0:00

The Chinese government and the Russian government have

0:02

a lot of resources devoted to pushing their

0:04

message out there and the US government doesn't

0:07

Right liberalism doesn't US government sits back and

0:09

says, you know from an Olympian remove And

0:12

it's like I am the overall mighty hegemon

0:14

of information And so I'm going to let

0:16

all these tiny little actors play it out

0:19

You know and then one of those

0:21

tiny little actors is the government of China

0:23

a country four times the size of the

0:25

United States With you know arguably a higher

0:27

GDP in the United States Welcome

0:36

to Bankless where we explore

0:38

the case for authoritarianism. What

0:41

did I just say what get into that? This

0:43

is Ryan John Adams. I'm here with David Hoffman

0:45

and we're here to help you become more Bankless

0:48

now, I want to make it clear before we

0:50

get into this episode both of our guests today

0:52

do not want Authoritarianism to

0:54

win 21st century. Okay quite the opposite

0:57

quite the opposite I think both have

0:59

dedicated their lives in various ways to

1:01

pursuing anti-authoritarian ideas and a

1:03

Vitalik's case technologies So today's episode

1:06

is more of a steel man The

1:08

question is if totalitarianism outcompetes free

1:11

societies and wins the 21st century's

1:14

how might it win? And

1:16

what if the information anarchy of the

1:18

internet spells the downfall of liberalism? This

1:20

is a fascinating conversation with Noah Smith who

1:22

is an economist and Vitalik Buterin who you

1:25

know from crypto I would call

1:27

this topic a non crypto topic today But

1:30

actually game theorizing on how the authoritarians might beat

1:32

us might just be the most crypto thing ever

1:34

before we get into the conversation Our friends and

1:36

sponsors over at steak wise want you to know

1:38

what they're up to in the world of liquid

1:40

staking on theorem If you're a

1:42

solo staker But your ETH is locked up

1:44

in a liquid because you're solo staking You

1:46

can continue to be a solo staker in

1:48

the steak wise protocol while also being able

1:50

to mint OS eth in order to use

1:53

your solo staked ETH in defy on layer

1:55

2's and I good layer or anywhere

1:57

else across the ethereum landscape you get to

1:59

keep your rewards that your node is

2:02

earning while doing more with your

2:04

ETH. And if you're not a

2:06

solo staker, Stakewise is introducing a

2:08

vaults marketplace to choose perks that

2:10

you want to add onto your

2:12

staked ETH between custom MEV strategies,

2:14

DVT, insurance, APY boosts, all

2:16

things available through the Stakewise vaults marketplace. There

2:18

is a link in the show notes if

2:20

any of this stuff peaked you. Bankless were

2:22

of course known to be a crypto podcast

2:24

but if you are a long time listener

2:26

of Bankless, you know that at the end

2:28

of the crypto rabbit hole comes conversations on

2:30

how do we structure society and

2:33

which structures do better than others and how

2:35

should we prepare for unfavorable structures like authoritarianism

2:37

and how can we prevent that in the

2:39

first place. And with this episode, we kind

2:41

of skip straight to the bottom of the

2:44

rabbit hole talking about how technology is changing,

2:46

society is changing and how that's gonna impact

2:48

the way that society is organized. So without

2:50

further ado, let's go ahead and get right

2:52

into the conversation with Vitalik Buterin and Noah

2:54

Smith. But first a moment to talk about

2:57

some of these fantastic sponsors that make this

2:59

show possible, especially Kraken, our preferred place

3:01

to buy or sell your crypto in

3:03

2024. If you do not have an

3:05

account with Kraken, consider clicking the links in the show notes getting

3:07

started with Kraken today. If you want

3:09

a crypto trading experience backed by world-class security

3:11

and award-winning support teams, then head over to

3:14

Kraken, one of the longest standing and most

3:16

secure crypto platforms in the world. Kraken is

3:18

on a journey to build a more accessible,

3:20

inclusive and fair financial system, making it simple

3:23

and secure for everyone, everywhere to trade crypto.

3:25

Kraken's intuitive trading tools are designed to grow

3:27

with you, empowering you to make your first

3:29

or your hundredth trade in just a few

3:31

clicks. And there's an award-winning client support team

3:34

available 24-7 to help you along the way,

3:37

along with a whole range of educational guides, articles

3:39

and videos. With products and features like

3:41

Kraken Pro and Kraken NFT Marketplace and

3:43

a seamless app to bring it all

3:45

together, it's really the perfect place to

3:47

get your complete crypto experience. So check

3:49

out the simple, secure and powerful way

3:51

for everyone to trade crypto, whether you're

3:53

a complete beginner or a seasoned pro.

