1 00:00:15,356 --> 00:00:23,556 Speaker 1: Pushkin. Today's show is about rare earth elements, which suddenly 2 00:00:23,596 --> 00:00:26,956 Speaker 1: in the past year or so have become very big news. 3 00:00:27,956 --> 00:00:30,116 Speaker 1: Rare earths have in fact been a big deal for 4 00:00:30,156 --> 00:00:34,196 Speaker 1: decades because you need small amounts of various rare earth 5 00:00:34,236 --> 00:00:39,836 Speaker 1: elements for basically anything with an on off switch for laptops, phones, 6 00:00:40,036 --> 00:00:45,596 Speaker 1: electric vehicles, drones, missiles. I don't actually know if missiles 7 00:00:45,596 --> 00:00:47,916 Speaker 1: have an on off switch, but you do need rare 8 00:00:47,916 --> 00:00:51,596 Speaker 1: earth for missiles. And we suddenly started to hear more 9 00:00:51,636 --> 00:00:56,396 Speaker 1: about rare earth's last April because the day after President 10 00:00:56,476 --> 00:01:01,276 Speaker 1: Trump announced new high tariffs on China, China said, okay, fast, 11 00:01:01,316 --> 00:01:03,196 Speaker 1: the way it's going to be, We're gonna make it 12 00:01:03,316 --> 00:01:06,596 Speaker 1: very hard for you to buy stuff made with rare earths. 13 00:01:07,076 --> 00:01:09,836 Speaker 1: And China can do that because they have choke hold 14 00:01:09,876 --> 00:01:13,516 Speaker 1: on the global supply of the essential components made with 15 00:01:13,716 --> 00:01:16,716 Speaker 1: rare earths, the magnets and other things that go into 16 00:01:16,716 --> 00:01:20,636 Speaker 1: our cars and iPhones and missiles. This raises some very 17 00:01:20,636 --> 00:01:24,556 Speaker 1: important questions like how did China get a choke hold 18 00:01:24,636 --> 00:01:29,076 Speaker 1: on rare earths, and more urgently, what's the US gonna 19 00:01:29,076 --> 00:01:43,276 Speaker 1: do about it? I'm Jacob Goldstein and this is what's 20 00:01:43,276 --> 00:01:46,796 Speaker 1: your problem? My guest today is David Abraham. He's the 21 00:01:46,836 --> 00:01:50,796 Speaker 1: author of the book The Elements of Power, Gadgets, Guns, 22 00:01:50,836 --> 00:01:53,516 Speaker 1: and the Struggle for a Sustainable Future in the Rare 23 00:01:53,636 --> 00:01:57,716 Speaker 1: Metal Age. David started out as a commodities trader back 24 00:01:57,756 --> 00:01:59,916 Speaker 1: in the aughts, and then he went to Asia to 25 00:01:59,956 --> 00:02:02,956 Speaker 1: do research and got interested in rare earth's back in 26 00:02:03,036 --> 00:02:07,996 Speaker 1: twenty ten. The fundamental problem David is addressing is this, 27 00:02:08,836 --> 00:02:12,236 Speaker 1: what should the US do about China's chokehold on the 28 00:02:12,356 --> 00:02:16,276 Speaker 1: rare earth supply chain. As you'll hear, he thinks the 29 00:02:16,356 --> 00:02:19,636 Speaker 1: current US strategy could wind up costing billions of dollars 30 00:02:19,716 --> 00:02:22,676 Speaker 1: without solving the problem, and he has a big idea 31 00:02:22,796 --> 00:02:26,956 Speaker 1: for what we should do instead. Before we get to 32 00:02:26,956 --> 00:02:29,876 Speaker 1: the interview, I should say the thing people always say 33 00:02:29,956 --> 00:02:33,796 Speaker 1: about rare earth elements. They're not actually that rare in 34 00:02:33,876 --> 00:02:36,596 Speaker 1: the sense that they're found in many parts of the world. 35 00:02:37,396 --> 00:02:40,956 Speaker 1: There are seventeen rare earth elements, and the reason they're 36 00:02:40,956 --> 00:02:43,916 Speaker 1: called rare earths is that they're found in very small 37 00:02:43,956 --> 00:02:47,476 Speaker 1: amounts mixed in with other elements. So it takes a 38 00:02:47,516 --> 00:02:49,116 Speaker 1: lot of work and a lot to know how to 39 00:02:49,276 --> 00:02:52,556 Speaker 1: mine and refine them. If you go back in history, 40 00:02:52,636 --> 00:02:56,116 Speaker 1: you see that the US dominated production of rare earth 41 00:02:56,236 --> 00:03:00,196 Speaker 1: through the nineteen seventies. After that things started to shift 42 00:03:00,236 --> 00:03:03,956 Speaker 1: to China to start. I asked David how that happened. 43 00:03:04,596 --> 00:03:09,036 Speaker 2: So they start producing these materials because they needed hardcore. 44 00:03:09,196 --> 00:03:12,036 Speaker 2: See it was the nineteen eighties or early nineteen nineties. 45 00:03:12,436 --> 00:03:15,156 Speaker 2: They were able to mine this stuff up and send 46 00:03:15,196 --> 00:03:18,236 Speaker 2: it out and at the time they're making Christmas lights 47 00:03:18,956 --> 00:03:24,996 Speaker 2: and T shirts. They're not thinking about larger developed products. 48 00:03:24,556 --> 00:03:25,236 Speaker 3: If you will. 49 00:03:25,276 --> 00:03:27,756 Speaker 2: But they slowly start to realize as their ambitions start 50 00:03:27,796 --> 00:03:31,156 Speaker 2: to increase that they want to be able to make cars, 51 00:03:31,196 --> 00:03:35,076 Speaker 2: and they see these materials as really critical to the 52 00:03:35,116 --> 00:03:38,636 Speaker 2: manufacturer of these products. So what they start to do 53 00:03:39,116 --> 00:03:43,796 Speaker 2: over time is start to develop those industries. Because in 54 00:03:43,836 --> 00:03:46,836 Speaker 2: the West, people don't want to dig up. They don't 55 00:03:46,836 --> 00:03:50,156 Speaker 2: want to dig up earth. No one wants to mind 56 00:03:50,196 --> 00:03:53,356 Speaker 2: in their backyard. People don't want processing, and for most part, 57 00:03:53,436 --> 00:03:56,076 Speaker 2: people who graduate college or high school want to be 58 00:03:56,196 --> 00:03:59,356 Speaker 2: going into more comfortable jobs. And so the Chinese raise 59 00:03:59,436 --> 00:04:02,276 Speaker 2: their hand and basically say, hey, listen, we'll do this work. 60 00:04:02,596 --> 00:04:04,876 Speaker 2: We need the money, and we're starting to see that 61 00:04:04,916 --> 00:04:06,996 Speaker 2: these materials are critical to the products that we want 62 00:04:06,996 --> 00:04:09,916 Speaker 2: to make in the future. So over success of five 63 00:04:09,996 --> 00:04:13,956 Speaker 2: year plans, which is how Beijing looks at its economy 64 00:04:13,956 --> 00:04:16,516 Speaker 2: and how it wants to go forward, it starts to 65 00:04:16,676 --> 00:04:20,596 Speaker 2: figure out that they want to develop these materials at 66 00:04:20,596 --> 00:04:25,076 Speaker 2: the heart of a high tech society that is slowly 67 00:04:25,156 --> 00:04:29,916 Speaker 2: starting to go from military to green technologies to high technologies, 68 00:04:29,956 --> 00:04:32,516 Speaker 2: and they want to make everything within their country. 69 00:04:32,596 --> 00:04:33,276 Speaker 3: So it was a. 70 00:04:33,236 --> 00:04:37,076 Speaker 2: Slow process, and it wasn't something that China woke up 71 00:04:37,876 --> 00:04:40,956 Speaker 2: and was secretly doing. These plans were out there for 72 00:04:41,036 --> 00:04:43,716 Speaker 2: the world to see, and it was fine when people 73 00:04:43,756 --> 00:04:46,356 Speaker 2: were thinking, Okay, well I just got my iPhone, I 74 00:04:46,396 --> 00:04:49,276 Speaker 2: don't really have to worry about things. They didn't think 75 00:04:49,276 --> 00:04:52,276 Speaker 2: about where the material was because people were thinking just 76 00:04:52,356 --> 00:04:55,956 Speaker 2: like it's a grape or wheat, as long as the 77 00:04:55,956 --> 00:05:00,436 Speaker 2: market can supply it, then we're fine. It wasn't until 78 00:05:00,436 --> 00:05:02,956 Speaker 2: people started to wake up and realize, wow, these materials 79 00:05:02,996 --> 00:05:06,316 Speaker 2: are very important to the world that we really have 80 00:05:06,436 --> 00:05:08,756 Speaker 2: to understand where the supplies are coming from. 81 00:05:09,196 --> 00:05:10,556 Speaker 3: So it seems to be a more of a wake 82 00:05:10,636 --> 00:05:11,596 Speaker 3: up call. Now. 83 00:05:11,876 --> 00:05:14,836 Speaker 1: I mean, you said something interesting there, like the market 84 00:05:14,876 --> 00:05:21,916 Speaker 1: will supply it, right, which was the basic worldview of 85 00:05:22,436 --> 00:05:26,156 Speaker 1: most people, most elites, say in the US certainly at 86 00:05:26,156 --> 00:05:28,076 Speaker 1: the end of the twentieth and the beginning of the 87 00:05:28,116 --> 00:05:32,476 Speaker 1: twenty first centuries, right, like a belief in trade and 88 00:05:32,596 --> 00:05:35,956 Speaker 1: in markets, and in many ways it was justified. I know, 89 00:05:35,996 --> 00:05:40,116 Speaker 1: it's an unpopular view now largely or at least less 90 00:05:40,116 --> 00:05:42,996 Speaker 1: popular than it was. But it did work pretty well 91 00:05:43,036 --> 00:05:45,676 Speaker 1: in many ways, right Like we did get more and 92 00:05:45,716 --> 00:05:48,876 Speaker 1: more stuff, the world was getting more efficient, manufactured goods 93 00:05:48,876 --> 00:05:52,796 Speaker 1: did get cheaper and better. So in many ways it 94 00:05:52,836 --> 00:05:57,756 Speaker 1: did work. And China over that time, through the twentieth 95 00:05:57,796 --> 00:06:00,436 Speaker 1: century into the twenty first century went up the value chain, 96 00:06:00,516 --> 00:06:03,476 Speaker 1: right as you say, they started out just mining and 97 00:06:03,516 --> 00:06:07,276 Speaker 1: sending the raw minerals out, and then they started refining. 