Eliza Filby with Rory Sutherland and Elfried Samba on the Bank of Mum and Dad economy

10:05Rory Sutherland:I thought you took it as a capital gain in some kind of way. Yeah, yeah, yeah.

10:09Elfried Samba:I think the important thing though is, and this is what I found writing the book, because the book is part an autobiography about how I was the beneficiary of bank and mum and dad. And I was sort of slightly uncomfortable with that notion that I was a Nepo baby. Because I was like, hang on a minute, I was the first person in my family to go to university, get a degree. I was the first person, you know, I got a PhD, I stayed there. We live in a meritocracy, you know. And I was very much sort of adhered and wedded to that narrative. And I think a lot of my generation are. And I think we've realized that actually, we're either the great beneficiaries of actually a lot of parental support that helped us get to where we have got to, or, you know, we aren't.

11:01Elfried Samba:And there's a level of degree of resentment, quite justifiably so, because they were told, get to university, that pathway, solid pathway to the workplace, financial security and home ownership will be there for you. So, you know, it hasn't worked out in the way that we were told, I think.

11:21Dr. Eliza Filby:And the thing is, it's a really interesting conversation, because right now we talk about hustle culture, and what's happening on social media, how everybody's putting pressure on each other to be able to get themselves out of the situation when they're fighting a losing race. It seems like the millennial generation were fooled by this, whereas Gen Z are not. They realize no matter how much you work, it's actually better, as you said, to be more loyal to your parents than it is to be more loyal to an organization, especially when you're seeing all the mass layoffs that are happening right now.

11:56Elfried Samba:Yes, I think Gen Z is super savvy. I think more than millennials. Millennials are kind of going, hey, what happened? Why hasn't it worked out the way we thought? Oh my goodness, I'm 40 and I'm still dependent on the bank of mom and dad. Oh dear. Whereas I think Gen Z and I think this is because they also grew up under the shadow of the 2008 financial crisis it's I mean look at someone like Mr Beast for example you know he's a product of the 2008 financial crisis you know his parents lost their home went bankrupt and he set up a YouTube channel because he heard that's how you made money and you know now he's the most successful YouTuber in the world.

12:36Elfried Samba:And I think that's sort of symptomatic of a generation who grew up under the shadow of the 2008 financial crisis. One's financial sort of attitudes are shaped between the ages of 7 and 12. Very young. Very young. It's not in your 20s. It's in your very much sort of childhood years. And so I think Gen Z growing up, sort of looking at millennials going, okay, that hasn't worked whatever millennials were doing hasn't worked and also I've seen both parents working majority of dual income households now and slogging it in a digital driven workplace and an increasingly unstable sort of workforce and they're not sort of capitalizing on all that hard effort either and so one of the things I think is a really important indicator of Gen Z savviness, is not actually hustle culture, I think is more investment culture.

13:32Elfried Samba:Right? And I wrote a piece for The Times on this. Is Gen Z, I think, are the most financially savvy generation who have done a lot of sort

13:41Rory Sutherland:of self-learning on FinTalk, YouTube, you know, now ChatGPT.

13:49Elfried Samba:But that's not, you know, that's a bit of a wild west. That's not the real story here is the amount of faith they have in the investment structure and compound interest and making money beyond a wage. And so you're seeing, you know, extraordinary numbers of Gen Zers, women as well as men, investing in stocks and learning about investment and really identifying as investors as much as earners. and I think that's super interesting and that's happening globally actually and that's a consequence of wages stalling and work not paying

14:27Rory Sutherland:and lack of job security as well so you can't even effectively confidently predict that your salary will be maintained for the next two years

14:35Elfried Samba:and also the development of tech right because when you have these apps and they're constantly notifying you to buy these stocks or check your stocks it becomes an obsession and it becomes part of their identity that's where I think it's really interesting and you're seeing it amongst young women as much as young men, you know? And I think that...

14:52Rory Sutherland:Of course, YouTube is more important in many ways than the British university system, in terms of where people derive their information. It is the British university system. And one of the things that intrigued me was that I never read the financial pages in the newspaper. It just struck me as an inherently saddo thing to do. But strangely, there's a small group of really talented YouTubers where I'll sit there and watch, you know, why buy to let investing is finished for 25 minutes. I never would have devoted that amount of time to it in print. But these people are just extraordinarily good.

15:25Elfried Samba:Yeah, I mean, they're totally unregulated. But I mean, I think also the biggest problem as well is not just that work doesn't pay, is that there's not that same belief in property. I was interviewing a young Gen Z who was telling me that her parents had bought their council house in the 80s and they were nagging her to kind of really think about getting on the property ladder and saving some of her income. And she had a side hustle. She was running a fanzine and making quite a bit of money doing it. And she was like, well, I don't want to own a property. I can't see myself owning a property. I want to put money into my business that will grow.

16:02Elfried Samba:And this is a critical thing. Move with me. Yes. And we're seeing, you know, quite a lot of young people thinking about emigrating and that ability to build a business wherever you are, I think is quite interesting. And that property being the sort of, you know, frankly, anchor that sort of weds you to a place that you might not want to be.

16:25Rory Sutherland:And also, I mean, an interesting thing, I thought the back to the office movement was very dubious when applied to the young. Because I said, look, if you want talented people to stay working for you, you've got a choice. You can either let them move to a low rent jurisdiction, okay, somewhere where they don't have to pay so much money in rent, or they're going to move to a low tax jurisdiction somewhere like Dubai. So if you want to keep them in the country, at least allow them to live somewhere affordable in the country some of the time. Because commuting costs plus rent costs are a bigger problem for people under 40 than tax, by the way.

17:01Rory Sutherland:I mean, if you think about it, I mean, interestingly, I think what often happens in lots of developments is there are these invisible thresholds you cross, which, for example, would be where one of the thresholds I always talk about is where something starts as an option and then becomes an obligation. And the classic example of that is the dual income household. So it started as an option if you wanted a bit more money, if you wanted to send your children to a private school. Both of you went out to work and you earned more money. What then happened was that house prices basically mopped up most of the surplus so that a second income was no longer an option.

17:41Rory Sutherland:It was an obligation. You couldn't, in fact, function unless you had two incomes coming in. So the net effect of this was you effectively lost 35 to 40 hours of discretionary time per household per week, which would sometimes then get eaten up further in childcare costs or some other overhead. For no real increase in discretionary income.

18:03Elfried Samba:But you're forgetting a crucial part of that story.

18:05Rory Sutherland:Go on.

18:06Elfried Samba:Female aspiration. Yeah. And with that, when you saw in the 90s, the women starting to outperform, frankly, boys... girls starting to outperform boys in the education system. Yes. And also changing marital habits. So the evolution of associative mating, so that you've got graduates now marrying graduates. It used to be, you know, the nurse aspired to marry the doctor and the secretary aspired to marry the boss. And that women married up, which is why actually there was such a huge rise in social mobility, is that it often came from women rising through marriage. in the night really from the 1990s you got graduates marrying graduates and quite often in the same sector right in the same profession so so you know doctors marrying doctors lawyers marrying lawyers and and the dual income household for a certain economic group of course it's it's we're not talking all here was was was also a consequence of just actually women wanting to fulfil their, and it still is, wanting to fulfil their aspiration in life, and quite often more successfully than men.

19:18Rory Sutherland:Oh, absolutely. Although you could argue that, as indeed Helen Andrews does, that we're talking about lawyers and doctors. We've also got to talk about a lot of women who are forced into work, which isn't particularly rewarding or pleasant, just to maintain a household. Yeah, yeah, yeah. So we always talk about this wonderful progress in terms of, you know, people who make it as university professors or journalists or whatever. But a lot with that was an awful lot of drudge work, not particularly well paid, which then became necessary.

19:49Elfried Samba:Yes, but there's also actually, I think, a bigger story within kind of lower socioeconomic groups is actually the rise of female breadwinners in working class households. And actually, as deindustrialization happened, particularly in the northern heartlands, actually, women went to work and men stepped back as financial contributors to the household. And quite often, it was female breadwinners in single parent households. So, I think it's not just that women had to go and do the drudgery work. Quite often, if there was just, you know, the biggest sector in that small town was retail, quite often it was women that had the opportunity and potentially the enthusiasm to do those jobs.

20:31Rory Sutherland:It's not entirely a victory, though, to define your success as being successful in male terms and being defined by your job.

20:39Elfried Samba:Yeah, I agree.

20:40Rory Sutherland:If you said, you know, the aspiration could have been to write really good poetry. OK. I mean, there are lots of useful things you can do with time. Naturally, some part of the household has to be involved with breadwinning. The idea that, you know, equality meant identicality, identical aspirations. You could argue that women had inherited a lot of that from men, and they were denied the opportunity to define their own purpose of success.

