Money Talks: The Paradoxes of Patagonia

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2:53Hello! Welcome to Money Talks from Sleep Money. I'm Felix Salmon and this is the show where we sleep money hosts interview interesting people about interesting things. David Gellis, welcome. Thank you. Introduce yourself. First of all, who are you? My name is David Gellis. My day job is being a climate reporter for the New York Times. And on the side, I write books. And my new book is Dirtbag Billionaire. So we are going to talk about one of the most idiosyncratic and interesting CEOs that America, or actually technically Canada, has ever produced. The Quebecois Yvon Jouinard and the deep paradox embedded in his company, Patagonia.

3:41It's all coming up on Money Talks.

3:51Okay, so we had you on the last time you wrote a book about CEO, which was your Jack Welch book, and you didn't like him very much. I thought he had a problematic legacy, you could say. He had a problematic legacy. Now you've written a new book, which is kind of dependent to that? I think in many ways it is the other side of the coin. Yvon Chouinard, who the book's about, the founder of Patagonia, he's not without his faults. The company is not without its missteps over the years. But on balance, I found the Patagonia narrative to be a really powerful counterpoint to the themes I wrote about in my previous book about Jack Welch.

4:27Jack Welch, bit of a dick, to use a technical term. Yvonne Schoenard, also kind of a bit of a dick. Yeah, he had his moments, for sure. It's not like this is the friendly, humane face of capitalism. You actually have a quote in the book where he's like, I don't even like people. Yeah, more often than not, he would find himself preferring to be alone in nature rather than even with his closest colleagues, let alone his biographer. This is a man, I don't know if I would say he's a full misanthrope, but he definitely has a very conflicted relationship with humanity, you could say. And yet, while your overall view of Welch was negative, your overall view of Chouinard is strongly positive.

5:21And you have this series of blurbs from all manner of great and good types, like talking about how inspirational and wonderful he is. So if it's not because he's a good guy, what is it? I mean, and this is where you have to step back and understand that the story I tell in the book is really one that is more than 70 years long. The narrative encompasses his whole life. He's going to be 87 soon. And from his early days as a craftsman and a climber and a blacksmith to his early days starting a climbing company to then founding Patagonia, he's done things a bit differently than most conventional CEOs would have done.

6:02at every moment. And in each one of these little choices he's made, I think there are powerful lessons that other business leaders and other political leaders, my blurbers, are responding to and saying, oh, there are lessons here that show capitalism doesn't have to suck so much. Every company doesn't have to like rape and pillage in order to also make a profit. And in fact, what Chouinard tried to do, not always successfully, but what he tried to do is use his business, Patagonia, as a way to show other companies that they could, I mean, just to use sort of the trite term, do well by doing good.

6:42It was, again, imperfect. It got messy. It wasn't always successful. We can talk about all the nuances there. But on balance, he really believes that business can be a force for good. So over the past, I don't know, 10, 20 years, something like that there has been this idea of do well by doing good double bottom line triple bottom line all of these kind of impacting all of this kind of these slogans have become increasingly popular i guess one of the messages of the book would you say is that like patagonia was like early to that game extraordinary early well ahead of its time you know as early as the 1970s they were funding local conservation efforts.

7:24His sort of conservation origin story happened when a surfer he met talked about this plan to dam the Ventura River behind the office. And he got pissed off about that because it might have meddled with the surf break that drew him to Ventura in the first place. And so he started funding the activists that were working to oppose the development that would have dammed the river. And there he understood a couple of things at once. One, he understood that, you know, a little bit of effort could go a long way to sort of creating the world that he wanted to live in. But more importantly, I think he understood that he could use the profits from his business to fund environmental activism.

