Ty Sagalow on Making Lemonade

My guest for this episode is Ty Sagalow (episode page), one of the founding members of the Lemonade Insurance Group. Ty has held various underwriting and product development position at AIG over his 25 year career there and served as Chief Innovation officer at Zurich North America and Tower Group before joining Lemonade as its first Chief Insurance Officer.

Ty wrote a book about his Lemonade experience called the “Making of Lemonade” which is the topic of the interview!

We cover all kinds of ground in the conversation but I didn’t take long to get to the heart of the matter. The thing that distinguishes many tech startups of course is that their technology is so great. What is that like? Here is a relevant bit:

Ty Sagalow: If you want to create a new process, it’s a thousand times fold better, you’ve got to start from very beginning, start completely from scratch and that takes a different type of way of looking at things. Um, and I’ll give you, I’ll give you one of my best examples.

So, um, we were at the tail end of almost getting all licensed from, uh, from New York and they wanted to make a number of changes, a dozen changes. So I call up Moshe and I say Moshe, we need to make a whole bunch of changes. So I start rattling off these changes as fast as I can and I’m hearing clicking noises in the background and at the end of, by dozen changes, and I’m saying as quickly as I can, I say to Moshe, do you got that? And he says, what do you mean Ty? And I said, well, have you taken note of everything that I’ve just told you we have to change? And he said, no. And I said, Moshe, why the hell not? He says, well, I made the changes as you were saying them should, should I have not done that? Should I undo the changes? And I said, [laughs] no, you don’t have to undo the changes. And that’s the last time I ever questioned Moshe Lieberman. If I was dealing with a traditional insurance software provider, I would have to send that in email. It would then prompt a meeting, which would prompt a number of emails, which would prompt then a number of meetings and maybe six months later I would have it.

It’s worth pointing out that this explanation, that building a system from scratch is better because of the flexibility that developers have in using more modern techniques appears to fly in the face of software development orthodoxy. See Joel Spolsky’s famous post Things you Should Never Do: Part 1:

…they did it by making the single worst strategic mistake that any software company can make:

They decided to rewrite the code from scratch.

There’s a subtle reason that programmers always want to throw away the code and start over. The reason is that they think the old code is a mess. And here is the interesting observation: they are probably wrong. The reason that they think the old code is a mess is because of a cardinal, fundamental law of programming:

It’s harder to read code than to write it.

Contrary to popular belief, most software ages more like wine than cheese. Bugs are hard to find and take enormous time and care to replicate, isolate and eliminate. Software needs time in users’ hands to become fully functional and to the extent that it looks like a mess that just means it reflects a messy reality and complexity in the operating environment.

On the other hand! There is real progress in software development tools, especially since modern consumer businesses are vastly greater in scale than before. One very (the most?) interesting innovation actually honors Joel’s quote above: microservices. This is the philosophy that software should be built of detachable component modules that you can replace if you want. A piece of software tends to be an accumulation of a lot of different functions (ingestion, storage, billing, reporting, etc) and these can be made architecturally distinct. If you want to totally change your web app you can just pull that part out and keep the rest together. This lets you keep the wine and throw out the moldy cheese.

That doesn’t mean I disagree with Ty! There’s a difference between licensing systems and building systems and I think an important exception to make for software that supplies the critical business function of a firm. And for an insurance firm that means recording its history.

Every company is different and every policy management system needs to be just as different or the insurer will be hopelessly unable to adapt the system to their needs.

So if you licensed a vendor system and you’d have to rewrite most of the software to suit your needs anyway, you might as well not pay for the legacy code you won’t use. That means that the new code (your code) is written by a few developers who, if they are good, can make changes quickly because they don’t need to read their own code, it is already sitting in their heads.

Yes you need to have a developer good enough to code a system almost single-handedly, and overall smarts and development knowledge is definitely a critical advantage of the valley startups.

The rest is maybe just not being afraid of building your own software!

Tyler Cowen on Big Business

My guest for this episode is Tyler Cowen (episode page), professor of economics at George Mason University, blogger at MarginalRevolution.com host of the Conversations with Tyler podcast and author of numerous books, the most recent of which is Big Business: a love letter to an American Anti-Hero, which we cover in the show. 

In the book, Tyler convincingly makes the case the big businesses are actually quite good for society and us individually. One reading of the book that we dig into is that the virtuous big business is a very American institution. Crony capitalism, state champions, these are not the kinds of engines of innovation and intangible capital that a more true market economy only can produce. Here is the bit from the interview:

David Wright: You’re bringing it up pretty succinctly there, but that was my second reading of the book, which is this very American book. And that’s depressing where it seems to me, if you’re anywhere else in the world, and we can talk about China in a second, you’re thinking to yourself, well, that’s great, that big business is good. But what does that going to be for me? Like what does that mean for me in Switzerland or Poland or Ghana or something. It’s depressing.

Tyler Cowen: It’s a very patriotic book. That’s one of the Straussian readings. Maybe is even thumbing its nose a bit at foreigners, but I think an implied message is be friendlier to your multinational enterprises. They can do a great deal for your nation as they have done in many countries around the world, most obviously Singapore, but much of East Asia, including parts of China and not embrace this. India is the country that probably needs that lesson more than any other. They’re one of the most hostile to outside business, including American big business.

Here is another bit on how the mission-driven culture of startups (the best of whom become the best of the big businesses!) might stem from societal inequality!

David Wright: It feels to me maybe that that is changing a bit. I don’t know why I think that maybe I’m just becoming more aware of it as I get older, but I wonder how much business was mission-driven in the past? Any sense of that?

Tyler Cowen: There was a phenomenally strong sense of ethical mission in American businesses, especially in the Midwest throughout the 20th century. It was very modest. It wasn’t always trumpeted. There, of course, was not any internet, but it was deeply internalized and very strongly felt and they propelled this country to many great achievements. But I think this renewed sense of mission for employees, it stems from income inequality, oddly enough. So, income inequality for labor is a sign that talent is quite scarce for whatever reason. And when talent is scarce, for one thing, talent’s already earning a lot of money, and they want something other than money and it’s hard to attract people. So, you build a mission into the enterprise. I think there’s a lot of cases where businesses may start approaching mission somewhat even cynically like, oh, we just want to make more money. But over time they do it. They start believing it. It becomes sincere. It’s a kind of artificially manufactured true sincerity and the final equilibrium.

We cover so much more ground, including:

  • Where businesses fit into the social intuition of the human mind
  • Similarities between how we treat famous people and big business and what another of Tyler’s books, *What Price Fame* can teach us about big business
  • What is good management and what effects does management have on employees?
  • How the book is an American book and how it is NOT a Chinese book
  • Crony capitalism doesn’t exist here, but where might it exist in the world?
  • Wall Street and Financial Dark Matter
  • How Tyler views the firm differently from most economists

Thanks for listening!

Melissa Perri on Escaping The Software Build Trap

Melissa Perri (youtubeepisode page) lives at the cutting edge of software process design and runs a consultancy devoted to building great product leaders. This of course applies to non-software products but the day is approaching when there is no such thing as a non-software product. Listen to this episode and continue on your journey to being a better producer of software, either as a coder or as an enabler of the programmers that build the products your company sells!

For the insurance people in the crowd this is one of the most important shows I’ve done. Five years ago Marc Andreessen made the point (see here and a discussion here) that software is eating the world and elsewhere he’s made the point that there are three layered observations in this hypothesis. 
  1. First and most weakly: every product that can will become a software product.
  2. Second, therefore any company that makes these products needs to become a software company. 
  3. Third and most strongly, that in any industry, the winning company will be the best software company, not the best at any other function. So in fact, Marc suggests, software will become the most valuable part of every product. In an insurance context that means that software will be more important than underwriting, than customer relationships and expense management, independent of software.

True? We shall see.. but  wrestle with these ideas a bit before dismissing them!            

The bottom line is that software development is the key new skill and it is HARD to do. I like to joke that the customer satisfaction rate for policy management systems is 0 and that is probably the most damning statistic imaginable for the insurance industry. It presumes this delineation between the technology and business side of the company, as Melissa points out in the cold open of my interview with her. That’s not how a software company looks at things. To a software company, the software is the means of delivery and business processes spring up to support the software in places where it can’t (yet!) go. 

Melissa’s book is called Escaping the Build Trap and is a highly refined explanation for how to integrate advanced software development management practices into the organisational culture and decision making framework. 

So this episode is a key part of a long-running theme in this show: why is software hard and how can we get better at it? Listen in and learn with me!

Alex Tabarrok on Innovation and Baumol Effect

My guest for this episode is Alex Tabarrok (youtube, player page), the Bartley J. Madden Chair in Economics at the Mercatus Center and Professor of Economics at George Mason University, blogger at Marginalrevolution.com, co-founder of Marginal Revolution University and co-author with Eric Helland of “Why Are The Prices So Damn High?” which is short, free book and which we discuss on the show.

Alex has written many other books and papers and there is a theme of thinking about innovation throughout his work. Several years ago he wrote a book on the topic called “Launching the Innovation Renaissance” which we also touch on as well as how the era of a country’s birth affects its institutional makeup, how national rivalries can generate positive externalities (pop quiz: what was NASA’s budget as a % of US GDP at its peak?), whether and why there has been a decline in innovation (and what’s the difference between innovation, entrepreneurship and economic growth?), where we might look for a model of education reform and how we might get there (what would a Hollywood-style investment in education reform look like?) including Alex’s own observations in launching his own education platform (marginal revolution university!), and much more!

I wanted to highlight one clip from the conversation that really caught my attention. Here is Alex’s favourite policy idea for improving economic growth:

Alex Tabarrok’s favourite policy idea for improving economic growth: reduce crime!

Matt Moore on Highway Technology

My guest for this episode is Matt Moore, SVP of the Highway Loss Data Institute. At HLDI Matt manages the research function for HLDI’s massive insurance and automobile dataset. In this episode we leap to the cutting edge of AI in automobiles and learn about how well some key safety features perform, such as:

  • Front Automatic Emergency Brakes
  • Curve-adaptive headlights (Big surprise!)
  • Lane departure warning systems
  • Blind spot warning systems
  • Parking sensors
  • Rear cameras
  • Rear automatic emergency brake

In addition to rattling through those features and how effective they are we touch on all sorts of related topics: what the different levels of AI are, how safe the roads can get, the mix of hardware and software in modern vehicle safety systems and much, much more!

Dinos Iordanou

My guest for this episode is Dinos Iordanou (player link), former Chairman and CEO of Arch, which he co-founded as Arch in 2001 and led from 2003 until retiring last year. In this incredible episode we cover: 

  • Dinos’ homeland of Cyprus (who is his favorite Cypriot? Who is the best Cypriot soccer player of all time? Where did a poor, young Dinos vacation and why?)
  • ‘Crappy’ jobs (and why Dinos loved them all), 
  • What quality Hank Greenberg and Warren Buffett share (Dinos worked with both!)
  • What lessons Dinos learned from Warren Buffet
  • The power of culture to transform firms
  • Philotimo, what it is and why it matters for a leader

An amazing show and my deep appreciation of Dinos for his time.

Don Mango and Matt Mosher on Innovation

My guests for this episode (player, youtube) are Don Mango, Global Head of Actuarial Pricing and Modeling at Everest Insurance, Two-term Casualty Actuarial Society Board Member and former CAS Vice President of Research and Development and Matt Mosher, EVP and Chief Operating Officer of A.M. Best Rating Services, responsible for rating operations globally.

For these heavyweight guests we tackle a heavyweight issue: are actuaries innovating enough? How would we innovate more?

We discuss:

  • whether innovation is greater in pricing or reserving, 
  • whether risk classification is the seat of all innovation, 
  • how AM Best sees its role in innovation
  • the impact of driverless cars on insurance innovation (the answer might surprise you!), 
  • what happened in the UK? 
  • how should the formal Standards of Practice influence the identity of actuaries and innovation in the field. 

And much more!

Here are some links:

ASOPs (including the historical archive!)

AM Best’s innovation criteria

Morris review of UK Actuaries

Kingman review of UK Financial Regulation

I’m fascinated by the tension between actuarial work and government regulation and this came up as a sub-topic in our discussion today. It will not drive traffic but expect more from me on these incredibly important issues in the future!

Mike Sapnar of Trans Re

My guest for this episode of Mike Sapnar, CEO of Trans Re (podcast page), a 4.5 bn premium reinsurer based in New York City. For many in my business Mike needs no introduction: we cover what the differences are between insurance and reinsurance, what makes for good negotiators and what Mike learned going through an agonizing year or so while his company was in the spotlight, subject to friendly and hostile takeovers alike a few years back. I’ve never been anywhere near the pilot’s seat during an all-or-nothing M&A roller coaster and Mike takes us through what he learned in those harrowing few months (go to minute 58 in the audio).

See below for the transcript:

Episode Transcript

David Wright:1:46My guest today is Mike Sapnar. Mike is President and chief executive of Trans Re a Reinsurer writing about $4.5 billion of premium worldwide. He joined the company in 1995 as a specialty casualty underwriter. Eventually rising to his current role in 2012 Mike has a bachelor’s degree in economics from the College of William and Mary and an MBA in finance from New York University. Mike, Welcome to the show.

Mike Sapnar:2:04Thank you for having me.

David Wright:2:04So you did an MBA at NYU and I, I’ve, I think, and maybe you can disagree with me, this is somewhat of an uncommon thing to do to be an insurance world and jumped back in, they call the general business education the stream and then come back to the insurance world. Oftentimes MBAs are a excuse for a career change for people in other industries, but you did an MBA in return and I’m wondering what you thought was useful about that, whether you yourself send executives and MBA programs. How do you reflect on that experience?

Mike Sapnar:3:08So, uh, in the interest of full disclosure, I did my MBA part time at night at NYU. So I did continue with working in the insurance industry while I was doing that. Now, uh, to your point, I went, I pursued my MBA because I wanted a career change at the time. Okay. And I thought I wanted it to be in banking and primarily that thought came to mind. Well, first of all, it started with, you know, my father was in, was in insurance. My grandfather was in insurance, two uncles and an aunt who were in

David Wright:3:41my goodness.

Mike Sapnar:3:42And I interned at an insurance company, high school and college

David Wright:3:46family business.

Mike Sapnar:3:47Right. So I swore, I swore that I would, um, uh, not get into the insurance business. So, ultimately I showed everyone I’m in the reinsurance business. But, uh, I did wind up in insurance after college because I wanted to be in Manhattan. And the only job I got in Manhattan was with an insurance company that was with continental insurance.

David Wright:4:10Was that through a family connection?

Mike Sapnar:4:12No, they interviewed on campus actually, and I just stuck my resume.

David Wright:4:16And hold your nose.

Mike Sapnar:4:17Yeah, yeah, exactly. The old days, you know, you had the manila envelopes on the wall, you dropped your resume in and they sent it off to the companies and they picked 10 resumes to interview.

David Wright:4:28What did you think you wanted to do at the time?

Mike Sapnar:4:30Well, I went to college to be a sports journalist and I picked the one more on the university in the country that didn’t have journalism as a major. So, uh, I just majored in economics and kinda just thought things would happen. I didn’t know. I didn’t really have a goal. In terms of where

David Wright:4:49did you do sports writing as a college student,

Mike Sapnar:4:51I did it as a a in high school. I was editor sports editor of the paper and had a column and what have you. And then I want to get to college. I had too much fun.

David Wright:5:00Okay. But you always had your eye on that?

Mike Sapnar:5:04I did.

David Wright:5:05What’s your favorite sport? Favorite sports.

Mike Sapnar:5:07Baseball.

David Wright:5:07Okay.

Mike Sapnar:5:08Uh, grew up playing baseball. Still Love Baseball team.

David Wright:5:12Who’s your team?

Mike Sapnar:5:12Yankees.

David Wright:5:12Yankees. Okay. And you’re from Trenton, right? So Trenton being closer to Philadelphia.

Mike Sapnar:5:18Exactly. I am a Philadelphia Eagles Fan.

David Wright:5:20Okay.

Mike Sapnar:5:20Well a long suffering one until two years ago. Uh, and but where I grew up, uh, we were on the television border of New York and Philadelphia, so we got both TV stations. So we got the full compliment of Yankees, Mets and Phillies. But first game I went to with my father was a Yankees game in 1973, uh, against the Texas Rangers in the old old stadium. So the original stadium. And I remember walking through the gates and the bright green flash that comes before you as a, as a seven year old, uh, that and the overwhelming size and fell in love with, with the Yankees and the stadium and the game. And that was it for me. Uh, we had eagle season tickets growing up, so I became a Philadelphia Eagles football fan and some, a little bit of schizophrenia when it comes to Philly in New York.

David Wright:6:09Geographical affiliation.

Mike Sapnar:6:11That’s right.

David Wright:6:12And your dad was a Yankees fan? He was a Yankees Fan. And if an eagles fan, yes.

David Wright:6:17So your father told your father and the Yankees Eagles and insurance.

Mike Sapnar:6:19That’s right. Pretty much must be proud. We’ll have to ask them.

David Wright:6:24And what was your Dad, what was your dad’s role in the insurance business?

Mike Sapnar:6:27Uh, he eventually ran all commercial lines for New Jersey Manufacturers in New Jersey, Trenton, based and Trenton, and he wound up on the board of directors, served there for a while as an executive and 10 years after he retired, uh, and you know, it was three miles from our house, so he was home at 5:30 for dinner every night.

David Wright:6:46Cool.

Mike Sapnar:6:46And uh, you know, kind of the way it was back in the day.

David Wright:6:50And one of the things that really interested me as I was researching for this is your, your surname is really unusual. You might be the only, Mike Sapnar on earth, which is probably pretty weird for Mike being a very common first name. What is the origin of that?

Mike Sapnar:7:03So, um, my, the, the origin is Croatian.

David Wright:7:08Okay.

Mike Sapnar:7:08And my family was on a small island off of, near Brac in Croatia and there were a bunch of Kristovs in Christiansens on the, on the island. And there were too many, apparently they said at that time. But, so you had to change your last name to whatever your profession was. And my family were soap makers and it was changed to Sapunor, S-A-P-U-N-O-R, uh, when my great grandfather came through Ellis Island, the u was dropped and the o is changed to an a and that’s the origin of the name. And my, my cousin has done a lot of research. He’s been back there. Uh, and we’ve actually had a couple of family reunions. There are Sapnars on the west coast that we don’t know that well, not a lot of them. And then, you know, a handful here on the east coast.

David Wright:7:54Interesting.

Mike Sapnar:7:55And Yeah.

David Wright:7:55So your great grandfather came from Europe. Your grandfather was an insurance. And did, do you know anything about whether your grandfather got your father into insurance?

Mike Sapnar:8:04Yeah, I don’t think so. Um, so he was in life insurance. My grandfather and my, my father was an accountant, a major at Villanova and a baseball player actually. And kind of the same thing to him. He just kind of fell into the job because there was a local company, he grew up, um, about a half mile from New Jersey manufacturers right down the road.

David Wright:8:26Wow.

Mike Sapnar:8:27And, uh, he spent his entire career 38 years at the same company. Yeah.

David Wright:8:32Interesting. One of the things you mentioned before we started recording was that you’re not the only insurance executive from Trenton, New Jersey.

