#547: Balaji Srinivasan — Centralized China vs Decentralized World, The DeFi Matrix, Ascending vs...

Well, I thought we might begin with some premises, some of which were sort of predictions in the last pod. One in particular was I think I had mentioned that COVID-19 I thought of it as a military defeat for the US. And the reason I thought of it as such is because literally billions of dollars had been allocated for biodefense over a span of about 20 years since the anthrax episode in 2001 and during SARS and Ebola all of these scares happened. And so in the US in 2018 announced they had a national biodefense policy that was supposed to combat man-made and natural threats. And so there's an expectation that of the WMDs, nuclear, biological, and chemical, that the US military would have some trick up its sleeve, just like out of the movies where hard men would come in in America's time of need and step in with some magic thing. And that totally didn't happen. And when that didn't happen, that's why I said, you know, COVID-19 was a military defeat, even if it wasn't being presented that way to the American public. A big piece of the military-industrial complex or the military, whatever you want to call it, was like cardboard. It was like a pumpkin villa. It just kind of fell over with a push. And people kind of argued with me about this and they said, 'No, no, no.' You know, because it was right on the border of what you would think of as military or not since most of the folks who had been talked about publicly were the CDC and the FDA and the civilian agencies, but certainly billions had been allocated for biodefense. It was borderline. You could argue it wasn't military. You could argue I was off base there that the military was actually highly competent. But then one thing that happened six months-ish later after our podcast was the whole Afghanistan thing. And so now you had something where the US military had 20 years and $2 trillion and total air superiority and total surveillance and a local government that they had set up and a military that they had trained, local military that they had trained and handpicked and equipped and even a timeline that they had negotiated with the Taliban which it had for the most part adhered to in terms of its terms. It hadn't like fired on American troops during that process. I think it adhered to its side of it. And those are advantages that you normally don't get in a military conflict. Folks with that level of advantage, it's like a huge handicap in golf. And you know, there's that saying, right, with military things, amateurs talk tactics, professionals talk logistics. And the withdrawal showed the US military is no longer really that amazing at logistics. Also, the president and the Secretary of State Blinken said something like, 'The collapse won't happen from a Friday to a Monday.' It basically did. It was like a Monday to a Wednesday or something like that. I forget the exact days, but it happened just over a few days. And you know, Biden said there's not going to be a scene that's like the helicopter evacuation in Vietnam. And there was. And the thing is that I'm not, by the way, saying it's not a political comment really. It's basically about the decline of state capacity over the last 20 or 30 years. In many ways, in 1991, the US was the hyperpower after the collapse of the Soviet Union. It was a hyperpower, as the French put it, that could win everywhere without fighting. And in many ways, the combination of administrations over the last 30-ish years have blown maybe the biggest lead in human history. Now, rather than winning everywhere without fighting, it fights everywhere without winning. So the Afghanistan thing I think was sort of, I hate to call it a vindication because it's a very unfortunate thing especially for the Afghans who are now subject to this medieval regime, but I think that that is something which also has important ripple effects, kind of flips over a card and you kind of think there's something that's 70% probability and then it goes to 100% probability and then you think about what the consequences of that are. So that's like one quote prediction or something that came true or piece of a world model that was vindicated. Let me pause there. Get your thoughts.

Okay. All right. So, I will just kind of download content and then pause and then you know jump in. Okay.

Okay, great. So, one thing that as a meta comment that I want to do is sort of A, invite pauses certainly, B, enumerate my premises and sort of open source my thinking so that people can understand where I'm coming from and if I open source my premises and my logic come from those premises and you can at least isolate if you think I'm off base, I'm either wrong in the premises or the logic at least we start to decouple the two. So, how do I build my model? Well, what's rising? What's up? Technology, which is drones and biomedicine and robotics and AI and so on, and particularly cryptocurrency which is the new backend of all of software as we'll come to. So technology, cryptocurrency, China and India, tech and Asia are up and to the right on many different kinds of graphs. Those are words but that captures the phenomenon of literally billions of people every day moving up and to the right. Whether it's global trade or it's number of smartphones or it is the number of people doing cryptocurrencies or the progress of all that is often up and to the right. And then what is falling? The West as a percent of GDP. If you make a graph of the US and the EU's percent of global GDP that's been dropping basically for the last 40 years whereas India and China's share in particular has been rising. You know, actually as of 2019 McKinsey had a report on this. But Asia was more than 50% of GDP I believe by 2019 on certainly PPP terms and I think it's going to pass or it's already passed soon.

Purchasing power parity. It's basically like...

Yeah, that's what I believe it is. It is sort of what can the dollar buy there? What can your renminbi buy there in terms of number of Big Macs? They have an adjustment for that because some of the production costs are less. $10,000 goes a longer way in some of these countries. So Asia isn't really the future, it's a present. So what's falling? A, the West is a percentage of GDP. There's a graph by Visual Capitalist, the US share of the world economy that shows it in sort of absolute terms and then you can kind of calculate the 0 to 100% terms. So West percentage of GDP, the US military strength as we just discussed and that's a very important topic to discuss further, internal US cohesion, and also just the European percentage of the world. It was much higher in the early 1900s and now it's like on the order of 10% and so just a percentage of the world. And so if the West is declining as a percent of GDP, in terms of its relative military strength, in terms of its internal cohesion, and in terms of just raw percentage of the world, yet all of these institutions that were set up years ago kind of assume Western predominance. For example, like you know, the United Nations is the US, the UK, France, Russia, and China. I know it's only four out of five so it's a small count but that's 80% Western or at least European if you think of Russia as a European country you can argue that. Whereas there's no India, there's no Brazil, there's no Japan. And you can argue whether that actually reflects the world as it is. Certainly probably India should be there rather than France. You might say India should be there rather than the UK and EU should be there rather than France or something like that. Go ahead.

So a lot has happened this year in Chinese, American, and Indian crypto. So just to discuss that, when we were talking, a Chinese interference with the Bitcoin network was something that was TBD. It hadn't actually happened yet with Chinese crypto. What we discussed was that they might pursue, the Chinese state might for example block at the firewall level but allow mining to continue which would mean like sort of a peekaboo problem where the Chinese chain gets extended but so is the rest of the world and so on and that would be bad. But what I also said was that's like in some the worst case scenario. It's actually better and perhaps more probable that they would just ban mining entirely or go after that and they're the one state in the world that is ruthless enough and has a low enough disregard for civil liberties and contract law and all of that type of stuff for them to just be able to do that. And that is what they did. Meaning they just went after, they just said get out of China. And so if you go to blockchain.com/charts/hashrate and go to the all-time chart and look at kind of the period from May to July-ish of 2021, you'll see it drop from about 180 terahashes per second to about 80 to 90 terahashes per second. And what is a terahash? That's 10 to the 12th hashes per second, meaning 10 to the 12th attempts to solve the inequality that allows you to mine a new block of Bitcoin. So it's kind of a measure of the computational speed of the Bitcoin network and the higher that is the more secure the network because the harder it is to falsify history.

I think the fundamental thing is, we can drill into this. China is the exception to the sovereign individual thesis. India, by the way, might be the partial exception, but China is the exception to the sovereign individual thesis where they want root over everything. If it's not made in China, they look at it with suspicion. And it's funny, you know, made in China, it's sort of a play on words. If it's not, they look at it with suspicion. And that's why actually they were very early on things like the Great Firewall or social media bans. Many years before politicians were getting deplatformed from Twitter, Xi Jinping denied Facebook's attempt to come into China and instead basically they set up parallel social networks that could operate within China but which the Chinese state had root access to. They've articulated this actually explicitly. It's an interesting concept and I think it's at least, they've got some philosophical basis for it which is the doctrine of internet sovereignty. That is to say if a nation state is allowed to interdict the physical packets crossing its border then it should be able to interdict any internet packets crossing its border and they're doing like customs for that. That's how they justify the Great Firewall. By the way there's actually an article that's sort of making the rounds that folks who are listening to this probably should read on Wang Huning. Did you see this article?

W A N G H U N I N G. So, 'The Triumph and Terror of Wang Huning' at palladiummag.com. And this whole site is actually really good. But what's great about this article is first of all reading this you're like okay the depth of this is just the IQ level is frankly much higher than what you're accustomed to seeing in mainstream media because it just doesn't come from the same set of tried premises and rehash things that we usually see. So I think it's informative and the whole site is actually really good. But basically what this article is about is a guy Wang Huning who's been there over three Chinese administrations I think Jiang's, Hu's, and Xi's which is unusual.

In the government, senior, most senior levels, the seven-man standing committee. And at least what the article says is he is China's top ideological theorist and to be consistent across those three administrations it's sort of like being, a rough analogy would be like Robert Gates who is Secretary of Defense under I believe both, was he under both Bush and Obama? I think so, right? Yes, he was appointed under both Bush and Obama which is unusual. Usually political appointees get fired by the, you know, if they're appointed by the Republican they fire the new Democrat, yeah exactly, and vice versa. So sort of like that and he's been there for a while. The reason I just bring this article up is you can sort of get a sense of how much they've been conscientious about the need for state control because they saw the fall of the USSR. They saw the US move in after that. They saw that Russia actually didn't do that well. They saw the loss of control. So, they've always been about control. And what's interesting is there's been a tension between total state control and of course capitalism, which is decentralization of control. And one thing that is true that I think is a constant across these three eras of China. So the Mao era was revolutionary communism. Then Deng, Jiang, and Hu was internationalist capitalism. And now I think it's fair to say under Xi Jinping it is, it's now pretty clear that it's a nationalist socialism, militarism, and economics is no longer first. It is there but they're reasserting group control but from the nationalist right rather than the communist left in some ways. And so the reason I think that's important is it's a genuine change in the same way that you can argue the US had a genuine change in culture over the last seven or eight years. Call it the Great Awakening which is what Matt Yglesias's article at Vox kind of dubbed the whole thing. And you can sort of see this religious fervor taking over the country. All these graphs up and to the right of various words. In kind of the same way, China for a long time had this keep your head down policy where they didn't like a lot of the things the West was telling them, but they sort of gritted their teeth and they manned the factories and they tolerated the humiliation of having their embassy at Belgrade blown up by a stray bomb and the US being like, 'Oh, our bad.' You know, that type of stuff. They didn't have the power to protest on a world stage. They're just like, 'You know what? Just suck it up and we'll just continue trading for a while.' But with Xi that is no longer the case. They are... Have you heard this term wolf warrior diplomacy?

