CEO Stories: They Say It Can’t Be Done

Q:  Welcome to This is Capitalism, CEO Stories. I am your host, Patricia O’Connell. Today I’m talking with two people They Say It Can’t Be Done. Christina Elson, the Executive Director for the Center of the Study of Capitalism at Wake Forest University and Patrick Reasonover, the lead producer on the movie. Christina and Patrick, thanks for joining us today on the podcast.

CHRISTINA ELSON: Thanks, Patricia.

Q:  Patrick, I want to ask you a question first. They Say It Can’t Be Done. That obviously has many meanings. This is a movie that is about I think would it be fair to say the inhibiting role of regulation on innovation and you specifically looked at it through the lens of four businesses in three areas. One was clean food, you know, not killing or herding animals, the ability to create food basically using animal cells; creating on-demand organs; and getting carbon out of the environment, two different companies focused on that.

So I’m presuming on one hand They Say It Can’t Be Done refers to the idea of they say all these businesses can’t be possible. But on the other hand I’m wondering does it refer to the idea that innovation is allowing these things to be possible but regulation is saying it can’t be done?

PATRICK REASONOVER:  Yeah, well, thank you, that is a great question and starting point for the discussion. So They Say It Can’t Be Done really captures for us the themes of the innovation and regulation but also optimism and pessimism. When we latched upon the title, there’s the saying ‘they say it can’t be done’ and then someone does it. So we were kind of referencing that just like innovative spirit that when confronted with an obstacle – they say it can’t be done – we do it anyway.

And then when we’re talking about it in the film in the context of innovation and regulation, our innovators are working on problems that people say can’t be done. We cannot solve global warming, we cannot solve ocean acidification, we cannot eat and live differently when it comes to meat and health care. And they’re doing that.

And then on the other side of it you have regulators who nominally should be helping these innovators by providing a structure and platform upon which they can innovate. But that structure is we discovered old, outdated, really for an industrial model of capitalism and not really for a digital, innovative model like we see today.

And so the ‘they’ that is saying it can’t be done is the regulators but really the message of the whole film is that ‘they’ could be any one of us. Because the regulators don’t come from nowhere. They come from agencies that were created by acts of law that were created by Congress and signed into law by the president.

So really we have to decide whether we are optimists and we believe it can be done or whether we are going to want to be pessimists and stop the things moving forward.

Q: Well I’m not going to ask either of you yet if you’re an optimist or a pessimist but just know that that question is coming so you’ll have time to think about it. But Christina, as someone who is very deeply involved in the study of capitalism and looking at all aspects of capitalism, I am curious if you could perhaps talk a little bit about the appropriate role of regulation in a capitalist market.

CE:  Right. Well, Patricia, thanks for having me. And yes, that’s a very important question because going back to what Patrick just mentioned about the role of markets and solving the biggest challenges facing us today, those things are human health, climate and things like education, continuing to educate the work force and really the innovative technologies that we see continuing to push those forward.

Regulation has always had a role of helping us understand a playing field. But one of the big issues that you see coming out more and more in some of the literature is how regulation can hamper, dampen, or tamper with competition.

And so in a free market economy the most important thing really is to make sure that there is a high level of competition and that businesses can get in and can succeed.  And then also the idea that there is a lack of understanding sometimes of the dynamism in the economy and how fast some of these innovations are happening.

So the regulatory process, as Patrick mentions, has this very first industrial revolution sort of framework to it and that’s just not the world that we are in anymore. A lot of the technologies and sciences are very rapidly converging and the frameworks just really weren’t set up that way. So yeah, we just need to rethink some of the ways that these processes are done so that we can continue to protect people when it’s appropriate but not create issues that are difficult to resolve in our dynamic economy.

Q: Has the prospect of over-regulation always been a problem or is this something new because we are now living in a much more technologically, even digitally advanced, accelerated world?