Mike Sapnar:8:38Right.

David Wright:8:39So maybe name some other names and what on Earth happened there?

Mike Sapnar:8:41It’s kind of weird too, uh… So Joe Plumeri, who was obviously the CEO of Willis for a long period of time, was not only grew up in Trenton, he played baseball, uh, with my father.

David Wright:8:55Okay.

Mike Sapnar:8:56And Plumeri is, uh, quite, um, uh, well known family in the area is I think his brother, his father was sheriff and the political realms. And so, uh, and coincidentally, uh, Joe went to Lawrenceville, um, which is where I went to high school, although he did not graduate from there. And then he went on to William and Mary where I went to college. So Joe and I have overlap quite a bit and I know him quite well and had a nice relationship with him. And then Brian Duperreault, although a Bermudian, uh, went to Trenton Catholic high school and spent some formative years in Trenton. So you know, you hear a cradle of coaches, I guess Trenton’s a cradle for reinsurance executives.

Speaker 4:9:35That sounds like a coincidence to me.

Mike Sapnar:9:37It’s total coincidence

David Wright:9:38Not everybody goes to New Jersey manufacturers.

Mike Sapnar:9:39It’s not like that at all. No, it’s total coincidence. Yeah. Kind of funny.

David Wright:9:44And so coming out of university, joining an insurance company, picking the story back up again, you, you were thinking at the time, this is not going to last.

Mike Sapnar:9:54So, you know, it’s one of those things where, uh, sometimes the best lessons you learn are working at a bad company.

David Wright:10:00Interesting

Mike Sapnar:10:01Continental was a bad company.

David Wright:10:02Okay.

Mike Sapnar:10:03They ran near 40% expense ratio.

David Wright:10:05Okay.

Mike Sapnar:10:05Uh, they almost went out of business in 1992. Now people will say, Oh, Hurricane Andrew, actually it wasn’t hurricane Andrew. Continental unknowingly had an 18% market share in Hawaii when hurricane Iniki hit. And they actually had a bigger loss from an Iniki than they did from Andrew. And this goes to show where the business was back then. Uh, they picked it up in Continental Insurance. They picked it up from First Hawaiian, which they owned a 50% share in, they’ve picked it up to a Continental Re. They picked it up through a Union America, which they owned at the time in London. And they had no idea what their market share was in, uh, in Hawaii until there was a hurricane.

David Wright:10:41Right.

Mike Sapnar:10:42So, uh, that put them in kind of a tail spin and that they never really recovered from and ultimately wound up, uh, selling themselves to CNA the, um, it was, it was a place that was run by a really nice gentleman named Jake Mascot who struggled with strategy, uh, in and out of life, uh, in and out of real estate transactions. Matter of fact, they built this beautiful building down here, 180 maiden lane that was their building a, they

David Wright:11:12Where you were working

Mike Sapnar:11:13Where I was working. They spend a ton of money on it and then, uh, sold it for about 60% of its value. Uh, when the real estate market kind of co.. you know, had a downturn in the, in the late eighties. And, you know, Jake kinda ran the company, uh, he was a very philanthropic person and we got way over-extended on those types of initiatives, uh, poor strategy, high expense ratio, and I just didn’t like the culture and I thought it was kind of maybe endemic of, uh, the insurance industry.

David Wright:11:46When did you figure that out? The part where… you didn’t, you know, I don’t like this place.

Mike Sapnar:11:50You know, I probably figured that out. Um, around 1993. Okay, so you’ve been there for a few years. Yeah.

David Wright:11:58How long was that… four..?

Mike Sapnar:11:59I started in 1988.

David Wright:12:00Okay.

Mike Sapnar:12:00So I’m going to start, I might have thought about that a little earlier. Uh, that I didn’t like it there because I started at NYU. Well, right around 1993. So that’s, that’s, I started in 93 from NYU and graduated in 96.

David Wright:12:14Right.

Mike Sapnar:12:14So, um, now you, you, you know, I’m sure we’ll get into this, but you, you talk about fortuity and, and what happened? So when I was offered a job with continental, I was given two choices. I can go into the guarantee and credit department, which did, um, just what it says, but included a fidelity and surety at the time. Or I could go into the marine department. So, which kind of owned, uh, MOAC which was Marine Office of American Corporation was a the market leader. Uh, I th I spoke with my uncle who was in insurance and he recommended to go into the Surety and Fidelity. thought it would be more interested at that time when I joined in 88, continental decided to reenter the financial institutions D&O business. So I came out of the training program. I wanted to move to Philadelphia and do surety and I was assigned to New York to do D&O.

David Wright:13:07Okay.

Mike Sapnar:13:07And what was interesting, there was a true hard market and it was s and l crisis savings and loans crisis was going on. So I wound up really is, it’s not knows 24 year old, literally honestly going into board rooms at banks around the country and presenting D&O options to the boards of directors and answering questions and selling to them. So why they buy it should buy their D&O from an a minus rated, um, uh, you know, insurance company.

David Wright:13:35And the answer was because I couldn’t get it anywhere else

Mike Sapnar:13:36pretty much. That pretty much was the answer.

David Wright:13:39Yeah.

Mike Sapnar:13:40And it was just a tremendous experience because you know, you, you go in there and you got grilled pretty hard and people cared about D&O because it was their assets on the line.

David Wright:13:48Yeah. So that portfolio must have done pretty well.

Mike Sapnar:13:51It did really well.

David Wright:13:52And there’s a, I think there’s a school of thought out there, which is, which I don’t know how much or what percentage, I think this is true, but where, the market delivers your result actually. Right. And so if you very bad company and a good market, you’re probably going to do okay.

Mike Sapnar:14:07You can do okay. For sure. Um, you know, they say the stock market is 50% based on how.. or a stock’s performance: 50% how the market does, 30% how the sector does and 20% how the, how the company does.

David Wright:14:20Yeah.

Mike Sapnar:14:21And you know, you can do okay, uh, for sure. But if you look at the, the range of, uh, of, um, loss ratios and performance in the insurance industry, it’s pretty disparate, right? It’s pretty spread. And um, you know, you can do really well but still not do as well as you might have.

David Wright:14:38And how much did that in the moment… One of the things that fascinates me about market cycles in this business is looking back from the perspective of a soft market at a hard market, you think to boy before, you know, that was, that was easy, right? Making money. You just have to write all the business and then in a soft market…. this is the hard part, but I feel like when you’re in a hard market, you’re thinking, I don’t know what to do here because I don’t know what the price is. Right? So you’re kind of always in the state of uncertainty. Right. And I’m wondering what it felt like as a, as a, you know, you’re younger, you have less perspective, I suppose, general perspective on the business, but you’re sitting there, you know, in retrospect, you’re probably thinking, man, that was, that was making a lot of money for my company back then. What did you think at the time?

Mike Sapnar:15:21So even back then I kind of knew it was, it was pretty good. Yeah, because you would, this is when you know you’re in a hard market and it’s just as you said, David, it’s, you quote something and then you’re like, oh no, I got it. I got it.

David Wright:15:35Right.

Mike Sapnar:15:35So, um, it’s, it’s, you know, people always say, they go back and say, well, I should have written more than a hard market, but if everybody said that it wouldn’t be a hard market.

David Wright:15:47Right.

Mike Sapnar:15:48So, and I think that’s lost on people and it’s just what you said, there’s fear, uncertainty. You just don’t know what the, what the right answer is. And I’ve been through two hard markets two really, uh, really hard markets in my career. The one in the late eighties coming out of liability crisis and the one after 9/11, which was an extended hard market as well. And it’s debatable which one was better, but they were both unbelievable. Good in retrospect. No. Incredibly good.

David Wright:16:14Yup. And so Continental Casualty, you’re started doing an MBA at night, you’re thinking now finance not thinking sports writing.

Mike Sapnar:16:22Exactly

David Wright:16:22What, what so what, what made you think what prompted that thought?

Mike Sapnar:16:27Um, well I thought if I was going to change careers, you kind of have to package yourself as an economics major. You know, you learn a lot of um, you know, 36,000 feet stuff, but they got a lot of specific skills, frankly, unless you’re an accounting major, uh, you come out of college qualified to do nothing, right. You’ve proven you can learn.

David Wright:16:47Absolutely.

Mike Sapnar:16:47Uh, so I want it to go learn some deeper on finance NYU was, uh, you know, it still is one of the leading finance MBA you can get. And as a part time program, it was the most flexible. Uh, and matter of fact, it was downtown at the time. It was over here at a dilapidated building on, um, on Church street. And that’s where I started until they, they built the new facilities. So, uh, and I was, again, I to Continental’s credit and generosity and the reason were they ran at a 40% expense ratio, probably is they paid for the entire degree. As long as I got a B or better on my grades, which, you know, in graduate school if you show up pretty much you’re doing it.

David Wright:17:31Yeah. And so then, you know, back to the original question, that’s one of your employees wanting to go get an MBA is maybe warning sign for you, given your own experience there enough. And, uh,

Speaker 4:17:40and you know, to your point, we don’t have many people who go get their MBAs around here.

David Wright:17:45Yep.

Mike Sapnar:17:45Now we did have somebody recently that, um, we asked to go get an MBA. We offer it to say, we’ll put you in the executive MBA program. Okay. We’ll pay for it. Yeah. And I think the NBA is, you know, not going to tell you how to, what the price would deal should be and how to do reinsurance or insurance. But the most valuable experience for me, it was being around people from other businesses and working collaboratively on case studies with people who have different perspectives who had come from banking, consulting, advertising, you name it. I mean he had the full gamut and you’re in your study groups and that was where you kind of learn to think outside the box, bring disciplines and things that have worked for other industries back to what you’re doing. And I, that’s where it was interesting for me. I mean, yeah, you can learn, you know, capital markets theory and um, you know, I took courses on bankruptcy, which, you know, I’ll never use, but were intensely interesting and it just develops your business thinking. And I think, but you can get that a lot of different ways doesn’t have to be an MBA. That was the route route that I chose. Management, you know, I don’t know if you can teach somebody to be an innovator. I don’t know if you can teach somebody management. I mean you can teach basic tenants I guess, but I think it’s more in the, in the personality and experiences then the than a purse per se education. Um, you know, I think you become a good manager by experiencing in a lot of different things with a lot of different people because a lot of different things come at you and you’re managing. And uh, so, you know, if you go, if you go to MBA to get your MBA to become a manager, I, I’m not, I think you might be disappointed at the end of the day.

David Wright:19:49Yeah. So you, you go do the MBA, you do make a switch. So that Continental had gone to CNA

Mike Sapnar:19:59So.. independently. I started. Um, so what happened was, um, and it wound up overlapping, but Joe Toronto, CEO of Transatlantic, in November of 1994, it takes a job to take over Prudential Re changed its his name to Everest, taking public, spin it out and take some people with him from Trans Re. And the, and the people he took were some of the people we took, he didn’t take a lot of people were in the professional liability facultative area. Okay. And I bought a lot of fact from Trans Re. So, um, I, I liked the, I liked the people I was dealing with. So I called up and said, are you looking for people because a bunch of your people just left. And they said, yes, we are. Why don’t you come in and talk to us? So I showed for an interview and the woman I was supposed to to interview with was Lisa Beal who ran special casualty at the time, which we defined as D&O, E&O and medical malpractice. And she had forgotten that we had a scheduled appointment. The only people in the office who could see me were Bob Orlich the CEO and Andy Barnard, the chief underwriting officer. So again, a bit of fortuity right. I show up and next thing I know, I’m sitting with the number one and number two executives in the company. And I interviewed with them and, uh, we, we hit it off and they told Lisa that they thought it’d be worthwhile if she did arange something and meet me.

David Wright:21:24Turn up next time

Mike Sapnar:21:25Yep. And she did and we hit it off and, and, um, uh, she hired me and they hired me to do both Facultative and Treaty. Well actually they said, do you want to do fact or treaty? And I had a, um, uh, a relative, another relative through marriage who was, uh, in the business working for Aon. And I kind of asked her what do I want to do? And she’d say, you want to do treaty? So I said, I’ll do treaty came into the treaty department, did fact for a while until they staffed it up and, and that was it.

David Wright:21:56Yeah. Do you think that maybe a better way of putting this is, at what point do you feel like you became as good of a treaty underwriter as you were an insurance underwriter? Is there such a thing as a difference between those two things?

Mike Sapnar:22:08There’s certainly, there’s a huge difference. I mean, I, um, it’s a really good question. The first of all, and we’ll probably get into this later. Insurance and reinsurance or different businesses, they share nine letters, but that’s about it. Okay. So, well and I’m sure we’ll get back to that. I didn’t become, it took, it took me probably nine months, nine to 12 months before the light bulb went off on, on treaty because it was just different. There were different terminology and different way to price a business portfolio pricing. It’s a, you know, swing rated deals, retro rated deals, cessions factors as

David Wright:22:46You have much more insight into pricing as a reinsurance underwriter don’t you.

Mike Sapnar:22:48Totally. Yeah. And um, you know, I just didn’t even know that terminology. Didn’t know what they were. I mean, I did basically the only thing I knew was what an ILF was, you know, and so, uh, I sat right outside to two women’s offices. One was Lisa Beal, who was my boss, who was one of the best underwriters I’ve ever met. And again, fortuity I learned from her and the person I learned the most from was Betsy Wellington, who was the chief pricing actuary for the professional liability area. And I would just darken their doorstep several times a day and come in and ask questions. And they were very patient and they were just great thinkers of the business. They were very analytical, very thoughtful and very patient and gave me their time. And I, uh, by asking questions and doing, I eventually eventually learned, you know, Betsy and I actually went on to write co-write a paper for the cas, um, on managed care, uh, D&O, E&O pricing and exposures. And you know, that was quite an intimidating thing. And she suggested it because at the time it was an emerging risk. And, uh, we worked on that paper and I wound to presentingi t to the cas, which was good. Imagine a, an underwriter going in front of 250 actuaries. It’s just kind of an interesting time.

David Wright:24:08I read the paper

Mike Sapnar:24:08Oh, you did?

David Wright:24:08Yep, very technical

Mike Sapnar:24:11Good for you

David Wright:24:11Very technical, right? And so it’s, I mean, if I remember correctly, it’s all about there’s a specific way of segmenting the risk, right? And then you’re saying, you know, this, this part where you have to look at a much more granular evaluation of this marketplace and you’ve priced and it was all the different pieces a little bit differently, you know, so I mean it’s, I think it’s a classic reinsurance pricing kind of analysis. Right? Let’s break it down. Let’s think about it from the, from the kind of the bottom up, but in a little bit of an re-aggregating in the ways we want to

Mike Sapnar:24:36It’s so interesting. And look, I think a lot of the theory still applies today because you’re right… Uh, healthcare is developed, but you know, you, you cannot neatly fit medical exposures into D&O, E&O and medical malpractice because of vicarious liability, strict liability, credentialing, um, employment practices issues. And when, when costs, decisions drive medical decisions, is that a D&O, E&O issue or is that actually a malpractice? It shouldn’t cost.

David Wright:25:04What do you mean by costs there?

Mike Sapnar:25:05In other words, the treatment I’m going to give you is based on a cost benefit analysis, not based on my professional opinion. Okay. So if, if that happens, sometimes people would say, well maybe that is based on the policies that were written by the healthcare institution, the, the HMO or the PPO or the IPA PPO preferred provider organization or individual practice, uh, association and therefore I’m just following cost protocol as opposed to medical protocol.

Speaker 4:25:32But a bad outcome was the medical outcome.

:25:34Yeah.

Mike Sapnar:25:35So is that a medical malpractice claim or is that actually an E&O claim from how I’ve picked

David Wright:25:40the wrong methodology,

Mike Sapnar:25:41Exactly the wrong cost benefit analysis.

David Wright:25:45So what’s the answer?

Mike Sapnar:25:45Well the answer was to… you can try to exclude personal injury, bodily injury from the, from the D&O, E&O contract. Market conditions will dictate that

David Wright:26:00Because you want to push them into medical malpractice.

Mike Sapnar:26:02Yeah, if it’s BI, it should be bodily injury should be there. If it’s, if it’s a negligent management. It should be somewhere else. The problem was at the time, um, those were two different underwriting departments, two different policies to different types of people. You don’t want to get in a situation where you get claims arguments. So the paper actually I think ultimately suggested there should be, you know, one policy, three sections and ah, and then price accordingly.

David Wright:26:29I mean that, that maybe it’s a good time to actually talk a bit about how insurance and reinsurance are different, right? Because classic reinsurance paper saying the way this industry is organized is let’s call it out of date, right? So maybe once upon a time, you know, the, the thought of whatever percent medical inflation, which was a of the paper that talks about that and that’s continued. I mean that was 25 years ago and, and where, you know, you have a single, low single digit medical inflation, you don’t think too much about the cost increases. Cause I think that’s what it comes down to is you want to isolate this kind of exposure being medical, medical related expenses from a policy which to isn’t really designed to handle that, that, that kind of risk. Right? And, and now the industry is saying rather, you know, you’re at your expert opinion on the reinsurance side of saying, you know, these things should be priced differently now and insurance companies and I imagine the insurance company responses as you said, well we’re set up that way and it ain’t that easy to change.

Mike Sapnar:27:20Right.

David Wright:27:20And so insurance being a business, which is about more than pricing and underwriting.

Mike Sapnar:27:25Yeah, I mean look, you know, insurance is about a lot of things, but I look at as branding and um, ability to administer well to process to manufacture or however you want to put it. It is day to day hand to hand combat on thousands of of of policies. There’s cross selling going on, there’s all different things. It’s more highly regulated than reinsurance. It’s a, and you’re trying to yeah. And you buy at your volatility, you’re trying to produce a fairly predictable return because all you are at the end of the day basically is a big mutual bond fund, uh, where a reinsurance is much more of a portfolio macro view of the world. Um, that may get very technical on portfolio pricing. And low and try to drive down, um, on, on certain certain types of risks. But the regulatory, um, environment is completely different. Uh, you can change your portfolio in, in a heartbeat, right? There is no mandatory renewals. There is no six months notice or you have to offer a 12 month policy or runoff deal or anything like that. Right. You can, you know, I’m out.. And you can put caps on your aggregates, on caps, on your exposure where you know, insurance is essentially just you add up all the limits. So yeah, it’s, it’s a completely different, different game. And to your point on the pricing side and what, you know, I mean we would get our pricing guidelines from an actuarial department that probably sat on a different floor who was doing some analysis and said, here are your ILF here are your IBNR. I mean, we had no say on IBNR factors, we had no sort anything like that. Right? Yeah.

Speaker 3:29:15That’s where I came from. And you start digging and I find that a cultural feature of reinsurance and interacts with insurance and I’m being a reinsurance broker. I see that all the time. Right. And I’m kind of in the middle of that and a lot of instances. Is there a sense of exasperation I think amongst reinsurance people when thinking about certain insurance companies because they’re saying you guys aren’t doing it in the perfect way that would make this pricing to totally adequate. And I think that where there’s a miscommunication is the insurance people tend to honestly undervalue a little bit that contribution because I think there’s a sense amongst them that listen to the scope of what I have to worry about here is really big, really big. I mean the systems issues and then the regulatory interaction or the distribution itself communicating to distribution, you know, being the farthest point away from a reinsurer. It actually, the Insurance client.. Insurer, insurance insurered relationship is one that we don’t see much.