21:04Elfried Samba:Yes, and look at where we are now, where, you know, there's a lot of women that that want more children, but don't feel they have the... basically the economic capacity to have more children. Um, you've got a lot of mothers who want to spend more time with their children and don't want to pay for childcare, but don't feel that they have... can take that risk, frankly, in this environment. Um, I think you're absolutely right. There's also a lot of fathers who want to spend more time with their children. I was gonna say exactly that. I mean, having said that, if you look at the data in terms of time spent with children, women in work today spend more time in the US with their kids than stay-at-home mothers did in the 1970s.

21:45Elfried Samba:Really? So yes, because we're just under this sort of slight sort of pressure cooker of parenting where it's all about being present with your children. Whereas in the 1970s, you know, latchkey kids, it was like, go and play, run along.

21:59Rory Sutherland:This is what I mean by the way, by one of those thresholds. Let's say you had a world which did exist where half of women worked and half of didn't. The women who didn't work were providing childcare effectively. You know, if your child came home from school, they went home with the kid whose mum was at home.

22:15Elfried Samba:Yeah, yeah, yeah.

22:16Rory Sutherland:And you'd have a situation in London where that family just didn't exist. Okay. So this is what I mean by these thresholds, where things go from being a pleasant option to an obligation.

22:25Elfried Samba:Yes.

22:25Rory Sutherland:You know, and, you know...

22:27Elfried Samba:Yeah, paid childcare. Everything is now structured and really expensive.

22:32Dr. Eliza Filby:Yeah. So, the word that I want to fixate on is pressure. I think that pressure is the perfect word to define what we're going through right now. There's pressure from all angles. There's pressure financially, there's pressure from a relationship standpoint, there's pressure to be the right parent, there's pressure to earn enough money. Is that why the energy around nepotism, nepa-babies, inheritocracy, is that why everybody sees it as a bad thing? Because they never had the opportunity to have that leverage. They have to deal with this. And then you see other people that don't have to deal with the same thing.

23:07Dr. Eliza Filby:It's almost like met with a negative connotation. Do you think that has something to do with the perception?

23:13Elfried Samba:I think... I mean, Nepo babies get a really bad part. Yeah, you see that in sports. I think Brooklyn Beckham, bless him. I think there is... Firstly, we're weirdly living culturally in the era of dynasties. You know, I mean, Succession, the TV show, the Kardashians, you know, Beyonce and Blue Ivy. It's now sort of, you know, obviously the Beckhams. LeBron James and Bronny James. Everyone is now monetizing their kids and their mothers. I mean, Mother's Day has become this massive thing now where, you know, everyone's posting how much they love their mother, you know, and their mothers become the celebrities along with the kids.

23:54Elfried Samba:So we are living in the era of dynasties, right?

23:56Rory Sutherland:There's a wonderful game in journalism where you look up a journalist's Wikipedia page and see how often their parents both have their own Wikipedia page. Okay, it's actually quite alarming.

24:07Elfried Samba:You can now do that in acting, writing, you know, it's actually broadened out beyond journalism. So I think we're living in the era of dynasties. I also think we're living in an era of a slight sort of denial, right? Because there's a lot of people who get very angry that we don't live in a meritocracy anymore, but are also in denial of how much help they've actually received themselves. So when we ran some polling data for the book, one of the things that fascinated me was the ones that were most likely to say, we live in an inheritocracy, yes, we definitely do, were men earning over 100k. So high-earning men, right?

24:54Rory Sutherland:But they have, in fairness, they have a reasonable grievance because they are... No, listen to the second bit.

25:01Elfried Samba:When you asked how many of them had had help from the bank of mum and dad, the majority of them had. But then when you said, are you liable to... are you likely to talk about it with your friends? No. So it's like this quiet acknowledgement of, yes, I have got a bit more help than maybe I publicly say to my peers and my friends that I have. But also I'm supposed to be doing really well. I'm earning a lot of money. I'm a Henry. I earn 100k. But also, so I'm going to perpetuate this narrative of being self-made. And what's interesting is when you look at how people talk about being self-made, what they quite often sort of refer to is their parents' struggles.

25:51Rory Sutherland:Yes.

25:52Elfried Samba:So actually, they're not self-made. So it was a brilliant paper done by a bunch of academics that assessed people that had actually got access and help on the property ladder through the bank of mum and dad, and what stories they told themselves and others about how they got their first property. And they referred to their parents' struggles rather than their present sort of success. And I think what's...

26:18Rory Sutherland:So it's vicarious self-maintenance. Yes. So it used to be that parents kind of, you know, sort of upheld their kids'

26:26Elfried Samba:success. Now we're upholding our parents' struggles, right? Yeah. That's a kind of way of justifying our being. But to answer your question very, very sort of round the house's way, is I think we are sort of living in a social media-driven culture where comparison now is... We've always compared ourselves within the village. But our frame of reference has changed completely. Our frame of reference is off the scale.

26:55Dr. Eliza Filby:Keeping up with the Joneses is no longer about your kids or your accomplishments, it's about your parents.

27:01Elfried Samba:Right. and we talk a lot about privilege, but we're, and being authentic, but no one's authentic when it comes to the privilege of the bank of mum and dad. By the way, there's... And I think that's just, it creates this sort of, you know, as one girl said to me, sorry, just to finish, she said, you know, I couldn't understand before I read your book, why literally when we turned 30, houses started falling out of the sky when it came to my friends. Literally, they were suddenly acquiring these houses. And she was like, the shyness and the sort of quiet way that people don't talk, you know, oh, well, actually, my parents dropped 200K into my bank account, and that's how I was able to get on the property now.

27:47Elfried Samba:You don't post about that bit. You don't post about that bit. Anyway.

27:50Rory Sutherland:No, I mean, one of the things that's dubious is that, I mean, it's very interesting if talk about tax and redistribution, because it is absolutely accepted that there's massive redistribution of wealth through income, okay? So you're taxed at 45%. That person you were mentioning is not far off getting taxed at 45 % on marginal income. But wealth is treated as sacrosanct because of this argument that you've already paid tax on it. And the argument is that if you tax wealth, it's double taxation because you paid income tax to earn the money. Now, with a rising property market, that's not true. And you get a very interesting thing.

28:28Rory Sutherland:You might remember the Labour Party was always attacking the Conservatives for tax cuts for millionaires, you see. Now, by millionaire, they actually meant higher rate taxpayers. The vast majority of whom might be trying to become a millionaire, but there is absolutely no suggestion that simply because you're a higher rate taxpayer, you are now or will become a millionaire. Yeah. The other thing is, which isn't well understood, is that people who earn a lot of money are generally portrayed as bankers who are high-rate taxpayers for 25 years of their life. There are a hell of a lot of people who hit that high-rate tax bracket as a reward for their previous 20 years of work.

29:06Rory Sutherland:So if you become deputy headmaster of a comprehensive school, say, for example, state school, okay, you've been working as a teacher for 20 years, and this is pay dirt, okay? The last five years of your life, you get promoted, you start to earn a lot. then the government immediately hits you. It's not that you've been earning 100 ,000 a year for the last 30 years like an investment banker. It's effectively what you've been working towards, and it's punished. And a lot of people at some point in their life reach those high earning thresholds, but only for a short time. And yet, at the same time, so what was nonsensical about this is they were conflating wealth and income as though they were correlated.

29:48Rory Sutherland:And of course, in many cases, they're completely uncorrelated. You get people who don't have a bank of mum and dad, who are earning a lot of money, who are not gonna have this sudden house dropping out of the sky. And they're taxed very heavily. Whereas some old farps who's just happened to buy someplace in Sevenoaks in 1973 gets... I mean, this literally... I mean, you know, where I live, you're surrounded by a single person, retired, living in a four-bedroom house worth 1.5 million, and their kids are actually a bit skint. Yeah, yeah, yeah. And it's the most absurd, because, of course, housing is totally illiquid as a source of wealth in a way.

30:27Rory Sutherland:And it also... The other reason it doesn't get taxed is because of the total sentimentality around inheritance tax. I mean, in other words, effectively, your ability to avoid the tax system depends on your ability to construct a sob story. So, let's say you introduced land value tax and a single pensioner was forced to downsize, okay? That's the front of the Daily Mail. Oh, my goodness, look at me, I'm forced to move out of my house, okay? Yeah. Meanwhile, you go out to work every fucking day, right, and get up at seven o 'clock in the morning. The government takes 45 % of... There's no sob story around, you know, hard-working people earning 70 ,000 a year.

31:11Rory Sutherland:Amen!