Yeah, wolf warrior.

This is not deep China analysis or anything like that. And I basically consider myself, I think, reasonably informed in China, but certainly there's folks who speak fluent Chinese. It's like a logarithmic scale. There's folks who know 10x, 100x as much as I know in China. So wolf warrior diplomacy what it refers to is there's a movie called Wolf Warrior 2 which was China's number one movie I think in 2017. It's worth watching and the reason it's worth watching is it's sort of surreal. It is American filmmaking techniques of the Rambo, Rocky variety of the mid-80s applied to a masculine Chinese-speaking hero where the Chinese are basically cast in the role of the USA and the USA is cast in the role of USSR.

So it is kind of like a rotation where you realize what aspects of filmmaking are constant and what are highly variable. Do you know what the number one movie in the world is right now as of our time of speaking?

Yeah. So, Frozen 5.

No. It's, well, so that's the thing. It's a, it's The Battle of Lake Changjin, Chinese language movie. Here's the thing. It tells you a few things. First is China's in-person movie market is massive and it is able to do number one in the world. And I think it just crossed like a billion dollars in box office. Number two, what the movie depicts is basically the defeat of the US military in the Korean War by the Chinese military. So that's where their head is at. They are making massive blockbuster epics with all the Hollywood techniques about the Chinese military winning and the Americans losing. And moreover, what you can get cancelled for in China is insufficient nationalism. As somebody once said, you know, in like the West today for an ambitious young person, they would articulate a desire to quote change the world. But in China, it is serve the motherland.

Chinese eyes. They need that.

Wolf Warrior or the other?

No.

What is the source of that?

May I just add one thing to that, which is when I was in Beijing, I lived in Beijing in 1996. I went to two universities there. And the most popular book at the time, and this is very understandable for a lot of reasons. This is not to fault anyone but the most popular book at the time which was stacked, it was widely counterfeited but also bought legitimately, stacked everywhere. You could see it in the streets in front of stores. It was called 'China Can Say No'. I think it was, and it was 'China Can Say No'. And there was this deep sense of, I think warranted, deep sense of being disrespected on a lot of levels from a geopolitical perspective.

That's right. Now the thing is interesting is if I recall that was modeled on 'The Japan That Can Say No'. But there is a difference. Some people will basically say oh you know people talked about the rise of Japan in the 1980s and why won't the rise of China turn out the same way. There's a huge difference by the way between China and Japan which is that Japan is literally occupied by the US military.

Huge difference. The US basically wrote Japan's operating system and constitution after World War II and they have literally a military base there and I think in a real sense they are an independently operated US subsidiary. The purpose of NATO was keep the Americans in, the Germans down, and the Russians out.

What they've done is setting up the decade and maybe the century. I don't think people realize how important some of this stuff is. Think about, you know, for example, their social media ban. How important is that today versus how important was it seen to be at the time?

Huge, right? That was a branch in history. So, basically, China wants to maintain root. And because they want to maintain root, I think they're going to have significant short and perhaps even medium-term advantages. But in the very long run, like 20, 30, 40 years, I think the century lines up as centralized China versus a decentralized world or a centralized China versus a decentralized West. And I actually think India may be actually a big component of that. And that's where I think things land up by like 2040-ish or so. But it's really hard to say because time compresses in the internet era. And just to kind of drill into that, let me give sort of a sci-fi scenario here. This is a sci-fi scenario. You know, like when you do a simulation and it's like, okay, all the molecules kind of move in this path, but they can move in other paths. So, I don't assign super high probability to this, but let's call it a scenario. I don't assign zero probability to it. Chinese control, American anarchy, Indian intermediate. So basically coming back to the thing that we kicked it off with which is the US military basically just got defeated by COVID and in Afghanistan. So obviously the immediate question is will they lose versus China and in particular will they lose, what will happen with Taiwan. Now there's sort of a first order response which is oh Taiwan and Afghanistan are totally different. Taiwan is obviously a first world country and it's an independent nation and it has its own judiciary and military and a long history of operating independently and civil society and blah blah blah whereas Afghanistan obviously was that was a fixer-upper at best and has a long history of civil war and was very difficult. So of course they're totally, totally different but they're not because there's certain things that are the same and one of the things that is very much shared between the two things is America's willingness to fight because the withdrawal from Afghanistan was based on a reluctance to pursue quote unquote forever wars and a thing where the American consensus on the right is isolationist like why are we helping these folks out by fighting their wars for them and on the left is also isolationist which is why are we harming these folks by bombing them? We should pull back. While the stance is perhaps different and I actually I can see reasonable things on both without litigating the percentage on each. The sum force is withdrawal. And so it is from Taiwan's view questionable as to whether the US would fight. And here's the problem. Wars get fought when things are questionable. As Shang Yang said is if the punishments are certain, there will be no punishments. Wars happen when there's a miscalculation. For example, I believe Saddam Hussein invaded Kuwait in 1991 because he thought he had gotten the go-ahead from April Glaspie at that time who was the US ambassador. Basically, he was like, you know, 1991 the Soviet Union was falling and so on, new world order. Let me settle scores. There's a transcript. There's different transcripts. One of them was, 'We have no opinion on your Arab conflicts of dispute with Kuwait. The Kuwait issue is not associated with America. Secretary Baker has directed me to emphasize this.' And so the thing about this is I'm not a scholar of this particular issue and she may have gotten a bum wrap on this or what have you, but people thought that she had given unclear instructions to Saddam. Now, first of all, what's interesting is like the US would basically green light an invasion is interesting in its own right, right? Like that it could happen versus not. But that's what being Leviathan means. If you're the guarantor of order, the Soviets allowed the North Koreans to go and invade the South. The North Koreans were looking for the nod, the go-ahead from their patron to be able to do that. And similarly, the US had actually been working with Iraq during the Iraq-Iran war because they were against Iran and they thought Iraq was a good way to put a thumb in the eye of the Iranians who had done the hostage crisis. And so that was, you've seen the whole video with Saddam shaking hands with Rumsfeld from many years ago, right?

Coming back up the stack. So the thing is that that kind of uncertainty is what causes wars.

Yeah. Because it's not like invincible US military, solid commitment to Taiwan. All right, we're not going to start a fight. It is will they, won't they? You're now decision treeing it out. It is uncertain for everybody involved. It's uncertain for Taiwan. It's uncertain for China. You have many scenarios. One scenario which I think is underestimated is China speaks a language. They have lots of people across the border. They have total focus on this. Xi Jinping wants... so one possibility is they try to force a gun to the head referendum where they try to get KMT, the pan-blue party to just vote for reunification with China. And that's something where there'd be an obvious gun to the head but it'd be like a peaceful, like you know, Germany and Austria, right, like they vote for it. Another possibility of course is an actual military conflict where maybe the US just doesn't even intervene. Maybe it does and then there's like a shooting war and we don't know what happens after that. But I think it's quite likely that the US loses. Now, why do I think it's likely the US loses? A couple of books I'll recommend. There's The Kill Chain by Christian Brose, who was formerly very senior on the Senate Armed Services Committee, saw the entire $700 billion defense budget, including the classified parts. And he has a quote in there which is over the past decade in US war games against China the United States has a nearly perfect record, we have lost almost every single time. And he says this is well noted in the Department of Defense but the American public doesn't know this and Congress doesn't know this. And he actually goes on in the first chapter to outline a scenario where China basically pursues an asymmetric strategy against the US, uses area denial weapons, force the US Navy to be way offshore while it's invading Taiwan and it can't get the reinforcements over there over this huge ocean. They're all blown up and or forced back and basically he thinks China would win. So that's a non-fiction book. There's also another book that came out this year called 2034. Kill Chain I think came out last year. 2034 which is co-authored by a former US Marine who's on the ground, this guy Elliot Ackerman, and another guy James Stavridis who I believe was the former NATO commander that also essentially talks about a serious Chinese effort on or conflict with China rather in the South China Sea where the US does not definitively win. In fact, they almost portray the US as this old battleship that's getting its butt kicked by the Chinese and it goes to nuclear very quickly. Okay, that's in their scenario. You know, I don't want to spoil it, but India intervenes at the end to kind of play mediator in a sense.

Yeah.

The good news is and I may have actually influenced this on the margins. India had been floating or there's folks in India rather who had been floating like a crypto ban in January thereabouts. I wrote three articles on this and the Indian crypto community, the web3 community really got out there and now Nirmala Sitharaman who's the finance...