Mike Sapnar:30:07That’s correct.

David Wright:30:08Right. And that, and that, that introduces some complexities. It’s very hard, I think for us to appreciate. And so coming back to a reinsurance underwriter, how much of that should a reinsurance underwriter understand?

Mike Sapnar:30:18Well, if you ask us a lot of it.

David Wright:30:20Yup.

Mike Sapnar:30:21Uh, we, we prefer to this another interesting point. I mean, we prefer to hire people out of the insurance industry to the reinsurance side. Okay. Because, you know, we’re a derivative, right? We’re a derivative, an insurance product that rid of the day. So you should understand the distribution of the complexities around that. Um, you know, what’s the difference between a retail book of business and a wholesale book of business? What’s the difference between the admitted and non admitted and policy language and the exposures around that? Uh, and the, we, we’ve hired six since I’ve been back in New York, 2002, we’ve only hired six people out of college. You know, most of the people we’re hiring are people who understand the original business. It helps a lot when you go in and do an audit or you’re trying to really have a discussion around where the market’s going, or you’re looking at actuarial data or you’re looking at limits profiles, or you’re looking at mix of business to really understand what that means to some, to, to a certain degree.

Speaker 4:31:20So we think it’s important. Do you have to work in an insurance company to be successful in reinsurance? No you don’t, I mean Gen Re, you know, they would take tons of people out of college, send them to jump school and teach them the basics of the business. But that was a different time and that was a time when reinsures controlled all the information. Reinsures control the bulk of the capital. They drove a lot of the pricing, they drove a lot of the information and data that was that the insurance companies just didn’t have it because A), they were small, much smaller. B) Information Systems weren’t, weren’t as good and uh, and it wasn’t captured and C) they tended to be much more locally and, and a Prokera we focused either specialty or regional as opposed to big nationals. So they didn’t have the wide perspective that reinsurers had.

Speaker 4:32:10The beauty that a reinsurer still brings to the table today is a much more, a much wider lens to look through the businesses, the trends, you know, as an insurance company can get too close to the business and not realize you have a concentration in, you know, REITS for D&O because you’ve been cheap. And not realize that you’re, you know, you write too much primary tech business. And, and I think what we’re starting to do, and this is getting a little off topic, but what we’re starting to do is what we’ve been doing is we take that data and we can now map an insurance company’s portfolio to the broader market and say, we don’t know if this is part of your strategy or not. But you know, in the middle excess layers you tend to be cheaper than the benchmark or your portfolio has a skew mix that is more towards um, hedge fund managers. Um, then commercial, you know, is that an area you like or you, um, unknowingly cheap and you’ve wound up with that business? What is driving that? What, here’s where you’re, you’re below market in terms of mix, where you’re above, here’s where you’re below market terms of attachment point, here’s where he above and here’s where he below market on pricing. Here’s where you’re above, does that match with what you’re trying to do? And I think that’s where we can get really good feedback.

David Wright:33:29So scope is pretty broad there of what reinsurers can do and tend to be typically pushed through the, the, the mind body of a, of an underwriter, right? And, uh, given that the scope is so broad and there’s so many things that a reinsurance underwriter must do, how do you measure reinsurance, underwriter productivity,

Mike Sapnar:33:50Well ultimately by profitability.

David Wright:33:52Sure. But that takes a long time, right?

Mike Sapnar:33:54It does. But you know, we have 40 years of data. You can have fairly accurate IBNR, you know, we do profitability studies every year with every con, you know, every lump by every line of business by office since 1986. So, uh, with projected numbers the um, and you’d have to decide whether, you know, when you look looking as or how does your relative performance versus absolute performance and all that. But all anyone I mean I think cares about is whether I wrote a profitable book of business and, and um, we’re not measured on, on, on volume. The, the, again, it’s a very good question. When I look at underwriters, what do you look for? Number one is you want to see all the business and a skill that is lost increasingly is, first of all, you can’t be a pontificator. And one of the things that Lisa Beal who I talked about who hired me and I learned from her is she was the best I have ever seen at saying no and getting the next submission. And I think that is the, that is a key. You got to see it all to build the best portfolio that you can.

David Wright:35:18What did she do? How did she do it?

Mike Sapnar:35:20It was, it was mannerism. It was explaining why she was declining it and usually offering another suggestion as to how under what terms and conditions would she provide capacity. And I think that’s all broker can ever ask for it. Right? A reason as to why you’re saying no and an alternative they can present the client if they don’t have anything else. Yeah. And if you do those two things and you do it respectfully and um, I think that that goes a long way to becoming a good underwriter. And you know, around here and uh, you know, our, our, obviously our brokers are our, our distribution, but underwriters are producers. You’ve got to get the broker to send you to the account. They’re under no obligation. Um, you got to get to know the client to sell what you’re bringing to the table as Transatlantic. Uh, and so you have to do that in a way that people want to trade with you.

David Wright:36:13You know, you, you, you do have a little bit of direct business and I’m wondering what you think about the differences between the business model, from a reinsurance perspective or reinsurance manager’s perspective. Is it, is it a different kind of person that does direct reinsurance versus broker marker reinsurance?

Mike Sapnar:36:31Um, I don’t know if it’s a different kind of person necessarily. Uh, I think if you do one or the other, you strengthen certain traits that you might have.

David Wright:36:44Sure. Okay.

Mike Sapnar:36:44Um, but I think anybody can do either. Yup. Um,

David Wright:36:48What traits?

Mike Sapnar:36:50So you know, if you’re in a, in a, um, in a direct mark in it, if you’re direct reinsurance company, it costs you money to say no. Yeah. Right? So you have to be very efficient in your marketing and identifying what is, um, where you should spend your time and in terms of producing business. And then you’ve got to, you have to be in a position where you are confident in your convictions because one of the drawbacks of being a direct reinsurance writer is there is no market check. So you’re out there quoting based on your view of the world insulary to the client.

Mike Sapnar:37:38And when you’re a broker market and new quote, unless you’re quoting 100% of the deal, you’re going to know if the market’s filling it out. And whether you’re at a price that the market now, the market is not always right, obviously, right? But we found oddly that our results are better on a syndicated basis than deals we wrote 100%. And part of the reason for that is, um, mistakes made when you do 100%, if you are going to do 100% of the deal, you better measure that downside. And reinsurance is always about the deal. You don’t, right or the bad deal you do right. Not about the nine good deals you wrote because we’re in an asymmetric trade. There’s finite upside, which is your premium. And there’s essentially infinite downside, obviously not, depends if it’s captured or limits are out there. So the risk reward can be quite unbalanced. And so you’ve got to figure out the deal’s not, not the right. And we are broker market, um, underwriter, you know, to some degree that you see a lot more business. It, it comes in and you’re triaging. So it was indirect reinsurer. You’re looking at what’s out there, you’re choosing where to spend your time and concentrate it and what companies you’re going to go after. And as a, as a broker underwriter, you triage them what’s coming in and you’re kind of picking those submissions out and you kind of flow and this is what I’m going to spend time on and um, you got a market check and sometimes you don’t get to something and someone says here’s the price, you know, that speeds up your analysis. Um, and when you’re in a brokered market you will write a deal one year and maybe come off at the next year. If you invested time to get a direct relationship and you go in and you write that deal very, very unlikely you’re non renewing that, that you would not renew that to next year. You’ve invested so much in it.

David Wright:39:36Yeah.

Mike Sapnar:39:37And I, you know, part of it is the cost of that and part of is the emotional attachment to us and uh, just like, uh, you know, as a broker. Right. Yeah.

David Wright:39:46I think that in some ways the one way of modeling what a broker does is your outsource in the emotional attachment to,

Mike Sapnar:39:53I agree with that. There’s two things, the emotional attachment and the tough message.

David Wright:39:57Sure.

Mike Sapnar:39:58Right. No one likes to deliver a tough message, but it’s easy to tell it to somebody who, obviously it affects the broker, but it’s not the broker’s company. And the broker’s got hopefully other accounts that, you know, and other markets. Um, it’s hard to do. You know, I’ve seen it time and again, people don’t like to deliver tough messages. Right.

David Wright:40:17It’s hard. It’s painful.

Mike Sapnar:40:18It’s totally hard. And, and I think if there’s one thing I hope that I am at least, um, developed a reputation for. It’s for being candid and honest with, you know, what we’re going to do, what we’re going to think and, and standing by our, our, our word and, um, you know, we, we try, I try to instill that in, you know, through the culture. I think we do a pretty good job of it. I think we’re consistent. But, you know, everybody’s different.

David Wright:40:49Has anything changed about what kind of a person is successful and reinsurance underwriting sense of beginning your career from an underwriting standpoint?

Mike Sapnar:40:58Um, yes and no. This is a great question. Um, so look, I think that reinsurance underwriting is one of the best jobs in the world because you can be real.. it’s, it’s so creative, right? You can be super creative. Now the market forces are going to dictate as to what people will buy. But the reinsurance is the swiftest most flexible capital there is in the world, right? It’s a one year deal is generally a standard contract and you can do a lot of different things within it. And it’s a one year commitment. This isn’t issuing equity, this isn’t debt, which requires, you know, SEC registration and lawyers and is and is five years, 10 years or whatever, 30 years if you want capital credit. Um, so you’re selling a very, uh, attractive product, uh, at the end of the day. And, and the one thing we think is important for, um, reinsurance underwriters is dealmaking and it’s really hard to find good deal makers.

David Wright:42:04What is that what is a dealmaker?

Mike Sapnar:42:05So a dealmaker finds a way to close the deal or finds a way to get to yes. In terms of offering alternatives. And I think a key part of that is the ability to have empathy, the ability to sit in the buyer’s seat and listen and look at your deal and say, if I’m on the other side of table, would I buy this deal where if I’m on the other side of the table, what problem am I solving and what’s the best way to solve it? And too many times our underwriters in the market, um, we’ll just say, here’s the quote, or here’s the terms and conditions are, here’s what we want to do. And a lot of times they’ll come up to come into my office and say, mmm, yeah, this is what I want to quote. And I’m like, who’s going to buy that? You know? And you know, obviously relative to market conditions. And in the other extreme the, people will decline business and you know, we’ll hear it didn’t get placed or you know, um, maybe ultimately the terms were better than what we thought. And I’m like, well, why didn’t we get creative around it? And so, you know, and it’s the ability to operate within those extremes. Know where the market is, know where the client is and know what, how and what to sell.

David Wright:43:13So when you were evaluating talent, right? Hiring an underwriter, be the, uh, new reinsurance underwriter or even just evaluating somebody who let’s say doesn’t have a really long track record, how do you, how do you assess that creativity in somebody without, without that track record? So is there any correlated to it, you know, like,

Mike Sapnar:43:29Yeah, I think, I think first of all, you’re going to ask them a lot of nonbusiness questions.

David Wright:43:34Okay. What’s your favorite one? What’s your favorite non business question to ask somebody?

Mike Sapnar:43:36Um, I usually ask him what is their favorite book. And why should I read that book?

David Wright:43:43What’s your favorite book and why should I read that book?

Mike Sapnar:43:45Oh, I got to, I have a, uh, a few, a few favorite books. Um, I think for me, I always go back to Liar’s Poker and so I’m a huge Michael Lewis Fan, so I read a lot of it. So I do like, I do like Michael, uh, I do like Money Ball. Well, yeah. But Liar’s Poker, uh, is, is a story. And, um, it’s about hubris. Uh, and it’s, it’s about creativity. And I, uh, I think there’s just a lot of lessons to be learned through that book about hubris and about being creative.

David Wright:44:24Yeah. Which, and what do you, what do we know about Hubris and creativity?

Mike Sapnar:44:27Well, we know that creativity, uh, in my opinion builds great and Hubris.. hubris brings them down and we talk about hubris around here, hubris around you as a person, right? Yup. Everybody’s equal and hubris around risk. You don’t know everything and you better measure risk reward and, and know that you could get some something wrong.

David Wright:44:48And what’s a time in your career where you’ve been hubristic?

Mike Sapnar:44:54Ooh, 1997 to 2000. I was in London and I, and it was a soft market and I was in, you know, dealing with Lloyd’s syndicates in a really bad, uh, business environment. And I wrote a lot of bad business.

David Wright:45:08I mean, why what happened?

Mike Sapnar:45:10Well, uh, hubris you know, I thought you could put a price on anything. Okay. Um, you know, we wrote a deal that had a swing rate, 750,000 x 250,000 with a Max rate of 55% of the premium.

David Wright:45:22Okay.

Mike Sapnar:45:23And I’m like, how can this lose? Well, when the original business is running above 200%, if you loose, and you know what’s worse, the loss ratio cap was driven on the Max rate. So you go to the Max, you multiply it times the loss ratio captain and get a huge number. I would have been better off way underpricing it with the 300% loss ratio, cap than getting a big swing up and, and I think, uh, and why did it happen? You know, I thought I was a D&O underwriter. This is was D&O business. I thought I knew it

David Wright:45:54Because you weren’t alone, right? There was a period, were, were a lot of people behave that way. So what causes like a whole market to, to just suddenly think,

Mike Sapnar:46:04Well, you know, it’s, it’s, it’s part of it’s human nature. You know, we’d come in and you’re coming off all these good results and you just don’t, um, you’re looking in the past and saying this is a good business. But back then, which I think is different from today, even though it’s only 20 years later, is data. You just didn’t have the data and you didn’t have any

David Wright:46:24it’s different now, isn’t it?

Mike Sapnar:46:25It’s way different.

David Wright:46:26And if you look at some statistics, and I did this recently, where just just, let’s assess kind of aggregate volatility for, I don’t know, reserve strengthening or something in the last, since the SNL data dawn in 1997 big cutoff date for a lot of things I do like this and you know, kinda moving up and down hard market and then flattens out for the last 10, 12 years. Yeah. I mean, the volatility of the industry has dropped. It’s different. Do you agree with that? Uh, I think that you’re talking for all lines. Uh, yeah. I mean, I would say, yeah, most lines. So it depends on how we’re measuring volatility.

Mike Sapnar:47:01So frequency in my opinion is cyclical. Okay. And the, um, we had a cycle of low frequency and I think we’re coming out of that cycle and cycle. We’re seeing it. It was a, it was a very long cycle, but I think a big part of that cycle, I ironically again, and this is social, um, in in two ways, the two things I really believe in. One is the financial crisis drove a lot of the frequency and severity down. Yeah, sure. And the reason was you just couldn’t get money. He couldn’t get blood from stone, so people didn’t bring lawsuits. There was no money to be had, especially in, in D&O and medical malpractice and certain, um, you know, uh, uh, uh, GL lines. Uh, the other people would point to is, you know, a social change and judges and a Republican administration. I’m a little less, I’m a little more circumspect about that. Sure. It’s about whether that’s valid or not.

David Wright:48:02Yeah. Uh, one of those other story, let me just see what you think of this one is that we are better as an industry at measuring things. There’s more data as a result. So when I think of like when you say what’s the vault, what volatility, I mean, you’re talking about kind of drivers of insurance claims costs, right? And I’m thinking, how about the output way on the other end of Insurance Company underwriting results. I think that those are more stable than they have been in a very long time. And you know, and I’m wonder, nothing’s 100% right because there’s going to be industry, economic, macroeconomic factors and everything, right? But for whatever reason, the ability of the insurance industry to navigate through this current macroeconomic environment over a pretty long period of time has been better than it has been in the past.

Mike Sapnar:48:43Yeah. But, uh, I will,

David Wright:48:47Because you’re saying that the degree of difficulty went down.

Mike Sapnar:48:49I, there’s a, there’s a few things in there. Um, so number one is the reserve releases, the casualty market was way better than expected. So the reserve releases that were there and then now the comp market has been way better than expected. Some reason has allowed people to, to smooth the results. And if you look at the results as to how much has and sorry, the second point is there was no cat activity from 2006 to 2016. So if you look at, if you take out x-cat x-favorable development, it’s really not that great.

David Wright:49:22And be breaking records though CAT record, I mean every year or whatever. Most cats ever.

Mike Sapnar:49:26I mean, most of the last two years. Yeah. And the results have showed the strain of that, you know, um, you know, you look at the, the reinsurance market especially now, some of those losses have been outsourced to third party capital. Um, but the other thing that has helped is without, uh, a robust fixed income return because of where interest rates are, you have to price to a better underwriting profit because your two levers are, um, our investment income on leverage that you have, which was historically eight to 10%. That is now three to five. So when, when it, and your other is underwriting profit. So therefore, I think some of that, um, lost income on the investment side is translated to people being more disciplined on pricing and therefore the results look better. I’m not sure the ROEs are any better. Um, now when you have 10 years of no category three hurricanes making landfall in the United States and Japan going 14 years without a wind event, you’re going to get additional margin that hasn’t historically been there. I don’t think you’ll see a run. I was having a, a conversation with Kara Raguel who runs.. The CEO Gen Re. Um, and she made an interesting point, which is like, I don’t think you ever got to see this kind of run again where you’re coming out of a, uh, uh, incredibly hard casually market that extended far more than longer than people thought. There was probably extended even more by the financial crisis. Uh, and this created an incredible reserve releases, a recent period of very, very good comp results that haven’t been, you know, really seen in a long time and no major catastrophes. It’s like that is like the tail event on the other side.

David Wright:51:15Sure.

Mike Sapnar:51:16To the favorable. So remains to be seen. I think you’re seeing pressure on people’s results right now.

David Wright:51:20Yup. Yup. What do you think about about? I want to talk about M&A.

Mike Sapnar:51:25Yeah.

David Wright:51:26So that’s been another feature of the last 15 years. Right. And Trans Re went through an episode, at the beginning of your tenure

Mike Sapnar:51:34Episode’s a good word [laughs]

David Wright:51:36Yeah. I mean, which was, you know, which was played, it was somewhat publicly, which is always a little

Mike Sapnar:51:41incredibly publicly [laughs]

David Wright:51:42What are your reflections on that, on that time of your life? What was your dominant emotion through that period? Were you angry? Were you, were you anxious? Were you,

Mike Sapnar:51:49So the one thing, um, ah, those were incredible. Um, I guess for me, six months, um, I was never angry. Okay. Um, a couple of things. I was angry decisions I was angry about internally, but I was never angry. Cause you’re a public company, it’s fair game, right? It’s business. Yup. And there’s a lot of things we can talk around that. Um, so, uh, I wouldn’t say it was, you know, the focus was, was um, you try, I think just to reset. So, so people know what happened.

David Wright:52:27Yeah, definitely. Tell us the story. Aig sells down at stake, right. So right. Pulls the pin out of the dam.

Mike Sapnar:52:34Well, basically, you know, we’re, we’re sitting at ground zero during, during September of 2008 when the world is imploding and AIG is in the middle of that. And they have, AIG owns 59% and Martin Sullivan’s our chairman. And so AIG a, the government comes in and takes the desks and the pencils and basically takes over AIG and the person they’re going to do was sell assets to get down to the debt. And, um, we’re one of the assets that’s unimpaired. So we’re one of the first people to go and we’d go out and we market the company and we do a secondary offering and, and sell down AIG to 10% and then nine months later they go to sell the entire stake. And so that was my first experience of going on a road show and meeting with investors and, you know, getting people to buy the company. Um, which I think at the time Aig sold us we were, we were sold out at 62% of book value was the middle of the financial crisis.

