to themselves.
00:27:19.780And the problem is, I don't know how many 28 year old marketing advisors or consultants are buying Jaguars.
00:28:06.160I think this is the double zero, isn't it?
00:28:08.320It will start to launch two or three electric performance, pretty high priced vehicles for which what we have to do is say, OK, well, before we start agonizing about who the market is, we've got to say how big is the market for this?
00:28:28.060Is there a market for a super premium luxury electric car from a brand that's known, you know, for a brand that actually has probably lost relevance?
00:28:36.960I mean, my sister-in-law wouldn't buy a Jaguar because she saw them as an old man's car.
00:28:44.140OK, you know, you can't if you can have loads of people loving a brand, but if they ain't buying it, OK, it's the you know, it's the red telephone box from we all love.
00:29:18.420Now, bear in mind, I'm partly defending them just to be a little bit perverse because I thought the degree of the degree of a program didn't take account of the business situation in which they found it.
00:29:28.580I think it speaks to the political dimension.
00:29:30.580And this is this is what I was trying to pick up on with the slogan, because it's interesting that it's the original slogan.
00:29:35.620But I just thought the slogan copy nothing is the most progressive slogan that you could ever possibly conceive of.
00:29:45.940So so this is because copy nothing essentially is, you know, it's year zero.
00:29:52.160That that's kind of the the mindset behind it.
00:29:54.860And in fact, it's not possible to make a car while copying nothing because it's still got the the wealth of human history built into it.
00:30:03.060OK, the world, the world, the world would be a much happier place, I think, if it understood that there is a kind of universal law to things, which I would include evolution, animal foraging, algorithm design, business behavior.
00:30:19.940OK, and that thing is occasionally is usually called the explore exploits tradeoff, which is what part of your resources do you spend exploiting what you already know?
00:30:31.320And what part of your available resources do you spend exploring what you don't yet know or what's changed or what, you know, in other words.
00:30:40.000In an incredibly stable environment, you could be where you had perfect information, you could be 100 percent exploit, not percent explore.
00:30:49.780OK, there is a the two actually, I think it's wrong to call it a tradeoff.
00:30:56.260I think they're actually a yin and yang thing.
00:31:05.060But equally, you become decreasingly good at exploiting because you exploit less and less and less if you don't refresh your knowledge by exploring.
00:31:16.560OK, and that's why, by the way, I would argue that marketing and innovation are the two parts of an organization which are not exclusively by any means, but are the epicenter for exploration.
00:31:34.900I think I think marketing and innovation are the same thing.
00:31:37.640One of them is effectively, OK, there are two ways you can make money.
00:31:40.960You can either work out what people want and find a really clever way to make it, or you can work out what you can make and find a really clever way to make people want it.
00:31:49.940OK, now, most successful businesses are a combination of both in some way and some extent there.
00:31:56.060But that is effectively an exploratory activity to some degree.
00:32:00.740What I think has happened in business is business has been taken over by the finance function, for example, which is obsessed with deterministic gains to what you might call efficiency, because they're and effectively it becomes an exploit business which no longer explores adequately.
00:32:21.720And in the short term, it's perfectly reasonable thing to do.
00:32:24.960In the long term, you actually go out of business.
00:32:28.020And an example of this, by the way, which never occurred to me, despite the fact that I worked in marketing for bloody years, it's in John Kay's book, The Corporation in the 21st Century.
00:32:38.460The companies that have been around for 150 years in the Fortune 500 or the FTSE, OK, if you look at the really long-lived companies, they're Unilever, they're Nestle, they're Procter & Gamble.
00:32:49.880They're marketing-led businesses that are constantly having to effectively rethink what they do on the basis of changing tastes, perceptions, needs, etc.
00:33:05.400And it's the focus on the consumer that effectively keeps them dynamic.
00:33:10.260If you focus on your internal efficiency metrics, which I think a large part of businesses actually do now, you gain short-term, very predictable gains, which finance people love and which arguably the stock market loves, at the price of long-term fragility or irrelevance.
00:33:31.020So I made this point for ages about bees, which is that, you know, a large proportion of bees follow the waggle dance.
00:33:38.940They take information on where there is a source of nectar or pollen or something else they collect, and they follow instructions based on existing knowledge, and they go and collect it.