Minister of India, like the equivalent of the treasury secretary, it's actually quite smart and has made good comments on this in public. And moreover, with the deliberation, she said this is not going to be a ban, it's going to be regulation of some kind. And over the last nine months, Indian crypto has just absolutely exploded. There's CoinSwitch Kuber and there's a bunch of these exchanges. I won't remember all of them. They've all just gone vertical with the rise of cryptocurrency this year and there's multiple India crypto unicorns and Indians are a huge part of the global crypto community. And in the meantime, China has basically forced mining outside and has basically done with their new bill. It's almost like pushing a guy until he's just almost off the cliff. They essentially have, in 2017, they pushed pretty hard to stop much retail trading activity happening within China and so hence like Binance kind of left the country and Huobi and OKCoin were forced overseas. But OTC was sort of allowed or kind of winked at. Now they're kind of going after OTC, they're going after mining.

One version of trading cryptocurrency is you go to a website, you click a button, you buy cryptocurrency. There's a user interface and so on. An OTC trade is like a big block trade where you call somebody on the phone. You're like, I want to buy a million dollars of Bitcoin. And the thing is, them as a seller and you as a buyer actually have an incentive. See, if they try and sell a million bucks of Bitcoin, they might move the price. You try to buy a million bucks of Bitcoin, you might move the price up. And so you both sort of settle on a mid-market price and you do the trade real quick because you don't know if it'll go up or down. So, that was kind of allowed, but they're cracking down on that, too. Now, what they haven't done, and you can read this bill. It's posted on their website. It's a long thing. Not bill, it's like an announcement, rather. What they haven't done is they haven't criminalized holding.

Uh, it is in Chinese.

I guess you could probably use Google Translate possibly to translate the page.

Yeah, it's like notice on further preventing and disposing of the risk of hype in virtual currency trading. That's the English translation via Google Translate. And I have a tweet on this, but basically they've kind of done everything up to criminalizing holding. So, they haven't criminalized holding. You can still hold.

Yeah, it's kind of like that. It's unclear. One of the things about China, you know, a friend of mine over there said is like in the US there is rule of law where you have written laws and that's supposed to constrain the state and you can kind of operate with those. Whereas there it's often more like guidelines and a negotiation which is actually more like interacting with the regulatory state in the US where it's like a moving boundary and they will basically do what they want. It's not something where the laws are meant to be binding on the government in the same way.

We don't know exactly how it's going to be enforced but it definitely signals a step up and the way you can see that is actions speak louder than words and that drop in the hash rate is actually a remarkable drop. Now, importantly, by the way, it came all the way, shouldn't say all the way back up, but it came back up to like 150 terahashes. So, even the Chinese government going after Bitcoin mining, it slowed down transactions a little bit for a few weeks, but not really all of it.

So, I don't know the exact breakdown. One could say this. There's folks who are looking at this every day, which I haven't been doing for a while. But Bitcoin mining is now actually understood to be something which is a component of the energy grid because in a sense, just like when you say a document, it's both a paper document and it's a digital thing. We use the term interchangeably now. So in a sense, Bitcoin mining is now like a money battery because on the power grid, you can't store power that easily. You have to sort of instantaneously generate it as being consumed and every flick of a light switch and so on is sort of in this model of this Gaussian where all these small events you can't predict whether you're going to flick the light switch on or not but you can have sort of demand prediction and it kind of goes up and down. You generate the power in proportion to that. The problem is that if you've got source of power that are themselves variable like renewables for example is the sun shining or not is the wind blowing or not? Now you got volatility on both sides and it's hard to match that up. And Bitcoin mining actually comes in there because it's a load that you can put basically in any location and dial it all the way up and rather than trying to store that energy in a battery, you quote store it as money by mining Bitcoin. And depending on the economics, it may be better to do that and then with that BTC buy energy later than to actually store it in a conventional battery.

This is an important thing that is happening now. Actually, Ted Cruz of all people actually gave a talk on this. So, it's starting to filter out into politicians.

Yes. Just a few weeks ago.

That's the thing is this is becoming a big thing within natural gas and so on because the flaring problem looks like this dystopian blast of flame into the air when you have like stranded gas that gets addressed with this.

It's much more broadly applied and this is something which I'm not an expert in this area but Google like Bitcoin mining oil and gas and you will be able to read about this. It's not just oil and gas. It's also renewables. Essentially, your renewable energy source, Bitcoin mining increases the profitability of it because there is always demand for the renewable energy you're generating.

Your renewable energy source, like especially if it's volatile like solar power or wind, now there's always a way to make money from it even if there isn't demand on the grid because it's volatile. For example, the sun may be shining but nobody's turning on their appliances or the wind may be blowing and nobody's actually consuming the power but you can use that to mine Bitcoin.

Power is like instantaneous, energy is over time. But go ahead.

What's interesting is now that China's sort of taken itself out of crypto, it has kind of left the door open for others. The US certainly has a big crypto sector. There's a huge fight within the US on crypto regulation and web three and whatnot and we'll see where that pans out and we'll also see where it pans out in India. It might be better, it might be worse. We will see. But basically, I'm cautiously bullish in both the US and India on cryptocurrency. And I'm cautiously optimistic that both India and China will maintain some degree of stability. And so I'm not saying it's a five-year thing, but like a 15-yearish kind of thing. 10, 15, 20 years. India could be an intermediate between like kind of a coming American anarchy and total Chinese control. And let me explain what I mean by this just to go back to that scenario we were talking about. And again, it's sci-fi scenario. I'm not saying I put a lot of weight on this, but I think it's possible. So let's say, you know, I had this one-liner, which is the US government has sort of lost root control over the system. The future of hard power is CCP and the future of hard money is BTC. This is related to that NYT CCP BTC triangle that we talked about last time, which is Woke Capital, Communist Capital, Crypto Capital. And just to recap that, Communist Capital says you must submit. That's a communist party. They're strong. You're weak. They have power. You don't. Bow to the government. It's very straightforward. Just down the middle like a fullback. Woke Capital says you must sympathize and that's different. That says it is because you are powerful because you're white or male or straight or cis. You have or you're rich or something. You have power and therefore you must sympathize. You must apologize and you must bend your eyes down. Your eyes are downcast. Your head is bent. But it ends in the same position of submission as Communist Capital with a bent head and a dispirited stance. So it's also an ideology of control. It's just a little more subtle. Rather than saying they are powerful, they say you are powerful. And the trick of it is with the algebra of intersectionality. Everybody's an oppressor on some axis. So everybody's either white or male or straight or cis or wealthy. Dave Chappelle, he's an oppressor on some axis. For example, right? So anybody can be turned into an oppressor in this way. So everybody kind of lives under threat of having their card yanked and instantly turned into an oppressor because an oppressor on some axis. So that's how Woke Capital works. It's more subtle, slightly more subtle. And then Crypto Capital, BTC is the third point on the triangle. And rather than saying you must submit like Communist Capital or you must sympathize like Woke Capital, it says you must be sovereign. You must hold your head up high, jaw out, and you must not just hold your own private keys. Ideally, you're living off-grid with a solar panel and you're growing your own food and you're in a Bitcoin citadel where you're waiting out the Mad Max and so on. So, all of those are actually like extremal points, you must submit, you must sympathize, you must be sovereign. And the thing is that while each of them is actually bad if you just go totally to that point, but they're also bad if you have the total absence. So, for example, obviously you don't want to just completely bow your head to this totalitarian state. You must submit. But the opposite of that, where nobody submits is San Francisco, where you can walk in and they've legalized crime. Anything under 950 or something, you can shoplift from Walgreens. You go in, help yourself, walk out, repeat it. And that's why like 22 Walgreens are closing in San Francisco. Did you hear about that?

Yeah. So, they basically have legalized crime. And then, you know, the city government is denying that this is a real thing. They're like, 'Oh, Walgreens published in their SEC filing three years ago that they might shut down some stores. Therefore, they're just doing this to make more profit, blah blah blah.' Right? And they're like, 'The rate of crime, reported crime has dropped in San Francisco.' And this is basically like quoting statistics from the Soviet Union at this point.

Crime rate in SF is so high. Anybody who's there has seen multiple crimes happening as you walk down the street. There's open air drug deals. There's public defecation. There's people who walk into a store and shoplift something. You can just record, probably put a camera up there, you'll see a bunch of crimes. The reporting doesn't happen because the prosecution doesn't, the police doesn't happen. So, okay, point is if you do not submit, you get San Francisco. Then, okay, if everything is quote sympathizing, then everybody is competing to be a victim all the time. And that's kind of where we are in many ways in American society. But the total opposite of that is also bad because the total denial that any victims exist is the denial of charity and many of our good impulses. And that leads you to a society that's Russia in the '90s where for 70 years all compassion and charity and goodwill had been sort of milked out of them because communism had said share at gunpoint. So all of that had been leeched out. All sympathy was kind of leeched out and that's what you get there. And the total opposite of that. And then sovereignty, of course, I'm sympathetic to this, but total sovereignty is actually the opposite of, for example, division of labor, which is also a capitalist virtue. You're trying to do everything yourself. And total sovereignty is also a position of total distrust of everybody else in society. And taken to its limit, and unfortunately, the thing about the internet is people do take everything to their limit. Taken to its limit, it's like one person can do everything by themselves. But humans are not just individual animals, they're also social animals. Now, of course, the total opposite of sovereignty is also bad. That's actually the Woke Capital and Communist Capital model where they can deplatform you via the corporation or the state at any time, censor your speech, etc. So, this triangle model is kind of useful because each extreme point on the triangle is bad, but so is the opposite point. And so, that's why I think what we want to do is carve out a decentralized center that has a healthy optimum between these with a recognition that different people will trace out different optima. For example, the Netherlands is a functional society, but so is Singapore and so is Dubai in its own way and so on. And these have different trade-offs of submission, sympathy, and sovereignty. So with that as like a political philosophy-ish kind of thing for the modern era, I think one new piece of information for me over the last seven, eight months is that the Woke Capital corner of the triangle, the NYT corner, the reason I say NYT CCP BTC is in many ways while CCP is in control of China, it is a state controlled press, it is something where nobody in the press is going to go investigate Xi Jinping or whatever. In America, they're saying if China's got a state-controlled press, America is a press-controlled state. And one way of seeing that is a corporate journalist can get a politician fired, but not really vice versa.