David Wright:53:29Wow, what a deal

Mike Sapnar:53:29Yeah. Well let’s go now. Spin forward, they buy Validus for 1.8 times book about it.

David Wright:53:34Yeah.

Mike Sapnar:53:36So not a great trade right. So that’s, um, which is also completely ironic, right? That Validus is now owned by AIG. And so anyway, um, we’re sitting there and we’re like, you know, we’re a publicly traded reinsurance company. Uh, all we do is reinsurance and, you know, we’re out there kind of raw, vulnerable. What’s our, what’s our strategy? It’s a difficult market. We’re trading at 62% of book value is

David Wright:54:01What does vulnerable mean in that context. I heard the word before. What is it?

Mike Sapnar:54:04Well, I think anytime you trading at a deep discount, the book, you know, shareholders, they’re unemotional, you get 20%, 25% gain tomorrow, they’re gone. Right? And, uh, in most cases, so you’re vulnerable to people being able to pick you up for a cheap price who have either cash or a highly valued, um, uh, equity, the currency that they can use to buy you with. Now, fortunately, financial crisis, a lot of people were impaired as well, especially in our industry. So no one’s going to come in and do a stock deal probably. And um, we’re like, well, the, the other major problem for us is we were onshore and so we’re fighting with one hand tied behind our back. We’re basically the only company with 35% tax rate and you’ve got to be a lot better to outperform your peers who are averaging an 8% tax rate. And we didn’t think that that was necessarily possible over time, right? In the short run sure. Um, but over time, probably not. And what, and when interest rates really compressed the big value of being offshore, it’s not the underwriting profit. The tax free is the investment income that’s tax free because when I’m onshore paying 35%, I’m buying Muni bonds because of the tax break, whereas people offshore are buying corporate bonds at a higher yield and paying zero tax. So, and you’re leveraged a lot right? In, in insurance and reinsurance, that was that. But with interest spreads so low at the time it wasn’t as um, as manifest of an issue. Right? So we were very fortunate there. So nothing really happened. But we said, let’s be proactive. So one), let’s get bigger two) Let’s get insurance and three), let’s get off shore. So we get into talks with Allied World who would give us all three of those and you know, both born out of the AIG families, similar culture. So we decided to do a book for book merger, merger of equals, right. Um, so we put out our s one, which is basically how it comes about. This is the document and that’s usually when you’re, you know, people will look in and say, Hey, is there an opportunity here in Validus looked in and said, hey, let’s, let’s make a hostile bid and unsolicited bid. There’s other history behind that. I won’t go into there, but let’s just say the Validus would’ve said they would have expected conversation before we did a transaction. There was not one, I think they felt a little miffed by that. Sure. And said, we’re going to go and go hostile. The problem I had with Validus at the end of the day is it would just, um, disingenuous with some of the information put out there and reserve it and what have you. They said we’re 500 million under reserved. It turns, it turns out we had a $2 billion, um, redundancy. But that’s

David Wright:56:45in retrospect now you can say

Mike Sapnar:56:47right now, I can say it totally in retrospect, we didn’t think we were deficient, but I did not know we were 2 billion redundant. Absolutely not. Yeah. But anyway, so we get into all that and that basically opens the gateway, um, into, um, uh, other part of the other parties looking.

David Wright:57:03That’s. What’s the psychology of that? So you’ll have more insight than me, but both of us were probably spectators to other people suddenly feeling like they can come in. It was like, almost like you opened the door to like, well, hey, let’s, you know, there’s, there’s a, there’s a fight going on here.

Mike Sapnar:57:16You have a fiduciary duty once somebody else comes in, uh, uh, to open the process and, and Eh, for, for shareholders, right?

David Wright:57:25Invite them in and you say, come, come, come and go.

Mike Sapnar:57:27Basically we had to, yeah, we basically had to go out and get a market check. Yeah. Now. So lessons learned. So we’ll just to spin forward. So we wound up then with five parties. Ultimately we had a bunch of people look, five parties ultimately make offers to buy the company including Berkshire Hathaway

David Wright:57:45That’s a lot of people.

Mike Sapnar:57:46Yeah. Tell me about it. Right? Yeah, we were, we were in meetings and due diligence 24, seven. Gosh, I mean it was, it was three hour nights. It was three in the morning for three months. Right. It was, but one thing I will say right about the experience. Um, I’d never want to do it again, but I wouldn’t change it for the world.

David Wright:58:04Okay.

Mike Sapnar:58:04Right. I learned a ton. I learned a ton and, but I wouldn’t ever want to go through it again.

David Wright:58:09Tell me something you learned.

Mike Sapnar:58:11So, um, first of all, I learned there, uh, no mergers of equals it doesn’t exist in Wall Street parlance. Right. There’s always a buyer and a seller.

David Wright:58:20Yup.

Mike Sapnar:58:20And even though we were a bigger company, we were getting a premium. We were doing a book for book swap, but we were getting um, uh, a um, well let’s come back to that. We were getting, it was a book for a book deal. We were going to have seven of the nine top positions, um, reinsurance was going to be a dominant uh, uh, part of the portfolio. And we felt we weren’t the seller at the end of the day.

David Wright:58:54Yeah.

Mike Sapnar:58:54Cause we were, we were the bigger company.

David Wright:58:56This is the Allied World transaction.

Mike Sapnar:58:57Yes. Yep. We were a bigger company. The issue was is we were getting a bigger premium in the book for book value based on the market price. And so Wall Street kind of said, well Transatlantic is the seller, they’re getting the bigger premium. Is that a big enough premium? Is there something else out there? Hmm.

David Wright:59:13What does it matter?

Mike Sapnar:59:15Why does that matter if you’re the, if you’re the seller?

David Wright:59:17Wall Street’s opinion. Yeah. Yeah.

Mike Sapnar:59:19Well you’re basically putting yourself in play, you’re saying, you know,

David Wright:59:23So they’re going after you instead of Allied World.

Mike Sapnar:59:23Exactly. Exactly. Um, and Allied World’s.. Scott (Allied World CEO) was going to be the CEO. So they kind of took that as a signal that, um, Allied World is the acquiring company,

David Wright:59:35They were a buyer, not a seller.

Mike Sapnar:59:36And we were going to have, but we were going to have the chairman, I was going to run the reinsurance and we’re going to have, you know, chief actuary, we going to have Chief, um, uh, claims counsel, you know, all this stuff that we were going to be running. But this is, you know, and then we did, did all that and the interest in doing a deal because we thought the parties will be better off. So number one was no such thing as a merger of equals number two was, um, you get a lot of advice, but it’s advice and at the end of the day, it’s your company. It’s your decision. So consider the advice, but trust your gut. We had a situation where we had a 22% shareholder in the company of the Davis Funds, the Davis Funds were a great owner because they were relatively easy to work with. They were, they did not look to control anything. They were, they were, uh, cooperative, collaborative, listened as you know, owning 22% of the company. And when we did the deal, we decided, you know, there’s a question about bringing somebody over the wall. I, you tell them about the deal before it happens to get their approval, but they are then restricted from trading in the stock.

David Wright:60:43Okay.

Mike Sapnar:60:45The advice from counsel and from Goldman was do not bring them over the wall. They don’t want to be restricted. Yup. So we go out, I don’t know, it’s a Friday. We know we’re announcing the deal Monday morning. We try to call them over the weekend to give them a heads up. We don’t get ahold of anybody. That’s a cultural thing at Davis we can talk about no one had their phones on or anything that they just shut off on the weekends. They woke up to the news on Monday morning and they weren’t happy. And so now I’ve got an upset 22% shareholder that if they endorse the deal, I’m done basically. And if they don’t endorse the deal, then it’s kind of like what’s out there. Right. The major shareholder doesn’t, isn’t endorsing the deal. And um, now my belief is somebody got in their ear before we did, before we talked to them and said, hey, this deal came out. Don’t do anything. Let me see what we can put together. You’ve got time. And that really started everything unraveling. And our gut internally was to make sure we didn’t announce anything before Davis knew. And advice was not to do that, I think because bankers just always want to move forward.

David Wright:61:52Sure.

Mike Sapnar:61:53And it was a bad mistake.

David Wright:61:55So is it your choice to bring them over the wall?

Mike Sapnar:61:57Yeah, it’s our choice ultimately 100% a hundred percent it was just their advice.

David Wright:62:03Wow. Interesting. It’s interesting as like from a shareholder perspective, if you’re a fund that any of your call it, larger holdings could just bring you over the wall as any point and you’re like, oh my gosh, now I’m in this. And then some of them over.

Mike Sapnar:62:13So then you become an insider and restricted on trading and yeah, and look, if they had said we brought him over the wall, we don’t, we’re not sure about this deal, you know, that would have, then we would have gone back and we would discuss more, looked at options, maybe pulled the plug a lot of different things we could do.

David Wright:62:28Yeah, sure.

Mike Sapnar:62:29And you know, there was one thing that, um, so Mary Pryshlak, who was at the time, the lead analyst at, at, at Wellington a she now has a much bigger role there and a really good, um, a student of the business. Um, when I talked to her after all happened, um, she just, you know, her one piece of advice was listen to your shareholders because I didn’t know what, you know, what are we gonna do with these five beds and everything? She says, go out and talk to your shoulder shareholders listen to shareholders. Now when the deal was announced and there speculation, you get all these arbitragers had come into your stock and all they want is a nickel more. And they called me every day. They’d call multiple times a day. They’ve yelled at us, we’re not engaging. We didn’t engage Validus right away because we wanted them to sign some NDAs. Um, and they, they were not nice people.

David Wright:63:23And you have to take these calls?

Mike Sapnar:63:24Well, I felt it was my obligation to take the calls.

David Wright:63:27Okay.

Mike Sapnar:63:29They’re ultimately going to be voting the shares.

David Wright:63:31Yeah, sure. Yeah.

Mike Sapnar:63:32And this was a very public fight, you know, valid. This is claiming and incompetent board said we’re self, we’re entrenched, all that stuff. Right. So, you know, you do not want to appear entrenched.

David Wright:63:43So to what degree does, does everybody involved here see this as kind of a game and to what degree does this hurt?

Mike Sapnar:63:48I can tell you, and, and I hope he listens to this Ed Noonan sees this as kind of a game, right? And, and you know, it’s, he’s right in a respect, right. It’s, it’s, you know, business is a game, right? Game Strategy. It’s game theory. So, um, and, but you know, when Ed sues you and says it publicly and says you’re incompetent and I was personally sued.

David Wright:64:11Of Course. Yeah.

Mike Sapnar:64:13But Ed and I have actually a very good relationship because when you talk, I didn’t get angry. You can’t get emotional. You, you have to stay focused. And I think

David Wright:64:22Focused on your next move on the game board

Mike Sapnar:64:24Everything, on everything. And um, now if you talk to most people at Transatlantic, you know, he’s, he’s like Voldemort, right? And that you’re not going to. So, um, so it’s the one thing about a merger too, is you learn a lot about your company because once other people started doing due diligence and you got to start answering some questions, you learn things. It’s amazing. And, and maybe it’s a little bit of an indictment, but you start going deep and you learn things. And there’s nothing like a, you know, basically a business colonoscopy. It is. You really do learn.

David Wright:64:59And you know, what’s interesting about that is in some ways that mirror is an argument. The reinsurers make it out of their clients, right? We’re going to, we’re going to pull up the drains here.

Mike Sapnar:65:07That’s right.

David Wright:65:07And you’re going to learn something. They’re like, well, what do I need to learn about my own business?

Mike Sapnar:65:10That’s a good point. And I think, and it’s a really good point, and reinsurers need to do that without coming across as, as arrogant, I think if you’re going to get the best result, because at the end of the day, yes, we’re asking to learn and we’re asking learn because we don’t know your business as good as well as you do, but you might learn in, in with us while we’re doing that. And you’re exactly right.

David Wright:65:33So one other thing that’s interesting about that is that the ring, the people over the wall idea me broadening the embrace the tent is a, is a very insurance kind of, of, of, cultural feature, right. For the insurance industry is weird in some ways where people do collaborate in the sense of reinsurance and their shared deals and

Mike Sapnar:65:52syndicated deals.

David Wright:65:53Right. Syndicated deals. That’s right. Yes. Right. So you’re kind of relying on other people. And as soon after that, you entered into an interesting arrangement with Gen Re, and Trans, right? Where it was a collaborative, I mean you’re competitors. Right? Right. Didn’t something, you know, we have, there’s a grand sense or a narrow sends some of your direct question, but it really, Eh, you know, there’s a, there’s a partnership there, which is in some ways not that unusual. I think the specifics of that deal are pretty unusual. Yeah. And you can you describe that if you’d like? Uh, but, but it’s an evidence of something which is very insurancey, which is we’re collaborating to try and grow our businesses.

Mike Sapnar:66:23Right. Yeah. To, it’s an interesting deal. You know, I think the, the structure of the deal is great. Um, unfortunately we’ve had some cat losses, so hopefully we get through that. And I, you know, from a financial standpoint, that’s probably been a little painful for, for Gen Re, but I think, um, uh, ultimately it, it’s a, it’s a, it’s a great deal for all parties.

David Wright:66:48Why? Maybe describe it quickly and then…

Mike Sapnar:66:52Um, so the deal is, um, I think it was 2016 now. Yeah. 2016, uh, when, um, Tad Montross announces his retirement and there they’re putting Gen Re over to, um, to under Ajit’s control. And, you know, my feeling was that, uh, if Gen Re came into the brokered market, it would be bad news for us. It’s a, it’s a powerful balance sheet. It’s a great brand. And, um, you know, they could, they could really be a quite effective in the broken market in my opinion, because you’d be, the brokers would have access to the highest rated of balance sheet in the industry in the US which they currently didn’t have. And so we started, I really started as a defensive move and I, and I called Ajit and I said, look, you know, Ajit’s been in the broker market his whole life.

David Wright:67:46Yep.

Mike Sapnar:67:47And I don’t think, um, he was going to sit on his hands with Gen Re. Uh, he has a great balance sheet with talented people and he wasn’t going to just, it, it kind of shrunk. Um, and I wouldn’t say it lost its way. They had a strategy and the, and I’m sure produce good profit, but I think it was under underutilized and I thought he’d want to be in the broker market, would that balance sheet. So, um, I said, look, you know, if you’re going to come into the brokered market, you either have to change the culture of your company and have direct people do that. Um, which we all know is very, very difficult. Um, or you got to go hire a bunch of people and generally already had concerned about expenses because they had, um, construct it would just the portfolio significantly. Um, and it direct operation runs, you know, a lot of internal expense. Um, three you can buy somebody. Um, but I don’t think that was in the cards,

David Wright:68:47but they tried to buy you,

Mike Sapnar:68:47they tried to buy us three times, which not a lot of people know, but they tried to buy us even before the hostile takeover. And, um, and or you know, we can partner together and I can give you variable cost access so there’s no fixed cost. Um, and um, I can do it at a high integrity underwriting. They’d always. So he said, well why don’t we do a retro? And I said, I don’t want the retro, I want to be able to sell your balance sheet in the broker market. Cause I think that’s far more powerful from a counterparty diversification. And the real goal he and I both had was to go after Munich and Swiss, his direct book of business together and do 100% deals, uh, and give the broker market an alternative to that. The problem was the market hasn’t really cooperated in terms of pricing and cause you know Munich and Swiss can be quite aggressive there but we wound up picking up a lot of business just by hanging around the hoop because of the Gen Re balance sheet. So they, 80% of the businesses is in the brokered market, our pitch was why don’t you want to see 80% of the business that’s out there. And the deal is we can’t put a line out bigger than ours. We put out an equal line on both new and renewal business. We have the right to retain our share on renewal business. We try to assign equally a new business, it’s always up to the client and the broker as to how, how in what capacity. But we’re selling both with the idea of basically duplicating Trans Re’s North America book for Gen Re. That’s the goal. And um, so I think it good for Gen because it’s access to eighty percent of the business. This place in the marketplace at our underwriting standards, um, and at a variable cost. And we say around here, we treat our money like it’s our own and we treat Gen Re’s money like it’s our parents’ money. And because, and, and that is true. That is valuable capacity to have. And, um, I, I want to, I want to be successful for them. I want to produce an underwriting profit. It’s obviously good for the, for the brokers because they have access to the balance sheet. Um, and if business is written through the broker market, um, you know, Gen Re has said, we will not move it direct. Um, so that’s, that’s an opportunity. It’s great for the clients because if you were to go down a schedule, um, I guess it’s f and then recoveries and premiums written, um, uh, they have huge counterparty credit limits with a risk with Swiss and Munich and Gen Re did not show up on a lot of peoples’ sheets. Yes. So chance to diversify with the highest rated capital and obviously it’s good for us because a lot of cases we can, you know, maybe drive differential terms, we can offer more capacity, we can offer a high quality security with no more administrative work.

David Wright:71:33Oh, I want to, so we’re running out of time actually, but I want to come back to maybe one theme that that’s been through this and certainly in that last kind of segment there, which is on things that both the market that continues to surprise you. Is there something that, that you, that you would just baffles you about this marketplace and that frustrates you? Maybe in some ways, um, and uh, and that may be you see as something that should change or needs to change or can change?

Mike Sapnar:71:59Well, I think, um, you know, I think when you see two planes go into two buildings on September 11th, nothing ever surprises you anymore to me.

David Wright:72:15Right.

Mike Sapnar:72:16Um, so I mean, are there, the only thing that’s inexplicable to me is the, the business as a whole, the industry as a whole, um, continues to shrink as a percentage of GDP and the overall economy. And we continue to have a product that only returns 50% of the, of the, um, of the spend to the consumer. Yeah. And I think if we don’t change that, we’re going to, we’re going to become obsolete.

David Wright:72:47Right.

Mike Sapnar:72:48And you can now, I think I was at a, at a presentation where Rod Fox showed a slide of, um, Michael Douglas on the beach and the scene in Wall Street where he’s talking on a telephone that’s probably two feet long, a mobile phone, and then he shows a slide of, of, uh, the computer in our pocket. That’s also a phone. Yeah. And then he says in, we’re still selling the same reinstatement one in a hundred, you know, cat programs that we sold back in the 80s here. And in 2019. And if we don’t innovate and get the costs down and, and get the consumer more of the cost of goods sold, returned to them, that it’s, it’s, it’s a problem. Insurance is a negative utility product, you know, no one wants to buy it our demand is driven by required, required purchases,

David Wright:73:41compulsory purchases. Right.

Mike Sapnar:73:42Whether it’s more, uh, you know, because you have a mortgage because you have employees because you drive a car because you sit on a board, it’s all compulsive, you know, a lot of it’s compulsory appropriate purchases and then when you have a reason to use the product, it’s usually something bad happened to you. Yes. Right. And then you’ve got to fight about a claim. Yeah. Not always, but often or too often I should say. So the biggest thing to me is why hasn’t the industry figured out how to get down it’s distribution costs or at least returned more somehow return more of the to the,to the buyer.