8:05And that began this really, I mean, 50 plus year journey at this point that has culminated in an extraordinary level of real philanthropic activity that has gone towards conserving large swaths of the planet. Right. And in the spirit of, I would say, most 1970s environmentalists and conservationists, he is ultra-nimby. He really doesn't want any development, what they call a banana, build absolutely nothing anywhere near anyone, and even don't build in the middle of nowhere. He and his friend Doug Tompkins, who you talk about a lot in the book, their big thing is let's just buy up as much land as possible and make sure no one ever builds on it.

8:47And there's a point in the book where not only is he opposing a dam in the Ventura River, but he's opposing like a college campus in Ventura because like that's bad. That's people, you know, which is kind of of a piece with his misanthropy and he doesn't like people. But I guess like now, you know, here we are in 2025. Is that actually admirable? I don't know if it's admirable. I think there's a real debate to be had about whether it's effective and whether it's what the environmental movement needs and what the planet needs at this point. Because this, as you say, this like extreme nimbyism and I mean almost this like Malthusian view that there's too many people on the planet and we somehow need to revert to a smaller global population in order to save nature.

9:41I mean, that's just frankly out of step with reality. Those are his views, but they don't necessarily meet the moment when you look around and understand that climate change is running rampant. Global development continues apace. We're approaching 10 billion people on the planet. You know, you can build some national parks in South America and that'll be very nice. And they would go even further. You know, I think they didn't not want to develop the parks. They would rather no one set foot in them at all for the most part. I mean, these people would just rather nature be left alone. So the question of whether it's admirable is very subjective.

10:17I think the question of whether it's effective and whether it's what the best use of resources is as a part of an overall climate philanthropic strategy is a different question. So one of the themes that I talk about every so often here on Slate Money, when I get into a sort of philosophical mode, is this idea of the problem with perpetuity and how it's a really problematic idea for the dead to try and control future living generations. and you can see this in you know the debates over i don't know the barnes collection in philadelphia or something like that and he's like you shall not touch this ever and then eventually it gets because ultimately the world belongs to the people who live in it and not the people who died decades or centuries ago and there has to be a limit on how much those people can control the world after they die and i guess the big climactic event in this book is basically Yvonne's attempt to try and work out what is going to happen to Patagonia after he dies.

11:26He says many times that he doesn't like people. There's no one he trusts to run it after he dies. Including his own employees. Including his own employees, including, yeah, his own hand-picked CEOs of which he has gone through many, and none of whom he gives any equity to. He controls all of the equity all of the time. So the solution is highly complex, and we don't need to go into the sort of nuts and bolts of it. But it kind of feels a little bit like I'm going to try to the best of my ability to sort of set up a series of entities and institutions that are going to behave like a kind of perpetuity that some kind of Yvonne, ghost of Yvonne is going to keep on like staying in control forever.

12:06I like that framing. And I think that's a great way to explore this, as you said, very complicated and unusual structure that he created for the company. And without, again, getting into the nitty gritty, essentially what happened is three years ago, he gave away the company. And so what does that actually mean? Well, he sort of locked up the equity of the company, the stock, which he and his family owned outright, into a series of nonprofit entities that means that the equity value of the company, right, the stock of a company will never be sold. And instead, what these organizations have been instructed to do in perpetuity, as you know, is to distribute the profits generated by Patagonia, the company, to environmental causes in perpetuity.

12:54So the roughly$100 million or so a year of profits that Patagonia generates, it's being given away on an ongoing basis to environmental activists, to conservation causes. And you're absolutely right. You know, that is Ivan's quirky, weird way of figuring out a way to distribute the profits generated by this company in accordance with his worldview. you. And again, all sorts of questions about whether that's effective, whether that's just, whether that's a good use of the equity. But he was able to do it and he got people to go along with him. Well, he didn't need anyone to go along with him because he had all of the equity.

13:32He could do what he liked. Well, he needed his family to go along with him and the Patagonia board to go along with him. And I think that's actually an extraordinary moment to just dwell on a second. This is a company that was valued at$6 billion at one point. They had a check on the table for six billion dollars you know most people towards the end of their lives wouldn't think too long about accepting something like that i feel like there's there's a slight tension here which isn't entirely resolved in the book and probably not even in yvonne's mind but there's a purely sort of net present value calculation of like i could take six billion dollars probably have to pay some tax on it.