So the org chart is the other way. Who can get who fired? Who's whose superior? Now the thing is immediate rebuttal is well what do you mean? I can write an article and they may not necessarily get fired. And I would agree it's like a stochastic org chart and that's what sort of hides the lines of reporting. But if let's take, I don't know, the Department of the Interior. If the guy from the WSJ and the guy from the Washington Post, the guy from the NYT who all had the beat that includes the Department of Interior just started writing negative article after article on the person in that position, they'd eventually get gapped almost like a board meeting where it's like a three to zero vote and they get fired.

You can argue that the corporate takeover of the US actually happened in the 1970s when three privately held newspaper corporations, you know, the Washington Post, which is owned by the Grahams, the New York Times, owned by the Ochs-Sulzberger family, and the Wall Street Journal, which is owned by the Bancrofts at the time before their sale to Murdoch. They all went after Nixon with the Post certainly leading the way and essentially they got quote the most powerful man in the world fired. Now of course you can argue and I think it's fair to say that Nixon was a crook. He actually did do those things. He hasn't denied doing Watergate or the burglary or anything like that. I'm not litigating that part. What I will say is that at the time what he thought was and what was certainly talked about was that JFK had done it as well in his race against Nixon in 1960. So he just had to do it. And actually there's a book by Seymour Hersh who is a legendary investigative reporter, exposed the My Lai Massacre, won the National Book Critics Award. So he has a book called The Dark Side of Camelot and claims for example that Kennedy stole the 1960 election with the help of the mafia and all this other stuff. Some of the stuff has kind of filtered out to the public that Kennedy had lots of affairs and all this type of stuff. But the election part is, I think, the material thing where Nixon thought that Kennedy had gotten away with it and quote stole it fair and square and Nixon decided not to contest it for the good of the country and then Nixon kind of did it himself and then he got tagged for it when no scrutiny was applied to Kennedy. Point being though that this concept of quote journalists holding politicians accountable means that the US is a press-controlled state. It also means by the way how's that accountability doing? If journalists are holding politicians accountable and over the last 30 years the US government has done very poorly. Who's holding accountable the people who are holding the government accountable? If they are actually the most senior management, the board of directors vote who comes in an emergency to remove the CEO namely the president via an impeachment or investigation or something. Well ultimately the board of directors is responsible. So the thing is though that the whole thing is set up to exercise power without responsibility because it's a stochastic org chart. No one reporter thinks of themselves as being like in control of somebody because it's like throwing a stone at somebody who's being stoned. No one stone necessarily kills them, but the fusillade, the hailstorm does. And of course, if you're at the Times or the Journal or the Washington Post back before social media, you had pretty big stones that you were tossing. And what's interesting is there is just to be on this topic for a second there's a concept called impact journalism where the whole point is to make an impact like that stone hitting somebody like the impact of a government truncheon hitting your head where the idea is that people will brag this article led to a government investigation. This article led to so-and-so reforms and what those reforms mean is that the state made something that was previously discretionary now mandatory or forbidden. That say a law was passed, freedom was constrained. In the most trivial sense, it's like a 40 mile per hour and 55 mph speed limit put you in a box on the v-axis of velocity. You can't go below that or can't go above that. Freedom was constrained. You were previously discretionary. Now you're in a box. You may argue that box is good or bad, but as every law is passed, you're in a box on more and more and more and more parameters, right? You can only do, you cannot be below this amount. You cannot be above this amount. So it's literally like an ideological box like a constraint. So the thing is that when you are able to quote cause impact in this way you are powerful but because it's stochastic it's not like you order it and it happens with 100% probability. You can deny that that power exists. The whole system is sort of evolved for the deniable exercise of power. In many ways the org chart is actually even embedded in the language. Do you know the concept like Russell conjugation is? Eric Weinstein is big on this. Do you know what that is?

So Russell conjugation at first it just seems like a funny curiosity. It's by Bertrand Russell, the concept also known as like emotive conjugation. So it's like I sweat, you perspire, but she glows.

Okay. So he doxes, she leaks, but the New York Times investigates.

Yeah, here's why is when it comes to like quote what journalism is, like what is real journalism? Anybody can go and set up a blog to go and review movies or restaurants, well pre-COVID probably easier, but review books or whatever. All that stuff, huge portions of a modern newspaper you can just kind of go and set up and do yourself. What is the one thing that you can't do on your own?

I would argue it is the investigative journalism part because you can't just go to somebody and like start digging through their garbage, interrogating their friends, acting as essentially a for-profit intelligence agency because basically what they will do is they will put somebody under surveillance. That's literally what being a quote investigative journalist is. You're putting somebody under surveillance, essentially wiretapping them, eavesdropping on them, and so on. And it's an extremely hostile thing because the goal often is to try to get that person fired, to cause harm to them, to cause harm to their company, and to essentially write up a prosecution and put that in the paper. And that's why they say the court of public opinion. It's basically like an indictment. You know, in fact, we sometimes use the same word like a biting indictment appeared in the paper, but it's stochastic. It's out there and it's deniable as to what happens. You know, hey, I just put it out there. Arthur Sulzberger used to say, 'Our job is to tell the public that the cat is jumping through the window. The public will take care of the cat.' It's like a disassembled bomb strategy where you give them all the parts and you emotively conjugate, you Russell conjugate the whole article such that the reader who's unaware of this is led to a conclusion but you kind of have no fingerprints on it because you just did it with language.

Yeah, it's semantic. That's exactly, it's power laundering. I'll give you some concrete examples of this. It's like here's a really good one. There's an article in 2012, how Punch protected the Times. You can just Google that and it talks about how dual class stock was the savior of the Times and you know it was something that was really good because they could think about the long term. Then a few years later in I think 2019, you can't fire Mark Zuckerberg's kids, and this is a denunciation of the same thing. Oh, we are creating a class of royalty that controls our national dialogue without basically just emotively conjugates it the other way. So dual class is good when the Sulzbergers do it and it's bad when Zuckerberg does it.

So let me give a scenario. And I'm certainly not saying this is desirable. I think this is possible. The scenario is Chinese control, American anarchy. So a Chinese victory of some kind in the South China Sea over Taiwan, whether it's a referendum or military victory or something like that, especially if the US prints money only to lose because you print a lot of money in a war. Foreign military defeat of that kind would show that the US is no longer a hyperpower and what that would potentially result in, you know that saying fiat currency is backed by men with guns.

All right. Yeah. So that's actually Krugman himself said that in an interview to Joe Weisenthal several years ago. Fiat money is backed by men with guns. What happens when those men with guns lose? And not in a sort of deniable way to COVID or Afghanistan like we didn't really try or it wasn't a military thing, but to a pure competitor. Well, there's potentially an economic markdown that happens. I mean, Russia's outcome in World War I, Sean McMeekin has a book that argues that the Russian Revolution, it's called like a new history of the Russian Revolution, argues that very good book that Russia's most important thing was it was at war during 1917 and that's what allowed Lenin and others to take power. It was a wartime thing. It wasn't just some random proletarian revolution. It was the chaos of war that led to that. And so foreign military defeat or even foreign conflict is the kind of thing where it turns things molten. Things that were bubbling, things can flow and move around. And here's a bad scenario. A bad scenario is an attempt to repeat Executive Order 6102 like the gold seizure. Do you know what that is?

During the rise of the centralized government of the US, and I'll come back to this, the concept of peak centralization. Basically, one of the things that FDR did was Executive Order 6102 which seized all the gold in the US and it basically like forced it to be kind of exchanged in at a certain price and whatnot. Now, right now we're seeing insane levels of money printing and it is certainly possible that at some point in the future they try something like an Executive Order 6102. And in fact, there's this guy on Twitter who, you know, has a moderate following who basically is starting to advocate for this type of thing because he had been predicting Bitcoin was going to go to zero. It's like Facebook is a fad. It's a bubble. Uh oh, no, it's terribly powerful. It must be stopped. You know, it's a flip from this thing is nothing. It's going to go to zero to we must drive it to zero or we must seize it. So, if they try something like that, and the reason that might be possible is you print a lot of money to finance this war and now you've got an Executive Order 6102-like thing, an attempted Bitcoin seizure, that is the type of thing that could kick off serious civil unrest. It's possible. The reason is if you're trying to seize BTC in a time of rampant inflation, that is no longer something that can be portrayed as being for the good of the population because inflation touches, I mean, inflation's already pretty high, but it touches everybody. Touches white people, black people, Latino people, Asian people. It is economics. It's very hard to portray it as some grand historical conflict or something like that. It really is the state versus the people. And it's not like the people were printing dollars or managing the economy. That was supposed to be the Fed and the Treasury and whatnot. So, if inflation is rampant and you try to seize BTC, that I think could be the match for the next wave of conflict.

I don't know. But I think that basically it's a huge difference between physical gold and ETF.

Yeah, sure. You just log in, you get a notification. Oops.

Interest is a massively scalable application, right? Just park your money and get money back. And DeFi offers insane interest at very high risk.