00:33:58.240But to their surprise, bee experts discover that a proportion of bees ignore the waggle dance and go off at random, which in the short term is inefficient.
00:34:09.600However, if you think about it, OK, what happens if you don't have those random bees?
00:34:14.600One, you can never get lucky because you never discover anything new.
00:34:17.080So consequently, you can't actually grow because you're limited by the extent of your own knowledge.
00:34:22.220Secondly, you're highly vulnerable to a change in circumstances, because if cows break into your favourite field and eat all the bloody flowers, you've suddenly got nowhere to go.
00:35:09.740But you're absolutely right in things like respect for Chestertonian fences, that your exploratory activity should be, to some extent, ring-fenced and constrained.
00:35:23.780And not only in extent, but also in speed.
00:35:27.380You don't want people, bees, jumping on every passing fashion.
00:35:31.200You know, they will actually, effectively, it will take time for a discovery made by a scout bee to filter back into the waggle dance.
00:35:41.380But, I mean, I actually met a scientist who's an expert in neurodiversity, who makes the same point, which is she believes that neurodiversity in humans is actually a manifestation of the same thing.
00:35:53.620Which is, you don't want everybody to think alike.
00:36:06.340I mean, you know, I would argue that comedy and humor, which is a human universal, would probably get suppressed in some adults, I would argue.
00:36:16.020That was the weirdest thing about having young children, is how early the sense of humor develops.
00:36:19.820I mean, you can actually play jokes with, you know, with infants who have no faculty of speech.
00:36:27.100You know, you can actually do silly little, OK, it's a bit slapstick.
00:36:31.180You know, it's not verbally sophisticated, but you can make them laugh.
00:36:50.040Yeah, I had these two imaginary places with my children called Poo Town and Wee Town.
00:36:54.340And I had to tell these incredibly long, convoluted bedtime stories about basically a place that was absolutely obsessed with faeces and another place.
00:37:02.720I remember my friend at university rang the professor of Hungarian at the University of Cambridge.
00:37:24.200But Rory, let's go back to something, because I think this is a very important point, which is the thing that gets my goat personally.
00:37:31.420And as someone who doesn't identify as conservative, despite what everybody else says, is the moralistic aspect of this, where I look at these companies...
00:39:31.020John Cleese and I both agreed on this, which is, I mean, there are creative artists who don't agree on it.
00:39:37.200But I don't think the trigger warnings at the beginning of films are an altogether bad idea.
00:39:41.280If you've had some traumatic experience in your childhood...
00:39:43.380I mean, I had a friend who went out of a film when I was much younger in tears because, as it happened, he'd shot a friend in the eye with an air rifle in his early childhood.
00:39:54.480And the film showed someone being injured in the eye and the whole thing, you know.
00:40:10.960And the intentionality not to upset people is, after all, behind things like politeness and gentlemanly behaviour and very, very traditional conservative values, OK?
00:40:22.940However, what you don't understand if you live in a bubble is reactance, which is there are behaviours that people are actually perfectly willing to adopt.
00:40:35.360But if you tell them to do it in the wrong tone of voice, they will actually develop a counter...
00:40:41.120In other words, this is literally a case where the activity is well-intentioned but counterproductive.
00:40:47.160And I think there's been a lot of that.
00:40:48.920I mean, you know, I think that when things become patronising, moralising, when, for example, I mean, this was particularly true.
00:42:44.980You've probably been to a farmer's market.
00:42:48.200To construct a farmer's market, first of all, it has the completely bizarre thing, which is that you buy direct from the manufacturer, but you pay more.
00:42:55.880Secondly, it's an unbelievably inefficient way of buying anything.
00:43:01.900Basically, what you do to construct a farmer's market is you take a Tesco metro and you make it really shit, OK?
00:43:07.760You've got to pay in six different places to buy five different things.
00:43:43.240And we also, in a sense, there's probably an element of the jack-of-all-trades heuristic, which is, well, if you only sell dips, they're going to be pretty fucking good, because otherwise you wouldn't be around in six months' time.
00:44:32.900And consequently, it's not safe to say that just because my motive for producing this Gillette ad is well-intentioned, that therefore it will have the consequences that I wished for.
