Latest / What Bitcoin Did / How The State Makes Us Poorer | Max Hillebrand

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How The State Makes Us Poorer | Max Hillebrand · What Bitcoin Did

• 0:00
  A lot of the things that you produce just go away, right?
• 0:05
  And that's even discounting just the money, right?
• 0:08
  You're forced to use the US dollar.
• 0:10
  The US dollar is one of the most mighty printing presses ever.
• 0:13
  The sad story of the cypherpunks is that they've built incredible ideas, powerful gold,
• 0:19
  but they're just humans and they can be killed.
• 0:22
  And they have been kidnapped, tortured and killed for decades.
• 0:27
  And that war is ongoing.
• 0:28
  and people will continue to sacrifice their lives in order to make these tools a reality.
• 0:34
  Scarcity is at the root of property.
• 0:36
  And we needed scarcity in cyberspace for money.
• 0:40
  That's why Bitcoin is such a massive achievement.
• 0:42
  We've introduced scarcity in cyberspace without a trusted third party.
• 0:46
  It's never existed before Bitcoin.
• 0:47
  Now the question is, how do we allocate our scarce resources
• 0:50
  such that we will solve our problems in the future?
• 0:54
  And that is what action is all about.
• 0:58
  Max Hillebrand, man.
• 1:00
  We have been trying to make this show for such a long time.
• 1:03
  Well, it happens when it happens.
• 1:04
  We're finally here.
• 1:06
  So I want to start with a question that bugs me.
• 1:09
  Whenever you talk to someone who doesn't really know
• 1:11
  that they should care about privacy,
• 1:13
  they'll always say, it's fine, I'm doing nothing wrong.
• 1:15
  And those are the people that are now using,
• 1:17
  especially with AI, they're giving up so much data
• 1:20
  to companies that it's kind of terrifying.
• 1:23
  And it makes me wonder if the fight for privacy now
• 1:27
  is kind of over for most people.
• 1:30
  If you don't do anything about it, it really is.
• 1:33
  The tools of surveillance have gotten so good,
• 1:36
  like so scarily good,
• 1:38
  that if you don't take extra precautions,
• 1:40
  you have very little secrets left.
• 1:44
  And we all want to have some secrets.
• 1:47
  But the cool thing is that for the last 30, 40 years or something,
• 1:52
  the cypherpunks have really worked hard
• 1:54
  to build tools that make privacy impossible.
• 1:57
  And so if you use modern technologies and you learn a little bit on how to use them and just choose the right applications in your tech stack, basically, you can have serious levels of privacy.
• 2:10
  You can have very well-protected communications, anonymous communications, and secure sound money that all rely on privacy as a whole.
• 2:24
  But it's absolutely achievable.
• 2:26
  You just got to know how.
• 2:27
  Yeah, it's funny though, because like the tools,
• 2:29
  like if you use Signal as an example,
• 2:31
  like I have basically every single person on Signal now.
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  I've managed to get even like my elderly family onto it
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  because I stole this from Odell,
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  but it's the only place to get baby pictures.
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  And so like, and that tool is amazing.
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  It's really easy to use.
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  It looks like any other like communication app.
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  So the tools have got really good.
• 2:49
  So they're usable.
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  But at the same time,
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  everyone moves towards like using the frontier AI models
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  and are probably like putting pictures
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  they shouldn't be putting up in there
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  of like their family, their kids,
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  they're asking financial information about,
• 3:00
  like they're doing everything
• 3:02
  that they shouldn't be doing
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  in terms of protecting your actual privacy.
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  Like, so while, I guess the point is,
• 3:08
  while the apps are getting better, more usable,
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  at the same time,
• 3:13
  I feel like it's accelerating
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  on the data collection side even faster.
• 3:17
  And I don't know how you pull someone
• 3:19
  who's like partly in that world
• 3:21
  where they are giving up way too much information.
• 3:22
  How do you pull them out?
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  What can they come out with?
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  and how do they get into a world that they are retaining their information?
• 3:30
  The problem is that it's always easier to build technology
• 3:33
  that doesn't protect the privacy of users.
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  Because to really protect users is an extra effort.
• 3:40
  And that requires technological protocol
• 3:42
  and just user experience, design and skills that take longer to build.
• 3:47
  And so we see that now with the frontier models.
• 3:49
  They don't care about your privacy.
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  They want to see how you're using the software
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  so that they can improve it further on.
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  Is that part true?
• 3:58
  Is it so they can improve it
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  or have they got other incentives?
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  I mean, that's one of the reasons.
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  They need a whole bunch of text
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  in order to make the system better.
• 4:08
  And that goes for anything.
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  If you know how the users are using the software,
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  when they get frustrated,
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  when it works well for them,
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  then you can make your app better.
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  Just listening to users is a very powerful thing
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  to make tools work better.
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  The problem is what if the users don't want you to listen?
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  But so like that makes like, obviously they are doing that.
• 4:29
  They're using it to train new models.
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  They're using it to make the user interface better, all that stuff.
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  But what else are they doing that's the scary part?
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  Yes, that is the really scary part.
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  And it basically comes down to censorship.
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  If you're asking stuff that they don't want you to ask about,
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  then very quickly they will suspend your account.
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  So they're checking for policies that you uphold the terms
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  and conditions and so on.
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  And of course, they could collaborate with governments
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  to hand over this information.
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  I'm sure they do to some extent.
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  Every big tech firm collaborates with the state.
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  And that's a problem.
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  But the cool thing is we already now today
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  have AI solutions that are reasonably private.
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  And really good.
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  Like Maple, I use it all the time.
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  Exactly.
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  Very, very good.
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  It's probably, I don't know, 10, 20% behind a frontier model.
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  but it's like, it's definitely good enough.
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  And like, I use both.
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  So like, to be honest, I care about privacy
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  and I try and do everything I can to sort of maximize that.
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  But there are times when I mess up
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  and like sometimes there's times
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  where I'll type something into like a frontier model
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  and be like, you are an idiot.
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  Like, believe that.
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  And there's other times when I've done it
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  and, you know, enter that information
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  and afterwards I've been like, fuck.
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  But you're right.
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  Like the tools are really, really good.
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  I think Maple's an incredible product.
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  I use it a lot.
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  it's just, it's hard to make people care, which is, I guess, why you wrote this book.
• 5:54
  Yes.
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  And the cool thing about this book is it's not just like a privacy handbook. It's like
• 5:59
  privacy and economics.
• 6:00
  Yeah, exactly.
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  And I know you're like the deeply rooted Austrian school. Like, why does privacy matter in economics?
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  It matters for a whole bunch of reasons. And like the main reason that I wrote this book
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  is because the economists don't really understand the cypherpunks. Right. If you look back at
• 6:18
  mises.org 2012 2013 every article about bitcoin was like no this isn't a great idea like it can't
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  work in the long run and what was it what was the reasoning when they said that because digital goods
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  are not scarce and money needs to be scarce right and they didn't really realize that bitcoin solved
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  the double spending problem which introduces scarcity in cyberspace the the core idea of
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  money is that if I give you money, then I no longer have it. And that's not how PDF documents
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  or music files work. If I give you the copy, I still have the original. So the scarcity aspect
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  isn't there in cyberspace. That's what makes cyberspace so beautiful. But it's very critical
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  for money that we have that. And then the other aspect was that, oh, well, the government is just
• 7:05
  going to shut it down. And well, the cypherpunks realized that we don't care. We just keep building,
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  we keep using, we will resist the state.
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  And so ultimately, I think those two main reasons,
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  a kind of a lack of computer science understanding
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  and then an assumption that the resistance against the state
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  is not possible in the digital realm
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  was why they didn't get it.
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  And so it took quite a long time
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  before more Austrian economists really started to hone down
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  and be like, no, this is actually useful.
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  Like Conrad Graf was very important in that.
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  Stefan Kinsella as well.
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  But that took very, very long, way too long than it should be because Bitcoin is obviously Austrian economics embodied.
• 7:49
  Embodied, yeah.
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  Exactly.
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  So that is the first side of why this book matters so much to me at least.
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  And then the other side is that the cypherpunks don't understand the economics of it.
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  Like there were so many cypherpunk projects that failed in ways that if they would have understand praxeology better, they would have designed the system in a different way.
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  and that's in part because it's difficult to design the system properly
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  so that it survives censorship and shutdown
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  and so this book is kind of here to get my two friend groups to meet
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  and be like you should really talk to each other
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  because both of you are trying to solve the similar set of problems
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  but you're going about it in very different ways
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  and both of these ways are extremely valuable
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  and if we put them together I think we have a really good shot
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  at making the world a much freer place.
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  awesome um i think the best place for us to like dive into the book is the thing that you talk about
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  right at the start i think we were kind of talking about a little bit before which is
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  a lot of people when you try and talk to them about privacy will say i've got nothing to hide
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  yeah like why do you think that is sort of one of the most dangerous sentences that
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  is uttered today it's i mean if you have nothing to hide you're just a very boring person
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  like we we all have things that we don't want everyone to know and i think it's a definitional
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  mistake people think that privacy is about full anonymity that nobody knows you that nobody knows
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  what you're doing and so on and and that's a part of privacy but privacy actually defined and again
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  that's where the cypherpunks come in eric hughes specifically privacy is the ability to selectively
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  reveal yourself to the world.
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  Privacy is a choice, a choice freely made on what to say to whom and when.
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  And if that's the proper framing of privacy, then it's a synonym for freedom.
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  If you cannot choose what to say to whom, if someone can force you to reveal an information
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  that you don't want to tell him, then that's not freedom.
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  That's slavery.
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  And if that's the fundamental starting point, then you start to realize it's just what humans
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  do.
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  We first think and then we speak.
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  And we think about the stuff that we want to say.
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  And we don't say many things for many reasons.
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  For one, because it might be rude to say the first thing that comes to your mind.
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  And then we catch ourselves, let's phrase that a little bit more diplomatic.
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  Like that's one of the reasons.
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  But it also then leads to just free action itself.
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  And so the ultimate conclusion of the economic side of the book is that if we don't have privacy,
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  If there is someone else who can surveil you and watches your actions and you cannot escape, then this means that you will not buy the goods that you would actually want to have.
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  And that means that prices start to be manipulated.
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  And it's a little bit similar to what inflation does to the market economy, that we buy the stuff that we don't actually want because we're kind of tricked into it because inflation.
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  And we build the stuff that we don't really need as well.
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  And so this malinvestment and overconsumption leads to a boom and bust cycle, ultimately,
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  where we build the things that we don't really want and we waste our time, capital and precious effort
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  on things that are not really the best interest that we would like to do.
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  So ultimately, it makes us poorer.
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  If we don't have privacy, if there's surveillance everywhere, then we're all worse off.
• 11:14
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• 13:44
  So this is like, I think that the increase in surveillance is like a slow creep towards like
• 13:51
  the world we live in today. Like the question I would have is if you went back a hundred years,
• 13:55
  I can't imagine anyone saying I've got nothing to hide. Like, is this a psyop? Where's it come
• 14:00
  from? This idea that, that people are okay with surveillance because they don't think they need
• 14:05
  to hide anything. Yeah. I think it's, it's, it's a psyop basically. Like people have been trained
• 14:11
  to not to use the tools of defense that they ought to, right? There's a great paper on the
• 14:18
  discourse of voluntary servitude. Because if you look throughout the history of mankind,
• 14:23
  one thing that was always the case is that there were, the number of slaves was way larger than
• 14:29
  the number of slave masters. And if the oppressed people would realize that they're oppressed
• 14:35
  and they would start doing something about it, the slave masters have no chance, right?