PR:  Well there’s a history to things. There’s a history to capitalism. It didn’t really always exist in the current form. We saw an explosion of innovation and factors of human betterment, health, living standards, length of life happen starting in the industrial revolution about 200 years ago. And with this form of capitalism, there has sort of been a trailing lead of regulation because regulators can’t know what the future is, or step into the imagination of innovators working in their basement on a new product, they sort of have to see what happens when it comes out.

And it’s really important that it works that way. And so we lose the dynamic component of capitalism were we’re seeing a lot of new ideas and a lot of experiments and a lot of things being tried and the ultimate decider as to whether they should proceed and be successful in our society is success on the market, just consumers choosing them.

But when regulation out paces or almost is trained to control or manage the innovation, then we know we are in a pickle. Because regulation should not be solving problems, it should be empowering problem solvers. And I think culturally there’s too much of a mindset that the regulators are the problem solvers and not the facilitators of the innovators and businesses who are actually the problem solvers.

Q:  Patrick, I’m going to ask you first – out of the four companies that you followed, first of all, how did you find these four companies?

PR:  Google. [laughter]

We started with the problems. Because when we started making a documentary about innovation and regulation, those are ideas and you can’t make a good documentary that people want to see about ideas. There has to be characters and story and something that is visceral and meaning about what it is to be a human being.

And so we began our process by finding the biggest problems that everyone shares. That’s the reason you care and that’s why you’d watch our documentary. If you are interested in finding solutions to these things that everybody is constantly talking about in the media but offering just doom and gloom and no solutions, well there are solutions.

And so once we had the problems we then went researching. And the four companies that we feature – and also university-based innovators, we weren’t just strictly looking at startups – we found them. They actually have been working on these things for years, sometimes decades. So it’s not new to them, though you haven’t heard of it.

And yeah, it was just a really wonderful process. There are many, many people that we talked to and looked at, there are multiple companies in each of these areas. So the four that we have are kind of symbols in a way of many people who are working on solving these problems.

But yeah, it was a real pleasure to think about well how do we solve global warming and find Klaus Lackner has discovered a means of making a plastic tree that sucks carbon out of the air at a thousand times the rate of a regular tree. Wow, there’s a real solution out there available if we will just implement it.

Q:  And it doesn’t need watering.

Christina, I’m wondering if you could shed a little light on one of these stories, which involves researchers from Wake Forest University who many years ago were able to create a new bladder for somebody who otherwise really had no hope of living without this organ. And sadly it seems that the ability to go forward in this area has been very much stunted by regulation.

To your point, Patrick, about telling visceral stories, I mean, watching this young man throw a football around when he’s talking about being in the hospital for a few days when he was a little kid having this procedure done is just startling. So perhaps if you could talk a little bit about the journey for the Wake Forest folks.

CE:  Yeah this is a great story because they have been working at the forefront of personalized medicine for over a decade, I think. And so when you think about what personalize medicine is, it really is taking your cells and thinking about how to grow what you need based on your unique person. So you can grow bones, you can grow organs, you can grow all sorts of stuff now.

And that has come along with another suite of technologies, the 3D printing technologies that now have allowed this kind of work in biomedicine. So again these converging technologies are very important to further what we can do in these areas.

But if you think about the problems that they would run into, the regulatory system for medicine is not really one that is based on the concept of personalized medicine, it’s based on what we have been looking at recently with the pandemic where we are trying to come up with mass vaccines, mass drugs, mass.. ways to treat hundreds and millions of people.

And the problem that they run into in building this business is that they need to scale their ability to create these solutions for people. So if I can create a solution for this young man and save his life as they did, that is really wonderful but these solutions should be able to be scaled for the hundreds of thousands of people that need organ donations. And the process has just been extremely complicated to do that, unfortunately, because of the way that the system has been set up to look at these regulations.

So working through that process, it takes so much time of the investigators in doing that that this is time that –  I think Patrick may agree – we feel would be much better spent for them to be engaged fully in their science and in their innovations and trying to bring these solutions to the public.

Q:  And you’re saying that’s on the part of the people who are developing these solutions? That’s not on the part of regulators?