00:44:48.180And by the way, I think a large part of DEI in the workplace has had the unintended consequence of really, really pissing off a large proportion of your own workforce through the implication that they don't deserve to be there.
00:45:05.000I mean, if you're really cynical, okay, you'd say that it suited the interests of employers to reduce the sense of legitimacy of its own workforce.
00:45:20.680Because, you know, in other words, I can't really ask for a pay rise anymore because, you know, I probably shouldn't be here in the first place.
00:45:38.240Cybernetics, by the way, brilliant idea, branding disaster.
00:45:42.600It's a very, very interesting idea which studies the flow of information within organizations and the biases and constrictions and bottlenecks that affect information.
00:45:55.020Whereas what we tend to do is look at businesses through the lens of the flow of money.
00:45:59.180This is looking at things through the lens of information.
00:46:02.680And the problem with cybernetics was about six years after it was invented, Doctor Who came up with the Cyberman, which, broadly speaking, ruined the chances of this discipline through a completely unpredictable nexicographical misfortune.
00:46:18.680But one of the great phrases of Stafford Beard, I think, is the purpose of the system is what it does, which is you can have this system which is intended to do this wonderful thing, and it can actually end up having not only unintended consequences, it can end up being massively counterproductive.
00:46:36.680And I think that happens all the time, because when we intervene in a complex system, this isn't a simple Newtonian relationship between input and output.
00:46:48.040Completely weird and strange things happen.
00:46:50.760And by the way, I mean, I'm going to go off on a slight tangent here, which I have to do.
00:46:58.080There's an informational problem with the NHS, which nobody's talked about nearly enough.
00:47:03.160There's also a problem with journalism to the same effect, OK?
00:47:07.140Now, in the United States, the customer, if you like, of a hospital, for example, is to some extent the patient.
00:47:17.540He's also insurance companies and everybody else, but ultimately it's the patient.
00:47:22.400If you're a doctor at the Mayo Clinic and you go on the record saying, actually, the Mayo Clinic's a bit shit and we haven't got enough equipment and there are patients in all the corridors,
00:47:30.640none of the other doctors will ever speak to you ever again, because you've basically shat on their turf, OK?
00:47:36.000Because it might discourage customers from coming to the hospital.
00:47:38.880So it's in the interests of American hospitals to pretend they're better than they really are, although, to be fair, the Mayo Clinic is incredibly good.
00:47:45.280So I don't want to make enemies there.
00:47:48.860In the NHS, your source of funding is the government.
00:47:51.360So the collectively healthy thing to do is to say we're really beleaguered.
00:47:56.120There are patients lining up in the corridors.
00:47:58.460Now, let's say you're an NHS consultant dermatologist and you appeared on Sky News and said, frankly, it's a bit of a piece of piss.
00:48:10.420And, frankly, you know, frankly, you know, I've got a nice office with a swivel chair and I've got all the funding I could possibly want.
00:48:18.180None of the other doctors will ever speak to you ever again, because you've broken the rule, which is you have to say how bad things are.
00:48:23.560Now, I'm not saying the NHS isn't in a bad state, although many of my experiences with it are actually much better than I expected.
00:48:32.460It's got a particularly bad user interface and it's not very good at presentation.
00:48:37.080OK, but actually the fundamentals of what it does, for the most part, I personally, I found pretty impressive.
00:48:43.600Oh, usually when you get the treatment, it's pretty good.
00:48:45.620I think the reason people are very concerned about the state of it is the fact that you have to wait a long time to be treated, which you do for many, many things.
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00:51:16.500Now, in journalism, if you write anything that's positive about anything, OK, you are regarded to be basically in the pocket of the PR industry.
00:51:34.800I mean, I think Paxman actually said it.
00:51:36.480Who is this liar and why is he lying to me is effectively his default position.
00:51:42.140I mean, I was surprised when I first had vague experience of practical politics that there are quite a few cross-party bodies where people perfectly,
00:51:50.240amicably, get on with people across the political divide to try and solve a problem to mutual advantage, OK?
00:51:57.200I didn't really realize this was going on.
00:51:59.280I assumed the whole thing was just about inter-Nissan conflict.
00:52:02.900Now, you have this problem in journalism, particularly in the U.K.
00:52:05.800In the U.S., they will hero a company.