• 14:40
  Simply because they're outnumbered. And so the trick of the government is to make you think that
• 14:45
  you're free when actually you're not. And just exactly that linguistic trap of I have nothing
• 14:51
  to hide is similar to who's going to build the roads. It's like a linguistic trap to make you
• 14:58
  think that you can't protect yourself and someone else will protect yourself and that someone else
• 15:05
  has your best interest at heart. But if you look closer, that's just not the case.
• 15:09
  And it's one of those things that the people who might say that will also be self-centering because
• 15:14
  they clearly don't feel completely free in what they can do. And like you said before,
• 15:18
  there are times when self-centering is a good thing. I can choose to not say the first thing
• 15:23
  that comes into my head when I'm talking to you. But when does it become a bad thing? When
• 15:28
  is self-centership a huge issue? When the consequences of you speaking the truth
• 15:33
  are worse to you individually than actually speaking properly. So we see this a lot in
• 15:42
  I mean, that's here Oslo Freedom Forum, right?
• 15:43
  We have this often.
• 15:46
  Where during the communist occupation of Czechoslovakia, for example,
• 15:49
  Vaclav Havel and Vaclav Bender both were writing about this,
• 15:52
  where everyone had in his storefront, you know, the butcher, the carpenter,
• 15:57
  had a sign in the window of workers of the world unite.
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  It was an empty slogan.
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  Nobody believed it.
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  But everyone had to do it.
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  And so you start living the lie.
• 16:08
  and that is very, very depressing.
• 16:12
  But the problem is if you don't do it,
• 16:14
  you go to the Gulag, right?
• 16:16
  If you're not a member of the Communist Party,
• 16:18
  your children will not go to school, right?
• 16:21
  Your children will not get a job
• 16:22
  and your cousin will get fired as well, right?
• 16:25
  So the cost of speaking the truth
• 16:29
  would be way higher than just going along with the lie.
• 16:34
  And then we just all lie to each other constantly.
• 16:37
  and that's a dreadful experience.
• 16:39
  So if you talk like today,
• 16:41
  the country probably that values freedom
• 16:44
  at least outwardly the most
• 16:45
  is probably America, would you say?
• 16:47
  Like that's like their slogan,
• 16:48
  that everything they do is about freedom.
• 16:50
  Do you think the people living there
• 16:51
  who are being surveilled
• 16:53
  are like giving up data
• 16:54
  to all the big tech companies in Silicon Valley?
• 16:56
  Do you think they're actually free
• 16:58
  or do you think they're being oppressed
• 16:59
  without knowing it?
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  They're being oppressed without knowing it.
• 17:02
  I mean, to be fair,
• 17:02
  like freedom is a very rare
• 17:04
  and very precious thing
• 17:05
  and we don't have much of it if you actually look at it right like uh if you need a license to cut
• 17:11
  someone else's hair like crazy that's not freedom yeah you know if like 50 of your paycheck just
• 17:17
  disappears before it even hits your bank account like that's not free either you know like back in
• 17:22
  the days like with the balls and shackles slavery like the slaves could keep a whole bunch of the
• 17:27
  things that they produce just to sustain themselves right now okay they like a lot of the things that
• 17:32
  you produce just go away right and that's even discounting just the money right you're forced
• 17:38
  to use the us dollar yeah the us dollar is one of the most mighty printing presses ever right and
• 17:43
  and and so no there's a whole bunch of theft happening in america and a whole bunch of
• 17:48
  censorship like all of the big tech platforms you know youtube google facebook all of these
• 17:54
  they're all american and they're they're definitely not free speech platforms right there is so much
• 18:02
  content that gets deleted there. There's so much shadow banning happening where the content might
• 18:07
  be out there, but they will change the algorithm so that nobody will see it. That's highly
• 18:12
  manipulative. So we're unfortunately quite far away from an actual free market where choices are
• 18:19
  made freely by those who want to engage with it. And the hard thing with this is like, I know that
• 18:23
  you've been living on Bitcoin for a long time. I'm sure your privacy practices are in the top 0.1%.
• 18:29
  but still, if you walk down the street here in Oslo,
• 18:31
  there's going to be security cameras watching you.
• 18:33
  Like you're still being surveilled.
• 18:35
  Like, are you free?
• 18:37
  No, like not to the extent that I would like to, right?
• 18:42
  There is a lot of things that I have to do
• 18:44
  that I don't want to, ultimately.
• 18:47
  A thinker from the 1970s, an American thinker
• 18:51
  called Rayo, an anonymous guy.
• 18:53
  He wrote a book on VONU,
• 18:55
  which means voluntary, not vulnerable.
• 18:58
  and he came up with a fascinating metric
• 19:01
  to answer exactly that question of how free are you?
• 19:04
  Because that's actually a difficult question to answer.
• 19:07
  And so his idea is the mean time to harassment.
• 19:11
  Or in other words,
• 19:12
  when was the last time that you were stolen from?
• 19:15
  That's a really useful metric.
• 19:18
  And the goal for freedom lovers
• 19:21
  is to increase that metric.
• 19:22
  Increase the time in between
• 19:24
  where you were physically harassed,
• 19:26
  stolen from,
• 19:27
  where you had to ask for permission. And he realized that that number is extremely low,
• 19:34
  extremely low for most people. Can you talk about the things that you would consider being stolen
• 19:38
  from? So theft is broadly defined as like seven different categories. There's obviously murder,
• 19:45
  right? That's the bad one, right? You steal someone's life. Then you have theft of physical
• 19:50
  property, right? You have coercion, which is the threat of violence so that you change your actions.
• 19:56
  So taxes would fit into that.
• 19:58
  Absolutely.
• 19:58
  Taxes are theft.
• 20:00
  Taxes are both the coercion that if you don't pay them, you'll go to prison.
• 20:04
  And then the actual taking of your property, your money, and so on.
• 20:08
  Then you have contract violations, for example.
• 20:13
  So this is when you've agreed to do something and then you don't do that.
• 20:17
  That's the theft of the counterparty.
• 20:20
  You have whenever you have to ask for permission.
• 20:21
  The hairdresser, for example.
• 20:23
  He's being stolen from in applying his own body and tools in a way that he sees fit by someone who says, no, you need a license for that.
• 20:31
  Rape, of course, that's theft of your sexual autonomy.
• 20:34
  Trespassing, that's theft of your dwelling place and your freedom to live peacefully in your own home.
• 20:41
  And lying, ultimately.
• 20:44
  Closely tied especially with contracts.
• 20:47
  Fraud, basically.
• 20:48
  Theft usually of money that was given in exchange for the contract that was lied upon.
• 20:52
  So with that definition, I was stolen from 30 minutes ago.
• 20:56
  Exactly.
• 20:57
  Yes.
• 20:58
  You were stolen from last time.
• 20:59
  I went to buy a sandwich.
• 20:59
  You bought a sandwich.
• 21:00
  Yeah.
• 21:00
  And you paid like what?
• 21:01
  20% value added tax?
• 21:02
  Yeah.
• 21:03
  Right.
• 21:04
  Last time you drove a car.
• 21:06
  You needed to have a license.
• 21:08
  You needed to have a registered car, et cetera.
• 21:12
  There's a lot of theft happening.
• 21:13
  If you really honestly define it and look at it, it's scary.
• 21:17
  there'll be people listening to this that aren't like familiar with the austrian sort of framework
• 21:22
  and will think me paying tax is not theft what would you say to that well try not paying it
• 21:28
  like there's countless people kidnapped and in jail like right now as we speak uh because
• 21:37
  they made a mistake filing it or they just for ethical reasons choose not to to support that
• 21:42
  that system and you know religious reasons etc and they're tortured like uh imprisonment is
• 21:50
  an insane torture like they they asked did a study on on lots of um imprisoned people of like
• 21:57
  would would you prefer physical torture if you could get out of here most of them said yes
• 22:03
  right so uh prisons are are horrendous institutions uh and they they get applied for
• 22:11
  peaceful people who've done nothing wrong, right? Who simply said no to a thief that came with a
• 22:16
  gun. It's, do you think that there's any way out of this system that we live in for everyone? Or
• 22:23
  do you think this is going to be a thing where you have a small group of people that manage to
• 22:26
  live outside of this system? I think the option to live freer or to choose towards a freer world
• 22:34
  is there for everyone. It doesn't come for free, right? There are costs there and they can be
• 22:41
  quite substantial. And so many people will, even those who understand it might not want to pursue
• 22:48
  this path. And then just countless people don't understand it. I mean, I would fall into that
• 22:52
  category. Like I'm not going to go and not pay my taxes. Like that's not something that I'm
• 22:58
  willing to risk. Like I have a family. Like there are things that will come above that for me.
• 23:03
  And that's why I see it as such a hard battle. Yeah. And that's, I think, where the cypherpunks
• 23:08
  come in with their amazing strategy
• 23:10
  of if we increase the cost of attack,
• 23:14
  if we make it more difficult for the thief to steal,
• 23:16
  if it's more expensive for him,
• 23:18
  then he will no longer be profitable.
• 23:21
  Because if it takes you 10 Bitcoin
• 23:23
  to buy the people and the machines and so on
• 23:27
  and the guns to steal one Bitcoin,
• 23:30
  you've just decreased your wealth by nine Bitcoin.
• 23:32
  So that's stupid.
• 23:34
  And there's a praxeology to violence
• 23:36
  where thieves are entrepreneurs too.
• 23:38
  And if they're not profitable, they will stop.
• 23:42
  And then simultaneously, if we decrease the cost of defense,
• 23:46
  then more and more people will choose to protect themselves
• 23:48
  simply because the means are available at an affordable rate.
• 23:52
  Do you think this is the reason that Austrian economics
• 23:55
  isn't sort of widely taught anywhere?
• 23:56
  It's kind of a niche school of economics
• 23:58
  because it's seen as dangerous by these people.
• 24:01
  Yeah, and especially by the thieves.
• 24:03
  The thieves don't like a well-educated slave forever.
• 24:08
  There was a very severe penalty in the Roman Empire when you taught your slave how to read.
• 24:15
  Because they would realize that it is an unjust system or they would be closer to realizing that.
• 24:20
  So yeah, education has always been, or a lot of education has been controlled by the slave masters.
• 24:27
  And they clearly do not want their slaves to revolt.
• 24:30
  And that's why the grand heroes of Austrian economic thought had substantial difficulties to actually get teaching positions even at universities.
• 24:40
  Like Murray Rothbard was teaching at a New York university and he was paid almost nothing.
• 24:45
  Even though he's like one of the greatest economic minds that ever lived.
• 24:50
  And then later he finally got a paid job at the Las Vegas University.
• 24:55
  But it was like a clergy level, like very, very, very, very low.
• 25:00
  And Ludwig von Mises had a great term for this back in the Austrian-Hungarian Empire.
• 25:06
  The intellectual, so the mainstream economists at the universities, he called them the intellectual bodyguards of the House of Hohenzollern, which were like the kings back then, right?
• 25:18
  So they have an intellectual bodyguard that trick people into thinking that being ruled by a master is correct and useful and you should be thankful for it.
• 25:28
  And we absolutely see this today.
• 25:31
  I mean, America is a great example of this.