31:11Dr. Eliza Filby:I'm living it. You should have been athletes as well, right? So an athlete will break their leg, or something will happen, or someone will break into their house, and they'll be like, oh, they can't have a sob story because of how much they earn. No one talks about how much they pay in tax, and the contribution there is, and the fact that what they earn during that period, they have to live with for the rest of their life. And we just talked there about wealth. Do you think that you can build wealth in current society, in the UK, the US, like, in the normal meritocracy way? Or is it a lot harder than people think?

31:44Dr. Eliza Filby:Because I saw a stat that if you earned£150 ,000 versus if you earned£100 ,000, there's no real difference in terms of, like, your take-home that you're gonna generate, right? So do you think that it's a rigged game? What's your thoughts? That's nice, yeah.

32:00Elfried Samba:I think we are confronting an economic system where wages have stalled, but also tax on wages have, you know, stealth tax on wages. The fiscal drag!

32:16Rory Sutherland:Fiscal drag! Which actually is brilliant. But in a higher rate tax ban, you were doing really well when that was first introduced. Yes, yeah, yeah.

32:24Elfried Samba:I mean, the real pinch point is actually if you go over 100k, particularly if you have kids, right? That's when it's really punitive. And I wrote a piece on why 100k is not. There's no child benefit. There's no child benefit. I mean, there are doctors. The marginal tax rate, I think, is like 65, 70%. There are doctors in the NHS working deliberately four days a week, so they are just under that threshold. That is not the kind of sort of NHS that you want, where people are underworking just to get into the right tax bracket. Right? So I think we are at a tipping point, because I think actually, when they introduced the fiscal drag for the first time, which I believe was under Gordon Brown, I would say there was a degree of ignorance, right?

33:05Elfried Samba:There is no longer a degree of ignorance when it comes to the fiscal drag because you've got YouTubers, you've got Instagram financial advisors saying, this is the fiscal drag. If you are, you know, this is the tax on your income. I think voters are super aware of the amount that wages are taxed in this country. I think they're also super aware because of social media, how underpaid we are compared to the US, for example.

33:31Rory Sutherland:Which is astounding. Astounding.

33:33Elfried Samba:You see, People working car washes are earning$80 ,000 a year. It's astoundingly bad when you see those comparisons. So I think we are more aware than ever of the way that we've taxed wages. I think we are...

33:50Rory Sutherland:It's even worse, by the way, in a large company, because if they have any money to spare, they won't actually pay you a pay rise. They'll just hire seven more people in HR and compliance. And in these white-collar welfare jobs, which are basically not really productive in any meaningful sense.

34:04Elfried Samba:I don't think that's true anymore, because actually one of the biggest sectors that's shrunk because of AI is HR.

34:12Rory Sutherland:Really? I don't think that'll happen, because who decides who gets fired? HR.

34:16Elfried Samba:No, because it's all automated. That's the theory.

34:20Rory Sutherland:That's the theory.

34:21Elfried Samba:But who decides who gets to keep their job? It's all AI at the moment.

34:25Dr. Eliza Filby:It's basically AI. I suppose that's a merciful release anyway. Yeah, people are using AI to apply for jobs and people are using AI to combat and choose who actually gets the jobs. It's like internet dating. It's awful.

34:36Elfried Samba:It's AI talking to AI now. But I think, just to get back to the point about taxing on wealth, so since 2008, we have this sort of rather farcical debate about the 1%. The 1%, the 1%, that's the evil 1%. And actually what they mean by that is actually quite often the 0.1%.

34:53Rory Sutherland:1%.

34:53Elfried Samba:Yeah. And I...

34:55Rory Sutherland:That is true, by the way, that at the very top, one reason you get people earning 150 ,000 a year who are resentful, is at the very top, you become a tax shapeshifter.

35:04Elfried Samba:Yeah, yeah, yeah.

35:04Rory Sutherland:You can redefine income in any way you like. Interesting fact, if you think about it, journalists don't pay very much tax because they're all basically self-employed business people who can more or less write everything off. Politicians, for 40 years, the biggest perk of being an MP was you basically got bought a free house. Okay? Now, if every single MP had half a million pounds worth of Microsoft shares, you go, this is a massive conflict of interest. How can these people be expected to judge things impartially when they're so vested in... So, you know, effectively, they have a vested interest in this particular stock.

35:39Rory Sutherland:They all had a vested interest in house prices going up. No one had an interest in...

35:43Elfried Samba:No, it's a political...

35:46Rory Sutherland:Jeremy Corbyn, house-owning millionaire.

35:49Elfried Samba:Attempt to... I mean, part of the reason why they can't properly reform inheritance tax is because of the... The emotional around property ownership, particularly amongst the baby boomers who were the...

35:59Rory Sutherland:I don't understand the sentiment about this. My favourite kind of tax is the one I pay when I'm dead. It strikes me as absolutely brilliant. But apparently, no.

36:09Elfried Samba:But to go back to your point about wealth. Alcohol taxes that bother me. When you think about the wealthy, should we tax the wealth owners? You have very interesting commentators like Gary Stevenson, who have gone viral.

36:25Rory Sutherland:He's just waiting to become a Georgist. He just needs to discover.

36:28Elfried Samba:He's very specific about who he's targeting, which is those that own over 10 million. But what I think he underestimates, and if you look at the data, it's really interesting, is what we're talking about when we talk about the inheritocracy and the bank of mum and dad and the demographic that we've been talking about.

36:48Rory Sutherland:We haven't even mentioned trusts either. No, I know.

36:51Elfried Samba:But we're talking about the mass affluent, right? The mass affluent. And those sort of... That actually Gary Stevenson has no problem with. But actually within people's workplaces, friendship groups, very few people know billionaires. Quite a lot of people know people that have had those deposits from mum and dad or that buttress support of mum and dad or, you know, mum and dad helping them so they can become writers or creators or actors. And that's where quite often then there is a grievance or a sort of discrepancy or a misunderstanding. Hang on a minute. You're wealthy. But actually quite often those people have, like you say, maybe they have a property that has no mortgage and is only filled at Christmas.

37:36Elfried Samba:Right? 50 % of baby boomers in this country have two spare bedrooms. Okay? So we have these quite often now widows living in big houses.

37:46Rory Sutherland:My wife keeps going on about wanting a bigger house so the children can come and stay, I go, they can stay in a fucking travel lodge. I don't want them hanging around the place night and day.

37:57Elfried Samba:But you've got mass affluent. But then you've also got within the mass affluent, a demographic that has seen a separation from your education attainment and your earning potential. It used to be inherently linked, right? And that's where the middle class were very happy. Thank you very much. And there were a lot of people who, my parents weren't one of them, who were highly educated and then also, you know, in the professions and bought houses. So they have amazing pensions and property. You know, my parents were undereducated but bought property. So theoretically, you should have a sort of group of young people who are all educated to the same degree and are able to achieve the same.

38:45Elfried Samba:But also you could have within that group, some whose parents didn't go to university but bought property and have got property wealth, some who have property wealth and pension wealth, and some who have no support whatsoever. So when we're talking about wealth, it's really important to kind of like, we've bashed the billionaires, but actually the real societal tension is in within this mass affluent, who are like, oh, but I went to Cambridge, but my parents didn't buy a property in London in the 1970s. So I'm totally screwed. That degree is not getting me what it's getting my other peers at Cambridge.

39:21Rory Sutherland:I had a brilliantly self-aware applicant. I wish I could have hired her. I couldn't. She'd studied medicine at a Northern University. And she said, I made a mistake. I realised too late that you can do all those secondary things like running the Afro-Caribbean Society if you're doing history. You can't afford to do all those extracurricular things if doing medicine." So she got a third. Actually, my perfect recruit. Someone with a third in medicine. That's exactly who I want. And I said, so, you know, do you have a real problem? She said, no, no, no. She said, I'm much better off than my contemporaries who got firsts and two ones.

39:58Rory Sutherland:Why? Because my mum lives in London. She said, I could just stay at home. I've got all the opportunities I want. My friends who are in kind of, you know, Bolton or whatever, they're kind of stuffed. And she's effectively got a free hotel room in London for as long as she likes. I thought I wanted to hire her simply for that level of self-awareness.

40:19Elfried Samba:Absolutely. And I think also the big difference there is that what's changed. My mum left home at 17. She was out the door as soon as she possibly could be. Partly because her mum charged her rent, keep, as it was then, right? But also because there was such a generational clash of values. You know, my mum was a sex, drugs, rock and roll child of the 60s.

40:47Rory Sutherland:Yes.

40:47Elfried Samba:You know, and my grandmother very much did not believe in sex before marriage, very much did not believe in bringing men home, or frankly, even having a boyfriend. So there was such a generational clash within the family. Now, that happens still, right? Let's not pretend that people don't have a sharp value divide with their parents. But it's less than it was. So actually, stay at home. Sometimes it's the other way around. Yeah. So if you look at sort of, you know, attitudes towards homosexuality, attitudes towards sex before marriage, you know, all of those sort of generational divides that used to be there in families that actually stopped them living together longer.