00:52:09.120In fact, they'll show an unhealthy degree of deference and respect towards just very rich people in the U.S.
00:52:16.900In the U.K., we do have an opposite problem.
00:52:19.120I think there are really, really interesting businesses in the U.K., you know, extraordinary businesses like Octopus Energy, for example,
00:54:47.440they're insanely upbeat, you know, you know, plucky British troops, you know, fending off whatever.
00:54:54.700They're very, very patriotic, first of all.
00:54:57.700And they are actually very, very optimistic about the future, OK?
00:55:03.740So, you know, the 1930s, which was probably the high point of innovation, to be honest,
00:55:07.800in, you know, certainly outside the field of bits.
00:55:11.380You know, my grandmother went from collecting rents in a horse pony and trap to effectively jet travel in her lifetime.
00:55:22.340It was very, very, you know, positive.
00:55:26.320And so something bothers me about this, that there are a lot of things where there are very heavy informational asymmetries.
00:55:35.260And I think we just have to be conscious of those.
00:55:36.760I mentioned the NHS, which is, it is in no one's interest in the NHS to spread a good news story,
00:55:42.760unless it's about how brilliant the director of the local trust is, OK?
00:55:47.360Because, effectively, you will lose social, you will be a social outcast for suggesting the problem is less than it is, OK?
00:55:58.900There's undoubtedly a negativity bias.
00:56:01.520Now, where this FT marketing person is very clever is she says that that's true of what gets someone to buy a newspaper or go to a website.
00:56:13.160But most of our business is subscription.
00:56:16.180And what people like to read is not the same as what makes people buy a publication.
00:56:22.800Now, if you look at successes, I would say the spectator, I would say this, wouldn't I,
00:56:27.200is actually reasonably balanced between optimism and pessimism and between, you know, positivity and negativity.
00:56:35.000You know, it's not a doom-mongering publication.
00:56:37.680You know, I can write positive articles.
00:56:40.760The Week, which is a fantastically successful, again, that's probably, what, 80% subscription-based, OK?
00:56:47.620So, the FT, her argument is that, actually, once we're a subscriber to a publication, rather than, like, once we make friends with someone, OK,
00:56:58.640we don't want them to be a massive, great doom-monger, OK?
00:57:02.340That's an element of journalism which actually comes from the days of newsstand sales.
00:57:07.780And that, actually, the negativity bias in journalism might be excessive.
00:57:14.740It's simply an interesting thing to explore.
00:57:16.800So, it's rather like sugar and salt in food.
00:58:25.600Rory, let's take a detour from our side now.
00:58:29.840One thing we wanted to talk about, because we're running out of time, is marketing and kind of PR when it comes to the political environment now.
00:58:42.320So with the political parties in the UK and also with Donald Trump, is there anything that stands out for you that you think is interesting to mention?
00:58:50.160One thing that struck me as a bit weird is that Trump derangement syndrome seems to be much less this time around.
00:59:02.640So, but why does what is, after all, I mean, the difference between a decisive win and a narrow win is probably only, you know, 600,000 votes in the right place.
00:59:13.780It was a very demoralizing defeat for the Democrats in America.
00:59:17.680One also has to contend that the Democrats in the United States are the biggest sort of marketing fuck-up you can possibly imagine.
00:59:36.900But, I mean, if you've got some sort of party operation, there must, there has to be a mechanism where you go, look, you cannot win.
00:59:44.260Or rather, you know, in other words, the chances are that in some debate or some other thing, you fall down a flight of stairs, whatever happens, that, you know, that renders the whole thing impossible.
01:01:56.740I think one of them involved a motor caravan.
01:01:59.760Well, I remember there was some kind of sex scandal in the Lib Dems where somebody was accused of having touched someone's back inappropriately.
01:02:07.180And the line at the time was, only the Lib Dems could have a sex scandal without any sex.
01:02:22.760Because of failures to, you know, we are all three Remainers or Remain voters who've then become, you know, very antagonized by the behavior of our fellow Remainers.
01:03:08.660And the first thing you've got to do is you've got to break this appalling stranglehold that there's a combination of lawfare and economics.
01:03:17.500It's also worth noting, by the way, that the economic interests of a government and the economic interests of an individual do not actually align that well in that government would like to grow GDP rather than GDP per head.