• 25:34
  People stay in the American school system until they're like, what, 25?
• 25:39
  And in debt for multi-million dollars.
• 25:42
  And at the end, they've had a proper indoctrination of loving the state, ultimately.
• 25:49
  And we see this everywhere.
• 25:51
  The school system that we are currently using goes back to the Prussians.
• 25:55
  because the Prussians lost the war against Napoleon
• 25:59
  and realized that they need more obedient soldiers.
• 26:03
  So a psychology professor, I forgot his name,
• 26:06
  researched on how can we make more obedient soldiers
• 26:09
  that will follow orders and just blindly march into their death
• 26:14
  without retreating and deserting.
• 26:17
  So they came up with the outcome-based education system,
• 26:20
  which is basically that, and we have this exact same system right now,
• 26:24
  You sit in a classroom, everyone faces the teacher, right?
• 26:27
  You have to sit down when you're told to sit down.
• 26:30
  The teacher knows the answer, right?
• 26:33
  And you are here to get the wisdom from the teacher
• 26:37
  and your success is measured by you repeating
• 26:40
  the truth of the teacher back correctly.
• 26:44
  And it's not based on the trivium process
• 26:47
  of how to actually achieve understanding and wisdom.
• 26:50
  It's about recollection.
• 26:51
  It about recollection right So you not there to think you there to memorize and to repeat back what you were told And that is I think the root cause of a lot of the
• 27:03
  suffering in this world. I mean, it's, it's what started the first war and the second world war and,
• 27:07
  and all the American wars that came after that are, I think heavily rooted in the education
• 27:13
  system and of course the money system, right? But that, those are big problems.
• 27:17
  So when you take the biggest minds in Austrian economics, I've read a few books now, a lot of them from your recommendation.
• 27:26
  But obviously, you know this group of techs way better than I do.
• 27:29
  Do they ever talk about privacy?
• 27:32
  Well, it's kind of in the word private property, interestingly.
• 27:36
  So it's kind of at the very root of it, but they've never so clearly articulated it.
• 27:43
  I think they've underappreciated the power of what privacy really is.
• 27:49
  There is a lot of this on involuntary disclosure.
• 27:53
  Like the gist of Austrian economics is like actions should be voluntary.
• 27:58
  And that defined by Hughes to choose what to reveal to whom
• 28:03
  is based on voluntary revelation as well.
• 28:06
  There was then a lot of thoughts on, for example,
• 28:10
  can we have like non-disclosure agreements?
• 28:13
  Can you and I sign a contract that says,
• 28:15
  hey, I will tell you a secret and I will pay you,
• 28:17
  but under the condition that you don't reveal the secret to someone else?
• 28:21
  If that's an opt-in contract for both of you, that seems okay to me.
• 28:23
  Exactly.
• 28:24
  So this was one of the conclusions that the Austrians reached.
• 28:28
  But they never really were that much technologists.
• 28:32
  Like Murray Rothbard only typed on a typewriter.
• 28:35
  Yeah.
• 28:35
  Is that why?
• 28:36
  Is it the world that they were writing these in
• 28:37
  is very different to the world we live in today?
• 28:40
  Yes, ultimately.
• 28:41
  and it wasn't just their main passion, I would guess.
• 28:48
  They were really into how can we design better contracting schemes,
• 28:52
  how could we design a government that is less predatory and so on.
• 28:58
  But one of the common philosophicals of Austrian economics is like,
• 29:02
  oh, the market will fix it.
• 29:04
  It's just that we are the market.
• 29:07
  We actually have to fix it.
• 29:08
  and yeah for for this i just value the cypherpunks because they're like no okay we don't have to
• 29:15
  petition for the government like we have to write the code and we have to deploy it right ron paul
• 29:20
  one of the amazing austrian economist influencers he's a politician right he has been lobbying to
• 29:25
  end the fed for like i don't know 50 years or something and apparently not succeeded it's still
• 29:31
  there they're still printing like more than ever and i guess it never really came to their mind to
• 29:37
  just build an alternative system.
• 29:40
  They're very much like advocating for the gold standard, but like for the government
• 29:43
  to adopt the gold standard.
• 29:45
  And sure, like for individuals to save in gold, et cetera, that too.
• 29:48
  But to really radically create a new monetary system that cannot be stopped the same way
• 29:53
  that gold could be stopped, just wasn't really that much there.
• 29:59
  I mean, there's people also doing that in Bitcoin, trying to make nation states adopt
• 30:02
  Bitcoin.
• 30:03
  What do you feel about that?
• 30:05
  How do you feel about that?
• 30:06
  Well, I don't like thieves to have tech that is unstoppable.
• 30:11
  So I'm not the biggest fan of it.
• 30:13
  I much more care about individuals being able to protect themselves.
• 30:19
  It's inevitable that thieves will use Bitcoin.
• 30:21
  They were probably one of the early adopters as well.
• 30:24
  Just because thieves are at the edges of society
• 30:27
  and they need the best technologies to stay ahead of the game.
• 30:30
  So to some extent, unfortunately, bad people will use Bitcoin.
• 30:34
  And that includes the state.
• 30:37
  There's not much that we can do about that.
• 30:39
  That's why Bitcoin is a good, fair, neutral money.
• 30:42
  And that's why it will succeed in the long run.
• 30:45
  So where does lack of privacy in this sort of Keynesian world that we live in today,
• 30:49
  where does that sort of distort the market?
• 30:51
  Where does it break things?
• 30:52
  Like you're not buying things that you would have bought otherwise, right?
• 30:56
  Ultimately.
• 30:58
  So, you know, that might be books, right?
• 31:00
  There are some books that you probably don't want to buy on Amazon with your name.
• 31:06
  Because that might lead to...
• 31:09
  You get flagged.
• 31:09
  You will get flagged, exactly.
• 31:13
  During COVID, people were buying Ivermectin, for example.
• 31:16
  If you bought that on a bank account,
• 31:18
  then they probably knew about it and they would come after you.
• 31:22
  So a lot of these goods were the powers to be,
• 31:28
  do you harm if they found out that you have them,
• 31:32
  you just don't buy them.
• 31:33
  And this means we decrease the demand for these goods.
• 31:37
  And that means that there will be less produced.
• 31:39
  Even though people actually want to have this for numerous different reasons,
• 31:43
  they would not be able or not really willing to buy it at that rate.
• 31:48
  And then the entrepreneurs who have correctly anticipated the demand of these goods
• 31:54
  would make less profit.
• 31:55
  Because even though there is actual demand, it's not executed upon
• 31:59
  because the cost is too high.
• 32:02
  And so these entrepreneurs who have successfully predicted what humans will want in the future, who should be rewarded for that incredibly difficult task that they've achieved, they now get punished by their business having less revenue and so on.
• 32:17
  Well, simultaneously, the businesses that are working on the things that the state forces you to do or at least heavily encourages you to do, they will get more and more business.
• 32:29
  They get outsized reward.
• 32:31
  Exactly.
• 32:31
  Like, you know, the painters of sign of Workers of the World Unite, they got a whole bunch
• 32:36
  of business.
• 32:37
  Not because people actually wanted to have the sign, but just because if they didn't,
• 32:41
  they would get into trouble.
• 32:42
  And so everyone had to get one.
• 32:44
  And so the only way out of this then is by building parallel systems.
• 32:48
  It's not the only way, but it's, I think, the way that is the least violent and the
• 32:54
  most peaceful and the one with the least harm.
• 32:58
  plus the one that works without the majority agreeing upon it.
• 33:02
  The problem of the whole politicking scheme
• 33:05
  is that sure you can try to convince the politicians,
• 33:09
  but then even like, first of all, that's difficult.
• 33:13
  But even if you do succeed,
• 33:15
  a whole bunch of people will be angry.
• 33:17
  The core of the political system is a violence
• 33:20
  and of you forcing others to do what you want
• 33:23
  rather than what they want.
• 33:24
  You know, like we've seen that
• 33:25
  with the Bitcoin strategic reserve.
• 33:26
  A lot of people were like, no, I don't want that my tax money gets used to pump the bags of the early Bitcoiners.
• 33:34
  I don't want that.
• 33:36
  And they have a right in saying that.
• 33:39
  But we forced them to spend their tax money on buying more Bitcoin, for example.
• 33:45
  I mean, it didn't really happen in America yet, but that was the claim or the goal.
• 33:51
  And so people won't like our ideas.
• 33:54
  and if we force them, then turns out that we are the baddies.
• 33:59
  And that's why I'm not a big fan of the political means entirely.
• 34:02
  I would rather work with people who would like to work with me
• 34:05
  and build the ideas that they agree with
• 34:08
  and not force them on things that they don't really want to do.
• 34:12
  And that's the beauty of the parallel economy.
• 34:14
  It's there for the people who want to, but we're not forcing anyone to join us.
• 34:18
  We're very open for anyone to come over to the free side of the world
• 34:22
  and will gladly accept you as long as you're being productive
• 34:25
  and you're actually helping us.
• 34:27
  We're very much not welcoming thieves.
• 34:29
  But ultimately, we're not forcing you to be part of this.
• 34:34
  Do you want to pay less in taxes and stack more Bitcoin?
• 34:37
  Of course you do.
• 34:38
  Well, by mining Bitcoin with Blockware, you can.
• 34:41
  Under section 168k of the US tax code,
• 34:43
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• 34:47
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• 34:48
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• 34:51
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• 34:54
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• 34:57
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• 34:58
  and potentially offset your tax liability entirely.
• 35:02
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• 35:04
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• 35:06
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• 35:08
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• 35:10
  while drastically shrinking your tax bill.
• 35:13
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• 35:17
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• 35:20
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• 35:24
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• 35:32
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• 35:34
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• 35:36
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• 35:38
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• 35:41
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• 35:42
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• 35:44
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• 35:46
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• 35:47
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• 35:48
  to track at the network level,
• 35:50
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• 35:54
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• 35:59
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• 36:03
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• 36:09
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• 36:14
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• 36:19
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• 36:27
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• 36:31
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• 36:36
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• 36:41
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• 36:59
  when you use the code wbd that's b-i-t-k-e-y.world and use the code wbd i want to go back to something
• 37:07
  we talked about before in terms of that that freedom index what when were you last stolen from
• 37:11
  what's what's your best ever run at that to be honest not not long because like i buy stuff in
• 37:18
  stores and there's a massive tax on that right i have a driver license right i like i drive a car
• 37:24
  um it's it's it's like it's really really really like actually difficult and then like it's
• 37:31
  difficult in the modern world to do this just as a single individual living right now try to do this
• 37:36
  as a business yeah like try to feed a family right try try to feed 30 employees and and like
• 37:44
  building goods and services without being stolen from it's basically impossible and that just shows
• 37:50
  you how dire the situation is like we can't build a pencil without theft how sad is that right and
• 38:00
  And why is that?
• 38:01
  It's deeply perplexing that humans are just so used to stealing from each other.
• 38:08
  And it makes me sad.
• 38:10
  I think the big problem there is I don't think people understand your definition of theft.
• 38:16
  I think there would be people in Normie world that would not consider a lot of the things they do as theft,
• 38:23
  even though I think they should.
• 38:24
  And I don't know how you turn that around.
• 38:26
  This isn't a five-year problem.
• 38:28
  This is a hundred-year problem.
• 38:29
  Yeah, this is a multi-generational thing.