41:25Rory Sutherland:Yes. Yes.

41:26Elfried Samba:Now you can bring home who you like and stay at home until you're 30. You know, to a certain degree. And let's not generalize too much because there are some households where there is that divide, particularly, potentially, you know, that's driven by religion, for example. But I think that's the interesting thing as well, is that there's a sort of value convergence that's happened within families that also makes this cohabitation for longer in the hotel of mum and dad actually possible as well.

41:52Rory Sutherland:When you want your spring break to feel like...

41:56Dr. Eliza Filby:And your kid's pool day to feel like. And your hotel bed to feel like. Ooh, and room service to feel like.

42:08Rory Sutherland:Because at Hilton, hospitality feels like.

42:11Dr. Eliza Filby:Your cabana's ready. Would you like fresh towels? It matters where you stay. Book now at Hilton.com. Hilton, for this day. You know? So when people put out the narrative that Gen Z is lazy, because they don't work as hard, or they're not, they don't have the grit, are they just being smarter? And do they just understand that the impact of our effort here? They're basically saying, I know how this road goes if I go into this rabbit hole trying to appease these institutions, when really the true answer is making sure that I'm closer to my parents. That'll give me more of a leapfrog to get into a different space.

42:55Dr. Eliza Filby:I can then use whatever money I do earn to invest, and then both will compound and I'll actually get there a lot faster. Do you think that that's what's actually happening here? That's a good one.

43:08Elfried Samba:I think yes. I think they are. They're savvy, but they're savvy because they're also screwed, right? I mean, we haven't talked about stupid...

43:15Rory Sutherland:But they're responding completely rationally in response to incentives. There's nothing weird going on here in terms of cultural shift. It's simply that you don't have job security. Graduate jobs were promised. The entire narrative you were promised, which is go to university, get a good degree, get graduate employment in a large, respected institution, effectively has turned out to be a bit of a cul-de-sac. Yeah.

43:37Elfried Samba:I also would say, like, literally, you can chart this trajectory throughout history. It's one of the wonderful, beautiful themes and threads that is constant throughout history. is young people have always been classified as lazy, entitled, and unwilling to work hard. You can find quotes from Aristotle that endorse that view, right? In ancient Greece. The same was said about the boomers in the 60s. The same was said about Gen Xers. They were known as slackers in the 90s. The same was said about millennials in the 2010s and now Gen Z. And very soon it will be said about Gen Alpha, okay? Who have, by the way, grown up with, you know, on-demand TV, shouting at Alexas and doing their homework on ChatGPT.

44:14Elfried Samba:They're going to be a nightmare in the workplace. They're going to be a nightmare in the workplace.

44:17Dr. Eliza Filby:Instant gratification as well, not waiting for anything.

44:19Elfried Samba:But I do think there's an important shift, and I don't know if you would concur with this view, is that there's three things that have happened in the last 20 years that make that sense of the individual most pronounced within Gen Z. Now, we've seen rising individualism since the 1960s, But Gen Z are the generation that's grown up invariably with a smartphone in their pocket since they were 13. So they have access to the world's information, right? Which is why nothing you say impresses them. We destroy childhood wonder when we gave kids smartphones at such a young age. They've grown up with the world's marketplace, which makes them instinctively, not entrepreneurs, that's different.

45:01Elfried Samba:They have a fluid attitude to being a buyer and a seller, right? And that has transformed how they see money and also living in a cashless society, right? And a globalized cashless society. So you had access to a smartphone and also critically social media, which is comparison culture, which is, you know, very negative, but also endless aspiration, right? So this ability of what can I do? What can I do? But also endless notification. So this is what I'm wearing. This is where I'm on holiday. This is what I'm doing. and it's constantly endorsed, endorsed, which doesn't happen in a way. Some people are asking that.

45:41Elfried Samba:Can I just finish? Yeah, yeah, of course. So you've got this hyper-individual. Anyone picked up someone else's phone? It is a total foreign land. It's a different world. It's a different world. So you've got hyper-individualized sense of self through the phone. Then you've got the rise of individualized parenting. So, with a few children, both parents working, there's been a cultural shift. So, it used to be that kids should be seen and not heard. There was a certain level of deference that happened in the home, where essentially, you know, hopefully benignly, you were slightly living in fear of your parents, right?

46:22Elfried Samba:Now, parents live in fear of their kids. Yeah. Right? Live in fear of their kids. Live in fear of their kids as well. And so it's no longer, here's dinner, it's, what do you want for dinner? Mm. And so we've grown up with parenting culture of choice and conversation. And you've got access to YouTube, where should we go on holiday? And so the children, remember, smaller families, my grandmother was one of 13. She had no voice in that house.

46:47Dr. Eliza Filby:No.

46:48Elfried Samba:You know, I have two children. They vocalize their opinions daily. So we have given kids a voice in the home, obviously through the algorithm, and then in school. School has become this hyper individualized, can't fail, conveyor belt in which you are, you know, you no longer are encouraged to work during your studies. It's this track. And actually, unfortunately, you know, for a lot of people that don't succeed in that system, they are very much given very few choices and a sense of failure that often lasts throughout life. But those three factors of that hyper-individualism through a smartphone, hyper-individualized parenting and a sense of voice, and then this hyper-individualized education system, you build that in early doors into a generation, and then they go into a workplace which is built on age and stage and a fixed hierarchy where you're supposed to be deferential to your elders and they're like, what?

47:47Elfried Samba:Why is no one listening to me? Why haven't I got promotion? Why are you not taking the time to tell me how brilliant I am? Why are you not, you know, recognizing me as a person? Why are you not understanding that I want to do this and I aspire to be this and I want to change the business like this? And that's where the clash is coming. But it's combined with the economy doesn't work in the way that it used to. And I need to forge my own path. And that's empowering. And it's to be encouraged. Because I think we're going to see a rise of less sort of classic employee trajectories, more multiple careers, but critically more solopreneurs and maybe entrepreneurs.

48:26Rory Sutherland:Oh, yeah. I think that's true. I mean, the other interesting thing to me is that why young people aren't angrier about it. And part of it is that they stand to inherit. The other reason is simply they simply were not alive as sentient adults at any point in time when it was any different. So I could reasonably expect, when I started work in 1988, you started to think about getting under the house on the housing ladder by about 1993. And even when you were renting, the landlord earned less than any of the four people in the house. So we were in a house of multiple occupancy to start with for the first four years.

49:08Rory Sutherland:I always make this point that, you know, my father was a landlord. He bought a large Victorian house and split it into six apartments. We lived in the largest one. Most of the people throughout the 70s, 80s, 90s who are renting there could have bought, but for whatever reason, they chose not to. They didn't want permanence. You know, it was more convenient. They couldn't be bothered with owning a place. And of course, you have these interesting, as I said, you have these interesting phase transitions, which we often don't notice, where things go from being an option and a choice to being an obligation.

49:39Rory Sutherland:And effectively, young people in London are working a form of indentured servitude, where they're... I mean, my description of Ogilvy is we effectively are a business that transfers wealth from clients to buy to let landlords, leaving a little bit left over for the people doing the actual work. So as a Georgist, I regard, you know, fundamentally, if you pay for a car, you are making a car. Without your money, that car would not exist. When you pay for land, in particular, property, you're paying for something that already existed. And so it's the difference between rivalrous consumption and what you might call benign creative consumption.

50:20Rory Sutherland:And so much of the economy, so far less of the economy goes into consumption now. We talk about this as a consumerist age, but as a proportion of outgoings, The typical American home in 1960, if you added up what they'd paid for their car, TV, washing machine, furniture, clothes, their possessions had cost them about the same amount as they paid for their house. Now, you couldn't find anybody bar an astounding art collection whose home possessions were worth even a fraction of what their house was worth. This is a really weird claim to fame. My grandparents were the fourth family in Wales to own a dishwasher.

50:58Rory Sutherland:Thank you. But looking at the relative ratio here...

51:03Elfried Samba:Liberation.

51:04Rory Sutherland:They lived in a five-bedroom house in Crecowell, which was a bit less she-she than it is now, but it was an extremely attractive large house. The house cost them, I think,£4 ,000. The dishwasher cost£80.

51:17Elfried Samba:Yeah, I mean, it's insane, isn't it?

51:18Rory Sutherland:So if you look at the multiplier, even if you went and bought a Fisher & Paykel, you you know,£2 ,000 dual-level dishwasher, if you multiply that up, that's a house costing£100 ,000. It would now be a million. And so nearly everything we buy, particularly in terms of consumer goods, has got cheaper and cheaper and cheaper. Food, we're talking about this cost of living crisis. I actually wrote in The Spectator this week, you could buy everything from Selfridges Food Hall and Dalesford Organic, and you would be spending a lower proportion of your salary on food than the average household in the 1970s spent on food just to survive.