David Wright:74:13Well, let me give you a counter argument. So I would say you’re right, you’re right, Rod that cell phones are smaller and better, but people aren’t any different. And so the cost isn’t about moving, moving bits through through the ethernet cords or fiber optic cables or whatever it is, which is way better. The cost is about actually humans relating to each other, humans lying to each other or not. And that’s never going to change. And so the, the 50% number, you’re saying it is stunning number and I, and I, I’d like to bring that up sometimes too or related related arguments. That’s how much it costs to prevent people from having, you know, 50% go to call it 25% but have a much bigger, you’re ready. I mean, so like let’s say somebody 25% or sorry, 75% going back to the consumer, but claims costs are three times higher because there’s so much more fraud. There’s, there’s less oversight, right? I mean, I think that the, the, the dark side to the insuretech phenomenon, right? So the skeptical live from the internist to industry looking at them and say, well, there’s no underwriting standards and underwriting standards I think are kind of hard to separate from human touch.

Mike Sapnar:75:12Well except you know, we just had a big fraud in North Carolina, um, on the life side. That’s all out of out of human touch. I mean, I think the biggest frauds had been out of human touch. I mean I was just in Bogota where my credit card I used in a taxi was copied and then tried to use at an ATM. I’m chase shut it down in about two seconds. Yup. Right. So if they can do that, you don’t think there are ways for us to at least identify potential fraud through artificial intelligence and I’m not sure human nature isn’t changing. I Dunno about you. I mean, my kids are 19 and 20. Right? I don’t know if they have a thousand friends or no friends. Right. They go on Facebook, they got a thousand friends, but don’t talk to anybody. Yeah, sure. Right. They, they texted the to their friend next to on the sofa. And I just don’t believe that they’re going to want to drive 10 miles to talk to an agent to buy their homeowners coverage in 10 years. I could be wrong and maybe that always will be a human touch, but then we’ve got to minimize the human touch. And I, you know, I’m going to catch hell for this. But you know, you look at Marsh and Aon, they touch it three times going through the chain and they take a piece every time. So to me, if you’re touching it, the front end, do you really have to touch it again in the middle and on the backend? So I think that they have a lot of leverage right now. I think that, um, consolidation around distribution, uh, potentially creates opportunity to drive costs down. And it seems to me it’s been driving costs up.

David Wright:76:45So what, what can Trans do to, to, to, you know, help shape this or realize this vision of the future of,

Mike Sapnar:76:51well, I think we have to, we don’t really want to be an insurance company. Yup. Um, although we do have insurance paper and I might use that with leapfrog technology, um, to, if we thought that we could start changing some of that dynamic. But I think it is, it is either investing or providing a reinsurance capacity or brain power or opportunity to experiment for, for our students and supporting those initiatives. We do some insured tech, um, one with beach actually, um, uh, selective initiatives where we want to try to change that. The other thing, transplant it can do is drive our own costs down to provide cheaper range shirts. And, you know, we’re looking at we, I think we’ve done some of that, but we’re looking at a lot of other ways to do that and to use the data we have more effectively to help people make better decisions so that they can be more fine with the pencil and they’re putting, putting pricing down.

David Wright:77:49My guest today is Mike Sapnar. Mike, Thanks for joining me.

Mike Sapnar:77:51Thanks for having me.

Martin Gurri on the Revolt of The Republic

Martin Gurri (youtubemp3) is an author and former CIA analyst whose book, the Revolt of the Republic, describes how and why we have political revolutions and a seeming explosion of negativity in media and politics. 

Martin spent his career analyzing media reports around the world and noticed the decline of the primacy of ‘papers of record’ coincided with big changes in political discourse everywhere. I normally avoid political analysis and discourse as mostly unproductive shouting but Martin stands out as a dispassionate and insightful observer of current events.

In this interview we compare various social media platforms, discuss what the public really wants and how we might get out of this mess. Martin has the unique distinction of recognizing the commonalities between Obama and Trump and his theory ties together movements on the left and the right.

One quick bit of extra background from my research: other than his own experience, Gurri drew on material from Walter Lippman, a mid-20th century journalist who feared that the spread of mass media would disempower the ‘elites’ in a destructive and destabilizing way. These elites wring their hands with every new ‘wave’ of media technology as Gurri describes in the book. And for the most part they’re wrong.

Is this time different? The pessimist might say it’s a question of degree rather than type.. We are an archer walking towards a target, the closer we get the better our chances. More democratization of media means more frequent and more violent and more random the revolutions. Even here!

The optimist says there is a direction to history. All technology is an amplification of human nature: mostly good and partly evil. There is a natural check pre-built inside us that stops the madness from overcoming the wisdom of crowds at scale for long. 

Gurri is careful to not come down too strongly on this but offers some predictions for the world might change: institutions of authority must become more open. It’s an interesting nod (head fake?) in the direction of that ultimate fascinating but not-sure-where-it’s-going technology of our day: blockchain. See my show with Steve Mildenhall on that most open of technologies. 

Thanks for listening!

Agnes Callard on Aspiration, Socrates and What does Philosophy Feel Like?

My guest for this episode is Agnes Callard (episode page, youtube). Agnes is an Associate Professor of Philosophy at the University of Chicago and her specialties are in ethics and ancient philosophy.

Agnes recently wrote a book called Aspiration which tackles an intuitively clear concept, that we aspire to learn new things and to value them. Easy, right? The thing with philosophy, though, is that things aren’t always as straightforward as our fallible minds are apt to think. Actually, the whole discipline of modern philosophy exists to apply order to our thoughts and it isn’t easy…

[35:57] Agnes Callard: And one thing philosophers can show you is that you didn’t actually say anything when you said that you thought you did, right, it sounded good to you. Um, but when we put a kind of… conceptual microscope on it, it turns out you said P and NOT P, you contradicted yourself.

We find that the idea in Agnes’ book, aspiration, is riddled with contradictions. How can you learn to value something new, like, say Opera? If you already value Opera you don’t need to learn anything. If you don’t value Opera then you’re just another irrational human agent wasting her time listening to all that Opera. As you’ll hear, Agnes has figured this puzzle out!

We also talk about philosophy generally. Philosophers spend their time sorting through intuitions to find the logical reality to our thoughts. It’s abstract stuff and in preparing for this interview I was reminded exactly how my mind recoiled at this in my undergraduate philosophy studies. 

[03:38] David Wright: I was thinking like that’s the feeling I always have when I’m studying philosophy or thinking about philosophy. It just doesn’t quite seem clear enough. And sometimes there’s a little snap into, into detail and you’re good, but for the most part you sort of wandering around and this kind of haze, is that what it feels like to be a philosopher?

And there’s so much more like our discussion of the culture of refutation in philosophy ([01:18:20] David Wright: Is there an etiquette of refutation?)

… and weakness of will:

[34:43] David Wright: What is a Akrasia, and is it real? What did Socrates think? What do you think?

[34:48] Agnes Callard: Okay. Um, Socrates and I don’t agree on this particular point…

Ever wondered if you should be angry forever? It’s not like an apology reverses the wrongdoing!

[41:22] David Wright: So next question, should I be angry forever? why? Why would I want to be angry forever? Why should I be? And then why might that be wrong?

And then I bring it all together in defense of Tyler Cowen’s Straussian analysis of Agnes’ book and come up with my own, which is that “[56:18] Everybody got Socrates wrong, starting with Plato”.

Agnes is breaking all kinds of new philosophical ground by reconciling the very deep urge of aspiration in us with the rest of mainstream philosophy. This was an amazing experience for me. Agnes is one of the more charismatic interviewees I’ve had the pleasure of sitting down with. So buckle up and come get philosophical with me!

Here is a transcript of the episode:

David Wright: 00:00:00 My guest today is Agnes Callard, associate professor of philosophy at the University of Chicago, Agnes’ specialties are in ancient philosophy and ethics and she’s the author of a recent book called Aspiration, the Agency of becoming. We’ll be covering all that today and more. Agnes, welcome to the show.

Agnes Callard: 00:00:14 Thank you.

David Wright: 00:00:15 So I want to start with how you’ve influenced yourself kind of grounding philosophical thinking in actual experience. So what are the most philosophically formative life experiences you had? And that means the way that the real world, real world Agnes has influenced the philosopher Agnes?

Agnes Callard: 00:00:30 Well, interestingly, I think that the further back you go in time, the less it’s me influencing me and the more it’s other things in the outside world influencing me. Like I think I can now make myself more philosophical, but when I was much younger I think other things had to. So if I, there are a lot of things along the way that I could cite, but I guess I don’t know, something is jumping out to me is when I was in high school, uh, I read James Joyce’s Dubliners and then I read like most of the rest of the drug of choice. Um, but the thing about Dubliners that really resonated with me was that it every story kind of had an epiphany in it. It had this sort of moment of realization in which somebody suddenly has a new understanding of their life but not just a new understanding and understanding maybe for the first time is especially striking and the final story of the dead, um, and I think you could get this thought out of so many movies, but I didn’t. It’s a wonderful life or something like that. So I was just amazed by that, by the idea that you could suddenly have an understanding of your life that it could like light up for you. And that seemed really desirable to me. And I think that eventually it took awhile. But eventually philosophy just came to seem like being able to have one of those epiphanies continuously for your whole life.

David Wright: 00:01:53 Hmm. Because you’re always learning about more about yourself or about the world or

Agnes Callard: 00:01:59 Because you’re always adopting the point of view that somebody has when they have that epiphany where they’re sort of thinking about their own life in a, not in a fully detached way. So not as an anthropologist of themselves or something. Right? Um, but, um, but in a way that isn’t just going along, going along with the flow of their everyday experience. Right? So if you’re a philosopher and say, I don’t know, you were thinking about, um, say I’m teaching the Meno and there’s a line in the Meno “shape is that alone of all existing things that always follows color” it’s definition of shape. Right? And so I have the students look around the room and look at the shape things in the room and just notice the fact that where you see a color boundary you see a shape boundary. And that is the way the world presents itself to us. Now that was always true. We always, but you know before they had that experience, color boundaries and shape boundaries would come right in their visual field, but that’s a moment where you noticed that it’s like it shines a little bit of light into the way in which the visual space is organized for you and philosophy is just kind of like doing that all the time with everything.

David Wright: 00:03:14 There was a feeling that I remember having when I studied philosophy as an undergraduate that I felt again as I was studying some of your work and related works and stuff, which is this feeling of fuzziness and by that I mean and you make mention in the kind of, in the closing remarks of your, in your book where you say, I don’t really see this as clearly as I need to to finish this process. Right. And that really resonated with me because I was thinking like that’s the feeling I always have when I’m studying philosophy or thinking about philosophy. It just doesn’t quite seem clear enough. And sometimes there’s a little snap into, into detail and you’re good, but for the most part you sort of wandering around and this kind of haze, is that what it feels like to be a philosopher?

Agnes Callard: 00:03:52 That’s a great point. Because the epiphany analogy that I was using suggests, well, it’s just the sudden clarity that it would be hard to imagine how you could extend it in time, actually. Right? It suggests something that occupies a moment rather than a period. Right. And I think you’re completely right that the trick philosophers have discovered in order to extend it in time, um, is to turn that, like, ‘looking for something’ into inquiry into trying to understand, but in order to try and understand there has to be something you’re trying to understand and that requires that there be something you don’t understand, some kind of puzzle. Right? So, um, so often any, any kind of philosophical inquiry will have somewhere at the back of it a kind of dilemma or a problem where sort of, there’s no easy way for you to think about the situation because if you’re inclined to go one way and then that creates one problem and if you move away from that, it creates another problem. And so you’re caught between these two problems and you have to find a way to think through whatever subject matter you’re thinking about without falling into either of those two problems. And um, that I think that creates that. That’s the kind of fuzziness of it. The fuzziness of it is that there’s something you’re trying to figure out or understand and you don’t and you know, that you don’t. And so you can experience the fuzziness.

David Wright: 00:05:19 There’s a frustration there. I had a, a conversation interview with Cathy O’Neil, who’s a mathematician and author and she has this phrase which I feel like I’m, this feeling of mine maybe predates my conversation with her, but she definitely articulated it best where she said everyone thinks mathematicians are smart, right? Because this is difficult, well it’s a subject area which.. Every subject areas has its own difficulties, right? But for whatever reason, mathematicians kind of wind up being elevated in some way intellectually, cognitively. And she said that the irony of being a mathematician and she was a mathematician for a few years, Is that you don’t feel smart, you feel stupid all the time because you’re always working on these problems that are really hard and you have to get used to that feeling. And I have the same characteristics as some actuaries who are to a degree mathematicians and taking these exams you have to do for actuarial.. there a lot of them and, and you spend the entire time just feeling inadequate because you’re always trying to learn this material which is such a challenge and you failed the exams.

David Wright: 00:06:11 And, and so it’s this exercise and, in feeling kind of pretty dumb. And, and yet, from the outside world they’re saying, oh wow, you know, you guys are so smart. It’s like it is not what it’s like on the inside. And what’s what’s interested me in the philosophy kind of comparison is that it’s a different kind of feeling of frustration, intellectual frustration, doing math and philosophy for math is it feels more discreet or it’s like you don’t get it, you don’t get it, you don’t get it, Bang, you get it. With philosophy, I feel like there’s much more of a feeling of progression in between it’s a little more continuous or I feel like you sort of can feel yourself coming towards the conclusion before you get there. And math. I feel like it just sort of snaps into place. Do you have any thought on, and you study, you study science for a little while, right? Before philosophy.

Agnes Callard: 00:06:49 Yes. And I, I think in high school probably my favorite subject was math. I love math and I love that feature of it. Um, the thing that’s amazing about math is that when you get the right answer, you know it’s the right answer. And that was one reason why Plato used it often as an example of, well, what we might now call something like a priori knowledge. Um, the thought he said math. It’s like remembering, um, because when you want to say you want to remember someone’s name, right? What was his name? What was his name? And then when you actually remember it, you know that that’s right, right. It’s like, it’s like, oh yeah, it had that “Oh yeah” moment, as opposed to just learning some new thing. Like here’s so and so, and here’s his name. Right? Yeah. And so every mathematical thing comes packaged with that thing that we also get in memory, which is like, oh yeah, that’s the right one.

Agnes Callard: 00:07:41 Right. And so Plato thought, well, yeah, so we should um, we should think of learning math as a kind of recollecting of what you knew when in a past life or something. So it has that click, right, that click of recognition and Plato thought philosophy could have that too. Um, but it’s a lot harder I think to get the click. I mean, maybe in some ways it’s easier because you get close. Well, I think you can, but then I, and I think maybe some people just do it, maybe, you know, maybe with just really differs from person to person, but for me I get it, but then it falls apart again. And so there is this progress, but the progress is two steps forward, one step back. It never it. Um, and, and I can always sort of tell as, as you’ve noted at the very end of my book, I’m like, yeah, and I haven’t really solved any of these problems and in fact I’ve just kind of gotten started and it always sort of feels like you’ve just gotten started. So, so I think that may Plato, was pretty optimistic that, or at least Socrates was that I think both of them actually were optimistic about the possibility of arriving at that click though it’s not clear that either of them thought you could do it within your lifetime.

David Wright: 00:08:50 Yeah. Well let’s, let’s talk about the beginnings of the book. So the book’s called Aspiration. Maybe you can describe a bit about what it is and I want to come back to the idea of of its origins in your own development, because let’s put it this way, when do you think was the first time that you were consciously aspiring, maybe a previous version of the theory and you’re thinking, wait, that’s what this is, is I’m doing it right now. You can you think of that example? So first describe it and then maybe talk about an early example in your own life?

Agnes Callard: 00:09:16 Yeah. Okay. Um, so, um, so Aspiration is the rational process of value acquisition. So it’s trying to come to value something that you don’t already value and um, so if you think about all the things you care about now and that includes people you care about, um, it includes, you know, maybe political ideologies that are important to you, religious views, um, um, activities that you love, um, you know, if you go back and think about yourself at age 10 or something, probably very few of those things were you into, right? Yeah. So there’s like, you know, what we’re all about in life and as adults, those are not the same things that we’re all about the children. And so the book is just about that process of like how do we get from there to here and you know, one story you could tell is it’s just a series of accidents.

Agnes Callard: 00:10:10 And so that’s why the phrase “a rational processes” important, um, where I’m making an assertion about that process, namely that you have some role to play and where you ended up. Um, um, in terms of my own. Well, so one thing about the book is that it came about, I suppose I’ve, this might be unusual because I’ve never heard anybody else say this about how their book came about. It came about with me trying to say something, write.. write up on a different topic and, and I was giving talks on this different topic and they kept getting refuted by my audiences and I kept, um, and yet I kept feeling like I was. What I had to say was there was something really right and important about the topic.

David Wright: 00:10:56 What was the other topic?

Agnes Callard: 00:10:56 Weakness of will

David Wright: 00:10:57 Right

Agnes Callard: 00:10:58 So this came out of my dissertation, right, and I was giving this theory of weakness of will and people kept pointing out that like, there were lots of cases of weakness of will that didn’t fit what I was talking about and that there seemed to be cases of what I was talking about that didn’t fit, that weren’t weakness of will, and people just kept making these, like giving these counterexamples and I’m like, there are good ones.

Agnes Callard: 00:11:14 I’m like, you’re right. Um, and uh, and then all of a sudden, one time I realized that the problem wasn’t that it was a bad theory. It was just, that it was a theory of something else.

David Wright: 00:11:22 Interesting.

Agnes Callard: 00:11:23 So, so it was almost like I kept the theory but shifted the topic. Um, and so that’s how it came about. So it didn’t come about by me thinking about my own experiences of aspiration. I was thinking about a set of like wrong examples, but clearly something in me wanted to think about this problem. Um, it’s, I think part of the reason why I didn’t think about it is it’s not discussed in philosophy very much. The word is basically not used, um, so I didn’t have anything to plug into and philosophy on the other hand, weakness of will is widely discussed and so it was sort of the closest thing to the thing I wanted to talk about and it just took me a really long time to figure out that there was this other thing.

Agnes Callard: 00:11:58 It was super widespread. No one had really philosophized about it. Um, but as for my own life, yeah, I think it would have been full of examples if I had thought to use them early on. I, I, I didn’t. Um, I guess the best ones would probably actually have been and were once I started to think in a more straightforward way. I’m just my students actually. That is, I’m just constantly interacting with aspirants, paradigmatic cases of aspirants and they often come to me and say, I’m thinking about my life and where it should go and like what road philosophy should play in it. Um, and we have, we have these conversations that are basically about aspiration. So that would be maybe the best.

David Wright: 00:12:44 You’re immersed in aspiration.

Agnes Callard: 00:12:46 [laughs] Yes

David Wright: 00:12:46 Everywhere, almost everywhere.

Agnes Callard: 00:12:47 And yet I didn’t see it for years.

David Wright: 00:12:49 We all are, but maybe it’s supercharged and universities because it’s explicitly.. explicitly an aspirational activity: going to school.