98 00:06:07,356 --> 00:06:10,996 Speaker 1: Right then they started manufacturing the basic components. And now 99 00:06:10,996 --> 00:06:13,196 Speaker 1: we're to the point where clearly they are making the 100 00:06:13,196 --> 00:06:16,236 Speaker 1: best electric vehicles, say, and the only reason we don't 101 00:06:16,236 --> 00:06:18,596 Speaker 1: have them here is because of tariffs, right, because we've 102 00:06:18,676 --> 00:06:23,076 Speaker 1: kind of moved away from the free trade beliefs that 103 00:06:23,116 --> 00:06:26,476 Speaker 1: we had. So, as you say, there was this wake 104 00:06:26,556 --> 00:06:28,836 Speaker 1: up call that you mentioned, and there's this very clear 105 00:06:28,916 --> 00:06:31,396 Speaker 1: moment when that happened. Right, it's not some gradual thing. 106 00:06:31,516 --> 00:06:36,636 Speaker 1: It's in twenty ten, and there was this territorial dispute 107 00:06:36,636 --> 00:06:40,556 Speaker 1: between China and Japan over some islands that kind of 108 00:06:40,596 --> 00:06:43,476 Speaker 1: classic territorial dispute. These are our islands, know, these are 109 00:06:43,516 --> 00:06:47,796 Speaker 1: our islands. And the upshot for our story is that 110 00:06:48,196 --> 00:06:53,996 Speaker 1: China stops sending what rare earth's basically to Japan. And 111 00:06:54,076 --> 00:06:58,316 Speaker 1: as it happens, you happen to be in Japan working 112 00:06:58,476 --> 00:07:02,556 Speaker 1: at that moment. So what was the effect of that 113 00:07:03,076 --> 00:07:04,716 Speaker 1: on the Japanese market and what was it like for 114 00:07:04,756 --> 00:07:05,556 Speaker 1: you as an observer. 115 00:07:06,356 --> 00:07:07,036 Speaker 3: I was based in. 116 00:07:06,996 --> 00:07:09,796 Speaker 2: Their Ministry of Economy, Trade and Industry, so I was 117 00:07:09,836 --> 00:07:13,036 Speaker 2: one of two foreigners, the other being a translator, and 118 00:07:13,076 --> 00:07:15,836 Speaker 2: so it was a fascinating experience to be there because 119 00:07:15,916 --> 00:07:19,356 Speaker 2: Japan relied on these materials. They had this just in 120 00:07:19,436 --> 00:07:23,276 Speaker 2: time manufacturing that the materials just had to arrive. Japan 121 00:07:23,476 --> 00:07:26,036 Speaker 2: has refined them in ways at that time China could 122 00:07:26,036 --> 00:07:29,396 Speaker 2: not do upgrade them, put them into an optical drive 123 00:07:29,436 --> 00:07:31,876 Speaker 2: that they would send back to China to put into 124 00:07:31,876 --> 00:07:38,996 Speaker 2: a computer. And so what happened was Japan's manufacturing lines stopped, 125 00:07:39,316 --> 00:07:43,236 Speaker 2: slowed down, and Japan was woken up to wow, we 126 00:07:43,356 --> 00:07:47,036 Speaker 2: have a reliance on China for materials, and China may 127 00:07:47,076 --> 00:07:49,996 Speaker 2: not be a strong supply huh. 128 00:07:50,036 --> 00:07:52,876 Speaker 1: So suddenly Japan is like, oh, all these things that 129 00:07:52,916 --> 00:07:58,996 Speaker 1: we make cars, speakers, you know, components, high end components 130 00:07:58,996 --> 00:08:02,476 Speaker 1: that go into electronics that are ultimately assembled elsewhere. All 131 00:08:02,516 --> 00:08:05,236 Speaker 1: of a sudden, we can't make those things now because 132 00:08:05,316 --> 00:08:07,116 Speaker 1: China stopped sending us rare earths. 133 00:08:07,396 --> 00:08:12,076 Speaker 2: And these are such small things, their value is so 134 00:08:12,356 --> 00:08:14,876 Speaker 2: low you wouldn't think much about it. It's just like 135 00:08:14,996 --> 00:08:16,916 Speaker 2: yeast did for bread. If you don't have yeast, then 136 00:08:16,916 --> 00:08:20,636 Speaker 2: you can't make bread. And so these materials didn't have 137 00:08:20,676 --> 00:08:23,356 Speaker 2: a lot of value. Japan didn't think much about the 138 00:08:23,396 --> 00:08:26,716 Speaker 2: supply lines, and then lo and behold, they're stuck. And 139 00:08:26,796 --> 00:08:30,636 Speaker 2: so what happened really over the month the two months, 140 00:08:30,676 --> 00:08:33,476 Speaker 2: is that China started seeing that, hey, they're not getting 141 00:08:33,516 --> 00:08:37,836 Speaker 2: their equipment from Japan to be able to make their computers. 142 00:08:38,156 --> 00:08:42,956 Speaker 2: And so really the fact that one country makes these 143 00:08:43,196 --> 00:08:46,476 Speaker 2: and has, as some people say, a choke hoal, is 144 00:08:46,516 --> 00:08:49,076 Speaker 2: it challenge for those who are depending But there are 145 00:08:49,076 --> 00:08:50,596 Speaker 2: some reciprocal relationships. 146 00:08:51,036 --> 00:08:53,356 Speaker 1: Yeah, I mean that's in a way part of the 147 00:08:53,396 --> 00:08:57,756 Speaker 1: happy story of trade, right is it is an interdependent relationship, right, 148 00:08:57,796 --> 00:09:01,196 Speaker 1: and China's like, oh, we're not sending the rarest to Japan. Now, 149 00:09:01,276 --> 00:09:03,636 Speaker 1: Japan's not sending the components to us that we need 150 00:09:03,676 --> 00:09:05,956 Speaker 1: to put into the finished product that we're going to export. 151 00:09:06,076 --> 00:09:10,276 Speaker 1: So their leverage is limited perhaps in that way. 152 00:09:10,556 --> 00:09:13,876 Speaker 2: Exactly, And that was the case in twenty ten. Now 153 00:09:14,276 --> 00:09:18,236 Speaker 2: what's happened over time is that China has gotten really 154 00:09:18,276 --> 00:09:24,436 Speaker 2: good at everything, so that they're making cars that Ford 155 00:09:24,556 --> 00:09:26,916 Speaker 2: is saying is far stronger than the cars that we 156 00:09:27,036 --> 00:09:31,236 Speaker 2: can make. So when you have a country that can 157 00:09:31,316 --> 00:09:35,676 Speaker 2: produce end to end within its borders, that set of 158 00:09:36,956 --> 00:09:42,156 Speaker 2: interdependencies where you have leverage becomes less so and so 159 00:09:42,476 --> 00:09:45,636 Speaker 2: over those fifteen years from twenty ten when we were, 160 00:09:45,716 --> 00:09:51,556 Speaker 2: you know, talking about Japan, China's ability to produce in 161 00:09:51,676 --> 00:09:56,196 Speaker 2: areas that used to be Japan's strengths has now increased, 162 00:09:56,236 --> 00:09:58,596 Speaker 2: and they're less reliant externally. 163 00:09:58,836 --> 00:10:03,276 Speaker 1: And so therefore they can use rare earths more effectively 164 00:10:03,596 --> 00:10:06,156 Speaker 1: as a choke point as a piece of leverage in 165 00:10:06,196 --> 00:10:09,076 Speaker 1: their negotiations with certainly the US. 166 00:10:10,156 --> 00:10:15,476 Speaker 2: They're more formidable partner than previously for sure. 167 00:10:15,676 --> 00:10:19,156 Speaker 1: So you're in Japan and twenty ten you see this 168 00:10:20,796 --> 00:10:23,196 Speaker 1: and is that what makes you decide to write this book? 169 00:10:23,396 --> 00:10:25,756 Speaker 1: Like you were early, you were into rearsts before it 170 00:10:25,796 --> 00:10:26,196 Speaker 1: was cool. 171 00:10:28,636 --> 00:10:30,956 Speaker 3: I was in twenty ten. 172 00:10:30,996 --> 00:10:33,196 Speaker 2: I had, you know, my career before that, I been 173 00:10:33,236 --> 00:10:37,916 Speaker 2: in commodity trading, which is mostly oil, gas, coal, big 174 00:10:37,996 --> 00:10:41,676 Speaker 2: ticket items. And then I had worked in the US 175 00:10:41,716 --> 00:10:46,556 Speaker 2: government and working on international trade issues, and so everything 176 00:10:46,636 --> 00:10:48,716 Speaker 2: kind of came together while I was in Japan, and 177 00:10:48,716 --> 00:10:53,476 Speaker 2: I was fascinated that the economy of one country, or 178 00:10:53,516 --> 00:10:56,716 Speaker 2: at least certain supply lines, could shut down because of 179 00:10:56,796 --> 00:10:59,396 Speaker 2: materials that people never heard anything about. 