Decentralized finance offers an absolutely insane level of interest. I wouldn't even quote the numbers because any number I quote, you can find a higher one if you can take on more risk basically. And what does that risk mean? It means possibly loss of principal like the smart contract could be hacked, possibly other kinds of things. But you know, you can put in a million bucks and get like $100,000 a year or more in interest. The thing is that you could also try and put a million bucks and try to make $10 million because some of these coins will 10x. So it is absolutely like the upside of crypto. By contrast, in banks, they're at like zero interest rates or like nothing.

Exactly. Crypto, it's like the Unix of money. You can rm -rf your entire fortune or move millions with a keystroke.

I don't, but I love that. I almost want you not to explain it because like five people in my audience will find that amazing and the rest won't get it. But I mean, I can sort of intuit it what that means, but why don't you spell it out for me?

rm -rf is it's like a Unix command, which means remove everything, recursive force. So, you do it at the top of your directory hierarchy. -r means descend into everything. -f means don't ask me any questions. And you know, people are used to doing this when they want to just nuke a directory, but if you do it in the wrong spot, you're like, 'Oh my god, I deleted my entire files or whatever.' Right.

Yeah. Now, modern systems will kind of detect what node you're in and may not actually allow you to do that. But that's what being a quote power user means. The computer will do what you tell it to do, not necessarily what you actually wanted it to do. That's what a bug is. You've instructed the computer to do something. There's an error in your logic. You didn't think through a scenario. You didn't think through an input. And it does what you told it to do, but not what you want it to do. By the way, this is like a super important thing in terms of cryptocurrency because it solves the principal-agent problem and replaces it with your ability to debug. Do you know what I mean by that? Should I talk about that for a second?

Principal agent.

So, this was like back in 2013 when I understood the full scope of this, I was like, 'Holy cow.' And the reason is whenever you have a principal and an agent, for example, you have a venture capitalist as a principal and they fund a CEO who's their agent or you are the principal and you hire a plumber who's your agent to fix something or you hire a banker to go and sell something for you. The problem is that in the two-by-two matrix of you win, you lose, they win, they lose, all four outcomes are possible. In particular, it is possible for you to lose and them to win. For example, they take a commission without delivering you returns on your portfolio. And in fact, the principal-agent problem is a fundamental thing of every single relationship on an org chart. Manager, engineer, CEO, manager, VC, CEO. Every single edge there has a two-by-two matrix of who can win and who can lose. Now the key is to try to diagonalize this as much as possible such that the win-win and lose-lose, you both win the most together and you both lose the most together such that there isn't any temptation for one party to defect off diagonal and win at the other guy's expense.

That's right. And the thing is that this becomes more complicated. When you have just two people, it's a two-by-two. When you have three people, it's a two-by-two-by-two because there's eight outcomes. Win-lose times win-lose times win-lose. It's a Cartesian product. When you have n people, it's two-by-two-by-two to the nth power. It's like this hypercube. And so it gets very complicated. So what starts to happen in large organizations is that some subset of people picks the strategy where they win and everybody else loses. For example, 51% can vote themselves the money of the other 49%. That's a straight win-lose zero-sum kind of dynamic. Now the way that startups avoid this is with equity. If you've heard the term like aligning incentives, it actually comes from like math where it's like a diagonal alignment pointing through this hypercube of incentives where the key thing to do is especially at a startup, 51% could vote themselves the other 49%'s money in theory if everybody, you know, is a shareholder vote and everybody's equal but there isn't any money to distribute, all the money comes in the exit. There's so internal politics are limited because internal resources are limited in a small company. And so what you do there is rather than encourage people to compute every possible strategy in this giant two-by-two-by-two-by-two hypercube, instead you say the win-win-win-win quadrant where all n of us win together in an exit, you know, an acquisition or an IPO. Well, you don't have to do out the math. That pays off the most. And every other off-diagonal thing where some coalition wins while the other group loses is sub-optimal. Okay, now here's the thing. The principal-agent problem comes from the fact that when you've got two human beings, their interests never fully coincide. There's a situation where one can die and the other can live or vice versa, you know, trolley problem type things. Push hard enough and there's often a divergence in incentives. Not so for robots, not so for programs, not so for intelligent agents. And you're going to tie this into cryptocurrency and blockchain.

Because with cryptocurrency, a program can now trade on your behalf. You can rather than hiring a banker to go and trade for you, you can write a program that will trade for you while you sleep on cryptocurrency exchanges and especially decentralized exchanges worldwide. That program that you write to trade, especially the reason I say decentralized exchanges worldwide, is that is truly just packet to packet. That's full internet. There may not even be a signup process that is fully on-chain. So that is something where you just like you go from a telephone number to an IP address. You know telephone number is a human associated thing but an IP address is a machine associated thing. Any machine can call any other machine via an IP address. That's what an IP address really is. You go from a human bank account to a cryptocurrency address and you've removed the human association and now a program can hold money, make money, lose money fully autonomously. So now rather than hiring the banker, you write the program. There's no more principal-agent problem because the program has no mind of its own. It's only the mind that you give it. This is super important because as trust in society decreases, it is harder and harder to maintain a scaled organization of human beings because there's more and more divergence. It's an individual era. Everybody's going in this direction. Why are you the boss? I should be the boss. In fact, both equality and freedom, while in some ways they're often made antithetical to each other, where they're actually also similar in another respect, which is if we are all equal, totally equal, if you ain't the boss of me, you know, I have total freedom. Then there's zero hierarchy. It's all flattened out. It is basically anarchic. And in that situation, everybody feels that everybody's interests have diverged. So I'm, you know, every man for themselves. Now, in that situation, it's hard to maintain a civilized society. So I think that the answer is going to be robotics, cryptocurrency. How do those things relate? Well, when you give a robot instructions to go and unpack a box, it just does it. There is no divergence between the capitalist and the worker. The capitalist is the worker. Management becomes automation. There's a great book, Factory Physics. Have you ever heard of this book?

It's way harder to build an assembly line than to work on an assembly line. Factory Physics, a good book. Also, Eliyahu Goldratt's book, The Goal, is quite good. He kind of managed to wrap a, it's kind of funny. It's like it's almost like a fictional story around operations research type stuff. It's executed better than it sounds. Okay.

That's right. That's right. So, both of these are good books. Factory Physics is like a textbook that takes a very quantitative approach to cycle times and other parameters in a factory setting. But the main thing that you take away from that is, and so you know I designed a robotic genome sequencing assembly line like 10 years ago as part of my first company. And this is something where you realize whoa it's actually way harder to build an assembly line than to run it. It's like the difference between writing a program and running a program because every box there, it's actually very similar to architecting like a data analysis pipeline, which more of your viewers will have done because something has to flow out from this and into something.

else. It has to be the right format. It has to process only this many units at a given time. You need to use buffers and cues to get rid of it and so on. And in many ways, by the way, that data analysis pipeline thing now integrates with the offline physical stuff where you'll do some physical process. You need to wait for computation online and then the physical process kicks off. So 10 years ago I was kind of merging robotics and AI and cues and all this type of stuff. You know the same way like tech people you'll mess around with a Palm Pilot years before people are using an iPhone or you will be in World of Warcraft before people are doing VR or everybody's on Twitter before other people are on Twitter. Right? So, I kind of saw this firsthand and one of the biggest things was what you want to do from any process like that is eliminate as much human error as possible. And eliminating as much human error as possible means as limiting as many humans from the process as possible. It's an error to have humans if you want to eliminate human error. Okay? And if you can reduce it to just bugs in your code, that's way better because you can see that on screen. It's super consistent. At least the error is made in the same way every time. Just to give you an example, if somebody rotates a so-called 96 well plate, okay, an 8x12 plate, if they just rotate it wrong, if they're cranking through high volume and they just rotate it wrong, which is easy to do. I mean, they've got kind of markers on it, but you know, people can screw up, there's 96 samples that are off, 96 patients get the wrong report.

So visualize like a plastic tray with indentations in it to contain liquid. And so those indentations are like really small basically eyedropper scale indentations. If you Google like 96 well plate, you'll see go to Google images, you'll see like a visual of this, right? Okay. And so each cell there is often like a patient sample.

Oh, I see what you're saying. Right. I understand what you're saying. They are matched incorrectly. Is that what you mean?

I thought about this a lot from many different angles and let me at least give you my thinking on it and you know shoot at it or agree as you want. This kind of relates to the thing I was talking about earlier with communist capital, woke capital, crypto capital, submission, sympathy, you know, you must submit, you must sympathize, you must be sovereign. And that last point on the triangle, you must be sovereign as you are discovering is actually not that's why I said it's an extremal point. It is too hard for pretty much anybody to not just hold their own currency but grow their own food and get their own water and so on and so forth. Humans are individuals but they're also social animals and you make some compromises. Now the stuff I just discussed on robotics actually reduces the necessary scale of societies. In theory you could have and this is where I think we end up in 2050 or 2040 maybe even sooner. You could go back to the future and have robotic farms, robotic autarkic farms where if you're looking at the automation of agriculture, it's getting there. It's really improving dramatically. AI for picking things and so on and you kind of give your instructions to your robotic field hands cuz then you go truly full stack. You're quote off the grid, but you have maybe a modern life. Now, of course, you need enough land. You're still going to have trade. You're not going to be able to grow every crop there, but you might be able to do okay. So, I do think that there's an eventual thing. I don't know what the minimum scale society is, but I think it's smaller than 300 million, might be smaller than a million, might be even a few thousand people could operate something decent. There's actually, to make that more explicit, there's a, you know, the project Open Source Ecology.