01:03:33.480How would you rebrand the Conservative Party?
01:03:35.060I think the first thing you've got to do is it, what are true of all political parties, are far too much enthralled to neoliberal economic theory, which is only has partial explanatory value, doesn't have that much predictive value.
01:03:49.900And the extent to which, the first thing you've got to do is effectively, I would probably, well, first of all, I'd probably go heavy on localism.
01:04:02.640I think there's a massive case for the devolution of power.
01:04:06.460If I'm right, Kent is actually effectively devolving.
01:05:18.300And equally, I'd say there are people who behave exactly as economists think people should behave, but you don't want them as your customers, okay, as a business.
01:05:25.860You know, they're the last people you want to do as customers.
01:05:27.740They'll just go to someone who's 3% cheaper, you know, with no particular loyalty, affinity, or anything of the kind.
01:05:35.260They're awful people to have as customers, e-cons.
01:05:37.680And my great complaint was that I think a lot of people feel cheated having voted Labour because, as I said, having someone from the Bank of England who's an economist as Chancellor of the Exchequer, okay, in a Labour government, is a bit like going on a Club 1830 holiday and taking your parents along.
01:05:58.480It kind of defeats the object of the whole exercise.
01:06:01.380But if you're going to vote Labour and yet you're going to have exactly the same kind of, you know, financial paranoia that you had before, what was the point?
01:06:12.020And this comes down to an interesting thing.
01:06:15.400I don't think, actually, Liz Truss tanked the economy.
01:06:19.340I think there was something entirely different going on, which was to do with interest rates and bonds and pension funds, which happened to coincide with that.
01:06:27.520But the narrative that as soon as you do something fairly dramatic economically, you know, effectively you're at the mercy of the bond market, effectively means now that nobody will try anything economically interesting.
01:06:41.000My problem is that I don't really fit comfortably with – the next thing we've got to do, and, of course, no one will get elected after they've done it, is we've got to start taxing wealth more and income less.
01:06:55.340It's absurd the extent to which – I mean, okay, intergenerational inequality is a problem which I don't think – I don't think our generation fully understands because we, at the very least, caught the end of a property wave which has carried us through life.
01:07:19.400There are people – most people our age, and we are in our early 40s now, never had a chance to get on the property light in the first place.
01:07:27.000I mean, we did catch the tail end of it, but it was far less –
01:07:29.400One of the reasons Londoners are left-wing is the person – you know, okay, Londoners are paying a lot of money to transport for London.
01:07:35.480They're paying a lot of money in tax, but they are at least getting something for that.
01:07:38.780The really extractive force for a young Londoner is your landlord.
01:07:44.520And so as a Georgist, of course, I fully believe that we should tax property, and we should tax the consumption of things that are effectively not creatable or renewable.
01:07:56.260And so that would probably include energy, by the way, as well, or at least fossil energy.
01:08:03.940But that's the extent to which the economics doesn't distinguish between rent-seeking activity and creative economic activity.
01:08:16.480Labour tends to be on the creative side of the equation, whereas buying a house and renting it out, I think we can fairly say, sits –
01:08:24.760I'm not suggesting that landlords all have it completely easy, by the way.
01:08:28.380But I'm also conscious of the fact that whoever owns the house where my daughter lives, which is split into three flats, never has to work again simply because they happen to buy a house at an opportune moment in 1983, okay?
01:08:43.740I don't think that's an acceptable state of affairs.
01:08:47.260I think that's – and the weird thing about economics is all economists are conscious of the difference between rent-seeking and value creation.
01:08:55.720And yet no economist ever suggests that you should treat the two activities differently in terms of taxation.
01:09:01.380And so, I mean, first of all, I think it's – I think the property market is simply ridiculous.
01:09:36.280I mean, in London in 1988, I could have, if I'd wanted to, bought a – what was a two-bedroom – no, hold on, a four-bedroom maisonette in Notting Hill,
01:09:47.560admittedly overlooking some railway tracks, for a hundred and something thousand, okay?
01:10:20.520So, if, you know, I'm – to be honest, I think the only reason young Londoners aren't actually becoming murderous is they don't really realise how different it used to be.
01:10:30.700They don't have the chronological context to realise how different it used to be.