51:59Elfried Samba:Can I say, this is why this nonsense about too much avocado on toast is the reason why young people can't buy houses. So there's a perception that they are consumerist driven and they're spending too much money on subscriptions and holidays and brunches and coffees.

52:20Rory Sutherland:They've been completely rational because all those things are a bargain and housing is a massive fucking... Right.

52:25Elfried Samba:And a classic example is the cost of a TV. You know, my mother's parents saved up so much money. My other grandparents got it on the Never Never.

52:37Rory Sutherland:Radio rentals. It was the coronation. You rented your radio.

52:41Elfried Samba:The symbolism of having a TV for Elizabeth II's coronation. Because it was so bloody expensive. You know, the one person on the street that had the TV, everyone congregated, right? The cost of a TV now is so ridiculously cheap. And it's a much better TV. It's ridiculous.

53:00Rory Sutherland:Consumer capitalism for the win, I say.

53:03Elfried Samba:But what's very noticeable is that as sort of, you know, the sort of ricochets and the reverberations of the 2008 financial crisis happened, certain things became cheap. travel, you know, eating out. It's gone up recently, but as you say, it's cheap. Technology, okay? Three things that are synonymous...

53:25Rory Sutherland:Booms are cheaper, generally. Yeah, yeah.

53:27Elfried Samba:Three things that are synonymous with the millennial generation. The three things that went up in price, education, childcare, and housing. The three, you know, arguably... And in the US, of course, healthcare. And healthcare, of course. In the US, yeah. Three, arguably, life's essentials, you know, particularly if you're in dual-income households, you need childcare. The only way that you could pay for that is through the reliance, to some degree, if you had it, through the bank of mum and dad. So everyone talks about boomers having all the money. No one talks about how generous they've been, actually, to their kids.

54:06Elfried Samba:And that cascade of wealth that's trickled down. And the reason why young people, I think, aren't angry is not because they're going to inherit, is because they've been almost nullified and sweetened by the buttressing support of their parents. And as we know, the Conservatives, when they were in power, were completely wedded to the triple lock pension and actually also sustaining property wealth. Yes. That's basically... And penalising... Penalizing young people through rising costs of tertiary education. Income tax. Income tax. So you're not regulating or dealing with the rental crisis that was happening in major cities in particular.

54:51Elfried Samba:You're not building houses. You know, we're living in this weird economy where you're right. Why aren't young people angry? They're being totally screwed over. Totally screwed over, yeah. And the only reason I can think of is because parents have really softened the blow. And it's as much in working class households, and this is what people I think don't give enough sort of thought to, as in middle class households, and especially obviously in the 1%. Because there are a lot of hotels of mum and dad, young people in their 20s still living at home, in working class households, where the parents are working longer to support the kids in their 20s.

55:32Elfried Samba:And eventually, one would hope, that care and that economic transition will

55:37Rory Sutherland:happen. By the way, they're huge concentration. So the dual income household forces you to live in a big city where property is more expensive. The university system, if I hadn't gone to university, there's nowhere I would have moved to London because I would have been lonely. I would have stayed in Monmouth. I had a much better life. Yeah, you both. Monmouth's beautiful. Yeah, okay. Shit, okay. Right. But you go to university, you make a load of friends. If you don't move to London, you're going to be lonely, because all your, you know, the majority of your friends will end up moving, or at least to some large city.

56:07Rory Sutherland:Okay. So the sort of centripetal effect of all this is also to concentrate more and more people in a smaller and smaller area. And I've got a mischievous thing. I actually think there's a possibility that London's actually objectively shit, okay? But people have paid such a high price to live there, they convince themselves that it's worth it. Yeah. No, I'm going to disagree. I'm sorry, that's true. I'm going to disagree. Let me explain what London is in retail terms. It's a fucking massive Tesco extra. Yeah, there's a lot of stuff there, but 99 % of it's irrelevant to you, and it's a fucking pain in the ass to get around.

56:42Dr. Eliza Filby:If you move to a nice small town,

56:44Rory Sutherland:it's like a little Waitrose. It's like an M &S Simply Foods. Here we go. Everything you want is everything you want. There's no benefit. Unless you want to go to the theatre or you're into deviant sex and you need lots of people to practice it with. The countryside is full of deviant sex. No, but I mean, it's just great.

57:01Elfried Samba:No, no, no. If you're into dogging, don't live in tooting. Live in, you know, Bichonsfield. Sorry, sorry.

57:07Rory Sutherland:Actually, dogging was invented in Surrey to give them something to do when it was too dark to play golf. That's my theory anyway. Deviant sex belongs to the repressed... No, no, no. But the countryside or suburbia, in many ways, objectively much nicer places to live. But people pay this huge price to live in London, so they have to convince themselves that because you can buy an avocado at one o 'clock in the morning, somehow all this pain is worth it. I have a real problem with this. It's a shit. No, it's seriously bullshit.

57:34Dr. Eliza Filby:It's not that good. You're not gonna like this. I'm on Roryside for this one. So I'm from... You're a Brummie, aren't you? Yeah, I lived in Birmingham, and then I moved to London. Yeah. And I spent about two, three years in London. So I'm from Congo, right, originally. And what happened was, when Congo became independent, a lot of people went over to Europe in pursuit of education, a better life, et cetera, et cetera. And what happened is that they came to places like London, in Belgium, you had like Brussels, you had Paris. Yeah, yeah, yeah. And what effectively happened is there was no opportunities.

58:08Dr. Eliza Filby:So what happened is that they overcompensated for the fact that there was shame for the amount of money their parents spent to get them over there. So they would dress like they were wealthier, they would act like they were wealthier, and they would shame everybody else that lived in the country, uh, because they didn't make the decision to go into these affluent areas, right? And although that is from the Congo to Europe, I think that also happens from big cities to small cities. People go there and put on this, because of sex in the city, and because of madmen, and because of all these pictures that we've built about being in the city, and how it's a signal for success, that I think that people...

58:50Dr. Eliza Filby:If you think about London, a lot of people... I'm trying to think about the amount of times that somebody that I know has invited me to their home. We always meet at a meeting point. Whereas whenever I'm in Birmingham or in other places, they're like, come to the house, right?

59:04Rory Sutherland:Because they've actually got a house large enough to accommodate.

59:07Dr. Eliza Filby:You see the difference between Los Angeles and New York?

59:10Rory Sutherland:I get Northern envy now. I go up to places like Newcastle and go, this is actually fantastic because there's virtually nothing in London that you can't get in Newcastle. Don't forget, the internet has... Yeah, I agree with that. That's definitely changed.

59:22Elfried Samba:And, you know...

59:23Dr. Eliza Filby:You're tooting through it through. I've heard about your... You said that your family's been there.

59:27Elfried Samba:I'm before you cut me open, I bleed the Thames. Like, seriously, I'm a Londoner through it. No, it's completely overrated.

59:32Rory Sutherland:It's massively overrated.

59:34Elfried Samba:I'm gonna give you a slightly different perspective. That's probably Croydon for crying out loud. So, three. Okay. Okay, right, all right. And I also went to school at Greyco Hospital, big up Greyco Girls, in Westminster. So I have an affinity to London that will never be destroyed. And my husband's tried to drag me out of London. That's a bias.

1:00:00Dr. Eliza Filby:Is it bias?

1:00:01Elfried Samba:No, should I think actually where I'm going to say something that doesn't apply to London as such, because I think I've lost... I'm not going to convince you guys how great the city is. You just either have to love it or you don't. And if you don't love it, that's fine. Leave. But the thing about the city is the liberation it gives women and mothers. Women can wear things, they can go places, they can do things in cities they cannot do in suburbia, they cannot do, certainly in rural societies and communities. And there is a independence of mobility, aspiration, collaboration for women in the city.

1:00:43Elfried Samba:And Sex in the City was that. That is why it was such a successful show. It wasn't just the fashion.

1:00:50Rory Sutherland:It was a show about, you know, until later in life, it was a show about a woman who was immensely successful, never get a one bedroom apartment, as well as I can see, but okay. who had 76 shoes and no kitchen.

1:01:04Elfried Samba:No, no, no. But try... Okay, let me give you the antidote to this, the contrast to this. If you are a mother in a rural community, you are basically a taxi service for your husband, quite often, if you've only got one car. At least you can drive. And a taxi service for your kids. Everywhere is a struggle. All of that is true, but at least you get to go at 60 miles an hour. And the village... There's plenty of potholes. You can't. is actually really difficult. I know lots of my friends who actually moved out to these wonderful houses that they couldn't possibly afford in London with all this space and a garden and all of these things.