14:12Put the rest of it into a foundation devoted to environmental yada yada. Front load that if front loading that was a good idea. Spend billions of dollars on preserving land and doing whatever needed to be done. And that money could get spent up front and effectively. Or as long as it took to spend it, you know, it would take to spend it. And throw off dividends for generations to come. Yeah. And in the meantime, it would be invested and it would grow and all the rest of it, just like a classical foundation versus, you know, I am going to put all of my eggs into the Patagonia basket. And there is a case to be made that over time, like the net present value of that Patagonia income stream may or may not be bigger than$6 billion.

14:57Is he saying does he believe that this income stream is worth more than$6 billion? Or is he really saying, I don't actually you care about the money so much. What I really care about is just no one else controls Patagonia. That. And it's absolutely the case that Doug Tompkins, who you mentioned earlier, kept telling him, just sell the damn company, take 3 billion or 6 billion or whatever you can get at the moment and put that to work in the world. And Ivan resisted and resisted and resisted. And when the moment finally came to do some sort of transaction, he again said, I'm not willing to risk losing control of the company or the company sort of losing itself or falling into the wrong hands, that risk is not worth the potential added revenues that might come from a more traditional sale or a more traditional transaction.

15:51And so that was the trade he made. And just to be clear here, the wrong hands includes, explicitly includes what's known as an ESOP, an employee stock ownership plan, where the company is owned by all of the people who grew it and built it and made it what it is today. Even his own employees he didn't trust to have the integrity and the consistency and values that he believes he demonstrated over his career. Now, whether that's a fair assessment, open for debate. I know I spoke to a lot of Patagonia employees who were somewhat resentful that he didn't cut them in. and give them a piece of the profits that they had helped generate.

16:32I know that there were several who fully believed that in the employees' hands, they would have been able to ensure that same level of consistency and commitment to quality and environmental outcomes. And yet, Ivan himself didn't buy it. He thought that at the end of the day, even if it was 5 or 10 or 20 years from now, something would go awry. I mean, it feels very sort of self-serving and almost hypocritical, right, in a sense. like the way he's like only i can be trusted with this company only i can do it right and then you have a whole book explaining like all of the crazy ways in which he you know didn't live that like he he went out there and started like cutting the pay of his sales guys because he felt they were earning too much money while he was raking in millions of dollars a year like he goes out and talks about how every billionaire is a policy failure.

17:25But at the same time, he made a lot of money just in terms of like profits from his companies over the years and was not shy about spending it on properties around, you know, everywhere and living pretty well. Here, I think we need to add some real nuance. And it's absolutely the case that for the majority, for the vast majority of the company's history, he and his family were effectively the sole beneficiaries of the profits thrown off by the company. He took good care of his employees. It wasn't the best, but they didn't get stock. You're absolutely right. But they were well-paid, fine. There was this moment that you refer to early in the company's development where the top salesmen were getting commissions, were earning a lot more than the executives.

18:05And he took steps to rectify that that pissed some of them off, understandably. But Yvon Chouinard does not live a luxurious lifestyle. Sure, he travels a lot. And when I spoke to him, I think this is not in the book at this point, but he actually said, But I said, you know, I was pressing him on his carbon footprint, frankly, because he travels all over the world to fish, you know, flying all the time. And he said, whatever circle of hell is reserved for people with the biggest carbon footprints, he's probably going to that one. So he's aware, right? But if you look at the way he actually lives and the places he actually lives, and I spent time with him at home.