• 38:33
  And Ludwig von Mises emphasized just the power of ideas.
• 38:37
  Ideas are incredible because with the right ideas, we do the right things.
• 38:43
  And with the wrong ideas, we do the wrong things.
• 38:46
  And for a long time, especially in the last hundred years or so,
• 38:49
  wrong ideas were proliferated as the truth.
• 38:53
  And that leads to so much pain and suffering.
• 38:55
  And that's why it's important to write books, to do podcasts, to tell people about good and useful ideas and to try to win in this marketplace of ideas to make people realize that some of their world set and mind view is not really proper, not right, not good.
• 39:19
  And yeah, that's hard work.
• 39:21
  what do you think of the state of bitcoin privacy right now because obviously like we saw what
• 39:28
  happened with uh bill and kione samurai devs um there's been like a big resurgence of zcash
• 39:34
  pumping online like i think that's a lot of the silicon valley vcs but like that that narrative
• 39:39
  is growing that bitcoin doesn't have good enough privacy and therefore people should be using zcash
• 39:42
  like what's your overall take on it um the the problem of bitcoin is is bitcoin privacy is
• 39:49
  architectural. In order to receive Bitcoin and to validate that you actually got Bitcoin,
• 39:55
  you need to validate and look at every other transaction that came before you from everyone
• 39:59
  else on the planet for the history of Bitcoin. That's a stupid design. It's a non-private design.
• 40:06
  You cannot make a Bitcoin transaction without telling the entire world about the transaction.
• 40:12
  And that's the limit of the privacy. You have to reveal yourself in order to use the system.
• 40:17
  And that sucks right There two major solutions to it fundamentally on the blockchain layer The first is CoinJoin where we create transactions together rather than alone
• 40:34
  And that increases the size of the crowd.
• 40:37
  And all of a sudden it becomes very difficult to see where the input's going to which outputs.
• 40:42
  That's CoinJoin, it's Wasabi Wallet.
• 40:45
  It's a solved problem.
• 40:45
  Like with Wasabi 2.0 and the Wabi Sabi protocol, you get fantastic privacy on-chain.
• 40:51
  And it works.
• 40:52
  And it's easy.
• 40:52
  It continues to work.
• 40:53
  It's super easy.
• 40:54
  It's automated.
• 40:55
  Very little mental transaction costs and mental friction.
• 40:58
  So that's a solved aspect.
• 41:01
  The second solution is to swap histories.
• 41:05
  If I have a coin with a certain transaction history and you have a coin with a different transaction history,
• 41:10
  we can atomically swap the coin so that I end up having your transaction history and you end up having mine.
• 41:15
  And if we keep doing this often enough, then all of the analysis of the blockchain becomes meaningless
• 41:20
  because we never know if a transaction stayed with the person or if it's swapped to someone else.
• 41:25
  And ultimately, the Lightning Network is a coin swap network.
• 41:28
  They also moved the swaps off-chain, which is another fantastic benefit.
• 41:33
  You can make a Lightning transaction without the entire world having to see it.
• 41:37
  And so that also solves the fundamental problem itself.
• 41:40
  So we have two incredible solutions like CoinJoin for on-chain transactions.
• 41:46
  There's also some research and work in progress on coin swaps on the blockchain.
• 41:50
  But we have a fantastic coin swap network in the Lightning Network, which is also faster, cheaper, and so on.
• 41:56
  So two fantastic solutions.
• 41:58
  In the long run, what I'm most excited about and where I think long-term the privacy of Bitcoin will head
• 42:04
  is with a concept called shielded client-side validation.
• 42:08
  RGB is an instantiation of client-side validation.
• 42:11
  It basically means that instead of everyone having to validate every transaction, only the receiver has to validate the transaction history of the sender.
• 42:21
  So it's a client-side validation rather than global consensus validation that Bitcoin is currently.
• 42:26
  And recently a couple geniuses found out how we can add zero-knowledge proofs in these things.
• 42:32
  so that even the receiver of a coin does not learn the transaction history of the sender.
• 42:38
  But he can validate in zero knowledge that it is a valid coin
• 42:43
  with a valid history or chain of signatures without any inflation.
• 42:49
  So the receiver can validate all of these things that we need to validate
• 42:52
  in order to move Bitcoin properly without learning anything about it.
• 42:56
  And this is like BitVM roll-up stuff?
• 42:58
  So, no. Shielded CSV is a second layer accounting mechanism.
• 43:03
  A little bit like the Lightning Network.
• 43:06
  The real problem is how do we get the Bitcoin from the base layer into the second layer
• 43:12
  and out of the second layer back into the base layer trustlessly without any single party or consortium.
• 43:19
  And that was the original vision of the Blockstream research group that worked on sidechains.
• 43:24
  How do we get this trustless two-way peg, they called it?
• 43:27
  How can we get out of the blockchain and back into the blockchain without a trusted third party?
• 43:32
  And in order to do this, we need something like BitVM or changes to the Bitcoin consensus protocol.
• 43:39
  But the cool thing is there's now like four or five really theoretical cryptographic research teams that are trying to solve this two-way peg problem.
• 43:47
  As soon as we have that solved, Bitcoin's scalability and privacy is solved forever.
• 43:52
  I think. Because then we will just
• 43:55
  pack out of the slow, expensive
• 43:57
  and non-private
• 43:59
  base layer into a second layer
• 44:01
  accounting system, similar to Lightning
• 44:02
  but with way better privacy guarantees
• 44:05
  than Lightning. With even way better privacy
• 44:07
  guarantees than Zcash.
• 44:08
  For Zcash, you still have to
• 44:11
  validate every transaction in
• 44:13
  a zero knowledge proof.
• 44:14
  With the shielded client
• 44:16
  side validation, the full nodes
• 44:19
  don't have to validate anything. They don't
• 44:20
  have to validate signatures, they don't have to validate spending conditions, they just
• 44:25
  validate proof of work and they collect a set of accumulators or nullifiers, just large
• 44:31
  numbers that you put in a database.
• 44:34
  That's basically it.
• 44:36
  So you can do some really powerful stuff with this.
• 44:39
  And over the last couple of years, we've not only improved the second layer accounting
• 44:43
  privacy, again, shielded CSV is kind of the pinnacle of what we have so far.
• 44:47
  We've also found ways of doing these two-way pegs without having to change the Bitcoin consensus model.
• 44:53
  So I'm extremely bullish on this.
• 44:57
  And funny that you bring up Zcash because I haven't really verified,
• 45:01
  but just recently Zcash found some bug in their shielded private payment pool.
• 45:09
  And so they just made a hard fork or the miners stopped mining transactions in this pool.
• 45:15
  So Zcash is a cool research project
• 45:18
  and they've done some amazing cryptographic work.
• 45:20
  But it's not really a decentralized money system
• 45:22
  if someone can flip the finger
• 45:24
  and transactions are no longer happening.
• 45:28
  So if you have money in the industry that pooled
• 45:30
  and we're using Zcash anonymously,
• 45:32
  right now you cannot spend them anymore.
• 45:34
  I mean, that kind of sucks.
• 45:35
  That definitely sucks.
• 45:37
  So we need systems that are not just anonymous
• 45:40
  but also unstoppable.
• 45:41
  And it seems that Bitcoin has successfully done the unstoppable part.
• 45:46
  And it's already almost impossible to build unstoppable systems.
• 45:51
  It's already almost impossible to build anonymous systems.
• 45:55
  But to build unstoppable and anonymous systems, that's like the holy grail.
• 46:00
  And it's no wonder that it's taken us so long.
• 46:03
  It's literally at the edges of human consciousness and computer science.
• 46:07
  and we just need to fail a million times
• 46:11
  before we will find the one nugget that makes it work.
• 46:14
  That's the most bullish I've heard you
• 46:16
  on Bitcoin privacy ever, I think.
• 46:18
  Because I think last time we spoke was quite a while ago.
• 46:22
  I can't remember where we were hanging out,
• 46:23
  but you were talking about,
• 46:26
  this would have been before
• 46:27
  all this new novel stuff would come out,
• 46:30
  but these systems at the time were not failing,
• 46:33
  but they were being stopped.
• 46:35
  Like when the Samurai developers got put in jail and I know like Wasabi removed themselves from the US, that felt like a huge step backwards.
• 46:42
  This feels like a giant leap forwards.
• 46:45
  Yeah.
• 46:45
  Yeah.
• 46:46
  The downside is, again, with CoinJoin specifically, we made Bitcoin anonymous.
• 46:53
  We did not inherently make the anonymizing technology unstoppable.
• 46:58
  Right.
• 46:58
  In its single instantiation.
• 47:02
  Like CK Snacks, the company who created Wasabi, shut down.
• 47:06
  Shut down their services and that coin join coordinator stopped working.
• 47:11
  But in a sly roundabout way, the code is open source.
• 47:15
  Always has been.
• 47:16
  The ideas have been created, the code was created and ideas are bulletproof.
• 47:21
  And as long as there are courageous people that will continue running the software,
• 47:26
  both on the operator as well as the user side, it will continue to work.
• 47:29
  and we see now that coin join volumes are higher than before.
• 47:34
  So there are always going to be some people
• 47:38
  who care about this so much
• 47:39
  that they will make sure that it keeps running.
• 47:42
  The question is, can we design these systems
• 47:46
  so that there isn't even a single operator in the first place?
• 47:49
  And this is also something with BitVM.
• 47:52
  There are probably, it depends on the nuances,
• 47:55
  but there are probably going to be operators
• 47:56
  of these two-way bridges.
• 47:58
  and they will be the choke point of the future.
• 48:02
  And the sad story of the cypherpunks
• 48:06
  is that they've built incredible ideas,
• 48:09
  powerful code,
• 48:10
  but they're just humans and they can be killed.
• 48:13
  And they have been kidnapped, tortured and killed
• 48:16
  for decades.
• 48:18
  And that war is ongoing
• 48:19
  and people will continue to sacrifice their lives
• 48:22
  in order to make these tools a reality.
• 48:25
  and that just shows you how much these people believe in it right there's really something
• 48:30
  there for martyrs to like they do it for a reason and maybe you should look into the reason
• 48:36
  why people are willing to sacrifice themselves for the the broader good of humanity it's fucking
• 48:44
  awesome man um before we move on to something else i want to talk about what else in the book
• 48:49
  are the things that because i know it sucks i've not read this before we're doing this but like
• 48:52
  What else should we be getting into?
• 48:55
  So the first part of the book really is about the economics.
• 49:00
  The second part of the book is about the implementation.
• 49:06
  Maybe a couple more interesting words about the economics.
• 49:09
  Because there are three core concepts that I think you have to really understand
• 49:14
  in order to appreciate the full spectrum of freedom and especially of privacy.
• 49:20
  And those are the starting points, the axioms, the things that are self-evident to a large extent.
• 49:29
  And this is the methodology of the Austrian school.
• 49:33
  The Austrians are special because they have a different way of thinking about economic problems.
• 49:39
  Different than the Keynesians, different than the historicism school, different than the Chicago school.
• 49:44
  And I think it is an incredibly useful way of thinking about the problem.
• 49:49
  And so Ludwig von Mises came up with the first axiom that's covered in the book.
• 49:53
  And that's the action axiom, which is kind of obvious if you frame it this way,
• 49:58
  but it's really hard to come up with that frame in the first place.
• 50:02
  But it basically says that humans have problems and we try to fix them.