180 00:11:00,716 --> 00:11:03,196 Speaker 3: So I wanted to understand, is. 181 00:11:03,196 --> 00:11:09,916 Speaker 2: The world is becoming more reliant on a green technologies 182 00:11:10,276 --> 00:11:13,636 Speaker 2: and everyone starts to have a smartphone in their hands, 183 00:11:13,716 --> 00:11:16,316 Speaker 2: reminding you back in twenty ten, not everyone had them 184 00:11:16,676 --> 00:11:20,436 Speaker 2: and their technology you couldn't make now skype calls or 185 00:11:20,556 --> 00:11:24,556 Speaker 2: video calls around the world, and so technology was going 186 00:11:24,716 --> 00:11:27,036 Speaker 2: was spreading around, And the question is what happened when 187 00:11:27,036 --> 00:11:29,716 Speaker 2: we become a high tech in green society. We're going 188 00:11:29,796 --> 00:11:32,636 Speaker 2: to be dependent on materials that people have not thought 189 00:11:32,756 --> 00:11:37,916 Speaker 2: much about, almost like the switch to internal combustion engines, 190 00:11:37,956 --> 00:11:40,796 Speaker 2: reliant on oil and gas. And if we don't get 191 00:11:40,836 --> 00:11:43,796 Speaker 2: the systems. Right, we're going to be in a situation 192 00:11:43,916 --> 00:11:48,156 Speaker 2: where one country can really dictate because they're focused on 193 00:11:48,196 --> 00:11:51,596 Speaker 2: the material supply. And lo and behold, the moment that 194 00:11:51,676 --> 00:11:54,596 Speaker 2: I had anticipated when I started writing about these papers 195 00:11:54,596 --> 00:11:58,276 Speaker 2: in twenty eleven twenty twelve has now arrived. And so 196 00:11:58,716 --> 00:12:02,156 Speaker 2: we're stock thinking about, oh, no, how do we supply 197 00:12:02,236 --> 00:12:07,436 Speaker 2: these materials? And in many cases we're already behind and 198 00:12:07,556 --> 00:12:10,436 Speaker 2: we have to think differently than where are these material goes? 199 00:12:11,516 --> 00:12:18,636 Speaker 1: So you write this book in twenty fifteen, not that 200 00:12:18,756 --> 00:12:19,876 Speaker 1: much happens in the world. 201 00:12:19,996 --> 00:12:20,156 Speaker 3: Right. 202 00:12:20,196 --> 00:12:22,156 Speaker 1: I hope it was well received and people told you 203 00:12:22,156 --> 00:12:25,356 Speaker 1: they liked it or whatever, But it's not like everybody 204 00:12:25,356 --> 00:12:27,116 Speaker 1: in Congress is like, oh my god, we got to 205 00:12:27,156 --> 00:12:29,996 Speaker 1: deal with this. Right. The sort of status quote seems 206 00:12:30,036 --> 00:12:33,116 Speaker 1: to persist for a decade after you write the book. 207 00:12:33,516 --> 00:12:37,796 Speaker 1: It seems like really until last year, until twenty twenty five. 208 00:12:37,876 --> 00:12:37,996 Speaker 3: Right. 209 00:12:38,036 --> 00:12:40,636 Speaker 1: There is again, as in twenty ten, there's this very 210 00:12:40,676 --> 00:12:43,836 Speaker 1: specific moment, and that comes in April when President Trump 211 00:12:43,916 --> 00:12:49,116 Speaker 1: announces these very high tariffs on China, and was it. 212 00:12:49,156 --> 00:12:51,396 Speaker 1: The next day China's like, okay, if you're going to 213 00:12:51,436 --> 00:12:53,956 Speaker 1: do that, we're not going to let you buy rare 214 00:12:54,036 --> 00:12:55,876 Speaker 1: earth or the stuff made with rare earth? Is that 215 00:12:55,916 --> 00:12:57,796 Speaker 1: about what happened? And then we're like, oh my god, 216 00:12:57,916 --> 00:13:01,756 Speaker 1: that's very that's a very good comeback China. 217 00:13:02,076 --> 00:13:06,036 Speaker 2: That's what's happening at the high visible level. Yeah, I 218 00:13:06,116 --> 00:13:09,716 Speaker 2: think you had something back in twenty twenty that got 219 00:13:09,756 --> 00:13:13,236 Speaker 2: people more interested and where the stuff come from, and 220 00:13:13,276 --> 00:13:17,116 Speaker 2: that's COVID And so at that time people were concerned 221 00:13:17,156 --> 00:13:20,596 Speaker 2: about masks. And then people were realizing it takes a 222 00:13:20,636 --> 00:13:25,356 Speaker 2: while to get material or things to the United States, 223 00:13:25,356 --> 00:13:28,436 Speaker 2: and if there is a challenge, then what do we do? 224 00:13:28,476 --> 00:13:30,556 Speaker 3: And there was a boat stuck in a canal. 225 00:13:30,636 --> 00:13:34,636 Speaker 1: At one point, people talked more generally about just in 226 00:13:34,676 --> 00:13:38,276 Speaker 1: time delivery and lean manufacturing. Right, this idea that you're 227 00:13:38,396 --> 00:13:41,316 Speaker 1: so optimized you don't have any inventory on hand, that 228 00:13:41,316 --> 00:13:44,636 Speaker 1: that can be more costly than it appears when there's 229 00:13:44,636 --> 00:13:47,476 Speaker 1: any kind of disruption. Right, So people started thinking differently, 230 00:13:47,516 --> 00:13:50,916 Speaker 1: perhaps about about supply chains at that time. 231 00:13:51,316 --> 00:13:53,676 Speaker 2: And so there was there was started to be some 232 00:13:54,796 --> 00:13:56,956 Speaker 2: smarter people who were connecting the dots. So back in 233 00:13:57,116 --> 00:14:00,076 Speaker 2: if I go back to twenty eighteen Congress, I was 234 00:14:00,116 --> 00:14:04,596 Speaker 2: invited to speak in Congress three times on this subject. 235 00:14:04,836 --> 00:14:08,556 Speaker 2: On a wide variety of minerals. There just weren't people 236 00:14:08,596 --> 00:14:12,196 Speaker 2: focused in that. But starting in twenty twenty, that's when 237 00:14:12,436 --> 00:14:15,676 Speaker 2: there were smart people starting to get involved in some way, 238 00:14:16,076 --> 00:14:18,876 Speaker 2: identifying this as a challenge. And at that time I 239 00:14:18,876 --> 00:14:21,516 Speaker 2: had been in the space for ten years and talking 240 00:14:21,516 --> 00:14:24,636 Speaker 2: about it, and I was like, I was wondering what was. 241 00:14:24,636 --> 00:14:25,396 Speaker 3: Where it was going to go. 242 00:14:26,436 --> 00:14:28,756 Speaker 2: But though some of those initiatives started to bear fruit, 243 00:14:29,036 --> 00:14:31,316 Speaker 2: there are a number of you know, smart people who've 244 00:14:31,316 --> 00:14:35,916 Speaker 2: been in the space since that time, and so there 245 00:14:36,036 --> 00:14:38,756 Speaker 2: were starting to be questions asked, you know, where are 246 00:14:38,756 --> 00:14:39,876 Speaker 2: we getting our critical minerals? 247 00:14:39,876 --> 00:14:41,196 Speaker 3: Where are where it is coming from? 248 00:14:41,436 --> 00:14:46,356 Speaker 2: And you're right that the real public display of oh 249 00:14:46,396 --> 00:14:51,276 Speaker 2: no rare earth was when we started a trade war 250 00:14:52,236 --> 00:14:58,436 Speaker 2: that we may have not fully appreciated the ramifications and 251 00:14:58,516 --> 00:15:02,316 Speaker 2: the connections that we might have sparked. 252 00:15:02,836 --> 00:15:05,716 Speaker 1: So what was it like for you that there was 253 00:15:05,796 --> 00:15:10,556 Speaker 1: just one day last April when China said they were 254 00:15:10,596 --> 00:15:13,596 Speaker 1: going to limit our access to rare earths and things 255 00:15:13,636 --> 00:15:17,516 Speaker 1: made with rare earths in retaliation for the high tariffs 256 00:15:17,516 --> 00:15:20,956 Speaker 1: that President Trump had suggested, Like, what was your day 257 00:15:21,076 --> 00:15:21,676 Speaker 1: like that day? 258 00:15:22,356 --> 00:15:27,916 Speaker 2: My first thought was, this is not good. Yes, and 259 00:15:27,996 --> 00:15:31,476 Speaker 2: that there becomes this confidence that we have in the 260 00:15:31,596 --> 00:15:36,156 Speaker 2: US that we can do things fast. And my concern was, 261 00:15:36,756 --> 00:15:39,116 Speaker 2: we're going to have this confidence that we can do 262 00:15:39,196 --> 00:15:40,876 Speaker 2: things fast in this space. 263 00:15:41,676 --> 00:15:43,556 Speaker 3: And my day was. 264 00:15:43,716 --> 00:15:46,716 Speaker 2: Trying to explain to people what these materials were and 265 00:15:46,756 --> 00:15:51,076 Speaker 2: why they were important, because I don't think people fully 266 00:15:51,156 --> 00:15:55,076 Speaker 2: understand that, and I don't think people fully understand that. 267 00:15:55,276 --> 00:15:57,236 Speaker 3: Today that. 268 00:15:58,916 --> 00:16:02,716 Speaker 2: What we are good at is the development of technology, 269 00:16:02,796 --> 00:16:06,116 Speaker 2: the development of AI. What we are not good at 270 00:16:06,756 --> 00:16:11,516 Speaker 2: is the fastening of mineral to metals or powarders and 271 00:16:11,556 --> 00:16:14,796 Speaker 2: then turning that into a product. 