Yes. It's a little different than what people think when they hear the word ecology. It's basically a kit of 30 open-source machines that if you build them from scratch, you could rebuild civilization. The global village construction set. Okay, open source blueprint. So it's like how do I get running water and how do I get this? It's all the things that civilization depends on and but it's machines that you can build yourself. And there's also a couple other books like this. There's a book called The Knowledge by I think Lewis Dartnell which I think is really good and you know how to rebuild our world from scratch kind of the post-apocalyptic thing. That's what The Knowledge is about. Yeah. The Knowledge: How to Rebuild Our World from Scratch. And then there's another book which is How to Invent Everything: A Survival Guide from the Stranded Time Traveler. And those books I think are quite good. Okay, those two as well as like Open Source Ecology because it addresses some of what you're talking about, which is how would somebody start from scratch and do this? We don't know how to do it. And in some ways, what's happening is there's a cycle of centralization, decentralization that just happens. For example, in China, it's like there's the warring states period and then the whole thing is unified and then it breaks up again and it's unified. And we see this in the computer industry in a totally different context, which is you have mainframes, then you have personal computers. Oh, and then you have cloud and then you have cryptocurrency and smartphones. It kind of goes back and forth like this. The thing about this is when you know a system is centralized, people chafe at the control and they want sovereignty, they want power, they push on it. Then they manage to break it up. Then it's all decentralized and it's chaos. And now what is scarce is leadership. They're like, oh, let's put it back together. And so on. And seen from one vantage point, this just looks like a cycle. You just keep coming back where you came from. You go from anarchy back to tyranny to anarchy to, right? But seen from another standpoint, it's like a helix. It's a cycle in the XY plane. But we are making progress in sort of this ascending cycle over many generations. Now, I'll put an asterisk on that, too, which is I don't believe that progress is necessarily guaranteed. In fact, there's a couple of good podcasts or shows like the Fall of Civilizations podcast or you know, Samo Burja actually has some good stuff on this where he talks about Göbekli Tepe, which is like the oldest human civilization. It appears looking at some of the civilizational records that humans may have like gotten pretty advanced and then just kind of totally collapsed. And we've done that a few times in human history.

So like Göbekli Tepe, for example, it's this site that's kind of like Stonehenge except way older than Stonehenge. Found in what is today modern Turkey that pushed way back our dates of when civilization started. Okay? So, it might be like, you know, playing a video game where you get to level 15 and then you die. You get to level 27 and then you die. And this just might be the most advanced human civilization we've built to date, but it could just collapse and we might come back. I mean, happened to the dinosaurs. They got hit by a meteor.

That's right. And so the thing is that when you say progress is possible but it's not guaranteed for example think about Christianity and the Roman Empire like Christianity in some sense was no offense to your listeners have nothing against it but it was like the original communism at the time of the Roman Empire. It tore down the Roman Empire. It said slaves are good and sooner a rich man go through the eye of a needle than get to heaven and basically it delegitimated the Roman Empire and eventually it fell at least the western Roman Empire and that was something you got the dark ages for a while until this sort of fusion emerged on the other side. You had the Germanization of Christianity you know had for example why do you have St. Nicholas and Santa Claus and snow next to a scene of Bethlehem and the manger in the desert. Those are two totally different cultures thousands of miles apart. But what's happened is it's copy pasting one story next to another like horizontal gene transfer in organisms. The meme replicates even if the substance is changed quite a bit. So what happened was eventually after the dark ages you got a thing that was a contradiction in terms or oxymoron before the Christian king not the Roman Empire the Holy Roman Empire of course it wasn't continuous with the thing but conceptually and you kind of had that but there was a dark ages like a collapse of civilization in between and so bad ideas or let's call it we say it's a bad idea let's call it certain ideas can collapse civilization that has happened okay and yeah we've recovered but it's not necessarily a guarantee if we've collapsed is a guarantee that we recover the dinosaurs didn't of course well some ideas are even generated or myths to collapse civilizations right yeah so right so this gets to something which I think of as a very important part of the future political axis which is you can say it is you know democrat republican you can say it's centralization decentralization but I think an even more important axis in the medium to long term is going to be transhumanism versus anarcho-primitivism. And we kind of talked about some of this before, I think, did we? Yeah.

So let me quickly do anarchism transhumanism then we come back to your point. So the quick thing on that is anarcho-primitivism says we're not living in nature. We're far away from it. We're having all these plastics. We're having all of this pollution. That's why maybe in you know there's a like a right of center version of that which is like our testosterone count is down which it is actually that's not like a conspiracy theory. It's actually like a scientific fact. It's like way lower than it used to be for adult men. All that is down. And so there's some aspect you know where this is now neutral. We're diabetic, we're eating all these grains, it's all bad. Instead, we need to kind of reject modern civilization in part or full like the Unabomber thesis and just go back to the land. And of course, the problem with this is I think that's a romanticized version of what going back to the land is. I don't care if some people want to go and do an Amish thing and live on their own or snapshot some point in time. They want to like tear down industrial civilization. Conversely, the transhumanist thing is the opposite, which says what makes us human is technology. You know, Richard Wrangham's book How Cooking Made Us Human. You ever heard of that?

But Cooking Made Us Human essentially says that technology is actually part of humanity in the sense that we sort of outsource our metabolism to cooking and therefore could evolve in a different way. That's probably also true for clothes and other things. You know there's this book The Naked Ape which is kind of also about that. And the idea is that you know we are a technological species. Technology is not some anti-human thing. It is humanity. It is a difference between us versus animals. And so our destiny is to get to the stars. Let's do this. Let's become transcendent beings like one with the machine brain machine interface. This vessel is just what we are today. But our ancestors ancestors, if we really want to make our ancestors proud, they were single cellular organisms or like non-human creatures. So whatever is in front will be to us as we are to them. And so that's like the transhumanism thing. And what's funny is both of these in their extreme form are like off-putting to some people. They're like, why can't we just like stick where we are? But the nature of things is that those people who have ideological zeal will start pulling the train in one direction versus another. It's very hard to kind of keep something just stable in one state. You'd have to end technology and communication etc. Right? So now coming back to your point basically what do you do when all these institutions collapse because most people cannot be that sovereign because it's like an overnight plunge into refounding everything. It is not simply be your own bank. It's maybe be your own food supply and there's certain things that are sitting on your desk that cost you 10 bucks but you would never be able to build them or it's very very expensive to build them from scratch like a I don't know like a USB cable.

Yeah, of course. That's a famous thing. You know, no one can build a pencil. The first unit rolling off the assembly line is wildly expensive. Then the 1 millionth or billionth unit is super cheap. But getting to that point of technology from just a grass field and sand is super hard.

That's right. But all the supply chain stuff is going to start forcing a greater degree of autarky. If we're lucky, it is just a gradual ramping up. If unlucky, it is too fast and you don't have time to adapt. It's like the difference between like working out gradually versus go put up 300 and break your elbow or whatever. The point is what I think happens is unbundling and rebundling. One of Marc Andreessen's collaborators a long time ago he had this throw off line which I love because it's so funny but it's also true is only ways to make money in business are bundling and unbundling. And this gets back to the spiral thing I was talking about. For example, you take the songs off of a CD and you unbundle them into MP3s. Then you rebundle them into Spotify playlists. Or you take the articles out of a newspaper and you put them into individual URLs and then you rebundle them into Twitter feeds. Or a subscription. That's right. And you take the countries that we have today that people no longer feel a loyalty to, you're unbundling them into the coming American anarchy, and then you're going to rebundle them on the other side into groups that do have something in common. And that will be probably a really messy global process when this Pax Americana falls. One analogy is the 30 Years' War. In some ways, by the way, that's actually quite analogous to what we're going through. Do you know about what happened then?

The printing press I have this tweet actually on this. Printing press Martin Luther led to the Reformation, led to the counter-reformation, led to the religious wars, the 30 Years' War, led to eventually the Peace of Westphalia and the nation state. And the internet plus Satoshi Nakamoto led to the decentralization by analogies to the Reformation, led to the counter-decentralization, led to potentially the coin wars, the American anarchy, and then question mark question mark, and then network states. So let me explain what that means. By the time of Martin Luther, the Catholic Church had become this ossified centralized power and had for example this thing called indulgences where you could go and sin and you can just go and pay some money and be like yeah to the church they'd be like no biggie. Okay, you have a hall pass. Yeah, it's a hall pass. Exactly. Right. You can argue it's similar and you know I know this is a little bit of a poke but like a carbon credit. Go and sin with carbon and then buy a credit. Right. You might argue that's a good thing or a bad thing, but it's analogous. Got to make those more expensive. Got to make them more expensive. Anyway, an even better example is like TSA Pre where like everybody's a sinner, everybody's a potential terrorist, but pay this money and you can be in an express lane. Like, huh, it doesn't strike anybody as right. You know, it's like this weird thing where if the issue was safety, why can you pay for it? Or at least it arouses question marks. So, two things. No, I was just going to bring us back to your tweet. The other thing I'll say for folks is if you want to learn a bit more about Martin Luther and many of the things that followed, there's an incredible podcast episode, takes a little while to get warmed up, called Prophets of Doom, which is on Hardcore History by Dan Carlin. It was the first episode I ever listened to of his which got me hooked. Fascinating listen. So I recommend that to folks. And back to our regularly scheduled apologies, sir. Please continue. Great. Also, there's a good thing on this called the Bitcoin Reformation with Tuur Demeester or T-U-U-R D-E-M-E-E-S-T-E-R that kind of goes through some, you know, similar ideas basically like analogizing Bitcoin to Martin Luther. So maybe look at both of those together and then you know the historical version and some of the parallels. But briefly, Martin Luther because of his time of the printing press, he didn't just nail his 95 thesis to Whitten in I think 1517. He basically, you know, people were able to copy his arguments. And for the first time, people had heard these sort of deconstructing arguments that said the Catholic Church is a scam. You should have a personal relationship with God. Doesn't matter what the church says, etc., etc. And so, yeah, there was a religious argument, but it was also an argument over power and who should hold power. And for a long time when I was a kid, I didn't understand why are people arguing about the body of Christ like a wafer. It seemed like the weirdest kind of thing to argue about and fight and kill about. I just didn't understand this. Now I understand that a lot of those things were sort of proxies for who has power. Does the church have power or do these new guys have power? And so what happened was the Reformation was like this thing of basically of decentralization of power away from the church. And the counter-reformation took a little while to get underway, but this was the Catholic Church saying uh uh not so fast. And basically fought. There are some reforms. There's also some combat and these were the wars of religion. You know, do you go with the centralized church or the decentralized Protestant movement, Protestant versus Catholic? And eventually after 30 years of war, very bloody war, people were like, okay, you know, we're going to come up with essentially a live and let live philosophy, the Peace of Westphalia, where we're within nation states and you have the monopoly of violence within that and a transnational religion doesn't have influence within this geography. So that is to say, the Catholic Church doesn't have influence here. And it was like, okay, we're both pretty bloody. Let's settle this. And the thing is that's way out of living memory. That is many generations ago. But you know sometimes people seem to need one thing that's funny is a lot of things kind of you can argue they happen in like 70 80 year cycles because things drop out of living memory and then certain aspects repeat. So the thing is people have sort of forgotten how bad war is in some ways. So they're kind of larping it and maybe they'll make it into a real thing. This is actually Fukuyama mentioned this that his end of history thing actually had an oppression comment that people on some level are wired to struggle and if they don't have struggle they will reinvent struggle they will struggle against order and prosperity to kind of make it hard manufacturer struggle. Yeah, absolutely. Yeah, exactly. That's right. And that's Francis Fukuyama. Fukuyama. Yeah. Let me actually I'll find the exact quote. Hold on one second.