Agnes Callard: 00:12:55 Yes. And also there’s something. There’s something very special about university. So after I wrote the book, I read, but I. But before it was published, I was able to put in a correction. I already realized a mistake, a big mistake that I made. So in the book I say that in order to aspire first towards some end you have to have some grasp of what the end is. You’re aspiring towards. So you can’t just like have no idea what you’re doing and yet still in some sense be aspiring. I made that claim in the book, but then I realized it was wrong because I think that’s what universities are, is that they are. That the question of whether you can aspire without knowing what you’re doing is actually more a question of institutional support than it is a question about individual psychology and that in some way that’s what a university is.

Agnes Callard: 00:13:41 It’s like an invention that not maybe not originally for this purpose, but that we have deployed for the purpose of making it possible to throw, throw, throw people into an environment where all they have is like, I want to become someone. I want to do something important and let that thought is productive in a way that it often isn’t. When you sort of go find yourself thing, right? Because when you go find yourself in Europe, there isn’t an institutional structure that is in any sense guiding you so that you’ll get somewhere. But I think in universities you are being guided in a, in a very gentle way and there’s so many ends you could pick that even if you don’t know where you’re going, you can be going somewhere.

David Wright: 00:14:19 you know, one of the things that I find interesting about young employees that we hire is a common criticism, and I gave it myself when I first started working is there’s not enough guidance, right? So it’s a bit more like a discover yourself in Europe, than discover yourself in college kind of thing. And people really liked the guidance, through college and it’s now it’s much harder because there isn’t an explicit pedagogy, I guess, saying here’s all this stuff and how you kind of learn it and, and nobody thinks about that because in business you’re not focused on education. It’s an important component of any successful company is training it’s, it’s, it’s younger staff and older staff and everybody for that matter. But the focus is not. The focus is on whatever the social function of the business is on producing profit of course, and selling things and helping the customer and all that. And, and so you kind of have this lack of guidance relative to what people have experienced before. And they really like the guidance. And so everybody wants to feel in this kind of comes back to an idea in the book which is in some of your papers to uh, which is that we have, we look outside of ourselves for the aspirational inspiration, right? I mean, where do you get the ideas from? Is from the people around you understanding your, you should we go to this university, gives them a lot of that. I guess, right?

Agnes Callard: 00:15:30 Yeah. So I think that guidance is really tricky because.. and the older people get the trickier it is to guide them. Right. Um, and um, so we have the same thing and universities just do you think about Grad students, right? So in some sense, I always feel like they don’t get enough guidance. I remember feeling that as a Grad student. Um, I remember feeling like I had this advisor who all he ever did was refuted everything I said and he would just like pick it apart and it was like, it was absolutely the best thing anyone could have done for me, but it didn’t always feel that way. And um, and I remember one point I actually learned a special trick with him, which is that you could deploy him against himself by just saying something like there’s no possible way to produce an argument for this conclusion.

Agnes Callard: 00:16:19 And then he’d refute you and give you an argument. You just like write it down and then of course next time it would show up in your work and he’d refute it. But, you know, I’m at least, at least you made a little progress there. So I think the problem is that, that, um, there’s, as with philosophy problems with guidance, they’re sort of two extremes, right? One is I’m just leaving people to their own devices and I don’t think they’re going to really get anywhere. I mean, maybe there’s some geniuses who would, but I’m very few of us are that sort of genius, very few geniuses or that sort of thing as even I think. So there’s just that, right? And then at the other extreme there is, I’m making other people into yourself and that’s a real danger. Um, people, um, when you influence someone and you make them and you and you bring it about that they do things in a similar way to how you do them, it makes you feel really good because it makes you feel like you’re living your life with knowledge.

Agnes Callard: 00:17:29 Like, wow, look at what a good thing I’m doing. If somebody else wants to do the same thing. Right? And so, um, like when I was first learning how to cook, I used to always pretend that I was in a cooking show and giving people advice about cooking. This is when I was first learning how to cook so I didn’t know anything, so I’m making stuff up and I would be like, so this is how you do it. Know. And like as though I knew, right? But the idea that I was guiding, someone made me feel like I knew, okay, so that’s very dangerous because we’re just motivated to make ourselves feel like we know by imprinting ourselves and other people. And so it’s, that’s the tension, right? Is that you want to guide someone but you want to guide them in a way where they become themselves and not you. And that gets harder as the person gets older. I think

David Wright: 00:18:20 it was a social feedback loop then I guess. Right? So you’re saying, you know, you’re right because people around you agree that you’re right. And, and that’s one of the things that really interests me and back to back to the book where we allow. I’ll pose this question, then we can get into it, which is, there’s no such thing as negative aspiration. Right? So maybe talk a bit about that, about why that’s the case or not the case.

Agnes Callard: 00:18:43 Yep. Good. So there’s actually two things you might mean by negative aspiration. One is aspiring to cease valuing something. I think that is possible, right? I give an example of it in the book, um, but the other is aspiring to value something that isn’t in fact valuable. Okay. So I think it’s possible to value things that aren’t valuable. I think people do that. Um, people make valuational mistakes, right? Um, however, um, I don’t think it’s possible to aspire to have one of those false values or more specifically, more carefully what I think is if you see that somebody is on the road to acquiring some false value, okay, as we’ll call it, valuing something that isn’t in fact valuable, then you can’t see that person as aspiring. They might see themselves as aspiring insofar as they falsely believe that that thing really is in fact valuable.

Agnes Callard: 00:19:43 Right? Um, but that aspiration, using the concept of aspiration and applying it to someone would, that someone could be yourself, is predicated on taking the thing that they’re moving towards, to be, as a matter of fact valuable and one way that, that, that might sound crazy, but one way to sort of see what family of thoughts that belongs to is just to see that, like on the picture I’m presenting of aspiration, what you’re doing when you’re aspiring, as you’re learning or you’re learning the value of something like say you’re learning to become an actuary and you’re learning the value of how to manifest a certain kind of honesty and integrity in relation to certain sorts of predictive practices, right? Um, so, um, and the word learning is effective. That is you can only learn what is in fact there to be learned. Just like the word knowledge is factive. So you can, the word say belief is not fact. If you can come to believe something, even if it isn’t true, but you can’t come to learn something if it isn’t true.

David Wright: 00:20:49 Santa Claus.

Agnes Callard: 00:20:49 Exactly right. You can’t learn that Santa Claus exists because he doesn’t exist. You can come to believe, right

David Wright: 00:20:54 I won’t be playing this for my six year old.

Agnes Callard: 00:20:59 You can’t, um, so you can come to value something that isn’t valuable, but you can’t come to learn that value. Um, and so since I think that aspiration is a learning process, I think there isn’t any false aspiration in that sense.

David Wright: 00:21:15 And so I think one of the really important ideas there, which I really liked, and this is the one thing that I’ve thought about a lot, which is your initial idea of what the value is, is, isn’t you know enough to know that this is worth pursuing, but you don’t know what it’s going to be like when you get there. Right? And so I think that what is, what is, you can have the false positive. That’s what we’re talking about, right? So I think this is there, but it’s not there yet. But one of the things that surprises me a lot about this is that when you get to the end, you might realize it was never there. And how do you determine or who determines or how is it determined that that value is in fact true or not?

Agnes Callard: 00:21:49 Right? So there are a couple of different ways to hear that question, right? So one of them is, um, who determines quite generally, which are the real values in which are the false ones. I don’t think anyone determines it.

David Wright: 00:22:04 And yet everyone does.

Agnes Callard: 00:22:05 I think that, um, well I think it’s a fact. There’s a fact of the matter, right? So nobody makes it be the case. It just is the case. But I think, I suspect that isn’t the question that you’re really asking. I suspect the question is you’re asking is sort of like, how can you know at an early stage, right? How can you be sure that this thing is going to, that you are going to come to the correct judgment that is valuable at the end of the day, how can you be sure secure that you’re in a good direction, moving in a good direction? The answer is you can’t.

Agnes Callard: 00:22:35 I think so aspiration is kind of a risky process, but that’s exactly why I’m. We do rely on so many structures as we’re aspiring, right? So we don’t just us, most of us, the vast majority of majority of us aspire to a way of life in a way of valuing that is in some sense socially sanctioned. And this is part of why the social sanctioning of certain practices is actually so ethically significant because, um, you know, if take something like homosexuality, right, so it’s now a possibility for someone to, in a kind of relatively comfortable way, depending on where they live. Right? But say they live around here, um, aspire to um, a certain kind of homosexual life, right? Um, but that aspiration was available to very few radicals and you know, as recently as 50 years ago or something. Right? And so the kind of value possibilities that are available to a person are partly a function of their community. It’s sort of function of both their community and sort of like how risk averse they are. Right? Because you might be willing to take more willing to take those chances, but it, that’s why, you know, that’s why we’re looking for a certain kind of feedback because we’re worried that we could be wrong and we’re correctly worried because we could be wrong.

David Wright: 00:24:02 Well, I want to actually, I’m going to come back to kind of the main theme of the aspiration, but I want to make sure. One of the things that amazes me about your career so far is that, and this made me make sense given that you started out with a different question but have kind of been, been drawn towards this idea of aspiration because a lot of your work winds up in the book, a lot of your papers. I was like, okay, I saw that before and then it turns out, yeah, there was a paper on that. So I’m gonna ask you a few questions that have touched on some papers and maybe you can sort of talk through some of the ideas and we can come back to it.

Agnes Callard: 00:24:31 Okay.

David Wright: 00:24:31 So, um, what is AristotleIian deliberation and how is it different from what we think it might might be or should be?

Agnes Callard: 00:24:39 So Aristotelian deliberation is the process where you go from having an end like say your end is, um, to buy your mother a birthday present. Okay. Um, you go from that towards some particular action that you’re going to perform that is going to lead to that end. We’re working backwards. Exactly. Yeah. So you work backwards from the end to the immediate action that you can take and Aristotle thinks of this as analogous to analysis and geometry so that if you have a problem in geometry, like construct such and such a shape, one thing you can do is start with the shape, assume that it’s constructed and then deconstruct it and see when you get to the first step that you could have done from the beginning and then go the other way. And that’s what he thinks deliberation is like. You start right? You start with like, okay, my mother has the president and

David Wright: 00:25:42 yes, yes, yes, how do I make that happen

Agnes Callard: 00:25:43 Exactly the way that it’s different from, um, I would say the thing that it’s really different from is how contemporary philosophers think of deliberation, which is that they think of deliberation as I’m, I’m offered a set of options. I’m in a marketplace say, right, and someone says you can have this or this or this, and I’ve got to choose which one. Right? And I’m going to choose whichever one is best say right? But they’re nothing has been presupposed about what my goals are. It’s almost like, well, look, there’s just some abstract idea of the best or utility or pleasure or something that I can measure them in terms of. And I just got to do the calculation. Which of these is the best option for me? Um, and um, so that, that clearly that accountant deliberation also presupposes a whole bunch of things. Like it presupposes that I have options like that. There’s more than one thing I can do, right? It’s almost like we’re imagining ourselves into kind of supermarket and in Aristotle’s day there weren’t any supermarkets and there were just a lot fewer choices such that from his point of view being able to come up with one thing you could do that could achieve your end, that’s like really impressive and he’s not too concerned with coming up with the best way.

Agnes Callard: 00:26:51 Right. I’m coming with any way is good. He does actually… there is a line where he says, Hey, if you come up with more than one way, then choose the one that’s more efficient or the one that’s more noble doesn’t care much. Right. Like, like, you know, every modern interpreter are coming at that line is like, wait a minute, wait a minute. How do we decide between the more efficient and the more noble. And Aristotle was just profoundly indifferent to that. He’s like, this is an awesome situation, right? Whichever way you like, you’ve got to. That’s an embarrassment of riches. Right. Whereas the modern point of view is it’s all about comparing your options.

David Wright: 00:27:22 You know, what’s interesting about that coming to my head, and this is another idea that I’ve been thinking about which is in Aristotle maybe picked up some of the lower hanging fruit philosophically because he was probably thinking that we can get to a decision is so important and, and that we can get to an end is very important. And these days that’s. We kind of figured that part out. Right now we’re moving on to maybe things that are harder to figure out but also maybe a little bit less impactful. Perhaps you know, sorting out which one is best is, is not as good as kind of the. Maybe you get the 80 percent solution right away. And I’m wondering like, you know, this.. Come back to an idea of what you’ve written on, which is quite a lot of what we do now is based on what on the, on the prior work of of say ancient philosophers and others and and you know, they might’ve picked a lot of low hint lowest hanging fruit and then we’re kind of just still working out going higher and higher up in the tree. And it’s a little bit less clear where the value is. So what do you think about that?

Agnes Callard: 00:28:15 I find that to be a question that’s very hard to think about. Maybe. Maybe it’s harder for someone to think about that question when they spend so much time directly kind of in the ancient world as I do, right? Where it’s almost like it doesn’t seem as low hanging because I’m trying to figure out exactly what Aristotle thinks about these things is actually super hard. Right? Whereas if I were looking at it from enough distance, um, you know, like if I think about Kant, say, so a philosopher I know pretty well, but who I’ve ever spent any time I’m trying to really interpret, right? I just kind of read them quickly and I’m like, yeah, I get what he’s saying, you know, the way that someone else might have been Aristotle. Right? Then I’m just like, oh, I see here are the things that he realized were achieved.

Agnes Callard: 00:28:57 Right? But what I’m like looking at ourselves so close. Um, so I guess I think that, um, you know, one, one way that I have of thinking about this problem is it’s not exactly so much a question of low hanging fruit as it is that a lot of what earlier philosophers do is come up with a kind of conceptual repertoire that gets integrated not just into later philosophy but into common, ordinary thought. Um, so like one example of that with Aristotle is, um, and this is not an original claim to me. There’s a book that was written maybe maybe 10 years ago, by Wolfgang Mann called the discovery of things where basically he makes the case that Aristotle discovered things in the sense of like continuing durable physical objects as a way of organizing the world. Um, whether or not you think you’re going to willing to attribute that much to Aristotle and go.. They were already there except, well, it was a popular conception of it.

Agnes Callard: 00:30:04 There’s a, there’s a, there’s a way in which it’s like, that’s like our question about value, right? It’s like, um, who determines. And it’s like, were they there? I mean, in some sense there were subtly determined it, right, but of course, in another sense they were there, but the world isn’t already, or the organization of the world doesn’t come along with the world. Right? So the lines dividing things from other things aren’t themselves just in the world. Um, we have to draw those lines. We have to carve the world up and what, you know, what you saw in sort of the earliest ancient philosophy, the Ionians people like Perimedes was a real skepticism about whether the world could be carved up in any way at all that made sense and not know.

Agnes Callard: 00:30:43 Um, and then you have Plato who thinks, well it can’t, but then there’s this other world that can, namely the forms, right? And then Aristotle comes along. It’s like, no, no, no. This world right here can be carved up and understood in a way that made intelligible and divided into things. Right? So one way to sort of appreciate that discovery is that it wasn’t obvious in the sense that it was challenged before Aristotle. Um, and so now think about where we are, right? Obviously there are things, there are all around us, we see them, right? We think we just see them, but we don’t realize we’re also thinking them. We’re thinking them using Aristotle’s concept of a substance. Um, and um, and so now I’m, it’s not just low hanging fruit, right? It’s, um, it’s that they built a kind of, um, they, they had, because they came first, they had a kind of foundational place in our conceptual repertoire.

Agnes Callard: 00:31:36 So we’re mostly thinking Aristotle’s thoughts as we walk around in the world, um, especially if we’re not philosophers.

David Wright: 00:31:45 So I want to keep going through this and we’ll come back to, we’ll come back to the, I think that next paper. How is the Socratic desire thesis foundational to socrates thinking in what ways?

Agnes Callard: 00:31:58 Um, so the desire thesis, the thesis that everyone desires the good, right? And um, I think in some way that is Aristotle’s foundational, sorry, Socrates’ foundational ethical thought. So Socrates had a set of idiosyncratic views that, that sort of coming up. Yeah, they kept coming up and they were sort of the um, it was like, this is the sort of thing that you always hear when you talk to Socrates, say his interlocutors

David Wright: 00:32:31 here he goes again.

Agnes Callard: 00:32:32 So there’s a lot of that. Actually, there’s a lot of the here you get here he goes again, line in a bunch of dialogue very strikingly in the Laches right. Um, so, so some of those, you know, Socratic principals are, um, there’s no such thing as weakness of will, virtue is knowledge of the good, men can’t be harmed. I’m a, nobody does evil voluntarily. Um, a punishment is education, etc. Etc. So there are these views that when Socrates would say them, people be like, that’s insane. And then, but then he would sort of argue you into them. And I would Say that the, the big sort of lever or sort of fulcrum that he used argue you into them was the idea that everyone desires to good because of that one is I’m actually relatively palatable and easy, right? Because the thought is, well, what do you, what is it that you would want from the bad? Why would you want bad things, right? No one wants bad things. Everyone wants good things. Um, and so of course everyone desires to good and now let’s move on.

Agnes Callard: 00:33:31 But that, that quick move that I just did hides a really crucial ambiguity, which is when you say everyone desires, they could do you mean that everyone desires what they think is good or what actually is good. And Socrates thought that the answer was both, in fact, that is people desire what they take to be good and what actually is good and it’s the same thing. Um, and getting his interlocutors to accept that, that version of the desire thesis right, where they’re committing themselves both to the objective goodness of the thing that they desire and their own grasp of that goodness that is then more work and that, that extra bit of work is then very important for getting you to accept some of the other crazy. Right?

David Wright: 00:34:17 It just reminded me of something I meant to mention a minute ago, which is that how much detail you go into in your work of going to the original, original Greek, trying to translate it again and think that the way we typically translate this word is a little bit kind of off and you can give me a few different ways and then you’re able to actually pull more meaning at a lot of the texts than is, has been accepted up to that point. And you know, there’s still more to be found. I mean, it’s kind of amazing, isn’t it? I mean, whatever, thousands of years later. Um, so what about what, so what is a Akrasia, and is it real? What did Socrates think? What do you think?

Agnes Callard: 00:34:48 Okay. Um, Socrates and I don’t do, don’t agree on this particular point. so, um, so, uh, a crazy acquisition is weakness of will, which is to say when you act against your better judgment. So you’re like, I am not going to eat another cookie. I’m not going to have another drink. But then you do anyway. Or like, I’m going to go to the gym tomorrow, but then you don’t, right. And, and, and you wake up in the morning and you’re like, I know I should go. I realized that would be the best thing for me. that would be the thing that I should do, but I just don’t feel like doing it. I’m not going to do it. and when I, when you give examples like this to people, everyone immediately recognizes them from their own lives as like, oh yeah, I do that. Right?

Agnes Callard: 00:35:27 And so then it’s really fun to tell them, well, philosophers, at least some philosophers think that’s impossible actually. So the thing you just think you described an experience, you didn’t experience it in a way that’s actually a really good example of the sort of thing I was talking about a minute ago about parmenides. It’s sort of like, um, there’s a way that the world appears to you or manifests itself to you. And you can describe that. But then there’s a question about the coherence of your description. Like have you said anything at all when you described it that way? And one thing philosophers can show you is that you didn’t actually say anything when you said that you thought you did, right, it sounded good to you. Um, but when we put a kind of, um, my conceptual microscope on it, it turns out you said p and not p, you contradicted yourself.