• 50:07
  That's ultimately what human action is.
• 50:11
  Mises would say that we live in a state of uneasiness and that we have an uncertain future.
• 50:17
  And we have means, we have resources, we have goods, our body, our time, our home, our wood, our meat, etc.
• 50:28
  And now the question is how do we allocate our scarce resources such that we will solve our problems in the future?
• 50:36
  And that is what action is all about ultimately.
• 50:39
  and the entrepreneurial spark,
• 50:43
  the creative idea of figuring out
• 50:45
  what will be the problems in the future
• 50:47
  and how do we allocate our resources today
• 50:49
  in order to fix them in the future.
• 50:52
  And not only for you yourself,
• 50:55
  but also for others.
• 50:56
  And that's why entrepreneurs and businessmen are heroes
• 50:59
  because they don't just solve their own problems,
• 51:02
  they solve other people's problems.
• 51:04
  And that's why they deserve recognition and reward.
• 51:07
  But ultimately this all comes down to action itself, to analyze the consequences of human action.
• 51:17
  I kind of like to think of psychology talks about the reason why we act in certain ways.
• 51:25
  And economics is about, regardless of why we act that way, what are the consequences of these types of actions?
• 51:34
  So a very praxeologically rigorous sentence is that the minimum wage leads to unemployment.
• 51:42
  And that is true.
• 51:44
  And there is a very obvious logical chain of reasoning that gets you from human action to minimum wage leads to unemployment.
• 51:53
  We should go through that chain.
• 51:55
  So basically, humans act.
• 51:58
  So we have problems.
• 51:59
  We want to live in a house and not be out in the rain.
• 52:04
  No, we're doing minimum wage, not price controls.
• 52:06
  So, okay, we want to produce a dinner, you know, to not be hungry anymore.
• 52:13
  And so that's our goal, right?
• 52:15
  Create food, not be hungry.
• 52:17
  Now we have our resources, you know, some flour, some salamis, cucumbers, whatever.
• 52:26
  And we want to make a sandwich.
• 52:29
  We need labor to produce anything, right?
• 52:32
  So we need to get someone to build it for us.
• 52:35
  We also need ideas.
• 52:38
  You could have all of the natural resources that you want.
• 52:40
  If you don't know how to use them, you will not be able to solve any of our problems.
• 52:44
  So ideas are part of the means of production that are needed.
• 52:50
  And now we want to allocate our scarce resources and transform them into a consumption good.
• 52:58
  So there are production goods that are the things that will later produce the consumption goods.
• 53:04
  And consumption goods are the things that we destroy in order to solve our problems.
• 53:07
  After I eat the sandwich, it's gone.
• 53:10
  But I'm no longer hungry.
• 53:12
  So ultimately, humans consume stuff.
• 53:15
  We destroy stuff to make us happy.
• 53:18
  And first we need to produce and create the things that we will later destroy.
• 53:23
  And now the trick is to be able to produce things very efficiently.
• 53:28
  if it's if it's if it's inefficient to produce something right then it it doesn't make sense to
• 53:34
  do again if it takes you 10 bitcoin to produce something that you can sell for one bitcoin no
• 53:40
  one's gonna do it no one's gonna do it right and so the problem of a minimum wage is that it increases
• 53:47
  the cost of production to more than what people would voluntarily be paid for right let's say you're
• 53:54
  to stick with this example, you want to produce the sandwich,
• 53:56
  you know you can sell the sandwich for one Bitcoin.
• 54:00
  That's what the people are willing to pay for.
• 54:02
  And let's say it costs you 0.5 Bitcoin
• 54:05
  to get all of the raw materials together.
• 54:08
  And let's say it would cost you 0.3 Bitcoin
• 54:10
  to hire the person to put it together.
• 54:15
  So your cost of production are 0.7 Bitcoin
• 54:17
  and your revenue would be one Bitcoin.
• 54:20
  So you make 0.3 Bitcoin profit.
• 54:23
  You're going to do it.
• 54:24
  Like 30 million sats, that's a lot of sats.
• 54:27
  Like I'll happily sell you the sandwich for that.
• 54:29
  Now what if the state comes and says,
• 54:32
  you are not allowed to hire someone for 0.3 Bitcoin.
• 54:37
  You can only hire them if you pay them double, 0.6 Bitcoin.
• 54:41
  Now this is a triangular intervention, as Rothbard would have said it.
• 54:45
  The state, or anyone, comes to you and coerces you
• 54:49
  under the threat of violence that you are not allowed
• 54:51
  to do a business with someone else.
• 54:54
  So Alice and Bob are not allowed to work together unless Alice pays Bob 0.6 Bitcoin instead of 0.3.
• 55:02
  Which, you know, at first glance sounds great.
• 55:05
  Like Alice, Bob is going to get more money.
• 55:07
  This is awesome.
• 55:08
  Why not?
• 55:08
  We want the workers to make a lot of money.
• 55:10
  But the problem is now we've increased our costs from 0.7 Bitcoin to 1.1 Bitcoin.
• 55:18
  So all of a sudden we're no longer profitable.
• 55:22
  We have to spend more than one Bitcoin,
• 55:26
  like one and a half Bitcoin, whatever,
• 55:27
  in order to produce the thing
• 55:29
  that the people will only buy from us voluntarily
• 55:32
  at one Bitcoin.
• 55:33
  Nobody is willing to buy it from us
• 55:35
  at 1.5 Bitcoin.
• 55:37
  So I would lose money if I offer the good.
• 55:41
  So what will I do?
• 55:43
  I will not hire Bob.
• 55:44
  Or increase the price.
• 55:45
  I could increase the price,
• 55:47
  but then they would not buy it.
• 55:48
  So I wouldn't have the customers.
• 55:49
  and so I just simply cannot afford to hire Bob anymore.
• 55:54
  So I have to let him go.
• 55:55
  I have to shut down my business.
• 55:57
  So it leads to unemployment
• 55:59
  because it increases the cost of productions
• 56:01
  higher than it otherwise would have been.
• 56:03
  And Bob might be willing to work for 0.3 Bitcoin.
• 56:05
  And that's the thing, right?
• 56:07
  Bob is happy.
• 56:08
  Bob wants to have the 0.3 Bitcoin.
• 56:10
  Again, 30 million cents is a lot of cents.
• 56:12
  I would do a lot of things for 0.3 Bitcoin,
• 56:15
  especially build a sandwich.
• 56:16
  so like that's that's the problem with with intervention is that alice and bob were happy
• 56:21
  before like if bob wouldn't have wanted to work for 0.3 bitcoin he wouldn't have done it right
• 56:27
  as long as alice didn't force him right as long as bob is not a slave and he's voluntarily choosing
• 56:33
  to work with alice both are happy do you think it's like a lack of understanding of second and
• 56:39
  third order consequences because like the reason that i think people are constantly trying to
• 56:44
  increase the minimum wages, because it feels good to be like, you should get more money.
• 56:48
  Are feelings getting in the way of actual economics?
• 56:51
  Yeah, absolutely. Absolutely. There's a fantastic book by Perel Biden called The Seen,
• 56:56
  the Unseen, and the Unrealized, which talks exactly about this. You know, and the classic
• 57:02
  example is the broken window fallacy. Yeah, you should explain that because people won't
• 57:05
  know exactly what it is. So if, you know, you have a butcher, he has a shop, right? The shop
• 57:13
  has a window and some hooligan comes along and throws a stone through the window, breaks
• 57:18
  it.
• 57:19
  The first obvious analysis of this is, well, that's great because Alice has a glassmaking
• 57:25
  shop.
• 57:25
  She makes windows.
• 57:27
  And now she's going to get some money.
• 57:27
  Oh, she's got some money.
• 57:28
  Like she has a job, right?
• 57:29
  She has a new customer that she otherwise wouldn't have.
• 57:32
  Alice is going to get rich because Bob will have to buy a new window from Alice.
• 57:37
  And that's, you know, that's again, like if we increase the minimum wage, people get more
• 57:42
  money.
• 57:42
  Isn't that great?
• 57:43
  But the problem is the unseen, right?
• 57:47
  The things that require a couple extra steps of analysis is that Bob, the butcher who now has a broken window, he had some savings.
• 57:54
  And his plans with his money, his capital was to take his daughter on a vacation.
• 58:00
  That is the thing that he was planning to spend the money on later.
• 58:04
  but now all of a sudden because the window was broken when it was working perfectly fine before
• 58:10
  he has to reduce the spending for the vacation in order to buy the window so the unseen aspect is
• 58:18
  that bob and his daughter will not have a fun time and charlie who is running the hotel that bob would
• 58:25
  have spent the money on is now not getting the money right so we're reallocating the money away
• 58:31
  from Bob and Charlie, who would have traded voluntarily,
• 58:34
  towards Bob and Alice, and Alice gets paid
• 58:38
  for something that was working perfectly fine before.
• 58:42
  This is the whole weird statist argument
• 58:45
  that going to war is great for the economy.
• 58:48
  Yeah, crazy.
• 58:50
  Which is wild.
• 58:51
  We're producing things, and then we're destroying the things
• 58:55
  in order to destroy other things.
• 58:56
  Bombs are expensive to produce.
• 58:58
  right and like we just destroy the bombs by definition of it blowing up and then we also
• 59:04
  destroy the houses and the equipment of the enemy right so it's a we produce stuff so that we can
• 59:10
  destroy a lot of stuff and somehow that's supposed to make us rich it makes no sense it makes absolutely
• 59:15
  no sense right unfortunately it's very very very common misunderstanding and because people think
• 59:21
  that people working in the factories building the bombs they're getting paid that's the thing it's a
• 59:25
  resource shift.
• 59:28
  Like the resources get allocated
• 59:29
  away from the peaceful people
• 59:31
  towards the military industrial complex.
• 59:34
  The people
• 59:35
  who produce the bombs, they get rich.
• 59:37
  And let's be honest, all these countries are running at a deficit.
• 59:39
  That money is being created and making
• 59:41
  everyone else poorer in the meantime as well.
• 59:43
  Exactly. Yes.
• 59:44
  And that's the same thing with the state.
• 59:47
  The state is exclusively funded by
• 59:49
  theft. Like definitionally.
• 59:51
  There's taxation and there's inflation.
• 59:53
  Those are the two ways that the state gets his money.
• 59:55
  Ultimately.
• 59:56
  And so anything the state spends money on is stolen from people.
• 1:00:01
  And the sad thing of theft is that it decreases the value of the society.
• 1:00:08
  And on the flip side, the beauty of free exchange is that by definition, it makes both parties better off.
• 1:00:16
  If you have a sandwich and I have a steak and I would prefer to have the sandwich and you would prefer to have the steak, then we can trade.
• 1:00:23
  and afterwards both of us are happier than before.
• 1:00:26
  That's why we did the trade
• 1:00:27
  because we thought that we'll be better
• 1:00:29
  after the trade than before.
• 1:00:31
  That's why we voluntarily did it.
• 1:00:32
  So by definition, with every trade,
• 1:00:35
  everyone is better.
• 1:00:37
  And on the flip side,
• 1:00:38
  if I have the steak and you have the sandwich
• 1:00:41
  and I have also a $5 wrench and I hit you
• 1:00:44
  and I take away the sandwich,
• 1:00:47
  now you have nothing plus a lot of pain.
• 1:00:49
  You're happy.
• 1:00:50
  I'm very happy.