CE:  Well, the regulators obviously spend all their time on this but what we would like to see, which we saw with one of the other innovators in the film, is just really how much time these innovators spend trying to work through these very, very complicated regulatory processes when they need to be running their companies and they need to be innovating and improving these products.

Q:  They are obviously really purpose-driven people.

I’m curious if either of you, and maybe Patrick you’ll answer first, if either of you has any thoughts about the fact that the vaccines were not just developed but went to market so quickly.  Now it’s quick by comparison to what we’re used to. Was it the appropriate pace of a process? Was it the right timing given the scope of the pandemic and what was happening with it?

But do you think that the fact that we have seen so far pretty good success with the results of the vaccines, do you think that could help change the mindset around the regulation process that we have now? Is this an opportunity for us to reexamine it?

PR:  Well my answer would be yes based on what we discovered in making this film. What you have is most of the acts that created these agencies happened decades ago. We’re talking potentially early 1900s, 1940s. So when you just think that in the 1940s those people had no idea they were going to be sending people to the moon in 20 years, ya know, there is just a limitation in the way these things are set up. It’s not like the Constitution where freedom of speech is a universal human ideal. That is not the same as an approach to regulating a specific business that may not exist in ten years.

So definitely to me, I think there needs to be a fundamental revisiting of how we regulate any of these businesses, particularly new ideas, because new businesses are particularly vulnerable at the start.  Once they are multi global, international corporations with billions of dollars it’s a little bit different than when, hey, I’ve raised $1 million, $20  million, I have a team of people I’ve brought to work with me on this together, they’ve left their good paying jobs to come here in hope that we can do something new and amazing. There really needs to be a different kind of approach to regulating for them, I think.

When we look at capitalism and we look at our system and we look at all of the amazing things that it has brought to our lives and reshaped how we live and be, do we trust people? Do we trust that most people are out there spending their time trying to contribute and do good and that is the goal of most of these businesses? Or do we want to be pessimistic and look out at the world with fear?

Q:  Christina, any thoughts?

CE:  Well, you know, of course people love entrepreneurs and hate big business [laughs] so I don’t know where the dividing line between one and the other is. That is a very interesting point of research. But yes, to Patrick’s point, we really need to encourage more business development and innovation in the U.S.

And one of the stories that I think in Patrick’s film that I found the most I would say disturbing is the story of the people growing the chicken meat, Just Eat. And they have a great product, they had really had some important breakthroughs in processing this and again decided eventually that they were going to go and launch this product in Singapore instead of in the U.S. because Singapore had set up a very clear regulatory process to allow them to do that.

That’s the kind of company we want launching in the U.S.

Q:  And just to give a little background for people who haven’t yet seen the film, which I do encourage people to do. One of the really jaw dropping moments for me in the film was when they were talking about eating meat that had been grown I guess would you say in a lab, is that fair, Patrick, in a lab?

PR:  Yes.

Q:  Meat grown in a lab from cells taken from a chicken whom they called Ian. And they were all sitting around eating a meal of chicken made from Ian’s cells while Ian, the chicken who donated the cells with I think very little harm to Ian, was walking around in front of them.

And the notion that here they were eating meat from him but he was still there, I mean in a way it’s almost very sci-fi, in a way it’s almost very.. this is really what we are capable of, in a good way.  What’s not to love about this?

One of the things that I always find interesting about capitalism, sort of to your point, Christina, about everybody loves entrepreneurs but not big businessmen or women, big businesswoman, big businesspeople. Everyone loves the creative part of creative destruction. The destruction part, not so much.

So in one part of the movie they talk about well Uber never would have been allowed for a whole bunch of reasons, going from everybody’s mother told them don’t get into a car with a stranger, let alone a stranger you’re going to pay, to the cab drivers and the other forms of regulated car services. But the market demanded it so hence it became a big force.

So you think about the people who are displaced during the destruction part of creative destruction…, let’s imagine for a minute in meat production if we were to go to this form of meat production where they are growing meat from cells. What happens to all the people who are working in food processing now, meat processing now? I mean are there potentially opportunities for them, for example?