So it is for example an exchange. It's happening on many different scales, but one of them is store your money at a bank. Okay. Pull it all out and now you've got Bitcoin on your computer. Store your money in an exchange. Okay, pull that out and then put it on a DEX partially. Each step here actually gives you greater control. Decentralized exchange. And there's ways of kind of doing this where you have less risk than on a centralized exchange, for example. It's an atomic trade. It's on the DEX like a flash loan and then you're getting it back in the next transaction. There's various ways of doing this where a centralized exchange improves your control over a bank and a decentralized exchange improves your control over a centralized exchange. Even if there's parts of it that seem like you're reinventing the wheel, the wheel was reinvented. In fact, there's this great graphic that shows an original stone wheel and then like a chariot wheel and then like a modern Michelin tire. We do need to reinvent the wheel and we have reinvented the wheel. We just need to be conscious of when we're doing it. So the way I kind of think about this, I just finished that Reformation analogy by the way. Just like there was the Catholic Church and then there was the Reformation which is a decentralizing event and then there was this huge fight with the counter-reformation and then eventually a truce where Protestantism basically won relative to the previous era but Catholicism did not die out. It's still a big thing. Similarly, I think you can think of the era we're in as the decentralization and now the counter-decentralization. So, just like the printing press and Martin Luther kicked off the Reformation, the internet and cryptocurrency have kicked off the decentralization. And what does the counter-decentralization look like? It looks like deplatforming from social media platforms. It looks like unbanking. It looks like the Chinese surveillance state. It looks like basically exercising root control. It's basically a root versus routers. So, do you have root over this computer system and you're exercising root control or do you have this decentralized set of routers that are just routing packets back and forth? And the counter-decentralization I believe is going to succeed in China and fail in the US. And what I mean by that is I think China because they have very ruthlessly competent managers. Yeah, there's actually a good video by Eric X. Li from 2013 which it doesn't hold up in every respect today because there's certain claims he makes that for example that Xi Jinping will step down and that they've figured out political succession because Xi Jinping repealed that or whatever. There are things where he says that the Mao era is continuous with the Deng era when really Deng was really a coup against Mao's successor. It was a total shift in direction. It's not what Mao intended. So those two parts maybe he just has to say that for domestic consumption or what have you. So you have to take it with a grain of salt. But the rest of it is actually very interesting where at least gives a 2013 Chinese vantage point on their system. Why do they actually have these ruthlessly competent managers? Because the way that the CCP works is yes, there isn't voting. If people want to exercise political power, they join the party. Sort of similar to how in the US, yes, you can vote, but if you really want to be politically powerful, you want to run for mayor or something like that, that means joining a party. So sort of like that. Of course, not the same, but roughly analogous. Those people who are quote politically ambitious will join the communist party and they might start as running some small really tiny town of 100 people and then they level up and they go to something of 10,000 or 100,000 people or a million and then eventually 10 million and each level becomes more and more competitive and they have surveys they do of the populace and they do like 360 reviews where they're looking at your peers who are running other cities and they're looking at your superior reports. It's like promotion in a corporation. And so now, of course, there's patronage and there's connections and so on that go into it, but it's like a giant corporation where they're looking very much at metrics and did you build this many toilets? Did you hit your numbers from above? Did you manage the population's discontent? Is this region does it have higher dissatisfaction than other parts of China and so on and so forth. So corporation is not a democracy, but it is responsive to its customers in a certain way. And the Chinese government was always kind of conscious of quote losing the mandate of heaven and having too much dissatisfaction. So they did all these polls and so on try to keep ahead of public sentiment, solve these kinds of problems and so on. Again, I'm not saying they're good. I'm saying that this is how they selected for competent leadership. That's why they have a lot of engineers in their ranks and that's why they built the Great Firewall and other things because they have guys who are basically selected as capital allocators as managers. So because of that, because they set the Great Firewall, because they banned social media, because they've done other things, I think China is going to win the counter-decentralization where, you know, people thought that their bans on the internet and their controls on internet wouldn't work. They kind of did. They basically just had their walled garden where they have root access and Xi Jinping can basically push a button and anybody can be disappeared. There's like super famous actresses that just got disappeared. Now, that's, as I said, ruthlessly competent because that's kind of a scary thing to be under. You don't really you don't have any recourse. There's no civil liberties. There's no human rights. And yeah, it's true that over the last 40 years they've delivered a lot of benefits to their population. There's this huge group that's being pulled out of poverty, but that level of absolute power can also go south. But the point is that I think they will succeed. They have succeeded arguably in the counter-decentralization. By contrast, in the US, the US establishment is by turns apathetic. It's either apathy or panic. For example, on COVID, oh, it's not a big deal. Oh, for example, these tech journalists wrote this article, no handshakes, please. Trying to make fun of anybody for taking precautions, trying to shame taking precautions. Folks wrote about, oh, these bubble boys are so concerned about this, making fun of this early on in COVID and then they switched completely to panic later and never acknowledged that they had had all this false reporting, misleading reporting. You know, they accuse people of being racist for saying, hey, maybe we shouldn't have the Chinatown parade after with the Wuhan coronavirus on the loose after Wuhan itself had canceled its own parades. This is like January, February 2020. So, what happened was they were at first apathetic. Oh, this is not going to be a big deal. Nobody should do anything. Then they're panicking. Oh my god. And so that kind of mode is very common. The US establishment is not selected for folks who look ahead. It's selected for actors, propagandists. It's not selected for capital allocators. Just a couple examples, Lorena Gonzalez, this legislator in California, thought that a relatively junior guy at Founders Fund was a billionaire. Or Brian Williams and a member of the New York Times editorial board thought that if you divided Bloomberg's fortune by 300 million Americans, all of them would get like a ton of money and obviously they wouldn't. So you actually select for folks who are verbally good but innumerate. And that's very different from what the Chinese system selects for. And that results in folks who are not like VCs or technologists. They're not like calculating ahead or doing contingency planning or saying neither apathy nor panic. We can have a technical plan to potentially succeed if we do X Y and Z. So what that results in is the US establishment that's always behind the eight ball. Lehman is a surprise. Bear is a surprise. COVID is a surprise. Trump is a surprise. Afghanistan is a surprise. Everything is a surprise. And then they react in this very reactive way. Facebook is a surprise. And why is it a surprise? Because Facebook's a fad, Facebook's a bubble. These tech journalists, for example, in 2013 even there's this article, why Facebook will never make a significant profit, a famous article. Amazon.com. Okay? Or another classic, Google's toughest search is for a business model. And it's something where, you know, this goes back so far in some ways. Basically, these guys are they're so used to inheriting something that they could never have built. They sit upon this US establishment that they don't understand what it is to build something and they don't think anybody can build something and therefore they're dismissive of the stuff until it gets so big that it can't be denied and then they react in this super panicked way.