1:01:40Elfried Samba:But a lot of them are moving back because of the resources, because of the facilities, but also because of the freedom.

1:01:47Dr. Eliza Filby:There aren't any resources.

1:01:48Elfried Samba:There's not any resources in the countryside, but there's far more in London. Sorry, I'm going to see it through a gendered lens.

1:01:55Rory Sutherland:Here's a tough question if you're going to be young, okay? It was axiomatic, effectively, in 1980, 1990. If you were earning, you know, 150 ,000 a year at Goldman Sachs, you were doing better than someone who was earning£60 ,000 a year, right? If I ask the question of someone who's, say, you know, 23 now, who's doing better? Someone who's working remotely in Ibiza or Fuerteventura on 60 ,000 a year, or someone working in London on 150 ,000 pounds a year? It's not an easy question to answer. It is. You think it is, why? Because of AI.

1:02:30Elfried Samba:Because actually, the return to office has reignited this culture of presenteeism, right? That we all thought, oh, that's not going to win. We're no way going to go back to five days away. It has temporarily reignited. Right, right. But what's becoming clear with use of AI is that suddenly there is a return to human. There's a return to in-person meetings, client relationships, the ability to speak, speak, convince, build trust, build connection, you know, listen to each other beyond... Yeah, but not all the time. Not all the time! But if you're living... That's what I feel. Go to London one day a week, meet a load of people, and fuck the hell off, and go and

1:03:12Rory Sutherland:get an orchard.

1:03:13Elfried Samba:Yeah, but that's what I'm saying, is that actually there's a really difficult... If you're talking about being in Ibiza and just running, being a digital nomad, I don't think that's the same sort of degree as... I don't think that's possible in the same degree that it was even five years ago, well, when we were in COVID.

1:03:31Rory Sutherland:I think new businesses are evolving which are actually tapping into the possibilities of that.

1:03:36Elfried Samba:And if you are young, which generation is the most likely to be in the office? Gen Z. Because they want that connection.

1:03:41Rory Sutherland:Their flats are so small, they just need the space.

1:03:43Elfried Samba:Yeah, because they haven't got a desk at home. But it's not. It's because they want socialization. Yeah, I know that. They want learning and they want to feel valued and they want to feel part of something. We have killed most forms of in-person socialization, whether it's religion, whether it's even community sport, whether it's any form of association or culture. And, you know, work used to be the place where you, you know, not only met your significant other, but also probably had an affair. You know, it was the place where relationships started, friendships were built. And actually young people know that they need that.

1:04:15Elfried Samba:And they need that more than ever, not just because of digital overload and rising loneliness, but also because of AI. And I'm seeing that actually you're seeing the return to office is very much kind of accepted by younger generations who are frankly scared about the tightening of the labor market and the insecurity of the labor market. The generation that doesn't want to come to the office, understandably, our millennial generation who've done their time, they've done their 10 to 15, 20 years in the workplace, slogging it in the office, have their network, and are at the sort of forefront and pressure point of early parenthood, and do not want to commute to London to get into the office for 9am.

1:04:56Dr. Eliza Filby:I do think that the purpose of work, but also the purpose of educational institutions like universities is changing. We're realizing that the real value, you can get the knowledge online, right? The real thing that you're missing out is the connection. One thing I would say is that I do think that more employers are seeing people that just want to work remotely unfavorably. They want people to start to come to the offices.

1:05:19Elfried Samba:Oh, yeah, cultural presenteeism is...

1:05:20Dr. Eliza Filby:If you're a Gen Z who graduated around the pandemic, which meant that you didn't have any office experience, a lot of people will look at you in a different way if you don't know how to... because they don't know what you're doing, right? So I think that it's partly because people want connection, but I also think that it increases your employability. opportunities if you do that. One thing that's really interesting that we touched on is the fact that, um, women benefit a lot from being in bigger cities, especially if they're career-orientated, which causes the question about relationships. And we talked about inheritocracy and the dynamic between parents and kids and how that's almost brought them together and they realize that that's the stakeholder that I have to please the most to increase my likelihood of having a good future.

1:06:09Dr. Eliza Filby:Now, how has the whole conversation around inheritance impacted relationships, dynamics, who people pick?

1:06:17Elfried Samba:I think it's huge. I mean, I spoke earlier on about, you know, a sort of mating, this theory of, you know, you marry someone similar to you, but also how that's happened with education. So, graduates marrying graduates. It's now happening with the bank of mom and dad. So, one bank of mom and dad is marrying another bank of mom and dad. And why? Think about it.

1:06:36Rory Sutherland:Otherwise, it's a bit of a problem. Because if one of you inherits£700 ,000 and the other one inherits£50 ,000, whose money is it? Becomes a little bit of a tough question.

1:06:45Elfried Samba:Well, interestingly, we ran some polling on this. Oh, here we go. And we asked, you know, if you inherit money and you are in a partnership, do you see it as money for the partnership? Or do you see the money as something that's uniquely yours? Men said money for the partnership.

1:07:04Rory Sutherland:Yes.

1:07:04Elfried Samba:The majority of women said it's mine. By the way, we live with a scarcity mindset, right? We are vulnerable historically when it comes to divorce. We are financially vulnerable if we have kids. So that does not surprise me, by the way. It's not that they're...

1:07:23Rory Sutherland:There's a total asymmetry here in a sense in that if you think about it, there's virtually no such thing as a trophy husband. OK, there is, right, you'd have to have a Nobel Prize and look like George Clooney to hang around the house all day doing like domestic chores while your wife went out to work. There's a total asymmetry there in the expectation of provision, OK, in that you can have a one way, you can have it one way round, it's very rare to get it the other way round, OK? And we had a previous guest on the show here who said she ran, she was selling effectively garden saunas, things like that, at trade fairs.

1:08:00Rory Sutherland:And she noticed one thing immediately. Women would come along to the stand and say, I'll have one of those. And men will come along and say, I'll ask my wife. And so actually, we're talking about income equality between the genders. There's massive consumption inequality. I'll tell you a little story about this, which is my children went to this sort of little private pre-prep school where, you know, the school run consisted of a fleet of Porsche Cayennes driving up to the building. And my wife overheard this conversation, which is, I feel a bit sorry for John. This is her husband who presumably works in, like, fixed income trading at J.P.

1:08:36Rory Sutherland:Morgan. Because I did promise John that when he got his bonus, if I got a new kitchen, right, i.e. 40 grams worth of kitchen, wait for it, he could have Sky. OK. So you literally had, as a concession, This man was allowed to have what every Glasgow tenement building would have. And there is this extraordinary... Now, if you look at the United States, it's different. There's a bloke economy. You know, speedboats, leaf-blowing machines, gas barbecues, you know, pick-up trucks, OK? European consumption is unbelievably weighted female. Is that fair?

1:09:17Elfried Samba:Because there's a veto. Yeah, I mean, there's quite an interesting...

1:09:20Rory Sutherland:I'm not even allowed to buy one of those soft ice cream makers from Ninja because my wife wants to keep the kitchen surfaces clean.

1:09:26Elfried Samba:I think that's now. I think it's, yes, it's a feminized economy. And I'll come back to that point. So I think it's... A machine that makes soft ice. Who the fuck does want that?

1:09:34Rory Sutherland:Right? Okay. Sorry, sorry, sorry.

1:09:36Elfried Samba:I just slightly disagree with you on that point.

1:09:37Rory Sutherland:Okay.

1:09:38Elfried Samba:We had... But I think what's happened is it's now multi-generational economy. Go on. So look at holidays. Yes. The amount of holidays that are now booked by grandparents and paid for by grandparents. The amount of... even weddings now, you know, hen parties are multi-generational. The mother of the bride comes to the hen party. That was not...

1:10:00Rory Sutherland:Well, my kids were very young. They jokingly said they were a bit pissed off that my wife and I had stayed married because all the people whose parents have got divorced, all the kids got twice as many holidays.

1:10:11Elfried Samba:Well, now it's across the generations. So, if you look at private schools now have a day for the grandparents.

1:10:17Rory Sutherland:That's it.

1:10:17Elfried Samba:Open day for the grandparents. Why? Because the grandparents are paying... The fees. The fees. So you've got this sort of multi-generational economy. But when it... One fascinating interview I did for the book was a girl who was... Her parents had got divorced when she was in her teens. And she had lived with her mother and her father had remarried. and she really from the age of I think about 25 had got with her partner they'd never got married because she again she never sort of trusted the marriage as a financial as a financial arrangement or as a lasting bond but she said to me I don't have a joint bank account with my partner right I don't want to co-join finances in fact she owned her own flat in London but she had a joint bank account with her mother.