18:39I was in his house in Wyoming for a long weekend. It's a log cabin stocked with Goodwill furniture. He cooks off a cast iron skillet he got 40 years ago. We cooked all our meals together. He goes out and catches fish, comes home, cleans them in the sink. This guy's 85, 86 years old when he's doing this. Smokes the fish in the evening and eats that fish jerky for the next week. So this is not a man who is spending all his profits on the finer things in life. You know, when he picked me up from the airport, it was in a 1999 Subaru hatchback. So I think, no doubt, he has been the beneficiary of a lot of Patagonia's largesse over the years.

19:20But this is not a man who's enamored with luxury goods. He'll spend it on land, though. That land was worth a lot of money. And he has land in California as well. Absolutely. Yeah. And one of the weird things that crops up from time to time in the book is talk about, you know, bank loans and credit lines. and, I mean, ultimately culminating in his first company, which was an equipment going bankrupt. And what that says to me is that, like, he is extracting all of the free cash flow from this company. Like, he is not leaving money in the company. It doesn't have a robust balance sheet. The companies are constantly, like, he's encouraging them to grow very fast.

20:02He's taking money out so that they have to borrow money. No, I don't know that all that's entirely accurate. But when you look at sort of the totality, were there moments early in the company's history where they got tight on cash? Absolutely. And this is, you know, we're talking about periods in the 70s and 80s where there was, yeah, a cash crunch because they grew too fast. But he learned from these experiences. And I talk about that, you know. And today, Patagonia is a private company, so I don't have full access to their balance sheet. But they have a large cash reserve. After this Black Wednesday layoffs in, I think it was 1991, which really resulted in the first and only to this date major round of mass layoffs at the company.

20:45After that, they made a commitment to always having a bit of a cash cushion that would prevent that from happening. And when you mentioned the loans, I mean, a lot of those are sort of like revolving capital that most companies draw on. So, again, was he the beneficiary of most of the profits? Yes. Did he endow the company with enough cash to keep going? Like, yeah, the company is very financially healthy. There was another piece you mentioned. Black Diamond and the bankruptcy. Oh, yeah, which again, that was a really fascinating chapter. So he actually started, again, as a blacksmith who was making climbing gear equipment, things like carabiners and pitons.

21:24And at a certain point, Patagonia got way bigger than the climbing business, as Doug Tompins predicted. You know, people buy more T-shirts than they do carabiners. Fine. And then there was a moment, I think it was in the late 80s or so, when Black Diamond started, or the company that would become Black Diamond, it was called Chouinard Equipment at the time, started getting sued for product liability cases. There was even a death of someone who died while using some of their equipment. Now, they fought those cases. A lot of them were sort of ambulance chasing lawsuits, people trying to extract some money from what they assumed was a part of the Patagonia company.

21:54They had been legally separated at this point. And Chouinard sort of decided to wash his hands of it. He sold it. They filed for Chapter 11. bankruptcy protection. He sold it to Peter Metcalf, a longtime employee who was running that business at the time. And he sort of washed his hands of it. And it was a painful moment for him because this was, in many ways, his identity was more as a climber and a blacksmith than it was as an apparel company CEO. And it wasn't long before he actually regretted that decision. And at a moment, he was trying to think about how Patagonia was going to grow. And he considered buying it back.

22:27And Peter Metcalf and the employees of Black Diamond wouldn't set it back to him. And so there was this little regret there. But that actually reminds me of the other point I wanted to come back to, which is you said he was constantly pushing the company to grow. And here I would just note that it was a schizophrenic relationship he had with growth. There were moments. Sometimes he wants growth. Sometimes he wants growth and he'll push for it. And then in an instant, right, you might have like some epiphany while he's on a rock climbing trip. He comes back and he says, cut it all out, ratchet it in and actually deliberately slow growth.

22:55And that push and pull is crazy making for Patagonia executives. Tell me about the New York Times ad. Was it Don't Buy This Jacket? Don't Buy This Jacket. Yeah, it was an ad that came out about 12 years ago, I think, at this point. And on Black Friday, they were trying to figure out how to make a statement. They were trying to talk about their commitment to, again, sort of limiting their own growth and encouraging consumers to buy responsibly, don't buy what you don't need, sort of very in line with their ethos. And so they took out this ad, Don't Buy This Jacket, in the New York Times, full-page ad.