• 1:00:51
  But you're not.
• 1:00:52
  And you're probably less happy than I'm more happy.
• 1:00:57
  So we've destroyed something.
• 1:01:00
  And obviously, obviously, right?
• 1:01:02
  Theft destroys things.
• 1:01:04
  War destroys things.
• 1:01:06
  Breaking windows destroys things.
• 1:01:08
  It's the intuitively obvious,
• 1:01:10
  it should be common sense that that's a bad idea.
• 1:01:13
  Is part of that down to like the broken window fallacy,
• 1:01:16
  down to the discounting of the use of savings,
• 1:01:19
  like saving money is using money.
• 1:01:21
  Is that discounted and the idea of speed of money moving around an economy over-indexed?
• 1:01:28
  Exactly.
• 1:01:29
  That's one of the Keynesian fallacies, is that saving money is a bad thing and spending it is good because it pushes up the GDP and the higher GDP is better.
• 1:01:37
  That's, again, a very short-term thinking.
• 1:01:40
  Because without savings, you cannot produce anything.
• 1:01:44
  Every production requires saving.
• 1:01:47
  It doesn't matter what it is.
• 1:01:48
  it's again a definitional argument of you cannot produce without having saved resources that you
• 1:01:54
  use in order to produce stuff right obviously and and so if we decrease savings we will produce less
• 1:02:01
  if we increase savings we will produce more eventually and that goes back to time preference
• 1:02:08
  as well the reason why people save basically to save means you know you have five ribeyes in in
• 1:02:15
  the freezer and instead of eating all of the five ribeyes today which you know would satiate you
• 1:02:20
  instantly you degrade you you delay your gratification so so that you go hungry today
• 1:02:25
  and so that you can have food for the next couple days so the more you save the more you are
• 1:02:32
  actually delaying the the satisfaction of things and that is ultimately what what makes us richer
• 1:02:38
  is to not consume and consume and consume,
• 1:02:42
  but to think ahead for the future
• 1:02:44
  and to save our resources today,
• 1:02:47
  to consume less today
• 1:02:48
  so that we and our children and grandchildren
• 1:02:51
  will have more stuff
• 1:02:52
  that they can build greater projects with.
• 1:02:55
  GDP is obviously like a nonsense metric,
• 1:02:58
  but it's the metric that everyone uses
• 1:02:59
  to sort of judge economies against each other,
• 1:03:01
  judge your own economy against previous years.
• 1:03:04
  Like what would the Austrians say you should use for that?
• 1:03:06
  Like how do you measure the economy?
• 1:03:09
  You shouldn't measure the economy ultimately.
• 1:03:13
  Like it's a methodological difference.
• 1:03:16
  And more I mean you can obviously but as soon as you create a metric then people will try to optimize for that metric And so it creates the incentive you don want to see
• 1:03:27
  Exactly.
• 1:03:28
  Yes.
• 1:03:29
  So you, I guess you should count for like problem solved, right?
• 1:03:34
  Number of trades is a somewhat decent metric, right?
• 1:03:37
  Number of voluntary trades should go up.
• 1:03:40
  Cost of goods?
• 1:03:41
  Yeah.
• 1:03:41
  Cost of goods or prices are kind of the result of a whole bunch of trades happening.
• 1:03:46
  And if we can decrease our prices, that means we can solve more problems ultimately, right?
• 1:03:51
  Because with less capital, we can solve the problem.
• 1:03:54
  And that means we have capital left over to solve the next problem.
• 1:03:57
  So yeah, probably decreasing prices is an interesting metric.
• 1:04:00
  Prices are so powerful because that was one of the genius starting points of the Austrian economic tradition by Karl Menger,
• 1:04:08
  is that the value is not in the good itself.
• 1:04:11
  The value is in the minds and hearts of individuals.
• 1:04:14
  This was a fallacy that goes back to the ancient Greeks,
• 1:04:17
  continued through with Adam Smith,
• 1:04:19
  and then later very much made deadly by Karl Marx,
• 1:04:23
  that value is in the thing itself.
• 1:04:25
  It's what they all believed in.
• 1:04:27
  And if you really believe in that and you think it logically through,
• 1:04:30
  then communism is the only logical way.
• 1:04:33
  But the problem is that value is not in the goods.
• 1:04:36
  Value is in your heart.
• 1:04:38
  You value something because it helps you.
• 1:04:41
  and you value the same thing different depending on the circumstances.
• 1:04:45
  If you're in the desert and you're starving for water
• 1:04:48
  and you haven't drunk for the whole day
• 1:04:50
  and someone offers you a tiny cup of water.
• 1:04:53
  I'll give you a Bitcoin for it.
• 1:04:55
  Take whatever you want, right?
• 1:04:57
  The little bit of water will have an unmeasurable amount of value.
• 1:05:01
  Well, if you're sitting at a fresh spring river
• 1:05:04
  and someone comes with a plastic bottle of water,
• 1:05:07
  you're like, no, thank you.
• 1:05:09
  I have a fresh spring water here.
• 1:05:10
  I don't value this water at all.
• 1:05:13
  So the same thing for the same person
• 1:05:15
  at different scenarios
• 1:05:15
  has immensely different values.
• 1:05:19
  But the thing is,
• 1:05:23
  we can't really put a number on value.
• 1:05:27
  Value is subjective and value is ordinal.
• 1:05:30
  Meaning I can say that I prefer steak over a sandwich.
• 1:05:34
  I'm not a big fan of bread,
• 1:05:35
  so I prefer just the meat.
• 1:05:37
  but I can't really say that I like steak
• 1:05:41
  five times more than sandwich
• 1:05:42
  you can't even say that you like steak
• 1:05:45
  every time more than sandwich
• 1:05:46
  exactly right
• 1:05:47
  and so then the question is
• 1:05:50
  what is the value of things
• 1:05:51
  that's a useful thing to know
• 1:05:53
  in order to allocate our resources
• 1:05:55
  because you could build your house
• 1:05:58
  out of pure gold
• 1:05:59
  that's an option
• 1:06:01
  not for me
• 1:06:03
  or you could build it out of wood
• 1:06:06
  So what should you choose?
• 1:06:08
  And the thing is, again, costs of things versus the value that we get out of them.
• 1:06:13
  If we build stuff that costs way more than what we get out of, then we're not profitable.
• 1:06:18
  We're making a loss and we'll just get poorer.
• 1:06:20
  So if we would all build our houses out of insanely valuable things like gold, then we would get poorer and poorer and poorer.
• 1:06:28
  So we need to find a way that we can make the decision of should I use gold or should I use wood?
• 1:06:32
  and the price is what helps us make this decision.
• 1:06:37
  The price puts an actual number on the value of things.
• 1:06:42
  It's not an exact representation of the value,
• 1:06:45
  but it is like at what price the two people voluntarily agree
• 1:06:49
  to exchange the good with each other.
• 1:06:51
  And that's why prices are so fundamentally important
• 1:06:55
  because it helps us to allocate our resources efficiently
• 1:06:59
  so that instead of destroying stuff,
• 1:07:02
  we create more stuff over time,
• 1:07:03
  which makes us richer
• 1:07:04
  and solves more problems in the long run.
• 1:07:07
  And that's fundamentally why socialism
• 1:07:09
  and communism doesn't work.
• 1:07:11
  Because what socialism is,
• 1:07:12
  is the abolition of private property.
• 1:07:15
  You are no longer allowed to own resources.
• 1:07:18
  The collective owns the resources,
• 1:07:20
  whatever that means, by the way.
• 1:07:21
  But the problem, if you don't have ownership,
• 1:07:25
  then you cannot trade.
• 1:07:26
  Because trading means to exchange ownership.
• 1:07:29
  And with a trade, we get a price.
• 1:07:32
  And so if you don't own things, you cannot trade things, you don't have a price,
• 1:07:36
  then you don't know how to allocate resources.
• 1:07:38
  You don't have a number to put on the value of things.
• 1:07:42
  And that's why every time socialism was tried, people starved to death
• 1:07:46
  because we've destroyed all the food, literally.
• 1:07:50
  It's a dire, dire situation.
• 1:07:52
  And that's why today's world is a little bit messed up
• 1:07:54
  because we're living in socialism.
• 1:07:57
  Yeah. I mean, we're in Oslo.
• 1:07:58
  especially in Oslo but but that means we we simply don't know the value of things anymore
• 1:08:04
  yeah and that means that we're tricked into spending more than we otherwise would have
• 1:08:09
  and in consuming more than we otherwise would have and in not building the things that we
• 1:08:13
  actually need and so we just get poorer over time and more depressed over time why does putting the
• 1:08:18
  value in the thing lead to communism um because uh let's say i have the stake and and i have the
• 1:08:27
  and you have the sandwich, right?
• 1:08:30
  And the value would be like objective in the thing.
• 1:08:34
  Let's say the steak is worth seven
• 1:08:35
  and the sandwich is worth five.
• 1:08:38
  Then if we trade, you win while I lose.
• 1:08:43
  Whereas in the other scenario, we both win
• 1:08:44
  because that's just what we want.
• 1:08:45
  Exactly.
• 1:08:46
  But why does that lead to communism?
• 1:08:49
  Because then if one person always loses in a trade,
• 1:08:53
  then we shouldn't trade.
• 1:08:53
  No one trades, I see.
• 1:08:54
  Right?
• 1:08:55
  It's a bad thing to trade
• 1:08:56
  if you know that one guy is winning over the other.
• 1:08:59
  That's why theft is bad, right?
• 1:09:01
  For the exact same argument,
• 1:09:02
  one guy wins, the other guy loses.
• 1:09:04
  We shouldn't do that.
• 1:09:06
  And so if value is in the thing,
• 1:09:08
  the logical conclusion is you should not trade.
• 1:09:11
  You should not even own anything then.
• 1:09:12
  I'll eat the sandwich that I don't want
• 1:09:14
  and you'll eat the steak you don't want
• 1:09:15
  and we'll pretend to be happy.
• 1:09:17
  Exactly, yes.
• 1:09:19
  So does it surprise you that we're seeing
• 1:09:22
  like quite a big rise in socialism
• 1:09:24
  and like outright communism?
• 1:09:25
  Like the communist parties like in the UK
• 1:09:28
  are definitely gaining traction.
• 1:09:30
  Like the outright communist parties that are,
• 1:09:33
  like, does that surprise you?
• 1:09:34
  Because when I look at that,
• 1:09:35
  I think most of these people
• 1:09:38
  are naively seeing the problems in the world
• 1:09:40
  that we've talked about this entire show
• 1:09:42
  and then just picking the wrong solution.
• 1:09:44
  Again, I think because feelings are way over indexed
• 1:09:47
  in all of this stuff.
• 1:09:48
  But like, does that make sense that that's growing?
• 1:09:51
  Absolutely.
• 1:09:52
  Again, Ludwig von Mises wrote a fantastic book on this
• 1:09:55
  called the middle of the road leads to socialism.
• 1:09:58
  And socialism being the abolition of private property,
• 1:10:01
  which is an instantiation of communism.
• 1:10:03
  So the problem is, if we start introducing price controls,
• 1:10:08
  just on milk, milk should be like,
• 1:10:11
  the farmers should get a decent price for their milk.
• 1:10:14
  So we're putting a minimum price on milk,
• 1:10:19
  which means that people are no longer able to buy the milk
• 1:10:23
  because they are not,
• 1:10:27
  or let's do the other way,
• 1:10:29
  let's say a maximum price on something.