272 00:16:15,036 --> 00:16:20,236 Speaker 1: I was reading your book, I thought of what does 273 00:16:20,236 --> 00:16:21,756 Speaker 1: it say on the back of the iPhone? Is it 274 00:16:21,796 --> 00:16:23,796 Speaker 1: designed in California? Made in China? 275 00:16:24,596 --> 00:16:24,836 Speaker 3: Yeah. 276 00:16:24,876 --> 00:16:26,716 Speaker 2: What's fascinated about Apple right now is there a lot 277 00:16:26,756 --> 00:16:29,556 Speaker 2: of companies that in the US are in production and 278 00:16:29,596 --> 00:16:31,036 Speaker 2: they're concerned about supplies of. 279 00:16:32,756 --> 00:16:33,196 Speaker 3: Rare earth. 280 00:16:33,836 --> 00:16:38,916 Speaker 2: Apple faces no such restrictions because they're producing in China. 281 00:16:39,396 --> 00:16:42,556 Speaker 2: So there's what we have understand is that there's In 282 00:16:42,596 --> 00:16:46,836 Speaker 2: twenty eleven, if we flashed back when Japan didn't have 283 00:16:46,956 --> 00:16:51,796 Speaker 2: access to rare earth, two things happened. One people in 284 00:16:51,876 --> 00:16:54,356 Speaker 2: Japan said, how do we make products without these rare earths, 285 00:16:54,636 --> 00:16:57,876 Speaker 2: which makes sense, but counterintuitively, a lot of Japanese companies 286 00:16:57,916 --> 00:17:01,156 Speaker 2: went into China because they said, we got to be 287 00:17:01,196 --> 00:17:02,156 Speaker 2: where the materials are. 288 00:17:02,876 --> 00:17:03,036 Speaker 3: Right. 289 00:17:03,076 --> 00:17:06,236 Speaker 1: If there's an export restriction, one way of getting around 290 00:17:06,276 --> 00:17:09,276 Speaker 1: it is move the factory to the country where the 291 00:17:09,276 --> 00:17:11,396 Speaker 1: stuff is to begin with. Right. 292 00:17:11,476 --> 00:17:14,196 Speaker 2: So that I mean, that's a complete solution that we have. 293 00:17:15,316 --> 00:17:19,276 Speaker 2: We can bank our economy that China will continue to 294 00:17:19,316 --> 00:17:23,116 Speaker 2: export products to us that we can label as you know, 295 00:17:23,196 --> 00:17:27,356 Speaker 2: apple or whatever, but we're totally reliant on them for 296 00:17:27,396 --> 00:17:27,796 Speaker 2: the production. 297 00:17:28,916 --> 00:17:31,836 Speaker 1: So what is the state of play now with respect 298 00:17:31,876 --> 00:17:34,956 Speaker 1: to China and the US and rare earths. 299 00:17:35,596 --> 00:17:40,316 Speaker 2: So China has over the past year put on a 300 00:17:40,436 --> 00:17:45,276 Speaker 2: number of restrictions. They put on some licensing restrictions, and 301 00:17:45,316 --> 00:17:49,356 Speaker 2: then the government later in the year basically said, hey, we're. 302 00:17:49,156 --> 00:17:50,636 Speaker 3: Going to start to ask for. 303 00:17:52,396 --> 00:17:55,996 Speaker 2: An application for any rare earth that is mined in 304 00:17:56,036 --> 00:17:59,716 Speaker 2: our country or is using our technology. And what we've 305 00:17:59,756 --> 00:18:03,036 Speaker 2: noticed is there are two things. One is it's important 306 00:18:03,036 --> 00:18:05,676 Speaker 2: to separate the material in the products. So the material 307 00:18:05,916 --> 00:18:09,076 Speaker 2: is a rare earth powder. The product is a magnet 308 00:18:09,236 --> 00:18:12,236 Speaker 2: that goes into a motor. And what we've seen is 309 00:18:12,276 --> 00:18:16,676 Speaker 2: that China has allowed the export of magnets, which goes 310 00:18:16,676 --> 00:18:22,956 Speaker 2: into motors, but has been less willing to export the materials. 311 00:18:23,836 --> 00:18:27,356 Speaker 2: And that's important because what the administration elsewhere wants to 312 00:18:27,356 --> 00:18:29,676 Speaker 2: do is to develop the industries that rely on the materials, 313 00:18:30,076 --> 00:18:31,516 Speaker 2: and those aren't coming out. 314 00:18:31,796 --> 00:18:34,436 Speaker 1: The strategy from China's point of view is, yes, you 315 00:18:34,476 --> 00:18:37,156 Speaker 1: can buy the magnets that you need, but you cannot 316 00:18:37,276 --> 00:18:41,636 Speaker 1: buy the raw materials. And the reason they are doing 317 00:18:41,636 --> 00:18:44,116 Speaker 1: that is because they don't want us to develop the 318 00:18:44,156 --> 00:18:46,716 Speaker 1: industry to build the magnets. They want to keep a 319 00:18:46,756 --> 00:18:50,076 Speaker 1: lock on that. Is that the inference they. 320 00:18:49,956 --> 00:18:53,836 Speaker 2: Have said from twenty ten since when I'm in this space, 321 00:18:54,156 --> 00:18:57,956 Speaker 2: we want to use Chinese resources for Chinese products. Why 322 00:18:57,996 --> 00:19:01,156 Speaker 2: should we go through the environmental challenges? Why do we 323 00:19:01,276 --> 00:19:04,116 Speaker 2: have to do anything just to export that so another 324 00:19:04,156 --> 00:19:05,116 Speaker 2: country can benefit. 325 00:19:05,356 --> 00:19:08,876 Speaker 1: Yeah, I mean that's the classic kind of mercantilist thing, right, 326 00:19:09,356 --> 00:19:13,196 Speaker 1: like why should we cut down trees in New England 327 00:19:13,316 --> 00:19:16,236 Speaker 1: just to send them to England to be made into ships? Right? 328 00:19:16,396 --> 00:19:19,596 Speaker 2: Yes, So it's an argument that's been used from the US, 329 00:19:19,636 --> 00:19:22,916 Speaker 2: from the natural gas industries through through lumber. 330 00:19:23,116 --> 00:19:24,676 Speaker 3: It's it's not uncommon. 331 00:19:25,276 --> 00:19:29,276 Speaker 1: Yeah, and just to be clear, this this dispute and 332 00:19:29,316 --> 00:19:32,316 Speaker 1: what China has done with rarest over the past year, like, 333 00:19:32,836 --> 00:19:37,996 Speaker 1: has it had a clear effect on for manufacturers? I 334 00:19:38,036 --> 00:19:40,956 Speaker 1: mean in military domains elsewhere is there stuff that is 335 00:19:40,996 --> 00:19:43,156 Speaker 1: not being made now or that is more expensive now, 336 00:19:43,276 --> 00:19:46,356 Speaker 1: or that is performing worse now because of this trade 337 00:19:46,356 --> 00:19:49,636 Speaker 1: dispute and China's kind of use of rare earths. 338 00:19:49,436 --> 00:19:50,716 Speaker 3: People are scrambling for material. 339 00:19:50,756 --> 00:19:55,556 Speaker 2: They're paying higher prices for material, so they don't Yes, 340 00:19:55,596 --> 00:19:58,796 Speaker 2: there are supply lines that get slowed down. It's not 341 00:19:58,876 --> 00:20:03,556 Speaker 2: like companies really want to come come out and say, hey, 342 00:20:03,716 --> 00:20:05,236 Speaker 2: you know we're not going to make X, Y or 343 00:20:05,356 --> 00:20:08,716 Speaker 2: Z because of we're not able to get the material 344 00:20:09,516 --> 00:20:14,196 Speaker 2: necessarily want to, but you do hear leaders of automobile 345 00:20:14,236 --> 00:20:16,636 Speaker 2: manufacturers saying, hey, we're not being able to produce. And 346 00:20:16,676 --> 00:20:21,316 Speaker 2: it's not just here India, Japan. There are a number 347 00:20:21,356 --> 00:20:24,116 Speaker 2: of places where the material is not getting out. And 348 00:20:24,156 --> 00:20:27,036 Speaker 2: so what the challenge is is we don't fully appreciate 349 00:20:27,716 --> 00:20:31,556 Speaker 2: is that that material that we need in the US 350 00:20:31,716 --> 00:20:35,756 Speaker 2: is turned into a magna that's then sent to the US. 351 00:20:36,156 --> 00:20:39,636 Speaker 2: We don't always get the raw material. So whether the 352 00:20:39,796 --> 00:20:43,356 Speaker 2: US is restricted or Japan is restricted, our supply lines 353 00:20:43,516 --> 00:20:47,316 Speaker 2: are impacted, and so there's too much of a focus. 354 00:20:47,636 --> 00:20:49,316 Speaker 2: What I feel is like, oh, well, the US has 355 00:20:49,356 --> 00:20:52,356 Speaker 2: to do X, Y or Z. The US has to 356 00:20:52,396 --> 00:20:56,156 Speaker 2: make sure material can get that it's necessary for manufacturers 357 00:20:56,156 --> 00:20:58,476 Speaker 2: to get to this economy to get to the country, 358 00:20:58,676 --> 00:21:01,316 Speaker 2: But it does not matter how it gets to US 359 00:21:01,356 --> 00:21:02,836 Speaker 2: as long as it does. 360 00:21:03,076 --> 00:21:06,076 Speaker 1: So I mean, so does that mean it's not like 361 00:21:06,116 --> 00:21:08,836 Speaker 1: the US has to have an end to end domestic 362 00:21:09,116 --> 00:21:11,516 Speaker 1: economy where you go from rare earth in the ground 363 00:21:11,516 --> 00:21:13,556 Speaker 1: to whatever the finished product is. We just need to 364 00:21:13,596 --> 00:21:17,396 Speaker 1: have reliably good relationships with a set of countries where 365 00:21:17,396 --> 00:21:20,796 Speaker 1: all those things happen. Like is the short version. All 366 00:21:20,796 --> 00:21:25,196 Speaker 1: those things need to be able to happen without China. 