1:11:14Elfried Samba:And I thought that was fascinating. What? Yes. She had a joint bank account with her mother because they had joint property investments. So her financial future was being bet on her mother, not on her partner. Now, that may be unique because she was a product of a divorce and she recognized the dependence. But I think it's a really interesting illustration of a broader trend here, is that there are a lot of millennial women who have sought greater financial security by being dependent on their parents than being dependent on a man. They've grown up with that sort of feminist narrative of don't get too dependent on a man because, you know, it could be broken by divorce.

1:11:58Elfried Samba:You don't want to be vulnerable. But your parents are almost offering, in some circumstances, that greater security. And I think the...

1:12:09Rory Sutherland:And can that relationship be controlling, really?

1:12:11Elfried Samba:There we go. You've hit on the main point that I wanted to make, is that we're talking about the bank of mum and dad like it's just that money trickling down. You know, it's just a gift. It's an unconditional gift. No, no, no. It's got a trigger as that. It's never an unconditional gift. We're giving you, you know, 50 grand for a house, but it has to be within three miles of us. And also, it's got to be a house.

1:12:31Rory Sutherland:Don't think you can go and spend it on avocados.

1:12:34Elfried Samba:And that spare room?

1:12:34Rory Sutherland:Yeah.

1:12:35Elfried Samba:It's got my name on it. Yeah. And when I sell my house and gonna need care, it's also got my name on it.

1:12:41Dr. Eliza Filby:So they're investing in their future.

1:12:42Elfried Samba:So, you know, to what extent, I'd love to know how much of this gifting is unconditional.

1:12:47Rory Sutherland:You're both younger than me. I just want to make something clear, which is my parents were, you know, actually weren't very... My dad went bankrupt, you know, when I was about 20 as a property developer. But they were fairly generous. I think my grandparents were reasonably generous. One of the things I noticed moving from Wales to England is, this is in the 1970s and 80s. In the 70s and 80s, once you left home, you were on your own.

1:13:13Elfried Samba:Yeah, yeah, yeah.

1:13:14Rory Sutherland:I just thought, the reason I'm saying that is because I'm 60, and I suddenly realised that anybody aged 25 watching this may not be aware of this generational shift. The cuts, yeah, yeah. Which was literally... I'm a little called cuts. You might get your parents to buy a bit of clothing for your kids. You know, there'd be small gifts, you know, made from time to time. But the idea that your parents would make a significant contribution to you once you had got a job... No. I mean, I think, you know, I noticed coming from Wales, I thought the English were remarkably stingy towards their own kids when I was at university.

1:13:52Rory Sutherland:You know, there were a load of people... Actually, it was interesting. Generally, the Irish, Welsh, Scots, the parents were kind of helping them out a bit. But actually, the Anglo-Saxons were effectively, you know, you've got this money, that's it.

1:14:04Elfried Samba:But I mean, student finance is calculated on your parents' ability to support you. I mean, that tells you everything. And now you've got financial products in the housing mortgage market that's entirely built around the bank of mum and dad, which tells you everything. So it's, yeah, it's a complete shift.

1:14:22Rory Sutherland:And also, I'm going to say the boomers are a fucking bunch of con artists, okay? because as they get older, they're calling on the sympathy towards the elderly, which was earned by an earlier generation who had fought in World War II or suffered post-war austerity. Or, you know, I mean, seriously, being a bit poor in 1955 was seriously grim. And so our sentimental attachment towards sort of rewarding the elderly for a life of hard grind still seems to apply, even though those people in their 20s were going to the Isle of Wight festivals and, you know, basically lived a life with welfare, final salary, pensions, free education, okay?

1:15:02Rory Sutherland:And yet we're attaching to them the same sort of veneration that we attached to an earlier generation, which, let's face it, had had it a bit shit.

1:15:10Elfried Samba:And had sacrificed a lot.

1:15:11Dr. Eliza Filby:And sacrificed a lot. Yeah, completely agree. So we can go on to this conversation for a very long time because there's still more questions, but I'd like to have a final question that I want to ask. Is inheritance a bad thing? We've talked about how it, how it, inheritocracy influences the dynamic between families, relationships in society, how we're moving, where people are spending their money, time, efforts. If I had to summarize the whole conversation with the question, is inheritance a bad thing? It'd be great to get your point.

1:15:47Elfried Samba:I think this desire to build generational wealth, which the English, I would say, are quite awkward at talking about. But the Americans, I mean, they say it as an aspirational thing on a first date. I'm here to build generational wealth. It's a real proud declaration.

1:16:04Rory Sutherland:It's actually very un-American. The whole idea of a dynasty. Of course it is. I mean, they were pissed off about having a king, but somehow it's fine if you have some...

1:16:12Elfried Samba:Yeah, but I think, and I have a brilliant American colleague who says to me, the thing is about generational wealth is when you have such a weak safety net, you need... the generational wealth is so that when the crash comes, you don't fall too far down.

1:16:27Rory Sutherland:By the way, in China, this is going to be even more extreme.

1:16:30Elfried Samba:It's not just building the new aristocracy, it's actually just the safety net that's not actually there in the same way that in American society. where was i yes so this idea of building generational wealth i think as a parent you know there is a natural inclination to want to help to potentially want to over help frankly in this society um because also it's never been harder to build the foundations that people expect now it's never been easier to build a business with a global market um platform but it's not But what I think is true, and I'm going to be specific here, is it's never been harder to achieve the things we were expected to achieve.

1:17:20Right?

1:17:20Elfried Samba:It's not never been harder. It's not that we have it very easy. Most of us, you know, have central heating. Most of us have access to hot water. Most of us have access to, you know, decent food. So, you know, by and large, humanity has progressed. But this whole idea, as we talked about earlier, that pathway has become more difficult. And so it's been a natural urge, not just that the middle class, the squeeze middle class, but also I think across all income groups to provide the safety net and the springboard at a time when the market has become dysfunctional in both housing, education and childcare.

1:17:57Elfried Samba:and the welfare state has withdrawn, particularly on education, particularly on council housing. The family has stepped up. So that's the economic condition.

1:18:11Rory Sutherland:Some families have stepped up because some families can't.

1:18:14Elfried Samba:Yes, but it's also actually, this is what I was saying, it's not just affluent families where that intergenerational, you know, the biggest sort of site of intergenerational help is in Bangladeshi community. So, we need to sort of, beyond thinking of the bank of mum and dad, the boomers and Sevenoaks, you know, this is a... in an economy where the welfare state and the market is dysfunctional, actually thinking intergenerationally is the survival mechanism, right?

1:18:44Rory Sutherland:If you phoned your dad, he could end it all.

1:18:47Elfried Samba:But the problem is, is that we have blended families, we have divorce, we have remarriage, we have control, we have value division, perhaps religious division. You know, there's all sorts of ways in which your relationship with your parents is difficult, is complex, is deeply, profoundly, you know, complex to the point where staying as a multi-generational unit isn't easy. It requires a lot of sometimes sacrifice or compromise or restriction. So I think we have an inheritance economy. It's undeniable.

1:19:27Rory Sutherland:Yes, I agree with that. We have, and that's going nowhere.

1:19:32Elfried Samba:I can't see in Europe, America's different, that that's changing very much in the next 20 years.

1:19:38Rory Sutherland:Why is America different than that?

1:19:40Elfried Samba:Because I think their economy is booming and wages are keeping pace. Now, you know, around one in four Gen Zers get help with a deposit for a house. You know, in London, it's over 50%. So, you know, it's significantly different. Got it. The bank of mom and dad.

1:19:58Rory Sutherland:They also have a lot more housing.

1:20:00Elfried Samba:And also a lot of money, more money goes on education there than housing. So it's a different story, but it's not as much of an inheritocracy. is increasingly becoming one, by the way. So just to finish my point here is what we have is the great wealth transfer trickling down. As boomers age and as Gen Xers age, that money trickling down the family tree, it will impact not just millennials, because most millennials will inherit around 63. Most of it will go on their kids. So actually, this isn't going away. So the question I would pose to government is, if we are living in an inheritocracy, how can you make inheritance matter less?

1:20:45Elfried Samba:You can't get rid of it, because that's political suicide. How can you make it matter less? And my conclusion, having studied this for more than three years...

1:20:56Rory Sutherland:Land value tax. Sorry.

1:20:56Elfried Samba:Land value tax is you have to tax wealth, not wage.

1:21:01Rory Sutherland:Yeah.

1:21:01Elfried Samba:You have to allow people to earn, and earn as much and keep as much of that money as possible. I'm not going to put thresholds on it. I'm not going to advocate specific policies.

1:21:15Rory Sutherland:But that has to be the way that you liberate young people.