23:27and of course it had the entirely opposite effect everyone started buying their jackets and patagonia really that was actually an inflection point for the company's growth and it took them up to another level and plenty of people called it hypocritical because it was in a way sort of brilliant marketing so you in the book you say the ad worked the sales went up the profits went up was that the aim of the ad all along i asked a lot of the people who were running the company at the time, who were on the board of the company at the time. And some people might not believe them when they say this, but their answer, and I intuited it to be pretty genuine because I talked to them and talked about the meetings that they had sort of struggling with their own recognition of this ad's hypocrisy even before they ran it, was they were really trying to figure out a way to tell this story.

24:18And a part of their own self-identity is their understanding of this paradox. of this contradiction, that this is a company that is, you know, on the one hand, talks about the need to limit growth and the need to reduce our impact on the planet, and yet is a giant apparel company that's having a tremendously negative impact on the environment in all sorts of ways. They are fully aware that they are a company that, you know, talks about the virtues of giving away money and yet has really comfortable roughly 10 % margins for an apparel business, all of which, as we've noted, go to a single founder and his family.

24:53So this sort of constant self-reflection, which raises questions for which there are not always easy or simple answers, was part of what they were trying to convey. They were trying to get consumers thinking in as much as they were trying to just sell a check. We have to have some ads right now because we're a for-profit organization. But when we come back, David is going to talk a bit more about Yvonne Chouinard and whether he was a policy failure.

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29:20This is a conversation I had with the current CEO, with members of the board, with Yvonne himself. What actually motivates people at this point, especially if they know that they are not only not getting stock today, but are never going to get stock, right? Like you're never going to be able to participate in the upside of this company in a way you might at a tech company or a more conventional company that has stock options that If you have a great year, boom. And the answer is they have for 50 years now attracted sort of mission-driven employees. That sometimes means that they might not get the absolute best people on the market.

29:55It might mean that when people arrive at Patagonia, they're not motivated to grow in a conventional way. And this is part of, I think, the growing pains that the company's having right now is it figures out how to operate in a retail environment that's changing really fast, that's more competitive than ever. But at the end of the day, if you talk to Ryan Geller, the current CEO, I mean, this guy, before he was the CEO of Patagonia, was an outdoorsman and an activist. And if you talk to other senior executives at the company, they all sort of fit that profile. These are people who genuinely care about the outdoors and their products, have deep personal relationships with being in nature, and are also really committed in the same way Yvonne has been his whole career, to trying to use their business as a leverage to change things on the margins.

30:50And so I think they're going to try to keep recruiting people like that, and it's going to keep being messy. Right. And one of the things I love about the book, and one of the things that just comes through even from this conversation, is that there are deep paradoxes and they're not going away and they will remain and part of the point of patagonia is just to be patagonia and to be this kind of proof of concept another part of the point of patagonia is to produce profits that can then get given to environmental causes but that is not even necessarily the main thing and if those profits go down one year or you know whatever like the mission remains the same and it's not necessarily a sign of failure or weakness or something like that.

31:30And we'll see how that plays out over time. I think it's clearly impossible to predict. And if it does wind up losing market share, is that like necessarily a bad thing? Who knows? Who cares? You know, being committed to the mission does not necessarily mean being committed to the proposition that if we donate twice as much money to environmental causes, then that means we've done twice as well. Right. Because it's it's bigger than that. Yeah. And I think, you know, this is another one of these sort of squishy paradoxes for which there's no real pat answer is how do you measure the impact of Patagonia?