• 1:10:31
  Let's stick with the maximum price on houses.
• 1:10:35
  So now we have a maximum price.
• 1:10:38
  Entrepreneurs can no longer charge more,
• 1:10:40
  which means they will produce less
• 1:10:41
  because they cannot produce the thing profitably.
• 1:10:48
  And now people lack houses.
• 1:10:51
  And so the government is like,
• 1:10:52
  hey, we got to produce more houses.
• 1:10:54
  But the producers will say, hey, well, I cannot produce it
• 1:10:59
  because my costs are too high.
• 1:11:01
  And so now there are two solutions to it.
• 1:11:03
  Either we remove the maximum price on houses,
• 1:11:07
  which sounds bad.
• 1:11:09
  So let's decrease the maximum price for steel.
• 1:11:16
  And now steel is cheaper because we forced them to sell it cheaper.
• 1:11:21
  and so now we can build houses again while being profitable
• 1:11:25
  because the costs of building have decreased.
• 1:11:28
  But now the steel producers are like,
• 1:11:30
  well, okay, but now I'm no longer profitable.
• 1:11:33
  And we're going to have the same choice.
• 1:11:34
  Do we remove the price intervention or do we double down on it?
• 1:11:38
  And now the fuel prices will have a maximum thing, right?
• 1:11:41
  And so it keeps trickling down
• 1:11:43
  until we have maximum prices put everywhere.
• 1:11:46
  And that's again just a maximum price
• 1:11:49
  is the abolition of private property.
• 1:11:50
  if you are no longer allowed to trade your goods for the price that both parties agree on
• 1:11:55
  it's no longer yours it's the government's and you have to ask for permission to trade it later
• 1:12:00
  and that ultimately you know leads to more and more socialism and then on the other hand we have
• 1:12:07
  inflation right the same thing like we can increase our money supply to pay the subsidies
• 1:12:11
  to those producers so that they have extra income but that means that we've increased the money
• 1:12:17
  supply, which means prices will keep going up. And so more and more people will be poor. And so we
• 1:12:23
  need to give them more subsidies. And what are we going to do? We're going to print more money,
• 1:12:26
  right? Until we have an economic crisis. And what's the solution to an economic crisis? It's
• 1:12:31
  obviously more money printing, right? And that just keeps going and going and going. And that's
• 1:12:37
  why the middle of the road leads to socialism. Unless we put a hard stop on theft. And then
• 1:12:43
  And hopefully very quickly we will actually become profitable again as a society How do you think you change the mind of these people who think that entrepreneurs and CEOs and billionaires are evil
• 1:12:56
  into thinking, no, these are the people that are solving problems for humanity
• 1:13:00
  and they should be paid whatever the market demands?
• 1:13:03
  Well, books and ideas are one answer.
• 1:13:07
  If you pick up For a New Liberty, for example, by Mary Rothbard,
• 1:13:10
  It's a very good intro to what freedom and entrepreneurship actually is.
• 1:13:15
  It's hard to disagree with that book.
• 1:13:16
  It's really easy to read.
• 1:13:18
  But much more prevalent is experiential knowledge.
• 1:13:23
  Start a business.
• 1:13:24
  Yeah.
• 1:13:24
  I mean, there's a reason that like growth in the communist party in the UK is like out of universities.
• 1:13:30
  Because these people haven't worked yet.
• 1:13:32
  Yeah.
• 1:13:32
  Right?
• 1:13:32
  and that's in part of what really started my love for for the economy and for entrepreneurism
• 1:13:39
  was to work myself like i got my first job when i was nine a big fan of child labor by the way i
• 1:13:44
  think child labor would absolutely solve the communist problem absolutely because children
• 1:13:50
  will realize the value of working it's a beautiful thing to help others dude i've got a two-year-old
• 1:13:55
  and obviously this isn't like working but she wants to help yeah like like there's a desire to
• 1:14:01
  This is working.
• 1:14:02
  This is absolutely working.
• 1:14:04
  Like cleaning the stairs in the house,
• 1:14:07
  you know, vacuuming the floor.
• 1:14:08
  She wants to cook.
• 1:14:09
  She wants to put things in the bin.
• 1:14:10
  She wants to like,
• 1:14:11
  she wants to join in and do those things.
• 1:14:13
  Exactly.
• 1:14:13
  It's innate.
• 1:14:14
  And encourage her to do that.
• 1:14:16
  Yeah.
• 1:14:16
  And to keep going
• 1:14:17
  and to solve ever larger
• 1:14:19
  and more complicated problem.
• 1:14:21
  Yeah.
• 1:14:21
  And to really, really appreciate that.
• 1:14:24
  She hates the vacuum cleaner though.
• 1:14:26
  That one's way too loud.
• 1:14:28
  Well, and that's the good thing
• 1:14:29
  about division of labor, you know?
• 1:14:31
  She might not have to do the things that she doesn't like to do,
• 1:14:34
  but she has to do something.
• 1:14:36
  She can't just sit on the couch doing nothing.
• 1:14:38
  So trade.
• 1:14:40
  You will clean the floor and she can do the dishes.
• 1:14:43
  Yeah.
• 1:14:45
  It's really strange, though, seeing this growth in communism.
• 1:14:48
  And I do think it's diagnosing the problem, misdiagnosing the solution.
• 1:14:53
  And ideas like this, they're just right.
• 1:14:57
  They are right.
• 1:14:58
  But they don't hit the feels.
• 1:15:00
  And I saw an interesting chart the other day that was like, it was one line going up slowly with like four or five decision points.
• 1:15:07
  One line going down slowly with four or five decision points.
• 1:15:10
  And the one going up was like tough but correct decision.
• 1:15:14
  The one going down was felt good.
• 1:15:16
  And I feel like that's just exactly what's happening in society.
• 1:15:19
  Like we're on that downward trajectory.
• 1:15:21
  Yeah.
• 1:15:21
  And I think that's just a narrative mismatch.
• 1:15:23
  Yeah.
• 1:15:24
  Because like, you know, the truth is actually a good thing and like obviously beneficial for everyone.
• 1:15:30
  And I think that's where just the mind control of government education comes in.
• 1:15:34
  But that like PSYOP is crazy.
• 1:15:35
  Like people think it's bad to make profit.
• 1:15:37
  Yeah.
• 1:15:38
  And I don't understand what has broken their brain.
• 1:15:43
  Bad economic theory.
• 1:15:45
  Ultimately, I think.
• 1:15:46
  Like with a wrong starting assumptions, like, you know, value is in the things itself.
• 1:15:54
  The collective is more important than the individual.
• 1:15:57
  These types of starting points, if you agree with them and you take the natural conclusion, leads exactly to these problems.
• 1:16:07
  So I think it's a methodological mistake.
• 1:16:10
  And this was in Vienna.
• 1:16:13
  They had decades of debates on the proper methodology of things.
• 1:16:17
  And we no longer really do that.
• 1:16:19
  You don't get taught methodology in university anymore.
• 1:16:23
  You just get the Keynesian nonsense.
• 1:16:25
  right i mean you don't even get that a lot of places like yeah i mean maybe at university but
• 1:16:29
  it's like going through the schooling system in the uk we never learned anything about money yeah
• 1:16:33
  like i i don't understand how just running a household budget isn't like you learn about
• 1:16:39
  mitochondria but you don't learn about how to like run a budget like it's insane yeah it is
• 1:16:43
  it is like that is so much more specialized and something that not everyone will have to do
• 1:16:48
  and you just never learn about like how how you should think about finances yeah it's crazy
• 1:16:53
  maybe the actual outcome is the intended outcome maybe people not really understanding how to not
• 1:17:00
  be poor is exactly what they wanted and obedient soldiers who depend on the state for their
• 1:17:08
  survival who will do anything that the state wants just to get fed yeah because like if you're
• 1:17:15
  starving if your daughter is starving and like you will kill for her right if if you're well off
• 1:17:22
  and she's fine, you probably won't kill.
• 1:17:24
  Yeah.
• 1:17:25
  And they got really good at tricking us into killing.
• 1:17:29
  And that's sad.
• 1:17:32
  One of the things I worry about in this
• 1:17:33
  is like the TikTok brain rot,
• 1:17:35
  like seven second attention span thing
• 1:17:37
  is that like if someone hears you say
• 1:17:39
  abolish minimum wage, child labor is good,
• 1:17:42
  like they're not going to do the work
• 1:17:44
  to understand what the actual argument is.
• 1:17:46
  Because if they heard the argument,
• 1:17:47
  I think it's very hard to disagree with.
• 1:17:49
  Like, I think that's also driving
• 1:17:51
  this in the wrong direction, that people, instead, if they hear abolish all minimum wage versus
• 1:17:56
  we'll pay you more, like that's all they need to hear. There's no, there's no reason to go deeper
• 1:18:01
  for a lot of people. And I don't know how we get out of that. Yeah. That's, that's a really good
• 1:18:06
  point. And you know, like the, the, the books that really walk you through these conclusions
• 1:18:10
  are like this, this thing, like my book is small. But this, and I guess like a textbook, right?
• 1:18:16
  Because these are deep topics.
• 1:18:19
  But like Man, Economy and State is like 1,500 pages.
• 1:18:22
  This is 500.
• 1:18:23
  This is relatively short.
• 1:18:26
  No, it's like the real step-by-step reasoning just takes time.
• 1:18:30
  And to really go through all of the different methods and ways of thinking of the problem to come to an actual conclusion, it's the unseen.
• 1:18:41
  It's the extra logical steps that need to be taken.
• 1:18:44
  And then it's just a question of, I think, you're in my job of packaging this up better, making better memes.
• 1:18:52
  This is mimetic warfare, ultimately.
• 1:18:54
  And we need to get really, really good at clipping those seven seconds and condensing this information into a digestible form.
• 1:19:04
  And that has always been the struggle for ideas.
• 1:19:09
  And the propaganda has been really good.
• 1:19:12
  There are countless psychology geniuses who have thought really long and hard on how to proliferate the positive ideas of the state.
• 1:19:26
  That's what propaganda is about.
• 1:19:28
  Goebbels was a genius, an absolute genius who applied his genius for really bad things.
• 1:19:34
  And we have to apply our genius for the better things.
• 1:19:38
  Yeah. This might be impossible, but has anyone ever tried to almost run two simulations of like ever increasing minimum wages versus abolishing minimum wages and seeing what the average wage would be at the end of it?
• 1:19:52
  I'm sure they have. I would probably disagree with the methodology of it because humans are not rocks, right?
• 1:20:02
  We can make science experiments with rocks because rocks don't act.
• 1:20:06
  They just react, right?
• 1:20:08
  You let them fall, they go down.
• 1:20:11
  They always have the same acceleration when they go down.
• 1:20:14
  That's gravity.
• 1:20:15
  And we can make replicable experiments for this.
• 1:20:22
  The historicism school in early Vienna, late 19th century,
• 1:20:27
  was thinking that we can apply this same methodology
• 1:20:30
  to analyzing economics.
• 1:20:33
  We can make a study of 100 people
• 1:20:36
  and we will see how they behave.
• 1:20:39
  And then we can draw conclusions
• 1:20:41
  and predict the futures with that.
• 1:20:45
  We've tried that now for a long time.
• 1:20:47
  Basically, you're better off flipping a coin
• 1:20:50
  than relying on an economist's prediction.