367 00:21:24,156 --> 00:21:26,276 Speaker 2: All those things need to be able to happen with 368 00:21:26,756 --> 00:21:30,916 Speaker 2: the reliable system. Let me take the oil market. Now, yes, 369 00:21:31,636 --> 00:21:34,116 Speaker 2: we don't need to produce all of the oil for 370 00:21:34,236 --> 00:21:36,796 Speaker 2: the US economy, but what we need to do is 371 00:21:36,836 --> 00:21:40,796 Speaker 2: to produce enough so that we're not reliant or beholden 372 00:21:40,876 --> 00:21:45,116 Speaker 2: on one country to squeeze the market. And that's the 373 00:21:45,276 --> 00:21:49,796 Speaker 2: same with most commodities. You don't have to be to 374 00:21:49,836 --> 00:21:52,676 Speaker 2: be able to produce everything that you need. You just 375 00:21:52,756 --> 00:21:54,676 Speaker 2: have to be able to make sure that the economy 376 00:21:54,716 --> 00:21:58,436 Speaker 2: can get what it needs. And so Japan's in a 377 00:21:58,476 --> 00:22:00,476 Speaker 2: situation where they're never going to be able to mine 378 00:22:00,516 --> 00:22:03,996 Speaker 2: themselves to self sufficiency because they don't have the resources. 379 00:22:04,036 --> 00:22:09,316 Speaker 2: So they have to work with other partners and that works, 380 00:22:09,956 --> 00:22:14,076 Speaker 2: But reliant on yourself is an expensive proposition. What we 381 00:22:14,236 --> 00:22:17,516 Speaker 2: haven't talked about, and I think what is There's this 382 00:22:17,756 --> 00:22:20,316 Speaker 2: preconceived notion is that, oh, if we produce it in 383 00:22:20,356 --> 00:22:23,596 Speaker 2: the US, then it's going to be cost competitive. And 384 00:22:23,636 --> 00:22:25,476 Speaker 2: the answer to that is no, it's not going to 385 00:22:25,476 --> 00:22:29,276 Speaker 2: be cost competitive. So we're our situation right now is 386 00:22:29,276 --> 00:22:34,316 Speaker 2: we're trying to make rare earth in this country that 387 00:22:34,436 --> 00:22:37,476 Speaker 2: are going to be more expensive than what can come 388 00:22:37,476 --> 00:22:40,996 Speaker 2: out of China. 389 00:22:41,556 --> 00:22:51,796 Speaker 1: We'll be back in just a minute. Hey, it's Jacob 390 00:22:51,876 --> 00:22:53,636 Speaker 1: and I want to tell you that I am hosting 391 00:22:53,676 --> 00:22:57,476 Speaker 1: a new show called Business History. It's about the incredible 392 00:22:57,476 --> 00:23:01,956 Speaker 1: innovations and massive failures and unbelievable characters in the history 393 00:23:01,956 --> 00:23:05,316 Speaker 1: of business, and I hope I think the show provides 394 00:23:05,356 --> 00:23:08,716 Speaker 1: insights about how business works today. At the end of 395 00:23:08,716 --> 00:23:11,236 Speaker 1: today's episode of What's Your Problem, we're going to play 396 00:23:11,236 --> 00:23:14,436 Speaker 1: you a clip from Business History. It's the story behind 397 00:23:14,516 --> 00:23:17,956 Speaker 1: the video game company Atari and they're surprising early hire 398 00:23:18,116 --> 00:23:21,196 Speaker 1: of a young hippie named Steve Jobs. The show's called 399 00:23:21,236 --> 00:23:23,756 Speaker 1: Business History. You can listen to it wherever you're listening 400 00:23:23,836 --> 00:23:26,196 Speaker 1: right now, and we'll play that clip at the end 401 00:23:26,196 --> 00:23:32,196 Speaker 1: of today's episode. What is the key choke point? Is 402 00:23:32,236 --> 00:23:35,516 Speaker 1: it magnets? Like what percent of the of the these 403 00:23:35,596 --> 00:23:38,556 Speaker 1: kind of special magnets are produced in China? Now? 404 00:23:38,956 --> 00:23:41,556 Speaker 2: The challenge, so you've got more than eighty ninety percent, 405 00:23:41,836 --> 00:23:44,916 Speaker 2: So the challenge is is not like this is a 406 00:23:44,996 --> 00:23:48,556 Speaker 2: one this is one magnet. Yeah, it's that there's such 407 00:23:48,716 --> 00:23:52,836 Speaker 2: a diversity of magnets and to be able to meet 408 00:23:52,916 --> 00:23:55,596 Speaker 2: the spec of individual. 409 00:23:56,756 --> 00:23:59,156 Speaker 3: Producers is the real challenge. 410 00:23:59,716 --> 00:24:03,516 Speaker 2: And so that you can produce the US could need 411 00:24:03,556 --> 00:24:05,996 Speaker 2: two thousand times, they could produce three thousand times, and 412 00:24:06,036 --> 00:24:09,956 Speaker 2: it's still not meet the needs right because you're not 413 00:24:10,036 --> 00:24:13,876 Speaker 2: producing at the right spec the right consistency. So it's 414 00:24:13,916 --> 00:24:17,796 Speaker 2: not that's the real issue, because you don't want that 415 00:24:19,156 --> 00:24:25,076 Speaker 2: missile to fail because the magnet got too hot and 416 00:24:25,156 --> 00:24:26,876 Speaker 2: it was and all of a sudden, the missile is 417 00:24:26,916 --> 00:24:30,156 Speaker 2: not going to its attendant target. That's the challenge. 418 00:24:30,436 --> 00:24:34,436 Speaker 1: And you've also talked about the human capital piece, the 419 00:24:34,476 --> 00:24:38,156 Speaker 1: sort of education knowledge industrial knowledge piece. It seems like 420 00:24:38,196 --> 00:24:42,316 Speaker 1: that is one where China is in good shape and 421 00:24:42,356 --> 00:24:43,516 Speaker 1: the US is in bad shape. 422 00:24:43,796 --> 00:24:46,436 Speaker 3: Frankly, so, when. 423 00:24:46,316 --> 00:24:51,596 Speaker 2: I was in some small cities in China, you know, 424 00:24:51,676 --> 00:24:55,436 Speaker 2: three hundred thousand, a million, there would be these conferences 425 00:24:55,836 --> 00:24:58,236 Speaker 2: discussing rare earths. And I would go into an event, 426 00:24:58,316 --> 00:25:01,316 Speaker 2: and I was there. There are a few foreigners and 427 00:25:01,356 --> 00:25:06,436 Speaker 2: then a thousand, fifteen hundred people in the industry, academics, 428 00:25:07,396 --> 00:25:11,276 Speaker 2: industry officials, people who worked in the companies, and they're 429 00:25:11,556 --> 00:25:14,636 Speaker 2: toiling in rare earths every day. Some are refining, some 430 00:25:14,716 --> 00:25:19,916 Speaker 2: are producing, they're figuring out how to commercialize products. Back 431 00:25:19,956 --> 00:25:23,996 Speaker 2: in twenty thirteen, we could not have a conference of 432 00:25:24,036 --> 00:25:26,876 Speaker 2: that size. There would be ten fifteen people there. Max 433 00:25:28,556 --> 00:25:31,396 Speaker 2: there weren't. There wasn't the industry there. 434 00:25:31,796 --> 00:25:34,316 Speaker 1: I mean, even on a more general level, you've compared 435 00:25:34,356 --> 00:25:40,596 Speaker 1: the number of universities in China focused on mining and 436 00:25:40,636 --> 00:25:44,716 Speaker 1: refining with the number even of students in the US 437 00:25:44,796 --> 00:25:45,476 Speaker 1: studying it. 438 00:25:45,756 --> 00:25:49,516 Speaker 2: Right, they're just a handful of people, a handful of 439 00:25:50,596 --> 00:25:52,876 Speaker 2: universities in the US studying and they're just starting up, 440 00:25:53,196 --> 00:25:56,076 Speaker 2: many of them. I mean, we just don't have you 441 00:25:56,116 --> 00:26:00,036 Speaker 2: didn't have the interest in mining, and you didn't have 442 00:26:00,196 --> 00:26:02,916 Speaker 2: the studies because we stopped. It's something we stopped doing 443 00:26:02,956 --> 00:26:05,916 Speaker 2: twenty years ago. So I've been a missing generation. And 444 00:26:05,956 --> 00:26:10,436 Speaker 2: in China that's when they just started. And so you 445 00:26:11,236 --> 00:26:15,396 Speaker 2: when you don't have the industry, you lose the capacity 446 00:26:15,436 --> 00:26:17,636 Speaker 2: to innovate because you just have to get to the 447 00:26:17,676 --> 00:26:22,036 Speaker 2: basics right. And we might have some We definitely have 448 00:26:22,116 --> 00:26:25,556 Speaker 2: some incredibly smart people who are learning, but it's all 449 00:26:25,556 --> 00:26:29,476 Speaker 2: of a sudden taking you know, amazing basketball players and saying, hey, 450 00:26:29,556 --> 00:26:31,796 Speaker 2: you know what, it's time to play cricket. There's going 451 00:26:31,876 --> 00:26:34,356 Speaker 2: to be some learning that has to get done and 452 00:26:34,356 --> 00:26:35,596 Speaker 2: that's going to take time. 453 00:26:36,156 --> 00:26:39,476 Speaker 1: So setting aside what you think we should do, like 454 00:26:39,556 --> 00:26:42,556 Speaker 1: not the normative, Like what do you think is going 455 00:26:42,636 --> 00:26:44,676 Speaker 1: to happen in the US and in the you know, 456 00:26:44,796 --> 00:26:46,996 Speaker 1: world beyond China, what do you think it's going to 457 00:26:47,036 --> 00:26:49,556 Speaker 1: look like? And I don't know what five years, ten years. 