32:11I mean, you know, Ivan always said he's doing this to sort of change other businesses or show other businesses that it was possible to influence the business community. Well, how do you measure that? Right. Patagonia is a one billion dollar revenue company. They're never going to change capitalism on their own. But I argue that if you look at the totality of their influence over the years, which includes helping form things like the textile exchange and 1 % for the planet and the B Corp movement, you can sort of see their fingerprints around the broader business landscape. And if you look at their commitment to childcare, which we haven't talked about yet, and their real investment in taking care of women and promoting women in the workforce, well, there you can see other companies going to Patagonia, trying to learn from them, and maybe implementing some of those practices.

32:58So no company is ever going to be exactly like Patagonia, but I think you can start to see some of that impact rippling out over the years. So I wrote down a short list of companies that are much bigger than Patagonia, but are non-profits or run for the benefit of non-profits or something like this, and they're mostly European. It'd be like Bertelsmann, Novo Nordisk, Ikea, bosch um rolex rolex um there are others like tata group i think in india it's mostly charitable foundations there's hershey in the united states but like it's mostly european but if you look at those companies in general like the way i think of them is like they are run like normal companies and then what happens to the profits is like a charitable thing and i feel like that's when you're saying that Patagonia is different it's like it's not just the profits go to charity that makes it different it's more or that it's owned by a non-profit or controlled by a foundation or whatever because that we've had that for a while but it's like it's more sort of deeply grained into how it operates and what it does and the way that I always find it easiest to sort of articulate what this means in practice is when you ask Yvon Chouinard about quality that's a North Star that he's come back to over and over.

34:19I was getting these crazy flashbacks, like Zen and the Art of Motorcycle Maintenance when I was reading that. And I was like, oh my God, I am so in Northern California in 1975 right now. Absolutely. And this is, in many ways, I mean, that is the cultural moment that really informed him. So you're right on. But quality to him, and this is what's so important, quality to him doesn't just mean the functionality of a product. When Ivan talks about quality, he, over the years, it wasn't immediate, this didn't come out fully baked, but he over the years came to understand quality as being a really holistic concept that extended beyond just a product doing the thing it was supposed to do, but to include questions like, well, what materials is it made of?

35:04And are those materials not only durable and functional, but are they non-toxic? Were they made in good conditions? What was the environmental impact of making those raw materials that ultimately became the finished product? If somewhere down that supply chain, a factory was spilling effluent into a river in Portugal, well, then in Ivan's mind, the final product wasn't a quality product. And this sort of bigger conceptualization of what it meant to be quality led Patagonia over decades to start interrogating its own supply chain and trying to clean it up, not only from a functionality perspective, but all the way down to things like the working conditions for laborers at its tier three factories.

35:51So are the people in the factories spinning the yarn that ultimately becomes the fabric that ultimately becomes a Patagonia product, are they working in reasonable conditions? And if the answer was no, then Patagonia started to cut off relationships with those suppliers. And that is, you know, a way in which I think this company is so markedly different than some of these other companies you mentioned, which yes, act like conventional businesses and do something different with the profits. That deep supply chain work, I think, distinguishes this model from a lot of the other things I've covered as 25 years as a business reporter.

36:29And this is actually deeply your beat. Like looking at the kind of companies that do that kind of thing, this is what you've been writing about for many years. So as the person who knows about this, like how exceptional is this? Like how many other companies take that kind of attitude to interrogating their supply chains and really trying to concentrate, I guess, think about it more on like Like the sort of E and ESG bit of the ESG movement and really saying that we need to be sustainable in a profound supply chain way. I think even over the time I've been a business reporter, like two decades now, we've seen many big companies, conventional companies, make real strides in caring about a lot of these issues and acting on them.

37:11So, you know, ESG, all these things, their acronyms, they're bandied around. But at the end of the day, there's some real meat on the bone when you talk to CEOs because they understand not only is it often sort of morally the right thing to do, but it's also we're in a moment where society is expecting companies to be more responsible actors. But at the end of the day, doing the right thing often is profitable, right? You know, not being in a situation where you're mucking up the environment and then have to pay some giant settlement. You know, any number of examples like that, it's often just a better business decision at the end of the day.