CE: Well let me make a quick comment about the destructive part of creative destruction because it is an important concept. And one of the things with creative destruction is that when we talk about how capitalism creates broadly shared prosperity, what does that mean?

And when you look at things like the invention of the car that put all the buggies and horses out of business, the prosperity part.. the car created a lot of prosperity for everyone, we might say, but the flip side of that is that the downside usually accrues to very specific groups, as you mentioned.

So there are very specific places that we can identify where the destructive part is going to impact and there are things that can be done to identify that and then think about well what do we want to do collectively through education and re-training to address that issue. And I think that many companies are heavily involved in retraining workers. We have a very good education system in this country. There is a lot of emphasis on training for the new and emerging economy. So I think those are things that we can certainly, certainly tackle.

Specifically where someone from the meat industry or the chicken industry might go, you know, there are always some jobs that may just go away and that is not necessarily a bad thing, they are just being replaced by other jobs that honestly are less taxing and less detrimental to people. I mean there’s no reason why people should be doing some of these jobs. They either should be done by robots or maybe not done at all.

Q:  Patrick, do you have any thoughts?

PR:  Yeah. Well, I think when we start thinking about this from a philosophical standpoint, your reaction when you hear that oh my god people all around the world may no longer have to spend their time in animal husbandry and slaughter, what will happen to them, we must do something, that is a very paternalistic way of looking at people and its very depersonalizing. They don’t need you to do anything, you know?

Animal husbandry and slaughter is perhaps not the most pleasant job and maybe some of these people who are engaged in it would rather do something else if they had the opportunities presented to them. I mean nominally this isn’t a world where oh suddenly their jobs are gone and they can’t eat. Right? It will be wow, they are eating better and at lower cost than they were before so they are wealthier.

That’s why it was so frustrating when we looked in the documentary at the American beef industry that is trying to use the regulatory apparatus to delay and shut down and prevent Eat Just and its competitors from launching these products and letting consumers decide. This traditionally individualist, cowboy, self-reliance community is suddenly, when they find their livelihoods threatened, going to go use the same old tactics that any threatened group does, which is to go and use the regulatory state as a sword against competition.

That is wrong and they I feel would be better serving their members if they thought about this more like Tyson, which is a company that invested in Just, Tyson Chicken, where they see collaboration and opportunity. Tyson has an international distribution system. Eat Just does not. But if they can produce a better product and Tyson can work with them to distribute it.

Q:  I think that was also one of the interesting points made particularly about Eat Just was the tremendously lower cost for food overall.

PR: Yes, that’s right, right? I mean basically they have solved this problem where everyone was using the bovine fetal fluid, amniotic fluid and so are the organ growing operations. But they cracked it to create a vegetable amniotic fluid and they can grow the cells in it, they can put exactly the right nutrients, like everything that you would need, no antibiotics, no artificial whatever. It’s standard, it’s improving, it can constantly improve the product. It is way healthier than food that you would buy from animal slaughter, not even close because there’s no exogenous factors.

So their ability to create this food in the lab and then mass produce it through a printing process is just incredible. And the idea that they should even really need permission to do this makes no sense. Because it’s sort of like well why did we have a food regulatory system? It’s because there were unscrupulous actors who were selling snake oil. Here we don’t have snake oil salesmen, we have scientists and microbiologists and plant experts and millions of dollars invested to create a new product that’s going to change the way we eat and see the world. Why not just let them do it?

Q:  A very good question. So what is it going to take to allow them to do it? Do you have thoughts, Christina, about how we move now from this environment where we a regulatory model that is probably outmoded to one that makes sense. I think one of the people in the film talked about something called innovation by permission.

CE:  Yes, permission-less innovation. I think as Patrick mentioned earlier in the show, ultimately it all comes back to us. We are the individuals who are responsible for the structure and formation of our government and the kind of things that are done through that mechanism, those democratic mechanisms. We need to have advocacy and think about what kind of world we want to live in and then take those steps to figure out how to get there through our political framework and economic system.