By the way, I will say one thing, which

Is once you do get in the mode of trying to react to this stuff that's all at 0.001% traction, you're thinking like an angel investor because it's like when you start looking at that dashboard and you no longer set your filter at something that's at 50% of the population traction or even 10%. You know, when you go to 0.01% and a tiny percentage of the population is using it, the number of things you're looking at explodes and you need to have a really good detector for what will be important, what won't be. And it's going to be erroneous at times and it needs to be quantitative because you put in 50k into this and 50 mil into this. And so it's hard but that's actually what capital allocation involves especially in the modern era is figuring out what's going to get big and getting ahead of it. So to your question what is going to happen with sort of the regulatory states collision with crypto there's various scenarios but I think on balance they're going to lose and let me explain what I mean by that. They they meaning the US government. The federal government is federal government. And why do I say that? Well, the short version is the US government is losing control over both domestic and international affairs. And so states and cities within the US will take positions at variance with the feds because cryptocurrency is becoming so valuable to them that they'll have the equivalent of sanctuary states and sanctuary cities for crypto. Crypto entrepreneurs will write model legislation that will be adopted by places like Texas and Wyoming and Colorado and Florida and other kinds of things that for example prevent Bitcoin seizures in law before the thing happens that give this is already there by the way in some ways like Wyoming's Dow law is quite advanced. Miami has accepted some city coins and Texas is big in Bitcoin mining. is already happening. But the next level of that is doing the same thing that they're already doing versus the feds, which is openly defying them and saying, "Actually, we're doing state nullification." And just to give you some recent examples of this, the federal government is losing control of events. I just made like a little list of this the other day, but both domestic and international affairs, inflation, Afghanistan, China on Taiwan, France on the AUS thing, El Salvador and Bitcoin. 17 states, by the way, opposed this idea that the FBI should be sent to schoolboard meetings. So 17 states wrote a letter on education. Texas has taken a different policy on on vaccine mandates and abortion. Germany went its own way on Nordstream, too. Florida is pushing back on this financial surveillance thing, saying that they are not going to abide by the federal government's edict on this. So, you're seeing significant energy at the state level within Empire. And then also outside from places like El Salvador or Switzerland that are just taking policies that are at variance with what the US government's position is. Now this is quite different from 10 or 15 or 20 years ago when under Obama for example there was a lot of kicking in doors in Europe going after Swiss bank accounts or sanctioning everybody on the planet or invading everybody for democracy like under Bush. So abroad a lot of muscle is being thrown and then domestically basically the the feds would would step in and force states to do something. But over the last few decades what we've seen are sanctuary cities for immigration. We've seen states have different gun laws, have seen states have different marijuana laws. We're seeing a larger and larger divergence. States, for example, had different gay marriage laws than than the feds for a long time. We're seeing a larger and larger divergence. States are becoming genuinely differentiated from each other and from the federal government and that's happening within. And then countries abroad are also taking a different route. So France for example, you know, now they're going hard on nuclear which is definitely not a priority of to my knowledge at least the current admin. Germany is trading with Russia. That's not something the US government wants them to do. India is trading with Russia on like some missile stuff. That's again something the US government threatens sanctions on. So countries are doing things that the US government doesn't want them to do. And states within the US are doing things the federal government doesn't want them to do. So because they're losing control over world events, the whole PAX Americana is based on the repeal of the 10th amendment at home and regulatory harmonization abroad. So you know FDR effectively repealed the 10th amendment where everything that wasn't officially to federal governments was left to the states. But a very broad interpretation of the interstate commerce clause said that everything is interstate commerce. So the states actually don't have any rights. We're going to reinterpret as a federal government having power over everything. And therefore you get these alphabet soup of agencies FDA and SEC and all these things kind of rose out of the FDR era and then abroad. Go ahead. You you left.

Texas or Florida.

Probably Florida. Why? Because those are becoming like freedom states. I think Wyoming is also good. I think Colorado under Jared Police is really good. You're basically seeing the pro-freedom. You know, Jared Police is a Democrat, by the way. He's a tech founder. He understands

That's right. So, yeah, he was uh he was a few years ahead of me at Princeton and did very well. a super smart guy. I think he he actually is like involved with tech stars and so on. So it's something where in some sort of the center and south of the country are going to diverge from the west coast and the northeast I think you know roughly speaking but that's not straight Democrat Republican that is more decentralization versus centralization. And so I think that those states, it's literally like a search engine, right? One thing I've wanted for a long time, and actually I've wrote about this like eight, nine years ago, but I think that the next political model is what I call crowd choice where you have a search engine where the rows are jurisdictions and the columns are policies, sort of like nomadlist.com, but it's basically a bunch of attributes and then you just put in your preference and you sort and filter. But then the next step is to group with a bunch of your friends and have you all put in your preference vector and then it finds a jurisdiction that is closest to your collective preferences.

Reproductive freedom. Exactly. So so how do you how do you think about the how to stack rank those things? The first thing I would say is as a pragmatist being in the US and a US citizen means you're sort of de facto funding all the wars the US wages around the world and so on. So people are implicitly already making moral trade-offs of some kind. When you point that out that sometimes takes the heat down cuz a new thing is different from the thing they've it's already baked the moral compromise they've already made implicitly. You buy stuff and you don't know where that supply chain comes from. Maybe there's something that you would disagree with ethically. So people make these compromises all the time. And fundamentally I think it is it's a vector. Policy is not a scaler. It's a vector. It's a set of decisions. You know a tax rate of X and a 01 as to whether drones are legal and this is your reproductive freedom/abortion policy and this is your this policy. And you know there's there's an aspect of DOSpus non-disputandum. I cannot

Probably mispronouncing, but the gosp disputandem is in matters of taste there can be no disputes. So there's aspects of this that are preferences rather than absolutes. I might say thou shalt not kill, but I can't say thou shalt like the color green. That's a preference. So some of these things and crucially by the way I think there are multiple optima. This by the way I was coming up with sort of a name for how I think about you know my philosophy or something.

Sure. Yes. So imagine looking down at a bit of hilly terrain and a local optima is the peak of one of those hills and a global optima is the highest peak of the highest hill.

So if your goal was to ascend to the highest height, you might ascend to the top of one of the hills, but really what you want is the global optimum in this case, which is the top of the highest hill. However, it could be the case that you could have multiple hills all in the same region that are basically of the same height.

Yep. How does that apply to to states? Similarly, how would you look at that? Very similarly. That's right. Because I think right now we sort of think of companies, currencies, cities, countries, communities as being different things, but they're all going to become the same thing. Essentially, the projection of a social network or rather companies become like apps effectively on this will sound like techb, okay? A blockchain is property rights, identity, historical records, marriage and birth certificates, all the type of stuff. A society can run a ton of stuff that it currently does at city hall on a blockchain. It's property rights. It is who has admission to what building, who owns what property, what sale occurred at what time, who paid who, dispute resolution. A lot of that stuff goes on chain. And then a lot of companies butt off from that and use that as an application point. So all of these things basically settle around companies, currencies, cities, countries, communities all settle around chains. That is like the the software stack for running a a community. And you know an analogy to this is before the internet books and movies and music and songs, television, telephone calls, those were all different. And then after the internet, they got turned into packets and all kind of mixed together. And so the normal thing that a macroeconomist will say is he'll say something like governments aren't households. Have you heard that before?

There's a quote actually I think it was Tyler Cowan quoted it. I think it was John Lchester in the something review of books. Gosh, hold on let me find it. January 2013, Richard Feman was once asked what he would pass on if the whole edifice of modern scientific knowledge had been lost and all he could give to posterity was a single sentence. What axiom would convey the max amount of scientific information the fewest possible words? His candidate was all things are made of atoms. In a similar spirit, if the whole ramshackle structure of contemporary macroeconomics vanished into thin air and the field had to be reconstructed from scratch, the sentence which packs as much of the discipline into the fewest possible words might be quote governments are not households. The reason this is really important is this is why people will argue that what I'm talking about for companies doesn't apply to cities or to countries because they're fundamentally different. Governments are not households. And there's a whole discipline of macro that has arisen around this. However, I argue that actually in many ways American and western macroeconomics is in its own way as pseudocientific as Soviet economics was. There's a whole discipline by the way of Soviet economics, Marxist economics that had all these equations and so on and there's some aspects of it that are still useful like Caner's work on Keter Kentovich on linear programming and optimal allocation you know so some of it is okay but a lot of it was basically essentially just a recapitulation of Marxist premises and when they say governments are not households and they say that recapitulates the whole field what they really mean is that the government has guns and households do not and therefore the government can seize money and course people to do things and households cannot do this. So everything which assumes some ability to do redistribution, some ability to print, some ability to do this, some do that. That is a hidden assumption. The bullet point at the end of QED is a bullet and the assumption is of course a force as opposed to physics where it's the analogy he gives is to physics and atoms. The human element isn't there. So once you say governments are not households and you think of it from a different angle of governments have guns. Yes, it is true they are different. But I do think that in the medium-term future because of exit, because of global mobility, I mean, we have this tension now. You know, I talked about exit a lot even before the Corona virus as the most important right, but post corona, postlockdown, people prize it way more. When it's taken away, you prize it more. You prize free migration. You prize ability to leave. And we're seeing a great migration in the US. So the great resignation, the great migration, remote work, all this and lockdown, all this stuff has made people both more aware of, you know, how important the policy is of the state that they're in and were able to move. And, you know, by the way, everybody doesn't have to move. You know, only a small percentage of the world moved to the US. And look at what a big deal that was. On the margins, some degree of mobility can cause massive change. This is also why everybody doesn't necessarily need to hold their coins. The fact that some people can is enormous leverage on the system. It's just like, you know, Steve Bomber back when this apocryphal story, but when an executive left from Microsoft to Google supposedly like threw a chair or shoved a chair or something like that, everybody didn't leave need to leave Google. Enough people need to leave that he's like, "Okay, this is real. Google is a real competitor." And eventually that led to him stepping down and Sethia taking over. So the thing is that the great resignation, the great migration, remote lockdown, all of these things mean much more exit. when there's much more exit, when you can hold your coins on your person, when you're renting rather than buying, when you're basically running light and your stuff is in NFTTS rather than real estate, and when all of the stuff when your books are in Kindle, when your mail is in Gmail or ideally, you know, in some kind of decentralized thing versus centralized service, when you don't have obligate ties to the land, then the state has less leverage. And so because of that over time it moves for example to like a subscription model.