01:10:34.380And – but there's a fundamental problem here, which is that if you – this is, you know, a joke I tell to Indian friends, which is there's no point in growing the Indian economy because the surplus will just be spent on weddings.
01:10:47.520And my Indian friend said, look, I got married three months ago.
01:10:53.480But if you have this thing that will basically soak up the greater part of people's disposable ink – my father's belief was that one of the reasons that the 1970s property was cheap was that things like cars, televisions, washing machines, foreign holidays were really fucking expensive.
01:11:11.760And therefore, you didn't have all – you know, if you really wanted a washing machine and you wanted to go off to the Costa every year, you didn't have that much money left to actually spend on your house.
01:11:23.320And now, my argument is, what's the point?
01:11:27.220You know, I would argue that – this is totally self-serving and a load of bollocks, but I'll tell you anyway.
01:11:32.600Anyway, people like me in what you might call the creative competitive economy are helping produce and market and distribute 65-inch televisions for, you know, 650 quid.
01:11:50.060Now, bear in mind, in 1998, such a thing wasn't even available, didn't even exist.
01:11:57.040If you'd shown one of those things to Louis XIV, he would have given you half of Gascony in exchange for your Samsung telly, right, and your drone, right?
01:12:06.880All of those things become miraculous – where there are network effects and gains to scale – become miraculously, insanely, stupidly cheap.
01:12:19.720I will sort of – I will not die on a hill, but I will passionately defend Starbucks, Costa Coffee, Holiday Inn Express, Premier Inn, what I call the satisficer, you know, pretty good quality, very good value brands.
01:12:36.640Because they've done actually a service which they've killed off the shit part of the market.
01:12:42.000Oh, isn't that a bit unfair, though, Rory?
01:12:43.460Rory, come on, like, there's loads of, like, what the Americans call mom-and-pop businesses that have been driven to the wall by these –
01:14:31.400Somebody has to take a call on taxing wealth more, OK?
01:14:37.560The extent to which a bunch of people have done incredibly well through asset price inflation and have ended up, in many cases, completely untaxed on a gain which was utterly unearned.
01:14:47.780Whereas the people who are actually doing the work are taxed at a marginal rate of 40% in taxation, plus then, if you add, for a Londoner, the cost of accommodation and transportation, you end up effectively –
01:15:03.560I worked it out once that, effectively, one of my colleagues, one of my younger colleagues, if I give them 100 quid, they just about end up with about 15, in terms of discretionary disposable income.
01:15:23.040The other thing we need to do is there are areas of economic activity which are highly promising, which we need to explore, and where I think we're too risk-averse.
01:15:36.060I think that one of the cultural changes that's happened over my lifetime is an incredible sort of aversion to harm, OK?
01:16:43.440Now, what's going to happen here is that someone's going to try starting that and someone's dog is going to be mildly hurt by a falling tin of baked beans.
01:17:35.520My grandfather, the doctor I mentioned earlier, he had a guy who sort of drove for him and repaired his car, who'd been in the trenches in World War I.
01:17:44.160And the story I told my grandfather was they had an officer, didn't particularly hate him.
01:17:49.720They thought he was a bit fresh, new, and over-eager, OK?
01:17:53.860And so he was slightly annoying as an officer, but, you know, nobody they particularly despised, OK?
01:17:59.600And one day, he decides to lead a charge out of the trenches, goes up the ladder with his Webley .45,
01:18:06.380and gestures forward and goes, come on, men, forward, OK?
01:18:10.700At that point, his shoulder is hit by some shrapnel, which means his arm completely detaches from his body,
01:18:17.780flies forward about five feet, still holding the revolver, where his arm lands in the mud, OK?
01:20:01.700But equally, you can't have a world where no one's allowed to eat nuts under any circumstances because someone somewhere may actually be, you know, may have a bad reaction to them.
01:20:13.040You can't calibrate the world that way.
01:20:22.580So join us on Substack where we ask Rory your questions.
01:20:28.540Who will be the winners and losers from the age of AI in marketing and advertising?
01:20:37.900Broadway's smash hit, the Neil Diamond musical, A Beautiful Noise, is coming to Toronto.
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01:20:52.820Like Jersey Boys and Beautiful, the next musical mega hit is here, the Neil Diamond musical, A Beautiful Noise.
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