458 00:26:49,676 --> 00:26:52,716 Speaker 1: With respect to rare earths. 459 00:26:53,076 --> 00:26:55,796 Speaker 2: The question is is what gets rolled? You know, what 460 00:26:56,156 --> 00:26:57,756 Speaker 2: are a country is going to be able to do 461 00:26:57,836 --> 00:26:59,476 Speaker 2: or are they going to be able to focus on and 462 00:26:59,516 --> 00:27:03,676 Speaker 2: what are they willing to do? Yeah, because the US 463 00:27:04,036 --> 00:27:07,716 Speaker 2: it seems to have you know, four different options that 464 00:27:07,876 --> 00:27:09,436 Speaker 2: are things that it could do. 465 00:27:09,556 --> 00:27:11,036 Speaker 3: We continue doing what we're doing. 466 00:27:11,516 --> 00:27:15,436 Speaker 2: We pick a few national champions, just like Japan realized 467 00:27:15,476 --> 00:27:18,156 Speaker 2: back in twenty ten twenty eleven, we realized, Wow, this 468 00:27:18,236 --> 00:27:20,596 Speaker 2: is really hard. We're not going to solve the problem. 469 00:27:20,636 --> 00:27:24,516 Speaker 2: We still rely on China. Number Two, there's a big 470 00:27:24,596 --> 00:27:28,436 Speaker 2: deal with China. All of a sudden, just like the 471 00:27:28,556 --> 00:27:31,556 Speaker 2: nineteen eighties when we allowed Japan and Korea to come 472 00:27:31,596 --> 00:27:34,436 Speaker 2: over with car manufacturers, we say, hey, we're never going 473 00:27:34,476 --> 00:27:37,236 Speaker 2: to catch up with China, and China can invest in 474 00:27:37,276 --> 00:27:40,516 Speaker 2: our country and let's do some big, happy day deal 475 00:27:40,556 --> 00:27:45,316 Speaker 2: with China. Number Three, we get serious and realize that 476 00:27:45,396 --> 00:27:48,756 Speaker 2: we need to focus on an entire supply line, that 477 00:27:48,796 --> 00:27:52,516 Speaker 2: we need to focus on creating an ev market, that 478 00:27:52,556 --> 00:27:55,956 Speaker 2: we need to start to create demand, and we realize 479 00:27:56,076 --> 00:27:58,476 Speaker 2: that it's going to take five or ten years for 480 00:27:58,596 --> 00:28:01,556 Speaker 2: us to be able to start competing more regularly with 481 00:28:01,636 --> 00:28:06,756 Speaker 2: the current level of China. Or four, we spend ridiculous 482 00:28:06,836 --> 00:28:12,356 Speaker 2: amounts of money, billions and billions of dollars. Yeah, without 483 00:28:12,436 --> 00:28:18,756 Speaker 2: a strategy that will enable us to declare victory because 484 00:28:18,836 --> 00:28:23,956 Speaker 2: we're spending on production of materials that will be stockpiled, 485 00:28:23,956 --> 00:28:27,956 Speaker 2: that will be warehoused, that won't have a market because 486 00:28:27,996 --> 00:28:32,876 Speaker 2: we focus so much on producing these minerals. But we're 487 00:28:32,916 --> 00:28:37,876 Speaker 2: not Our defense system isn't stronger, our industrial base is smaller. 488 00:28:38,716 --> 00:28:41,476 Speaker 1: So clearly, from the way you frame those options, you 489 00:28:41,516 --> 00:28:45,436 Speaker 1: think option three is what the US should do. Right, 490 00:28:45,916 --> 00:28:48,636 Speaker 1: don't start by thinking about rare earths, but start with 491 00:28:48,956 --> 00:28:51,596 Speaker 1: what we want to produce in this country. And you 492 00:28:51,676 --> 00:28:55,196 Speaker 1: say that that's eves electric vehicles, And I'm curious, why, 493 00:28:55,956 --> 00:28:58,036 Speaker 1: why is it that you think we should build our 494 00:28:58,156 --> 00:29:01,636 Speaker 1: rare earth strategy around electric vehicles. 495 00:29:02,076 --> 00:29:06,356 Speaker 2: I'd argue it's the key to most of our industrial 496 00:29:06,436 --> 00:29:11,756 Speaker 2: strength in the future. Is it's because it's the largest 497 00:29:12,036 --> 00:29:17,756 Speaker 2: consumer of battery materials, it's the largest consumer of magnet materials. 498 00:29:18,316 --> 00:29:23,476 Speaker 2: So we want a great robotics industry. We need a 499 00:29:23,596 --> 00:29:29,076 Speaker 2: dynamic battery industry, we need a dynamic magnet industry. We 500 00:29:29,116 --> 00:29:33,036 Speaker 2: want to have drones great same thing. So if you 501 00:29:33,076 --> 00:29:37,516 Speaker 2: don't have the base industry, then you're undermining all the 502 00:29:37,596 --> 00:29:41,476 Speaker 2: other industries or you're making them reliant on innovation in 503 00:29:41,756 --> 00:29:45,036 Speaker 2: countries that you can trade with. And that is why 504 00:29:46,436 --> 00:29:51,916 Speaker 2: evs are so critical, and you can say you can say, 505 00:29:51,916 --> 00:29:54,556 Speaker 2: all right, well we need them to because they are 506 00:29:54,996 --> 00:29:55,836 Speaker 2: a green. 507 00:29:56,196 --> 00:30:00,796 Speaker 3: Product and we need to save the planet. Great. 508 00:30:01,436 --> 00:30:05,436 Speaker 2: I think there's a reasonable argument to put it mildly there, 509 00:30:06,196 --> 00:30:08,876 Speaker 2: But I would argue that we need a strong defense. 510 00:30:10,276 --> 00:30:12,636 Speaker 2: You want to have a strong robotics industry, you need evs, 511 00:30:12,716 --> 00:30:17,196 Speaker 2: otherwise you're creating niche industries. It's the same thing we 512 00:30:17,236 --> 00:30:19,636 Speaker 2: complain about Department of Defense banking ten thousand dollars for 513 00:30:19,676 --> 00:30:23,316 Speaker 2: a screw. They need a specialty screw. So what we 514 00:30:23,396 --> 00:30:26,796 Speaker 2: need to do is make these materials, make the batteries, 515 00:30:26,836 --> 00:30:30,076 Speaker 2: make the magnets, tournament the commodities so that they're coming 516 00:30:30,156 --> 00:30:33,116 Speaker 2: out and they're produced at a cheap rate within this country. 517 00:30:33,116 --> 00:30:35,676 Speaker 3: So we've got a dynamic system. 518 00:30:35,956 --> 00:30:37,196 Speaker 1: Do you think that's going to happen? 519 00:30:39,236 --> 00:30:40,756 Speaker 3: I would like that to happen. 520 00:30:41,196 --> 00:30:42,516 Speaker 1: Doesn't feel likely to me. 521 00:30:43,676 --> 00:30:48,316 Speaker 2: I feel there's an overrating sense in that American ingenuity 522 00:30:48,796 --> 00:30:52,076 Speaker 2: can turn around and produce materials that we can all 523 00:30:52,116 --> 00:30:56,196 Speaker 2: of a sudden jump ahead, as if country that all 524 00:30:56,236 --> 00:30:58,956 Speaker 2: of a sudden decided not to put in landlines and 525 00:30:59,076 --> 00:31:02,116 Speaker 2: when to a fully mobile back in twenty ten, They're like, oh, well, 526 00:31:02,116 --> 00:31:02,956 Speaker 2: we can just jump ahead. 527 00:31:02,956 --> 00:31:04,716 Speaker 3: We don't need to invest in all of those. 528 00:31:05,996 --> 00:31:12,076 Speaker 2: All those was wasteful phone lines. It this is hard science. 529 00:31:12,956 --> 00:31:14,756 Speaker 3: This is where you're you're you're you're. 530 00:31:14,676 --> 00:31:17,956 Speaker 2: Mixing acids and heats, and we need to focus on 531 00:31:18,036 --> 00:31:21,996 Speaker 2: building those people so that we can have more breakthroughs 532 00:31:22,436 --> 00:31:24,956 Speaker 2: because China is not sitting back. This is something that's 533 00:31:24,956 --> 00:31:28,836 Speaker 2: constantly innovating and China, Japan, all of these countries are 534 00:31:28,836 --> 00:31:31,556 Speaker 2: figuring out how can we make a better product, and 535 00:31:32,276 --> 00:31:36,676 Speaker 2: we're we don't have that fighting force in the material 536 00:31:36,716 --> 00:31:37,956 Speaker 2: world that we once have. 537 00:31:42,996 --> 00:31:45,316 Speaker 1: We'll be back in a minute with the Lightning Ground. 538 00:31:56,276 --> 00:32:00,316 Speaker 1: We are going to finish with the Lightning Ground. I 539 00:32:00,356 --> 00:32:02,916 Speaker 1: want to talk to you about your other job besides 540 00:32:03,476 --> 00:32:09,236 Speaker 1: the rare Earth experts. You run a company called Outposts. 541 00:32:09,636 --> 00:32:12,876 Speaker 1: You were the founder and CEO of Outpost, which. 542 00:32:12,716 --> 00:32:14,316 Speaker 3: Is my way for founder and CEO. 543 00:32:14,476 --> 00:32:16,876 Speaker 2: Back in twenty fifteen, when the book was coming out, 544 00:32:16,956 --> 00:32:18,916 Speaker 2: I was living in Bali. 545 00:32:18,596 --> 00:32:20,836 Speaker 3: And seeing that people were starting to work remotely. 