Agnes Callard: 00:36:12 And so we’re gonna need to find some new way to talk about the thing that you took to be what you just described. And I think that much that is the idea that the way people ordinarily think about those episodes is conceptually confused and incoherent. I’m there. I think that’s correct. Um, I’m with Socrates on that now. Socrates wants to go even further and just say, yeah. And really nothing like that can happen. It can happen. Namely, you always do what you believe to be good. You always act on your better judgment. Um, and so at that point you can come up with a variety of sort of, um, dismissive explanations as to why people mistakenly take themselves to act against their better judgment. for instance, self deception would be one. Another would be they quickly changed their minds right at the last minute. Um, I’m, Socrates has a much more.. Socrates doesn’t give either of those, actually he gives it a much more complicated and interesting explanation of what’s really going on there.

Agnes Callard: 00:37:09 um, um, namely that people actually can’t tell apart different kinds of mental states so that, you know, there’s such a thing as believing that it would be good to get a bed and then there’s such a thing as say fantasizing or imagining that it would be good to get out of bed, right? You can have a thought in a variety of moods. You can have a thought in unbelief motor and say hypothetical mode or fantasy mode and Socrates thinks that you think you can just using introspection tell apart your thoughts, which one, which kind you’re having, but you can’t. And so you called it a belief, but it wasn’t a belief. It was a kind of fantasy of like the, you know, that I really think that I should get out of bed. That’s not even a thought you have. So that’s the socr, Socratic analysis.

Agnes Callard: 00:37:51 Um, I have a different analysis. My analysis is that akrasia is the product of an interrupted growth process. Um, so, um, you know, over the course of our lives we adopt new value frameworks and we adopt them with different degrees of perfection in terms of how much to what degree have we completed the aspirational process and come to inhabit the new value. Um, and one thing that sort of stands in the way in an almost universal sense of like coming to value anything is just the basic condition as animals, right? Where like what we want is immediate physical pleasure. That’s, we’re, that’s the value system we’re born with a biological exactly right. And, um, and so like no matter what, like you might value exercise, right? I’m in this and it’s going to be an aspirational project to come to value it. Right? And it’s gonna take years of I’m hating it. And then sort of coming to see what forms of exercise give you a certain kind. It’s not going to be enough for almost anybody to be like, this Is good for me in the abstract, right? They’re going to, you have to find something that gives you a certain kind of pleasure or delight. Um, but even if you find that thing, the chances are you didn’t ever come to inhabit it completely fully. And so there’s this kind of vestigial value system that is in you. And when that comes out, that’s awkward. My understanding.

David Wright: 00:39:19 So is there, is there a way in which it’s kind of a value confusion, is that a way of thinking about it where you think that some things more or less valuable than it should be?

Agnes Callard: 00:39:27 I… So there are one place where confusion definitely shows up is in people’s self descriptions of being Socratic because I don’t think most people do see akrasia as being, um, what I just said, right? Nor do they see as being what Socrates just said. Um, and um, of course you might ask, and I think you should ask at this point, well, why not just trust what people say? Right? But the answer is that it sort of turns out that, and I didn’t sort of spell this out a minute ago, but the, under philosophical analysis, the idea that, look, I fully knew that it was the wrong thing to do, but I intentionally decided not to do it. That’s a contradiction. It’s a contradiction because intentional action is action for a reason. And when you act for a reason, your reason has to be that the thing that you’re doing is good.

Agnes Callard: 00:40:15 And, um, if you think that something else is better and you’re free to choose while everyone desires the good, so there’s a reason you wouldn’t choose the better thing. Right? And so to say, I intentionally and freely chose the worst thing. It’s kind of like saying I desired the Bad. It doesn’t make sense. Yeah. So that’s the confusion. The confusion is in some sense the ordinary person taking a kind of liberty with a concept like action or intention that once you analyze it a bit into its components, you see the contradiction. Um, but, um, so that’s one level, that’s just the level of the person theorizing about themselves right now. There’s another level of confusion where, you know, you might say, if I’m right about akrasia, my analysis is correct, then it entails at least this much confusion. The person who was akratic hasn’t fully inhabited a certain value system, and so they are to that degree, confused about it. They don’t have the knowledge that somebody would have had they fully inhabited it. Yes. Yeah.

David Wright: 00:41:22 So next question, should I be angry forever? why? Why would I want to be angry forever? Why should I be? And then why might that be wrong?

Agnes Callard: 00:41:31 So, um, suppose that I’m somebody wronged you in some way, like they stole money from you, let’s say. Then you have a reason to be angry with that person, right? That is your anger is rational, right? And the reason is that they stole money from you. That’s why you’re angry at them. Um, and so now let’s think about what it would take for you to no longer have a reason to be angry at them. well, let’s say they gave you back the money, gave you back the money, but, but it’s still true that they stole from you and that’s what you were angry about, that they stole from you. So when they give you the money back, if they haven’t changed it yet, they apologize. They haven’t changed it. Um, you might say, and I do think about this a little bit in at least some version of paper I wrote on this.

Agnes Callard: 00:42:25 What if we went back in time? Could they do, could they solve it that Way? At least theoretically, right now there’s a question actually, whether it’s going back in time is theoretically possible. It’s an active debate in the, uh, philosophy of physics. David Lewis, one great philosopher from who I took a class on this very topic thought. Yes, but most philosophers think no, but anyway, I suppose suppose we can go back in time and so I suppose it goes back in time and decides like, this one I’m not going to steal from you. Right? Well then I think it’s true that you don’t have a reason to be angry at them, but you never did have a reason then, right, in that weird world in which time travel happens. And so the question is, supposing the real question is like, supposing you do have a real reason to be angry with someone, um, is there anything they can do to address that reason?

Agnes Callard: 00:43:09 And there’s at least a prima facie argument that there isn’t anything that can do, um, and that would, it would follow that you would have a reason to be angry with them forever. Now it doesn’t follow from that, that you should be angry with them forever because you might have other reasons. Right? In fact, you most certainly will have other reasons and those reasons can easily dwarf your reason to be angry with them. But the point is, and it might even be irrational for you to be angry because you have so many reasons not to be angry with them. Right? But the sort of so, so in a sense, the, the, the philosophical position that I’m looking at doesn’t make an um an interestingly counter intuitive, practical recommendation that everyone stay angry forever. But I think it’s puzzling enough to think that whatever reason you have to be angry with someone, like even when you were a child, that you still in some sense have that reason.

Agnes Callard: 00:44:00 Um, and, and it would still be rational for you to respond to it in some way. And I think that’s an unacceptable conclusion. So what I try to do is find some way around it. I think one of the reasons why it’s unacceptable is that it makes it impossible to give a really good account of apology and forgiveness because I think that what you were doing when you forgive someone is to say, I no longer take myself to have any reason at all to be angry with

David Wright: 00:44:26 and that matters

Agnes Callard: 00:44:28 Exactly. Um, and so I think in a way puzzle about eternal anger is really a puzzle about how we can account for forgiveness

David Wright: 00:44:38 yep. and

Agnes Callard: 00:44:39 you wanna know how?

David Wright: 00:44:41 how?

Agnes Callard: 00:44:41 So I think that, um, I think that the sort of illusion that you have a reason to be angry forever is a product of the fact that, um, anger severs you from the person that you’re in a relationship with, right? Um, so, um, and this is going to be true even if the person is a stranger, but it’s easier to explain if the persons close to you. So let’s imagine that it’s your spouse, right? You’re angry at them. Um, and um, so anger feels like when you’re angry at someone, you think about them a lot, right? And you have these conversations with them in your head and you’re like, we, you show them how wrong they are obsessed with it. Exactly right. And yet you hate them and you don’t want them to be in your head. It’s like anger is like being trapped in a room with like the last person in the world.

Agnes Callard: 00:45:40 You want to reach out to them. You can’t get them away from you. And um, I think what’s going on there is you’re trying to think about your relationship with this person. Um, which is essentially a two way street, but the thing they did has broken it and so you’re angry thinking is sort of your attempt to do something that requires two people but only as one person. Right? Just like your attempt to have a conversation that’s a two person thing, but you’re just going to have it on your own and it never works. Like the fight you have with the person in your head. You sound so good and they sound so Bad. And then in real life you have that fight and like they have much better arguments. Right? Um, and so I think that the sort of feeling like there’s nothing they could say is the feeling like, well, there’s nothing that the image of them that I have in my mind could say to make me forgive that image.

Agnes Callard: 00:46:27 Right? Um, and so in a sense there is a kind of myopic or sort of Cartesian bubble quality to the rationality of anger and that when like the actual interaction with the actual other human being makes a real difference in terms of creating a repair to the relationship that you then become able to think about this problem together with them. And I think once you can think together with them and not in the illusory whatever you’ve just imagined them, you’re sort of rational resources change. Um, and um, it’s no longer the case that the fact that they did that thing is a reason for you to be angry with them.

David Wright: 00:47:13 Framing that, uh, that I read about in the paper that I really liked, and this kind of comes back to the aspiration book is interpreting that in terms of valuational progression. Right? And so the, the idea of being angry with somebody is that we have the shared value system, would you violate it? And now bring me back, show me that we have this value system is still in.

Agnes Callard: 00:47:33 Exactly. Yeah, yeah, yeah, exactly right. So, you know, the way that I understand anger is sort of predicated on the idea that to be in a relationship with someone is to be engaged in like a kind of co valuing people valuing one thing together where that’s not the same as just two people who both values something, right? I’m sort of like the difference between walking with someone and just walking next to a stranger. Um, and that, um, what happens with anger is that there’s a kind of injury to that valuation so that you’re now trying to do something by yourself that you can only really do with another person. That’s why you need them in your head. Um, and so you have devolved into a kind of doing a two person activity as a one person know you’ve transformed it into a defective one person version and the processes of like fighting with the person and talking it through with them and apologizing and all of that is repairing the relationship so that you can do it as a two person thing again. And then there, that sort of eliminates the need for anger because that’s what anger is, is trying to do a two person thing as a one person thing.

David Wright: 00:48:38 So I want to change gears just a little bit and we’ll come back to that now. Which is, this comes to your, to the conversation you had with Tyler Cowen. Oh, it was great. I mean, I couldn’t recommend it highly enough. Really enjoyed it. And he, he has a reading of your book. would you pushed back on. And I’m going to, I’m going to try and mount myself to mount to his defense here. So his reading is that actually this is a piece of a theory of everything. Would you have in your head whether you know, it or not? so he calls the Straussian reading the book because there’s all. This covers a lot of ground here. And uh, you know, you think of like, just the, the papers you mentioned where deliberation is an important idea here. The Aristotelian deliberation which you were examined because that’s about looking at a goal and thinking about how you get to that goal.

David Wright: 00:49:15 It’s a goal oriented process even though you might not see it as clearly as you want to. The aspirational element, deliberate aspirational deliberation Aristotelian, I think the desire thesis, I think it’s important there because you have this, you are desiring the good and that’s another way of putting the value system. Right? And so this was goal oriented kind of process again, where we’re looking, where we, we, we are all, there’s a set of values that are out there and they’re all good and that’s what values are and if they’re not values and they’re not good, you know, it kind of an equality there. So the angry forever. There’s valuational progress there, right? So you’re either moving away from somebody becoming angry with them, moving towards them and, and you’re creating a deeper relationship and so you pushed back because you said this is the value of change.

David Wright: 00:49:55 So does the theory of change and this isn’t just describe states, right? So where I would then say where I think Tyler was onto something there is that I don’t think there isn’t such a thing as state, right? I think that we’re always changing. We’re always nudging a little bits here and there towards goals end of every interaction we have with somebody else’s other progressive value system deeper or farther away and every act we take in the world I think is actually moving towards something or away from something. And I think the human experience isn’t necessarily one, at least in its, in its most fulfilling version where you’re working towards goals. So this is actually a theory of everything because that is everything. Everything is a progression towards something. What do you think about that?

Agnes Callard: 00:50:36 So, um, I have sort of two kinds of responses to that. One is sort of meta and methodological and the other is more first order. So maybe the meta or methodological one is just to say like, even if I were to grant all of that, the book is not even really a theory of aspiration. Um, there’s so much left to do. There’s nothing in the book about love.

David Wright: 00:51:01 It is itself aspirational.

Agnes Callard: 00:51:02 Exactly right. And so if you think about it then if you think about the book as being itself aspirational and as having left out a whole, that is what the methodology that I use in the book is to sort of break a whole bunch of stuff in philosophy to say here’s like a whole bunch of distinctions that are super useful that like we’ve been using internal external reasons and then, and then like none of them work to describe this phenomenon.

Agnes Callard: 00:51:24 So look, let me just create a mess and then I hope someone else is going to clean it up and produce some new because it’s not like we can live without them. Right. And so I haven’t cleaned, haven’t done the cleanup work. Um, and so then, you know, there’s a question, what point of view do you adapt towards somebody who’s done what I did, right? And you could adopt this sort of optimistic perspective where you’re like, yeah, but like we can sort of project forward and see that like in a sense it implies a view about everything. Um, and I prefer like as an aspirant myself, I guess I prefer the more negative approach of like, what is this? It’s nothing because that’s what’s gonna get me to produce the next thing, right? It’s like if you think it’s already there, that induces a kind of complacency of like, um, and nothing more even really needs to be done.

Agnes Callard: 00:52:13 Whereas my approach is like so much wanting to be done because that’s what’s gonna get me to do it. So it’s almost like there’s a kind of a gestalt question were part of the what part of what goes into how you’re going to view that is the place that’s going to play in your future, you know, deliberations. All right. So that’s the sort of methodologic question. But now the sort of first order substantive question of like are there states, right? So there’s an issue that I don’t come down on in the book. It’s probably the most important issue that I don’t come down on. Um, and I would say it’s the single greatest way in which ancient philosophy influences that book is making me realize that there’s a debate that I don’t know how to resolve, and so I have to steer clear of suggesting and solution one way or the other.

Agnes Callard: 00:52:59 But the debate is about whether aspiration is infinite or not. And it’s a debate between Plato and Aristotle. And Plato thought, yes. So Plato thought you should spend your whole life trying to improve yourself in the sense of trying to more fully acquire the values that are in some sense I’m ill suited your mortally embodied soul. And so never going to have them in any kind of perfect way. You’ll always be subject to something like akrasia. I right. Even if we don’t call it that, um, and so you should just try to perfect yourself. That’s the Platonic view that aspiration is infinite. Aristotle’s view. And the ultimate underlying disagreement here is whether or not the soul is immortal, whether dies. So implant as you, it doesn’t die. So you know, it’ll be reincarnated, those afterlife, you just, you just keep trying, okay? Maybe forever. Aristotle thinks the souls mortal, so when you die, you’re dead.

Agnes Callard: 00:53:49 That’s it. Um, and so you’ve got to achieve something in your life and that achievement can’t just be making yourself as good as possible. There’s got to be some amount of making yourself into something where at that point it’s good enough and now your job is not to have yourself as a project anymore. But to have outside projects where you do things like help other people become good and write constitutions for cities, for new cities that’s like ourselves, you know, prime example of like a great thing you can do for the world. It’s like create a new city, right? A really good constitution for write a really good set of laws. And like when you’re doing that, you’re not aspiring. What you’re doing is putting into action knowledge that you have. And I think it was really important to Aristotle to think that you can have knowledge.

Agnes Callard: 00:54:33 Knowledge isn’t just something you’re always trying to get. Um, knowledge is a state of your soul, an ordered state of your soul. And, um, there’d be no point to spending your whole life trying to get it if you could never get it. Um, and again, whether or not there seems like a point actually, it really matters whether you think the soul is mortal or not. So I think that really is the fundamental disagreement. Now what do I think that is? What do I think about whether aspiration is finite or infinite? Whether it is self indulgent to spend your whole life perfecting yourself. I really go back and forth on this one and I have a really hard time. Um, you know, I, I’m pulled, I’m very much pulled by both sets of intuitions I have to say. And so I try not to come down on that question and um, but so now the question is whether or not my book is really a theory of everything actually depends on how you answered this question because if you answer it.

Agnes Callard: 00:55:24 So maybe Tyler is a Platonist right? Um, and maybe that’s like my Straussian reading of his Straussian reading of my book is that he’s just taking a Platonic framework for granted. Um, and the Platonic framework is the one in which in the human realm, all there ever is this change because in this world there is nothing stable. Um, whatever is stable, it has to happen in another world. In the Aristotelian framework is more humanist and it says no, there is something stable in this world to go for. And so there are states and that’s what his whole theory of ethics is about how their states of character, they can be acquired and once you have them you’re not still trying to get them in the period of education as a period up to age, maybe 30 or 40 and then you’re done with education and now it’s time to do things.

David Wright: 00:56:09 So let me give you my Straussian reading here and, and that’s that. I’m sure you’re not going to believe this, but it’s my reading of your book. So we’ll see what you think. Everybody got Socrates wrong, starting with Plato and so that it is not about the goal actually. So the goal is there to get us to work, to work, right? But it’s the work that is actually the goal in some kind of weird way. Right. So if you think about Socrates’ method where he’s, I believe, I believe Socrates, which is to say that I think he’s actually trying to figure it out in conversations. Right? I don’t think he was with. When you read the books, you sort of get this feeling that he had in the answer all along. Right. You know, there’s always kind of Socrates’s it isn’t always the case, but he’s the hero who conquers the problem and he wins and carries the day.

David Wright: 00:56:55 Right. But I want to believe anyway in a Socrates that was there really to try and figure it out with other people and say, let’s all get together and work this problem out. Right. And I think Plato’s Plato almost, right. Socrates is a little bit too superpowered then. Then maybe he really was because Plato wants it to be a direction towards a correct answer at the end and bang just draw a line under that one. Move on to the next book. Right. The next dialogue. But Socrates never actually wrote anything down and I think the reason why he didn’t write anything down with, because you never probably never felt like it was complete and I think that he was probably okay with that as a result because he could have rewritten history. Socrates perhaps and said actually had all the answers all along and Plato kind of did it that way.

David Wright: 00:57:33 Right? So he rewrote it or he wrote it, he wrote it, and so he’s the authority. We’re kind of trying to see through Plato to Socrates, but I think he created more certainty than Socrates would have felt because Socrates is this underlying kind of feeling of a social construction of all these ideas. And Aristotle just took that and ran with it. And on we go to philosophers of the day. We’re trying to find the right answer. But actually, and this is where the ask, this is where I’m okay with the mess you created in that China shop, because I’m thinking, well, it’s the process of cleaning it up and breaking in and cleaning it up. That’s actually what we’re doing and we should be okay with that and some kind of weird way. What do you think?