I mean clearly those two things are tightly intermeshed but if you are in business, what are you doing as a businessperson in this area? We are all consumers in this country and we all can demand products that we think are going to provide us with a healthier, safer lifestyle. So there’s a lot that we can do but it does take a certain amount of thinking.. feeling that you have individual advocacy, which just goes back to this question you first asked about, optimism.

Q: Well and we are going to get to that. We also have to be given the choice to choose these products. The option of whether to choose this kind of meat, the option of whether we want plastic trees dotting our streets.

There was the gentleman who was working on the ocean farming and he said one of the things he loved about being featured in the movie was it got him out of his office where he is spending all his time trying to contact regulators and do research and out in the water, which is what he really loves.

But we don’t have the choice yet of being able to say I’m going to try that kind of food, or you know something, I’m going to take a chance on that 3D printed organ. So when we don’t actually have the choice yet, how do we as consumers use any agency, we as individuals?

CE:  Usually it’s based on our need. So for example if I need a 3D printed organ, you better believe I’m gonna spend a lot of my time trying to figure out how I can do that, whether that is going to be on the market or in research or other things. But yeah, we would love to see more of these products that are kind of trying to get ready to be in the market move faster through that.

Q: And I think as with many things the first step is awareness. And one of the things that you really did with this movie, Patrick, is create awareness around certain problems and certain solutions that do exist for these problems. These are not theoretical solutions. These are solutions that are already possible, that are already proven.

I did say I was going to ask you the question –  you know it’s coming – optimist or pessimist? Christina, I’ll let you go first.

CE:  Well so I’m an optimist and I think it’s partially genetic. My father is a huge optimist. I think my mother also. But there is actually research, very interesting research, about optimism and its role in and people feeling that they have what is called a locus of control, meaning that they can shape and change a situation that they are part of and that they can actually create solutions to problems. Optimists tend to be natural leaders, whether it’s in politics or business or the military. They tend to have a very strong sense of achieving things for just the purpose of enjoyment of achievement.

And so there are a lot of things about optimism that research suggests that it’s partially heritable but it is certainly shaped by environment. So it is very important to think about.. There’s a lot of reasons to be optimistic today. I mean I know people may think that sounds strange coming out of a pandemic but there are many, many reasons to be optimistic today. I mean we live in a world of unbelievable possibilities.

Q:  Patrick, optimist or pessimist?

PR:  Well I mean I’m definitely an optimist. I think that we’re all optimists and pessimists. Really what you need to be is self-aware. I mean there are some times when it takes digging in and being optimistic, there are some times when you should be cautious. But what we see now is a huge message of negativity in the media that makes people overly cautious.

I often get the question oh well did you try the meat? And my answer is always, well of course I did. I’m there, they have this meat and you’re not gonna eat it? Don’t be  –

Q:  And how was it?

PR:  It was delicious. I couldn’t tell the difference.

So we have a tort system so I don’t understand why the FDA needs to approve foods that we eat. It seems to me like they should just be able to offer the meat and if there is a problem then they will be sued. We have a working tort system of English Common Law in this country and so I don’t understand why we need to be so overly cautious that we have to protect ourselves from potential harms that we can’t even see.

In the past, the future never changed for like millennia. People’s lives were largely the same. If they tried to imagine the future, it would be exactly as the past. We are in innovation land and people have become… capitalism has freed people to create new things. And so the future is always going to be different and when people are free it is always going to be better because people will be choosing these things.

And so I think be optimistic when it is called for and be cautious when it is called for but right now, just as we saw in this film, there are millions of people who you don’t know working all around the world on amazingly cool stuff that is going to solve the problems that you are worried about right now. And the best thing you can do is to help them.

Q:  Patrick and Christina, thanks for giving all of us a lot of reasons to be optimistic. And thanks for joining us on This is Capitalism: CEO Stories.

CE:  Thanks, Patricia, it was great to be here.

PR:  Thank you for having me.