546 00:32:21,716 --> 00:32:25,676 Speaker 2: So my partner and I set up a network of 547 00:32:25,716 --> 00:32:29,596 Speaker 2: properties that allowed people to work remotely. It was the 548 00:32:29,676 --> 00:32:33,036 Speaker 2: dawn of the digital nomad Era and that was our focus. 549 00:32:33,516 --> 00:32:36,476 Speaker 1: Are you still do you still run that company? 550 00:32:36,596 --> 00:32:39,356 Speaker 2: I still run that company on a day to day 551 00:32:39,836 --> 00:32:40,476 Speaker 2: not like I did. 552 00:32:41,436 --> 00:32:46,396 Speaker 1: So is it right? There's two places in Bali and 553 00:32:46,436 --> 00:32:50,316 Speaker 1: one in Sri Lanka that the company owns runs correct. 554 00:32:50,356 --> 00:32:52,236 Speaker 3: Those are our brand and properties. Correct. 555 00:32:53,076 --> 00:32:58,236 Speaker 1: And like people typically from Europe in the US who 556 00:32:58,276 --> 00:33:00,836 Speaker 1: are traveling around the world working on their laptops, pay 557 00:33:00,956 --> 00:33:03,116 Speaker 1: to live and work there is that basically the idea. 558 00:33:03,276 --> 00:33:07,716 Speaker 2: Well, when we started in twenty fifteen, people were coders, marketers, 559 00:33:08,436 --> 00:33:11,636 Speaker 2: people who could be away from others, people who have 560 00:33:11,716 --> 00:33:14,916 Speaker 2: their own businesses. And then what we've seen since since 561 00:33:14,956 --> 00:33:18,956 Speaker 2: COVID is a more professional set. So it could be 562 00:33:18,956 --> 00:33:22,196 Speaker 2: anyone who's who's working remotely. You never know where someone 563 00:33:22,316 --> 00:33:25,716 Speaker 2: is behind their screen. And so we've seen this this 564 00:33:25,716 --> 00:33:28,076 Speaker 2: this change and what used to be dominated by the 565 00:33:28,196 --> 00:33:33,076 Speaker 2: US the UK, all of a sudden, more people started 566 00:33:33,116 --> 00:33:39,516 Speaker 2: to travel. You saw people from Mexico, Brazil, Russia, you know, 567 00:33:39,676 --> 00:33:42,996 Speaker 2: elsewhere starting to fill up the spaces. And so what 568 00:33:42,996 --> 00:33:45,676 Speaker 2: we've seen is a general trend that's changed. 569 00:33:46,156 --> 00:33:48,756 Speaker 1: And so just very basically what is the business Just 570 00:33:48,796 --> 00:33:50,196 Speaker 1: so just so it's clear. 571 00:33:50,556 --> 00:33:54,076 Speaker 2: We provide spaces for people to live, work and connect 572 00:33:54,076 --> 00:33:55,716 Speaker 2: with others, and the places they go. 573 00:33:56,396 --> 00:33:58,836 Speaker 3: Companies call outpost. 574 00:33:58,276 --> 00:34:02,716 Speaker 1: And what do what do people not understand about life 575 00:34:02,716 --> 00:34:04,196 Speaker 1: as a digital nomad. 576 00:34:05,276 --> 00:34:09,356 Speaker 2: That when you can have everything that you think you want, 577 00:34:10,276 --> 00:34:12,556 Speaker 2: you can have cheap food, you can meet people all 578 00:34:12,596 --> 00:34:15,156 Speaker 2: the time, there's always something stimulating about being in a 579 00:34:15,196 --> 00:34:19,596 Speaker 2: foreign country. That alone isn't going to give you the 580 00:34:19,676 --> 00:34:22,436 Speaker 2: direction you need for your life. It's not going to 581 00:34:22,476 --> 00:34:26,756 Speaker 2: make you continuously happy. It's the connections that you get 582 00:34:26,796 --> 00:34:29,996 Speaker 2: along the way and being able to be able to 583 00:34:30,036 --> 00:34:34,076 Speaker 2: build something that you're proud of, whether they're friendships or 584 00:34:34,116 --> 00:34:37,956 Speaker 2: family relationships or businesses. It's the impact you have on others, 585 00:34:38,036 --> 00:34:41,676 Speaker 2: not the freedom and the self improvement that you have 586 00:34:42,156 --> 00:34:44,076 Speaker 2: by being outside of your own culture. 587 00:34:45,116 --> 00:34:47,516 Speaker 1: So you're saying being a digital nomad is not as 588 00:34:47,556 --> 00:34:49,396 Speaker 1: fun as it looks on Instagram. 589 00:34:50,116 --> 00:34:52,036 Speaker 2: It is as fun as it looks on Instagram, and 590 00:34:52,076 --> 00:34:55,876 Speaker 2: in some cases more fun. But a lifestyle where you're 591 00:34:55,956 --> 00:34:59,196 Speaker 2: uninhibited and you're not building, and you're just soaking up 592 00:34:59,236 --> 00:35:05,836 Speaker 2: services over time, there's less meaning there. So it's a 593 00:35:05,876 --> 00:35:09,676 Speaker 2: great way to spend time. Don't get me wrong saying, hey, 594 00:35:10,076 --> 00:35:13,316 Speaker 2: don't spend the lifestyle. But if you're spending three four 595 00:35:13,396 --> 00:35:16,396 Speaker 2: years and you're not building along the way, then you've 596 00:35:16,476 --> 00:35:19,876 Speaker 2: kind of looked back and you and your pause. But 597 00:35:20,236 --> 00:35:23,716 Speaker 2: for periods of time, it's a wonderful experience. You can 598 00:35:23,716 --> 00:35:26,636 Speaker 2: get out of your shell. You can be challenged by 599 00:35:27,196 --> 00:35:29,956 Speaker 2: things that you didn't you know, by the by the language, 600 00:35:29,956 --> 00:35:33,276 Speaker 2: by the food, by the situations that you would find 601 00:35:33,276 --> 00:35:35,396 Speaker 2: yourself in that you wouldn't be in your own country. 602 00:35:35,636 --> 00:35:37,636 Speaker 2: And it gives you a chance to reflect on some 603 00:35:37,756 --> 00:35:40,516 Speaker 2: of the certitudes that you There are certain things that 604 00:35:40,556 --> 00:35:43,596 Speaker 2: you believed or core beliefs because you lived a certain 605 00:35:43,636 --> 00:35:44,116 Speaker 2: way that you. 606 00:35:44,036 --> 00:35:46,276 Speaker 3: Wouldn't be challenged until you're in a different country. 607 00:35:46,716 --> 00:35:49,076 Speaker 2: And so as someone who's lived overseas for a long, 608 00:35:49,116 --> 00:35:52,076 Speaker 2: long period of time, and that's what I love about that. 609 00:35:52,956 --> 00:35:56,756 Speaker 1: Yeah, although I mean, I guess it depends. It seems 610 00:35:56,796 --> 00:35:58,716 Speaker 1: like if you go and live somewhere with a bunch 611 00:35:58,756 --> 00:36:02,156 Speaker 1: of other digital nomads, there is less of that than 612 00:36:02,196 --> 00:36:04,756 Speaker 1: if you're like going and staying with the family of 613 00:36:04,956 --> 00:36:06,516 Speaker 1: you know, people who live there are just going and 614 00:36:06,556 --> 00:36:08,356 Speaker 1: living in an apartment and hanging out with people who 615 00:36:08,436 --> 00:36:12,076 Speaker 1: live there. Right, It's seems like living in a Digital 616 00:36:12,116 --> 00:36:17,076 Speaker 1: Nomad House would reduce the foreignness of the situation. 617 00:36:18,156 --> 00:36:21,996 Speaker 3: It does, It does. There's what I would say is. 618 00:36:21,916 --> 00:36:23,436 Speaker 2: That you want to be able to mix them both 619 00:36:23,996 --> 00:36:26,556 Speaker 2: because you need that system and that routine, and especially 620 00:36:26,556 --> 00:36:30,116 Speaker 2: when you're in a foreign country, everything is new, so 621 00:36:30,636 --> 00:36:33,196 Speaker 2: you're going to forget your nine to five and when 622 00:36:33,276 --> 00:36:35,356 Speaker 2: you're having a job, you have. 623 00:36:35,276 --> 00:36:37,316 Speaker 3: To continue that routine. 624 00:36:37,956 --> 00:36:40,956 Speaker 2: So the spaces that we offer give that routine to 625 00:36:41,036 --> 00:36:44,116 Speaker 2: people and that consistency and that they're meeting other people 626 00:36:44,196 --> 00:36:46,996 Speaker 2: so they feel comfortable where they are. And then from there, 627 00:36:47,156 --> 00:36:49,956 Speaker 2: my hope is that people branch out and start to 628 00:36:49,996 --> 00:36:54,836 Speaker 2: really get absorbed because there's too much and increasingly too 629 00:36:54,876 --> 00:36:58,436 Speaker 2: much similarities. And everywhere we go you can get your 630 00:36:58,476 --> 00:37:02,036 Speaker 2: Starbucks and you start to see the culture of the US, 631 00:37:02,116 --> 00:37:03,236 Speaker 2: whether it's tipping. 632 00:37:04,636 --> 00:37:07,476 Speaker 3: Or the service culture. It starts to spread out. 633 00:37:08,076 --> 00:37:12,036 Speaker 2: And when we you're using the same online travel agents, 634 00:37:12,836 --> 00:37:15,756 Speaker 2: so you have the same experiences in other places and 635 00:37:15,796 --> 00:37:17,996 Speaker 2: you think everything is the same. You really have to 636 00:37:18,036 --> 00:37:21,276 Speaker 2: break out and start meeting people, start learning a language, 637 00:37:21,476 --> 00:37:23,836 Speaker 2: start going outside the realm, and I think that's when 638 00:37:23,836 --> 00:37:24,916 Speaker 2: you start to get rewarded. 