1:21:20Elfried Samba:And in a demographic situation where we have too many old people and not enough young people and certainly not enough babies being born, you need young people to have the capacity to earn and build. And I think that is the most simple sort of framing I can muster.

1:21:41Rory Sutherland:Because at some level, the taxing of wealth, wealth is money that you either don't need or lack the imagination to spend. One of my theories is that the success of consumer capitalism and globalization in that, you know, people who aren't that wealthy can own quite a lot of nice stuff and can go on foreign holidays and so forth, has distracted people from the extraordinary wealth inequality. So, do you see what I mean? That essentially, this idea that, you know, well, you know, you point at people's consumer goods as evidence of their wealth, and meanwhile, of course, you know, you're redistributing income incredibly energetically.

1:22:24Rory Sutherland:I mean, if you think about it, the NHS is a massive redistribution of income from the young to the old. I mean, young people pay as much into the NHS as old people do, but they get almost nothing from it, right? Unless they have an accident on their fixie bicycle or whatever it is you young people are doing. You know, basically, they get very little from it. And there are lots of mechanisms which are, you know, obviously, the whole pension system is a massive redistribution from young to old. And the thing I felt, the reason I'm sympathetic to this is, now I'm 60, I get all these weird pension-related tax breaks.

1:22:56Elfried Samba:You get bus pass.

1:22:58Rory Sutherland:Yeah, no, because I live outside London. I saw the light and I moved outside the M25.

1:23:04Elfried Samba:You get museum concessions. I mean, you're in. No, no, no.

1:23:06Rory Sutherland:And I'm going to go, my question is, where were all these perks when I was 30, had two kids and needed the money? I know. Now, Roger Martin has an interesting idea, which I thought I'd share with you, which is he thinks at the moment, you pay no tax on the first 10 ,000, 11 ,000 pounds of earned income. Okay. Roger Martin wanted to make... Canadian business guru nearly got this adopted in Canada. It's actually longitudinal. So nobody pays any tax on the first$200 ,000 there. It was Canadian dollars. So actually, you would start off more or less untaxed for the first few years of your working life to enable you to actually...

1:23:43Rory Sutherland:So this was a kind of front waiting of a tax concession, which I think is genuinely interesting.

1:23:49Elfried Samba:That's really interesting. I mean, I think David Willett's had an alternative idea where you've got a sort of... The Pitch, very good book, by the way, isn't it? Yeah, you've got a windfall when you were 30 of sort of 10 grand that enabled you to sort of ideally spend on property. But the idea was that it equaled out the gift that some people getting from their parents, the state would give. But I just want to make one comment because I think whilst I advocate this idea of penalizing wealth, not wage, it's very clear the government are not going to do that. And the successive government, so if you think about what have they done to students - Why not?

1:24:26Elfried Samba:Well, let's look at what they've done. So if you think about throughout the 2010s, the concession was made to wealth, and the penalization was on wage, right? Fiscal drag, you know, the rising property prices, you know, the quantitative easing benefited, baby boomers, it penalized.

1:24:45Rory Sutherland:But rising property prices have just blinded half the population to how shittily they're being treated everywhere else.

1:24:51Elfried Samba:What have they done to student loans? They've made it longer, right? It's exposed to interest. It doesn't have any kind of the the wraparound protections that triple lock has on pensions and you are penalizing workers there when you think about the recent budgets what did they do two things they continued the fiscal drag right again penalizing workers and critically they enforced inheritance tax on pensions so it used to be that inheritance tax just took into account property. Now it takes into account pensions. Why? Because what the government, I believe, want to do is the safest political thing to do is release that money early.

1:25:38Elfried Samba:Release it early. So, oh my goodness, my pension is going to be subject to inheritance tax as well as my property. I need to release that money early. And that's what's happened. So the bank of mum and dad, parental gifting, has trebled over the last decade. And the reason why is because government incentives have...

1:25:59Rory Sutherland:Reduced your exposure to inheritance tax.

1:26:00Elfried Samba:Reduced your exposure to inheritance tax. Now, what is happening, therefore, is that it's being released unevenly. Some have it, some don't. So no provision is being made by those, for those that don't have that. And so the, and this is what essentially my book is about. It's not about the intergenerational warfare between the old and the young. It's about the intragenerational division within millennials and Gen Z, between those that have the bank of mum and dad, and are getting more of it, more of it, pumped. Look, here's another 30 grand, because Rachel Reeves is getting on the, getting out a red box and is gonna penalize us.

1:26:40Elfried Samba:You know, getting more of it. And whilst those that don't have anything, or whose parents can't afford to release anything,

1:26:47Rory Sutherland:because it's all bound up in property, are really struggling.

1:26:52Elfried Samba:And that's, I think, what has been happening politically. It's far from ideal. But what they're trying to do is release it back into the economy. Because what young people are doing, when they get that money from Bank of Mum and Dad, they're spending it. Yes. They're building a new kitchen. They're spending money on holiday.

1:27:16Rory Sutherland:Unless their dad's Warren Buffett, who wouldn't give his daughter money to replace the kitchen. This is the fundamental problem.

1:27:22Elfried Samba:There's not enough money amongst young people to keep the economy going. To maintain an economy. Right. Boomers, we need them to release it.

1:27:30Rory Sutherland:The whole theory in economics is that people accumulate wealth in their youth and then spend at an old age. What the economists found was that old people are often surprisingly frugal.

1:27:41Elfried Samba:Yes, too frugal. In proportion to their wealth, partly because their wealth is tied up in property.

1:27:46Rory Sutherland:Useful tip, by the way, for anybody who's got parents or grandparents. Interestingly, apparently, if you don't downsize by the age of 72, voluntarily and deliberately, you'll only do it under duress when you're forced to move into sheltered accommodation or you run out of money. And And so there's this psychological thing. It's a bit like, I suppose the logic is, once you're 74, you think, why would I go through the trouble of moving to a smaller house when four years later I might have to move into sheltered accommodation or something else? So there's this... One of my arguments is you should actually have a stamp duty holiday around a certain age.

1:28:25Rory Sutherland:So it says, if you want to avoid paying stamp duty, it's now or never. So it actually basically says, shit or get off the pot, and forces people to make that decision at a point in their life when they can still make it.

1:28:38Elfried Samba:And guess who's moving back into the city? Because it's convenient. They're often nearer their families. How can they afford to? Baby boomers are moving back into the city. Who wouldn't do that? One of the problems is there's not enough downsizing.

1:28:52Rory Sutherland:But also, the city is for young people. Oh, rubbish.

1:28:55Elfried Samba:Rubbish, rubbish, rubbish.

1:28:56Rory Sutherland:You're just occupying a house in Tooting, which are young people... Your husband is absolutely right. He's trying to do the decent pro-social thing by moving out to a decent bit of suburbia where you can have a lawnmower and a patch of lawn, a patch of grass, right? Okay, right? And then your house would be free for young people to use.

1:29:14Elfried Samba:But can I just say one thing? My mum is 79. She lives in the house that my grandfather one and put the deeds into my grandmother's name so he couldn't bet them again. I see. My father, who lived in that house his entire life, is buried in the garden. We buried him in the house that he was born in. And so she can't move because Dad's in the garden, which apparently devalues the house by 50 grand. And we did get special dispensation from the council. So, but it speaks to a broader truth. You look genuinely shocked. I'm shocked, Rory. We buried in the garden. It was totally legit. It was just some sort of secular...

1:30:01Elfried Samba:Sacred... No, it was...

1:30:02Rory Sutherland:What sort of ceremony was it?

1:30:04Elfried Samba:Church of England. We got a priestess. Okay, fine, fine. Yeah, yeah, yeah. Anyway, the reason I say that weird, rather dark anecdote about my father is because actually one of the reasons why, the biggest reason why people don't downsize and move is because of the infrastructure that they've often spent 30 years, 40 years building in that area. And so whilst it's unsafe, inconvenient, expensive to heat...

1:30:32Rory Sutherland:It's a community.

1:30:33Elfried Samba:It's a community.

1:30:38Rory Sutherland:I grew up in the Welsh borders, trust me. Nowhere in London is a community. It's a delusion that Londoners tell themselves.

1:30:46Elfried Samba:No, no, no, no. I won't have that. I'm sorry, I won't have that.

1:30:48Dr. Eliza Filby:No, you're right. You are right. I have to come in as the referee today because we're going to have to wrap up, unfortunately. But this has been amazing. It's great watching you and Rory go on a sword fight about where to stay. But this is a very necessary conversation. And thank you guys for having it and sharing so generously with our audience.

1:31:09Elfried Samba:Pleasure. Thank you so much.

1:31:11Dr. Eliza Filby:Amazing. Thank you, Rory. A pleasure.

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