Agnes Callard: 00:58:04 So there’s a lot in what you say that I agree with. I very much tended, as one person once said to me something like, for you, Plato is like, Socrates’ ugly, clothing. He’s like clothing you’re going to take off to get to the real Socrates. So yes, I think that’s very much how I read that. I lost. I disagree that the way Plato presents Socrates is like the dialogues and with some answer because they don’t. I mean most of them, most of the dialogues that are considered the most Socratic end in confusion

David Wright: 00:58:33 How about the ones that were the ones that were the most Platonic,

Agnes Callard: 00:58:35 um, well I’m

David Wright: 00:58:37 not in the formal philosophical sense of Platonic

Agnes Callard: 00:58:39 They still end in weird ways. You know, the Theaetetus. Um, the Republic, the Sofist. I mean, um, so, but, but you know, in any case we have the Socratic ones and so we do have Plato presenting Socrates as being aporetic. That is Plato didn’t merely present Socrates as just having a bunch of views. But I mean, even in the Platonic ones, you might arguably in the Platonic ones a view emerges, but it isn’t something where it’s like always asserted by Socrates. Um, so, um, the Parmenides, I mean, that’d be a great example. Um, um, socrates is just totally lost. Um, so, so, um, but on the other hand, I guess I look, I do think that Socrates is genuinely looking for answers to these questions and that’s what the, what are you doing in the dialogues? And he often says it, he’s like, actually, you think I’m trying to beat you or whatever, but I actually am just trying to look for an answer to this question and many of the conversations, this becomes an explicit topic in the Protagoras and the Gorgias. And it’s a really interesting question, why it is that, you know, doing that so much shows up for people as being something else. Right? um, Socrates understood that he was going to be misinterpreted and he says that in the dialogues and he’s like, you’re going to think I’m being ironic. He says that uses the word ironic in greek, right? Um, and so the problem of interpreting Socrates is already a problem even within the dialogues and Plato presents us that problem. Um, and you know, as for um, like the process is the goal.

Agnes Callard: 01:00:06 See, I guess the thing that’s, that’s a not unpopular interpretation of Socrates, that’s the thing that worries me about it is like how pleasing of a story that is to tell yourself and, and how often Socrates seems to not be willing to allow himself that I think he thinks that the thing that he’s doing, which is looking for answers and not finding any, is the only possible worthwhile way to spend your life. Okay. So does he think it’s valuable? Yes. Um, does he think that it’s enough? No, I think um, that is um, the idea, it’s like there’s a real temptation to make a certain inference from it’s valuable and it’s the only kind of meaningful human life to. It’s enough because it’s got to be enough then. Right. I mean this has got to be like pretty good. It’s got to be pretty awesome if it’s the best possibility. And I think that Socrates, one of the ways in which Socrates challenges us as to say this is all we can do and it’s not very good because what you actually want is knowledge and you can’t have it in this life, that’s Socrates, right? And of course one sort of like Straussian and reading of that is like, no, really, that you don’t need to worry about the afterlife or this is the valuable thing. Right? But just think about how that reading of it defangs the point and makes it easy and acceptable and kind of, um, uh, kind of.

David Wright: 01:01:34 Meaningless

Agnes Callard: 01:01:35 Yeah. And not only meaningless, but a kind of, it really allows you to flatter yourself in a certain way, right? Um, in the sense that it allows you to be like, hey, I wrote this book. And like there’s a whole bunch of stuff I didn’t explain, but it’s fine. Like, I’m doing the great thing and this is awesome and I’m but like, what’s going to move me forward? What’s gonna move me forward is it’s not that it’s not awesome and this is not good enough and we need to answer these questions. And merely being like engaged in the activity. I mean it’s kind of a paradox, right? Because the thing I was describing to you at the very beginning was like, well I want this light to be shining in my life. It’s kind of a piff epiphanic light. And you were saying, but it’s kind of this, there is, it’s partly there’s this confusion and it’s like the thing that, the thing that allows you to extend it in time is the fact that there’s this confusion in the fact that there’s a direction you’re moving through it and you’re inquiring. But none of that would make any sense if there weren’t something you were after. And I don’t think the idea that you’re after something is a lie you tell yourself, I think you really have to be after…

David Wright: 01:02:28 So let me push back here. So because think of what aspirations teaches me is that you don’t necessarily need to know what the goal is. I mean, you kind of do, right? Think about… Think about the example of your own career. Right? So this book came up, but I mean you weren’t looking for it. So you’re looking for something else and then suddenly this thing is discovered and so it’s almost like those, those authentic moments, those eureka moments, the accumulation of knowledge, that’s kind of like a byproduct that keeps you going, that you love and who knows why where motivation comes from, right, why do we work so hard, all that kind of stuff, but for some reason we love it. We also love the good parts of it too. Right? But the process does seem to create a lot of value for the world.

David Wright: 01:03:05 One of the things that, and reading Tyler’s book Stubborn Attachments.. that I thought was so neat was he’s integrating directly this idea of economic growth into philosophy and economic growth. I mean, I don’t know how familiar you are with kind of the intellectual side of the venture capital business in silicon valley and all that, but one of the amazing things about what their whole strategy is that we don’t have a stake… We don’t have a strong idea here for what’s going to work. So we’re gonna place a lot of bets and all these little companies and most of the vast majority of them are gonna, fail spectacularly, lose all the money, but once in a while one of going to hit on something, it’s almost impossible to tell in advance and that’s what efficient markets teach us is you don’t know what, which one’s going to work, so you have to let it emerge on its own.

David Wright: 01:03:44 And there’s a goal there kind of implicitly. So two ways to think about the goal. One is the goal here is to make money. The goal is progress.. the goal is knowledge! The goal is some, some good that nobody can dispute, but the pursuit of that goal is almost mindless or it’s almost like, I don’t know, it’s almost, I don’t know what the right word is. Maybe you can help me with that, but I don’t know how it’s going to happen. I’m just kind of trusting that it’s going to happen and I’ve seen it a few enough to have enough times that I believe it’s gonna work, but that’s not really why I’m doing this. I’m just kind of doing it and I love it and I love the good parts and that sort of keeps me going, but I feel like that that’s a much more accurate description of how I lead my own life and how I observe. I’ll have other people do it too. When we really liked the idea of goals, we tell stories about goals and they are important to a degree, but that’s not what’s really going on, what’s really going on. Something else, something a little messier, harder to see, but, but just as powerful in the generation of insight and knowledge and wealth in society.

Agnes Callard: 01:04:40 So I mean, I guess one question about say that process that you described. If placing bets and then we don’t know what’s going to happen, but we have say some reason to believe that one of them will work out. One question to ask is like, could that fit the paradigm that I’ve described about a learning process? Are you learnIng anything when you’re doing that? Now you can totally discover things over the course of discovery. You discover like that this one was the good one, right? Um, but when you’re trying to say, come to appreciate classical music, come to see what people see in it. Like what is that thing? I think there’s something there, but I don’t know what it is and I’m trying to get myself to see it. Um, there’s, it’s important that in that process you’re changing, right? The idea of prediction is sort of, there’s a kind of way in which you’re holding yourself fixed and you’re letting the world vary it up.

Agnes Callard: 01:05:38 Um, and your description of venture capitalism is a description of that sort of activity, which I think can add value. I have no objection to it, but it isn’t aspirational. Um, and not all ways of having new things come into being are aspirational.

David Wright: 01:05:57 Sure.

Agnes Callard: 01:05:58 Um, um, you know, one way to have new things come into being is just doing a bunch of random stuff and like some of it will work out right? And you can do that in a more informed way where like, you have some reason to believe some more reason to believe that one of the, one of the more account, what’s really interesting is to think about a kind of continuum between that kind of random activity on the one hand and something like a university on the other hand, right? because I think of a university is kind of a structure that makes possible aspiration that makes aspiration possible, um, where in some sense it fits what you just described with venture capital, right?

Agnes Callard: 01:06:32 Where you’re like, we’re going to get a bunch of people in here and we don’t know what they’re going to do, but they’re gonna do something great. Right. Um, but, um, but there, there is a kind of structure present that um, you have some reason to believe is going to do some work in guiding them towards the things that are valuable. You have a history department and you have

David Wright: 01:06:50 the structure is pretty rigid, isn’t it in universities? You have departments.. you have a hierarchy established status markers. And..

Agnes Callard: 01:06:52 I mean, I guess it depends what you’re comparing it to, you know, like in some ways I teach classes on whatever I want. Nobody ever tells me what to teach on next quarter, I’m teaching James Joyce and Elena Ferrante and in a class that I made up and I’m a philosopher. So like there’s a lot of ways in which universities are not rigid that are, maybe not as obvious, but there are some ways in which it is.

Agnes Callard: 01:07:21 Um, I mean also students like mostly just take the classes that they want. They have to fulfill a major and they have some basic requirements. Some, some, some universities, any of those, um, they have a lot of choice as to what kinds of classes they take. And then we have a lot of choices to whether they want to be in the drama club or whether they want to do sports or like there are all these, there are all these sort of institutional things that are available to them but they don’t have to do. Right. Um, and so that’s, you could say, you know, there is an institutional structure there, but it actually makes possible a certain kind of freedom I think. So the question is, so I think that structure is a structure where you can sort of say that what you’re doing is in some sense guiding people towards this kind of value where you hope that some or many of them are going to become great.

Agnes Callard: 01:08:06 Um, I think that like I’m betting on people, it’s just a very different approach to that. And um, even in silicon valley there’s um, you know, some amount of that university structure is starting to be incorporated in the form of guidance and even institutionalized guidance. Right?

David Wright: 01:08:24 Yeah.

Agnes Callard: 01:08:25 Um, and in a way, what you can see happening there is in some sense silicon valley is just aspiring to become a kind of university, right? To incorporate the best aspects of it and we’ll see whether it works or not. Right. The university is a very old institution that we’ve kind of been handing down to ourselves for a thousand years or so. Um, and you know, and I mean our, I mean arguably arguably dates back to Plato’s academy. Okay. But certainly to the, you know, medieval Germany or something.

David Wright: 01:08:54 Yeah. And I think that there is an element of knowledge acquisition in a lot of venture capital and this is something that Tyler and I discussed a little bit and it’s something that I believe is the case. I mean they’re not just smart people, they’re smart people who think very deeply and are using the experiences of what works to learn more about kind of the underlying reality of the world or whatever it is, you know, the current state of the economic process, which itself is so complex. It’s so hard to understand. And, and one, one theory of why, why a venture capital firm exists is, is, well this is kind of a new conception of it used to be just a parceling out cash, right? But the way that particularly one firm Andreessen Horowtiz manages and others do now too is we’re here to help these entrepreneurs and a much more explicit way and use the network.

David Wright: 01:09:36 And, and, and we know the firms did do this before, of course, but it seems so much more prominent now as a way of using using this as knowledge distribution. So, so we’ve learned these lessons from these other places and we are learning something about the way the world works and here’s what you, here’s the knowledge and you can go work with it and figure it out. So anyway, I want, I want to move on to another idea here which is the idea of optimism and I see it, I see aspiration and this is another kind of theme where it linked me to venture capital. And so that’s kind of jumping off point here is that it’s fundamentally optimistic, right? I think or, or it could be interpreted that way. So I wonder if you could talk to me a bit about how you think of it as optimistic and another, another idea here is whether it is, whether it’s kind of their philosophy itself generally is optimistic or not. What do you think?

Agnes Callard: 01:10:25 I guess I think of optimism and pessimism, more as features of people rather than features of institutions or concepts or activities. So I sort of agreed that aspiration is optimistic, but I guess my thought was that aspirants are, um, yeah. Okay. Um, yeah. And, um, and I think that, I guess what I would say is it’s a kind of tempered optimism, right? Because as an aspirant you’re constantly aware of the way in which you were defective and that awareness is crucial to your development. So, um, but, um, you know, that is the flip side of how good you could become, right. Um, and the idea that the idea of aspiration is the idea that how good you can become when weighed in the balance with how bad you are, it outweighs it. So you’re going to move in that direction. Right? And that’s optimistic.

Agnes Callard: 01:11:23 Is philosophy optimistic. I’ve found that strangely a lot of philosophers are really pessimistic. Um, and I, I’m not sure why I think that there could be a lot of different reasons. So one of them could be a lot of philosophers now especially, you know, people who have tenure track jobs. You like me just seeing a lot of students, great students not get jobs that’s bound to make you pessimistic. Right? Yeah. Um, and then maybe you started out in philosophy thinking that you’re really going to get somewhere and the more philosophy you do, like, I don’t know, the more I feel like even in my intro courses, I’m just like, wow, I thought I understood the Meno, I’ve taught it 50 times. And so there’s this, um, it, I think that can be quite difficult as you get older to live with. So here’s the thing, here’s like a demographic fact that I’ve found about people who work in ancient philosophy. So, um, you know, as you were noting a little while ago, part of what I do is interpret passages right? And I’ll read it in Greek and say, well, here’s the translation, but actually here’s a slightly different translation that’s maybe better, more accurate, right? And then there, there’s not just translation issues. There’s text issues for a lot of these text, especially like say Aristotle’s De Anima, book three. Our manuscript edition is terrible. So it’s like we don’t know what it says, right? and people argue about what the Greek says, not just how we translate it. okay. So here’s something I’ve found that I find super interesting, which is that the older people get, the more dogmatic they become about those issues, about issues of, um, you know, uh, what the text says, textual criticism as it’s called, um, what that text actually says, but then even more so like how we interpret it and when there were like multiple readings of a passage, right?

Agnes Callard: 01:13:13 I’ll be like, oh, here’s another reading. And like if somebody is over the age of 60, the chances that they’re like, no, there’s only one reading. This is how you have to read it. Like super high. Right. And I think it’s partly that, like they’re like, look, I’m approaching death and at the very least I have to know what Plato’s republic says. You know what I mean? It’s like I can’t keep going. I can’t just die and admit as I’m dying that I don’t know what those books that I find the very basics. Like what is the first line of the republic mean or something, you know, I went down to the Piraeus that. So I think that that could explain something like pessimism is like this feeling like that as you get older, as a philosopher, the need to leave things open just becomes harder and harder. And Socrates actually encounters in the Gorgias because Callicles says to him like, you have this philosophy thing you do is, is, is really appealing and young people, it’s kind of like a list which is kind of attractive and like a young person. But like when you see an old person doing it, it’s kind of and stupid like move on with your life, make some progress. Right. And like if you’re a philosopher, you haven’t done that. You’re still listening at the age of 60, you know, and uh, that can seem sort of pathetic to you, I guess.

David Wright: 01:14:23 Uh, we’re, we’re out of a time, uh, but, uh, I want to ask one more question, which is you’re, your own journey really intrigues me in that when you were refuted so, so convincingly right on your initial version of the aspiration idea you kept going, not everybody would right or you might say, okay, that didn’t work, I’m going to try something else. And so you, there’s a persistence about your efforts there, which I think ultimately is, and will mark the success because that’s kind of one of the more interesting and important qualities in any person. Where does that come from? Do you, do you recognize that as something that maybe you do well? Um, and, and what do you think about it?

Agnes Callard: 01:15:08 I don’t think it’s a personality trait. I think it’s that at that time I was working in contemporary philosophy, not ancient that, you know, the basis of my book. I was reading a lot of ancients and um, I’ve just been really persuaded that refuting someone is the best thing you can do to them. It’s the greatest favor that one person can do to another. And I mean simpliciter not just as philosophers. Um, and so that gave me a kind of perspective on it where I’m just like, wow, these people are really doing this amazing favor right over and over again because it’s still there. It wasn’t just my book, this happens to me all the time and happens to me kind of with every talk that I give, but I’m looking for it. Right? I’m listening for it. I’m like hunting for the refuting point. I’m not trying to avoid it. I’m like, what’s the best version of this point that this person just made that I can even turn it into? If I can respond to it? Is there a version of it I can’t respond to you? I’m always looking for that. I’m, I want to help them refute me because I want to help them do me this favor. And I think that I just have been persuaded by Socrates. Somebody says that in the Gorgias okay. Refuting someone is the greatest favor you can do them. Um, and he’s like, yeah, I’m always doing people these favors and like I wish someone would do them to me, but nobody’s ever willing t.. right. Um, and so I really appreciate that, that they’re doing that. I sincerely appreciate it. And I think that, um, I don’t know. I think maybe that’s the best thing I’ve gotten out of Plato is the ability to sincerely appreciate that and so then it makes me kind of cheerful and it doesn’t make me feel bad about myself or feel like I need to give up because the feeling like you would need to give up is the feeling like you need to avoid having that happen to you again. Right. Shift ground so it doesn’t happen or say something else or. But I’m not trying to avoid it because I’m actually trying to make it happen. It’s unusual.

David Wright: 01:16:52 Do so. When you refute other people, do you find that they have a similar response or or not?

Agnes Callard: 01:16:58 No, usually no.. Though I’m hoping. I’m hoping to make it more usual how by teaching this to my students and I think my students do respond in this way

David Wright: 01:17:12 Saying this is a good thing. Socrates was right.

Agnes Callard: 01:17:13 Yes. Like what I’m doing because I wouldn’t say it to them. Like they’ll like my grad students who like have this thing that my teacher did to me. I mean that’s another big part of it, right? I had this teacher who just refuted me and even when it didn’t feel good, I could kind of see that it was good, right? So I do that, but not only do I do it, but I do something he didn’t do, which is to be like, and right now I’m doing you a favor. Let me explain why this is the thing you should actually instead of trying and then they’ll sort of try to avoid. And I’m like, no, no, no, don’t, don’t do this thing where you’re trying to avoid seeing my point. Actually just try to see it and make it worse. Um, try, try that approach or something. And I think it’s kind of liberating when you, when you try it, you realize that like it, it’s almost like you become empowered again somewhere. Um, so, so I don’t know, maybe if like, yeah, if I hope to have a legacy that would be an awesome one. And I do think that some people by temperament are such that being refuted, it doesn’t bother them very much actually. Yeah. But that’s not true of me. It’s not for me. It’s not a fact about my temperament, it’s more about like a commitment to a certain ideal in the light of which I’m trying to shape myself. And so I think that that’s available to people even who don’t have the temperament.

David Wright: 01:18:20 Is there an etiquette of refutation? Does, is it sort of implicit there? Maybe that’s something you need the handbook you need to write. I mean,

Agnes Callard: 01:18:26 oh my god, there’s such a huge. This is a big issue in philosophy because um, for a long time like say in my early years in grad school, but much more so before that there was a very bad culture of how refutation was nasty. Yeah, exactly. They get nasty, they pick on particular kinds of people. They try to refute them in a way that makes them look maximally stupid. Sure. Um, and um, it’s so easy to turn a refutation into an attack on a person. Right? And so there, I think there really is an art of trying to refute people where I’m like, what you make you make him part of the problem with trying, with turning reputation into an attack on the person.

Agnes Callard: 01:19:13 I think the main problem is not that it hurts people’s feelings, but that a, it’s a bad way of refuting them because you’re usually not going to be centering on their main point, you’re just going to be finding the point where you make them look stupid, but you should be finding the point where they’re most relevant. Yeah. Or about them. Um, but like it, you got to get to the heart of what they’re saying and show that’s wrong. You’ve got to bring down the whole edifice who can’t be satisfied to be like, oh, you got this little fact about Socrates wrong or something. Right. But that might be more embarrassing. So yeah, I think that there’s a lot of work to be done. I mean, there’s a lot now. There’s a lot more consciousness in philosophy that we have to refute politely, but I think it’s for the wrong reason. Namely it’s like, so that we can be more civil to one another, which is a good goal. It’s not that that’s a bad goal, but like there are intra-refutational reasons why we shouldn’t be that way.

David Wright: 01:20:01 Yeah, yeah, exactly. Yeah. My guest today is Agnes Callard. Thank you very much for joining me.

Agnes Callard: 01:20:06 Thank you so much. That was really fun.