639 00:37:26,556 --> 00:37:27,596 Speaker 1: Thank you for your time. 640 00:37:28,716 --> 00:37:30,756 Speaker 3: I appreciate it, thank you very much. 641 00:37:37,836 --> 00:37:40,476 Speaker 1: David Abraham is the author of the book The Elements 642 00:37:40,516 --> 00:37:44,516 Speaker 1: of Power. It's also the founder and CEO of Outpost. 643 00:37:45,276 --> 00:37:48,516 Speaker 1: Today's show was produced by Gabriel Hunter Cheng. It was 644 00:37:48,796 --> 00:37:52,276 Speaker 1: edited by Lyddy Jean Kott and engineered by Sarah Brungeer. 645 00:37:52,716 --> 00:37:55,916 Speaker 1: You can email us at Problem at Pushkin dot FM. 646 00:37:56,476 --> 00:37:58,836 Speaker 1: I'm Jacob Goldstein and we'll be back next week with 647 00:37:58,876 --> 00:38:07,316 Speaker 1: another episode of What's Your Problem. I'm Jacob Goldstein, and 648 00:38:07,436 --> 00:38:10,716 Speaker 1: right now we're going to a clip of a new 649 00:38:10,756 --> 00:38:14,036 Speaker 1: show that I co host. The show's called Business History. 650 00:38:14,196 --> 00:38:16,796 Speaker 1: My co host is Robert Smith, and this clip is 651 00:38:16,876 --> 00:38:20,676 Speaker 1: from an episode we did about how Nolan Bushnell, a 652 00:38:20,836 --> 00:38:25,316 Speaker 1: stoner turned entrepreneur, created the video game company Atari and 653 00:38:25,396 --> 00:38:29,476 Speaker 1: hired a young, inexperienced Steve Jobs. I really hope you 654 00:38:29,556 --> 00:38:31,556 Speaker 1: like the clip, and if you want to hear more, 655 00:38:31,716 --> 00:38:34,756 Speaker 1: you can find Business History wherever you're listening to this 656 00:38:34,876 --> 00:38:39,276 Speaker 1: show right now, this like nineteen year old hippie kid 657 00:38:39,316 --> 00:38:42,356 Speaker 1: walks in and he says he won't leave until they 658 00:38:42,356 --> 00:38:45,236 Speaker 1: give him a job, and the receptionist calls the head 659 00:38:45,236 --> 00:38:48,436 Speaker 1: engineer and she goes, yeah, we got a hippie kid. 660 00:38:48,436 --> 00:38:50,636 Speaker 1: In the lobby says he won't leave until we hire him. 661 00:38:50,796 --> 00:38:53,876 Speaker 1: Should we call the cops or let him in? And 662 00:38:53,916 --> 00:38:55,076 Speaker 1: the engineer says. 663 00:38:54,876 --> 00:38:55,676 Speaker 3: Bring him on in. 664 00:38:55,916 --> 00:38:59,196 Speaker 4: It's nineteen seventy's a Silicon valley, and this guy wanders 665 00:38:59,236 --> 00:39:02,276 Speaker 4: in and he is whenever you tell a story like this, 666 00:39:02,316 --> 00:39:02,796 Speaker 4: you know who it is. 667 00:39:02,876 --> 00:39:05,476 Speaker 1: It's Steve Jobs. It's Steve Job. So fun, it's so 668 00:39:05,596 --> 00:39:11,916 Speaker 1: delightful and perfectly. Steve Jobs is very good at his job, yes, 669 00:39:12,116 --> 00:39:16,916 Speaker 1: and very unpleasant to wrqu On. Surprising. He tells Bushnell 670 00:39:17,116 --> 00:39:19,836 Speaker 1: that like everybody's soldering wrong, right, they're actually putting together 671 00:39:19,836 --> 00:39:22,076 Speaker 1: the hardware, sladering the hardware. He's probably right, and bush 672 00:39:22,116 --> 00:39:24,196 Speaker 1: Nell's like, yeah, he was right. He keeps calling his 673 00:39:24,236 --> 00:39:28,436 Speaker 1: manager a dumb shit. Probably was not kind, not necessary. 674 00:39:28,996 --> 00:39:32,596 Speaker 1: Bushell winds up putting Jobs on the night shift, partly 675 00:39:32,636 --> 00:39:36,036 Speaker 1: so he won't bother so many people, and partly because 676 00:39:36,076 --> 00:39:38,676 Speaker 1: he knew that Jobs like to hang out at night 677 00:39:38,716 --> 00:39:42,516 Speaker 1: with his buddy Steve Wozniak, who was a great engineer, 678 00:39:42,596 --> 00:39:45,556 Speaker 1: would be great to have hanging around atari And in fact, 679 00:39:45,596 --> 00:39:49,796 Speaker 1: Jobs and Wozniak helped to make Breakout a great a target. 680 00:39:49,876 --> 00:39:50,996 Speaker 1: Remember breaking Out of. 681 00:39:50,956 --> 00:39:52,916 Speaker 4: Course you're trying to knock down the bricks in a wall. 682 00:39:53,196 --> 00:39:55,116 Speaker 1: Still games like that, you got a little paddle at 683 00:39:55,116 --> 00:39:56,796 Speaker 1: the bottom end. There's a moment when it goes through 684 00:39:56,796 --> 00:40:02,076 Speaker 1: the wall and then goes so good. So Jobs worked 685 00:40:02,076 --> 00:40:04,196 Speaker 1: at Atari for a little while and then decided he 686 00:40:04,236 --> 00:40:06,396 Speaker 1: wanted to go off to India to find his guru. 687 00:40:07,396 --> 00:40:10,836 Speaker 1: Perfect asked Atari to pay for the trip. Nobody ever 688 00:40:10,836 --> 00:40:14,476 Speaker 1: said he lacked moxie and wound up making a deal 689 00:40:14,516 --> 00:40:16,636 Speaker 1: with Atari where they pay him to go part of 690 00:40:16,636 --> 00:40:19,356 Speaker 1: the way there. They had exported some games to Germany 691 00:40:19,396 --> 00:40:20,836 Speaker 1: and there was some kind of problem with the games 692 00:40:20,876 --> 00:40:22,596 Speaker 1: in Germany, and they're like, we'll send you to Germany 693 00:40:23,116 --> 00:40:24,996 Speaker 1: to fix the games and then you can get the 694 00:40:25,036 --> 00:40:27,156 Speaker 1: rest of the way to India. And you know, the 695 00:40:27,236 --> 00:40:30,316 Speaker 1: Germans said Jobs was terrible to work with, but he 696 00:40:30,396 --> 00:40:33,196 Speaker 1: fixed the games. I was thinking about like the link 697 00:40:33,236 --> 00:40:35,396 Speaker 1: between Atarian Jobs and what did he learn there, and 698 00:40:35,396 --> 00:40:38,396 Speaker 1: it felt like maybe a little overdetermined, but I do think, 699 00:40:38,916 --> 00:40:42,116 Speaker 1: you know, clearly he had this profound sense of aesthetics 700 00:40:42,596 --> 00:40:45,956 Speaker 1: and of delight, right, like think of the Macintosh, right, 701 00:40:45,996 --> 00:40:48,596 Speaker 1: this breakthrough Apple machine in the eighties. It was round 702 00:40:49,036 --> 00:40:51,156 Speaker 1: and instead of squares. It was rounded, and it cost 703 00:40:51,236 --> 00:40:53,396 Speaker 1: them more money, but it was beautiful and it was 704 00:40:53,556 --> 00:40:56,116 Speaker 1: fun and you were engaged with it like a game. 705 00:40:56,716 --> 00:40:58,796 Speaker 4: It almost looked a little bit like an arcade game 706 00:40:58,836 --> 00:41:01,476 Speaker 4: with the curves. Yeah, but more than that, I think 707 00:41:01,516 --> 00:41:03,956 Speaker 4: that especially at Silicon Valley at the time when they 708 00:41:03,956 --> 00:41:06,516 Speaker 4: were dealing in actual silicon Right, if you're making chips 709 00:41:06,556 --> 00:41:09,756 Speaker 4: for somebody, you're thinking about the future and the computers. 710 00:41:09,956 --> 00:41:12,396 Speaker 4: You're not thinking about the psychology of the customer, because 711 00:41:12,396 --> 00:41:15,916 Speaker 4: the customer was another electronics company, right, And so Atari 712 00:41:16,076 --> 00:41:18,156 Speaker 4: and the strength of it was really the first time 713 00:41:18,196 --> 00:41:21,836 Speaker 4: where they're just like, how will a regular human being 714 00:41:21,916 --> 00:41:25,116 Speaker 4: who has no training whatsoever interact with technology? 715 00:41:25,276 --> 00:41:31,316 Speaker 1: Yeah? So Atari now mid seventies, they're selling all the 716 00:41:31,356 --> 00:41:34,756 Speaker 1: machines they can make. They need more space, and so 717 00:41:34,796 --> 00:41:37,916 Speaker 1: they rent an abandoned roller rink and they turn it 718 00:41:37,956 --> 00:41:41,516 Speaker 1: into this office slash video game factory. I've been ten 719 00:41:41,596 --> 00:41:42,236 Speaker 1: years older. 720 00:41:42,476 --> 00:41:44,036 Speaker 4: I would have loved to have worked in a roller 721 00:41:44,076 --> 00:41:45,196 Speaker 4: rink video game factory. 722 00:41:45,276 --> 00:41:48,436 Speaker 1: Yes, everybody smoked weed. Yeah, there was a hot tub. 723 00:41:50,036 --> 00:41:52,236 Speaker 1: There was a pool party where everybody ended up naked 724 00:41:52,236 --> 00:41:56,156 Speaker 1: in the pool at Bushnell himself looked back on it 725 00:41:56,236 --> 00:41:59,436 Speaker 1: later and said if that isn't a horror show for 726 00:41:59,516 --> 00:42:02,396 Speaker 1: any HR person today, I don't know what is