• 1:20:52
  They're just not accurate.
• 1:20:54
  and that's why I value the praxeological method
• 1:20:59
  because we don't have to run these experiments.
• 1:21:02
  We just have to find good starting points
• 1:21:05
  and deduce logically from there
• 1:21:06
  and see how far we can get.
• 1:21:08
  And we can get really, really, really far.
• 1:21:12
  And the interesting thing is that we can extend this.
• 1:21:16
  So to get back to the axioms that I mentioned earlier,
• 1:21:19
  with the action axiom by Ludwig van Mises,
• 1:21:22
  we can deduce a bunch of economic thoughts.
• 1:21:26
  We can deduce a whole bunch of exchange theory,
• 1:21:29
  monetary theory, interest rate theory.
• 1:21:31
  All of this we can deduce just from human action ultimately.
• 1:21:36
  But what Mises was very careful about
• 1:21:39
  is that we cannot make normative claims.
• 1:21:41
  We cannot say that a minimum wage is bad
• 1:21:45
  and we should not do it.
• 1:21:47
  We can just say that it leads to unemployment.
• 1:21:49
  And then later in the 1980s, Hans-Herborn Hoppe introduced a second axiom to the canon, which is the axiom of argumentation, from which we can deduce moral claims.
• 1:22:04
  So he has found, and I think it's a marvelous achievement, a solution to the you cannot derive an ought from an is problem.
• 1:22:12
  Like we cannot have a logical claim on what is good and what is bad i think he has clearly shown that we can right you you cannot deny that you own yourself in an argument ultimately like now
• 1:22:25
  that we're speaking i cannot claim that i control your thoughts and still presume that we're actually
• 1:22:30
  arguing and trying to discover the truth because if i control both my brain and your brain i'm just
• 1:22:36
  talking to myself that's not really an argument right we're just agreeing with myself then so like
• 1:22:41
  I have to presuppose that you are a sovereign being with your own mind, your own thoughts, and your own capability of reason and discovering truth.
• 1:22:49
  So with this additional assumption, we can deduce what you ought to do and what you ought not to do.
• 1:22:56
  And that's why I'm so firm on theft is bad.
• 1:22:59
  Like it's not just economically stupid.
• 1:23:01
  It doesn't only make us like less rich.
• 1:23:04
  It makes us poor all the time.
• 1:23:06
  But also it's just a bad thing to do.
• 1:23:08
  because I could not actually claim that theft is a good thing
• 1:23:12
  without proving that I own myself.
• 1:23:15
  And therefore, I don't appreciate theft of my body.
• 1:23:19
  Otherwise, I wouldn't have made the point.
• 1:23:22
  And so we can, with the right methodology applied correctly,
• 1:23:25
  we can really come to much better conclusions
• 1:23:28
  than with wrong methodology,
• 1:23:32
  like trying to do science experiments with humans.
• 1:23:35
  You know, that whole idea of overpopulation is bad and we'll just run out of resources comes from exactly this thing, right?
• 1:23:43
  Of we can make an experiment in like a Petri dish and we have like a certain amount of resources and sugars and then we add a fungus into it.
• 1:23:51
  And eventually the fungus will spread and all the resources are gone and then the fungus dies.
• 1:23:56
  So therefore we should kill humans to decrease the population so that we will survive longer.
• 1:24:00
  Like, I mean, it sounds ridiculous, but countless people think like this, right?
• 1:24:05
  Crazy.
• 1:24:06
  And it's crazy, right?
• 1:24:08
  But what this experiment misses is that we humans can create more sugar, right?
• 1:24:16
  If we run out of stuff, we can just produce more of it because we are value-making machines, right?
• 1:24:22
  And we can produce things with our hands and our minds.
• 1:24:26
  And so having the wrong methodology leads to really, really dangerous conclusions.
• 1:24:30
  fuck man i feel like we should do every six months we need to do like you can give me an austrian
• 1:24:35
  economic lesson yeah yeah this has been awesome um i i only got this book two days ago from you
• 1:24:42
  so i've not read it yet but this is going to be my uh my deep reading on the way home um but thank
• 1:24:47
  you so much man this has been awesome no i really appreciate it is there anything that we've not
• 1:24:51
  talked about that you want to today we'll definitely do this again though yeah we have to
• 1:24:55
  I guess one aspect that's also at the very core of the book
• 1:24:59
  is that ownership of information is a horrible idea.
• 1:25:05
  It's one of those root problems that humanity has
• 1:25:08
  is that we think we can own ideas.
• 1:25:11
  And ownership means to be able to stop other people from using it.
• 1:25:15
  It's the IP rules.
• 1:25:16
  It's the IP rules, exactly.
• 1:25:19
  This is so stupid.
• 1:25:21
  Like, tremendously stupid on many levels.
• 1:25:24
  um god gave us ideas that are non-scarce the words that i'm speaking now i can give them to
• 1:25:33
  you i can give them to a million people in the audience hopefully let's see let's see
• 1:25:37
  and the beautiful thing is i still have them yeah right i didn't have to sacrifice the sharing
• 1:25:45
  of information so there is no potential conflict over who can control and own the ideas we can all
• 1:25:53
  have them right and we need ideas to produce things right again if you're on a lonely island
• 1:25:59
  with all the raw materials that you have but you don't know how to use a screwdriver then you can't
• 1:26:05
  build anything right ideas are an essential means of production we need it in order to produce
• 1:26:11
  anything right we need it to act we need to think and to have these ideas right so the beautiful
• 1:26:18
  thing of ideas is that we can all use them at the same time once one person figures out a way of
• 1:26:23
  doing something we can all use it and that one guy doesn't lose anything which is incredible it's a
• 1:26:29
  gift and the idea of i wrote this book these patterns of words this collection of words are
• 1:26:37
  mine and if you put them on your piece of paper i will hit you and take your book away because it's
• 1:26:43
  my ideas that's so stupid because not only does it introduce a conflict where none existed right
• 1:26:51
  We didn't have the conflict over ideas, but now all of a sudden we have.
• 1:26:55
  So we've taken this abundance and put it back into the bucket of scarcity.
• 1:26:59
  When we all want to go past scarcity, right?
• 1:27:02
  We would like to have as many things that all of us could have whatever we want so that we no longer suffer.
• 1:27:07
  That would be a utopia.
• 1:27:08
  That would be paradise, right?
• 1:27:09
  And we have that paradise with ideas.
• 1:27:12
  But if we try to put it back into the box of ownership and scarcity, we're like back into the hellfire ultimately.
• 1:27:18
  And the second aspect is, not only are we reducing the beautiful abundance of ideas, also I would actually be stealing your physical paper.
• 1:27:28
  Because you worked hard to produce this paper.
• 1:27:31
  And it is the scarce resource.
• 1:27:33
  Either you have the book or the paper or I have the paper.
• 1:27:37
  We can't both have this particular edition of the book at the same time.
• 1:27:41
  That's a conflict.
• 1:27:43
  That's where ownership and property rights is the solution to a problem.
• 1:27:48
  The problem is who will be able to walk out with this book today?
• 1:27:51
  Is it you or is it me?
• 1:27:52
  It's mine, man.
• 1:27:55
  Because Amazon printed it.
• 1:27:58
  I paid Amazon to print it.
• 1:28:00
  So it was my book, but then I gifted it to you.
• 1:28:03
  And now it's no longer mine, it's yours.
• 1:28:05
  So we have a clear chain of ownership that solves the conflict of who gets to walk out of it.
• 1:28:10
  It's you.
• 1:28:10
  And I have to agree with that based on me arguing about it in the first place.
• 1:28:15
  so me trying to steal the book if you started to print it on your own is me actually taking away
• 1:28:22
  your property and claiming that you stole my ideas which i still have i still have the pdf of the book
• 1:28:29
  yeah so scarcity is at the root of property and we needed scarcity in cyberspace for money that's
• 1:28:38
  why bitcoin is such a massive achievement we've introduced scarcity in cyberspace without a trusted
• 1:28:43
  a third party. It's never existed before Bitcoin. And we've achieved that. And now we have money in
• 1:28:48
  cyberspace. And that's beautiful. But for most things in cyberspace, scarcity is a really,
• 1:28:53
  really bad idea. So this is why this book is published on the public domain. Like the PDF,
• 1:28:59
  the markdown files, the print editions, the EPUB files, all of this is available for free on my
• 1:29:04
  website. Towards liberty.com slash pop, Praxeology of Privacy. You can get it for free. Because it
• 1:29:11
  doesn't cost me anything to give it to everyone who's listening, anyone who wants it. And also,
• 1:29:16
  if you want to print it, please do like printing is expensive.
• 1:29:21
  You're doing you a favor.
• 1:29:22
  Exactly. Yeah. Like I want these ideas to flourish and to be understood by people. So if people want
• 1:29:29
  to print it, if people want to sell it, do it and like keep the money.
• 1:29:34
  That's awesome. I love that. I mean, I think everyone should read this book. I know I'm
• 1:29:39
  going to learn a lot from it uh it's funny because like when i when you like i agree with you
• 1:29:44
  wholeheartedly and like the idea of what you're saying but i know that like i also would want
• 1:29:48
  people to support you in what you've done with this and buy it as well download it free and buy
• 1:29:53
  it like i'd appreciate it too right but uh ultimately like i i have no claim of stealing
• 1:30:01
  your money if you print this book and sell it yeah right it would be kind of a nice move you
• 1:30:06
  to give some of that to me.
• 1:30:08
  But you don't have to.
• 1:30:10
  And honestly, I don't even expect it.
• 1:30:12
  If people go through the effort,
• 1:30:14
  and it's a lot of effort to print the book,
• 1:30:16
  bring it to market, tell people about it,
• 1:30:18
  manage all the customer relations,
• 1:30:20
  that's a big job.
• 1:30:21
  And people should get paid for it.
• 1:30:23
  These ideas aren't mine.
• 1:30:25
  I may have been the one to
• 1:30:28
  put them in exactly this pattern,
• 1:30:30
  but there's nothing new under the sun.
• 1:30:32
  All of that I've learned in here
• 1:30:34
  comes from other people.
• 1:30:35
  there's like 500 footnotes in this book
• 1:30:38
  you know like there is an insane amount of fantastic thinkers
• 1:30:42
  who've gone so deep into these problems
• 1:30:44
  and I'm standing on the shoulders of giants
• 1:30:45
  like I wouldn't be here without reading tons of books
• 1:30:49
  that were available for free on mises.org
• 1:30:51
  so this is just my way of giving back
• 1:30:54
  to all the free information that I could accumulate
• 1:30:57
  and you know put a little spin on it from my point of view
• 1:31:02
  but ultimately this book is a free book
• 1:31:05
  and get it for free, get it in print,
• 1:31:08
  do what you want with it.
• 1:31:09
  Make a movie, love a movie.
• 1:31:11
  It might be a hard one to find, to make a movie.
• 1:31:15
  Dude, I love you.
• 1:31:16
  Thank you for doing this, man.
• 1:31:17
  It's really, really cool.
• 1:31:18
  And I'm serious, we should do this every few months.
• 1:31:20
  And you can be my Austrian economist teacher.
• 1:31:24
  Let's do it.
• 1:31:25
  All right, thank you, man.
• 1:31:26
  This is cool.
• 1:31:26
  Thanks, Danny.
• 1:31:35
  Thank you.