37:47So I think I say this to say that I don't think Patagonia is alone in caring at all about this. Many companies, I think, have made real strides over the last decades. What I think I can say with certainty is that Patagonia exists at the far end of that spectrum. You know, very few companies have gone as deeply, as rigorously, and critically been willing to forego profits in the name of this journey. Many companies, I'm thinking of Unilever, right? Unilever's done some of this work over the years, but anytime it sort of got too expensive, they said, well, we tried, but we're not going to compromise our margins that much.

38:25And then they would say, you know, we'll get to the rest of it later. Patagonia got to the point where they said, you know, very famously, I think it was 1987, they discovered that there was formaldehyde in their cotton. Yvonne said, we are stopping using conventional cotton. That may mean a 20 % reduction in sales next year. But if we can't figure it out, we're done. And that willingness to sacrifice, I think, is what sets this company apart. another thing that sets it apart especially in the current environment is its willingness to be very politically vocal and to take sides and be unapologetic about that which yeah we could i think all use a bit more of in the corporate world given how powerful corporations are just footnote isn't it amazing that companies don't say anything anymore i mean i remember yeah i mean like just in the last five years five years ago they were making political statements left right and center and now nothing.

39:19Correct. I mean, four years ago, literally four years ago, right after January 6th, this was literally my beat at the New York Times was covering the intersection of business and politics. And during the whole Trump administration, right through January 6th, I covered, you know, any time President Trump would do something outrageous or offensive, all these CEOs would stand up in unison and say, this is madness. This is crazy. And not one CEO says anything today. It's astonishing, astonishing capitulation. With the exception of Yvon Chouinard, who's out there making his statements. And one of the things he says and believes is this famous slogan of every billionaire is a policy failure.

40:01So I guess my question for him, and you can be his like, you know, vessel here, is up until this latest piece of financial engineering, you are a billionaire. You are therefore a policy failure. what policy should have been in place to prevent you from becoming a billionaire? I mean, that's a terrific question. And I think the honest answer, I mean, I can't speak for him, but in all my conversations with him over the years, I genuinely don't think he's considered that question. And the reason why is not only does he sort of have disdain for politicians, but he sort of has very little patience for the whole political and policy apparatus.

40:44That's just not the way his brain thinks. So if you asked him to sort of come up with tax proposals, he's going to like laugh you off and go fishing. That's just simply not how he thinks. I think what he would say is this notion of every billionaire being a policy failure. To him, again, this is not going to be prescriptive, but I think what really rankles him is the concentration of wealth in society and the inequality that has become just the default byproduct of the way major corporations are structured these days. Now, again, he is absolutely a part of that and a beneficiary of it in many ways.

41:23And that gets back to this irresolvable paradox that is him and this company. But it was the moment that was an inflection point on his journey to actually give the company away was in 2017, I think, when Forbes for the first time put him on the billionaires list. Now, before that, the concept of how much money he had was sort of abstract because it was all in paper. It was all in stock. He would get the profits. He would give them away. Fine. The minute he was actually labeled as a billionaire and someone put a number on it, he freaked out because he didn't think of himself as a billionaire until that moment.

41:57And at that moment, he went to everyone at the company, All the executives, all his board, he said, we have to figure out how to get me off this list. And that began the process that ultimately led to the giving away of the company. Which I think is a good place to leave this. David Gallis, thank you very much for coming to Brooklyn to record this. Thank you, Felix. Plug the book one more time. It's called Dirtbag Billionaire. Have you memorized the subtitle yet? Oh yeah, Dirtbag Billionaire. How Yvon Chouinard Built Patagonia, Made a Fortune, and Gave It All Away. Thanks to Jessamyn Molly and Shana Roth for producing.

42:30And we'll be back on Saturday with a regular Slate Money.

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