3:55

Go to kraken.com/banklists to see what crypto

3:57

can be. Not investment advice, crypto trading.

6:00

Welcome back to Bankless. Hey, great to

6:02

be back. We also have Vitalik Buterin.

6:04

He is a philosopher, I would say,

6:06

in the context of today's conversation and

6:08

probably know him as a co-founder of

6:10

Ethereum. Vitalik, welcome to Bankless as well.

6:12

Thank you. Good to be back. So

6:14

we are doing this episode on a

6:17

post, an argument that Noah put out

6:19

on his sub-stack. And the title of

6:21

that post is, How Liberal Democracy Might

6:23

Lose the 21st Century. And

6:25

I want to provide some context for why

6:27

we're having a Bankless episode on this. Isn't

6:30

Bankless a crypto podcast? This is certainly a

6:32

crypto adjacent topic, but I guess

6:34

I'll give some framing for this. You know,

6:36

when I read Noah's article, I was kind of

6:38

a know your enemy type of reaction for me

6:40

because Bankless listeners will know we are very much

6:43

a friend of liberalism in lowercase L.

6:46

You know, civic rights, free speech, free markets,

6:48

private property. We want that to succeed. I

6:50

mean, we have a horse in this race.

6:52

And I think in order to help

6:55

it succeed, you have to understand the

6:57

points at which it will fail, liberalism,

6:59

that is. So in the past,

7:01

I think especially in the way that I was

7:03

brought up, I've been guilty of a blind faith

7:05

in liberalism. You know, like it'll obviously win. I

7:07

think I'm sort of a maybe a victim of

7:09

just like a child in the US, like growing

7:11

up in the 90s. And

7:13

I don't want to live in a blind

7:16

faith of like liberalism will always win. I

7:18

want to live in an actual reality. And

7:20

I think that's why Noah's article was so

7:22

instructive. And so Noah

7:24

has this argument for

7:26

how authoritarianism might actually

7:29

outcompete Western liberal democracies.

7:31

And Vitalik, I think you called his argument.

7:33

I saw a Farcaster tweet about this, the

7:37

strongest case for authoritarianism. So

7:39

I think you thought it was a pretty good

7:41

case. I know you have some takes here. So

7:43

that's what we're going to do in today's conversation.

7:46

Number one, we want to just frame out the

7:48

argument. So have Noah explain it. Maybe Vitalik have

7:50

you help? And then two,

7:52

we want to talk about maybe the counterpoints to

7:54

this argument. And then three, we want to finish

7:56

off with where do we go from here? Does

7:58

that sound good? Amazing, I'm

8:00

getting thumbs up. All right, so let's start

8:02

with you Noah. So let's frame this up

8:05

because I think we need some background. Can

8:07

you just explain what we mean by liberalism

8:09

and why so many of us have this

8:12

blind faith in it? I can't be the

8:14

only one. So explain liberalism and why it

8:16

just feels like everybody thinks that liberalism

8:18

has won already, at least in the

8:20

West. Well, so when people

8:23

say liberalism, there's really, I think, three

8:25

things that they mean. The first thing

8:27

is markets, your right to basically buy

8:29

and sell stuff if you want. The

8:31

second is an own stuff, et cetera,

8:33

property rights, all that. The second is

8:35

democracy, your ability to elect your leaders.

8:37

And the third is kind of civil

8:39

rights, your ability to kind of do

8:41

whatever you want, you know, as

8:44

long as it doesn't hurt anybody else, of course that's always

8:46

being, who knows what that really means. But

8:48

those are sort of the three things people mean when

8:50

they say liberalism, your ability to elect your

8:52

leaders, live your life the way you want to

8:54

and buy and sell stuff and own stuff.

8:57

Noah, why, you start the article this way,

9:00

why were we raised in this age, and

9:02

you say you were raised in this age

9:04

of liberal triumphalism, like the sense that liberalism

9:06

has won already? Right, in the 20th century,

9:08

at the beginning of the 20th century, we

9:11

were just in the middle of the industrial revolution,

9:13

the really fastest part of it. And people kind

9:15

of didn't know how society was gonna be organized.

9:18

There were a lot of different ideas about how

9:20

we were gonna organize an industrial society and nobody

9:22

really knew what that was gonna look like. And

9:25

varieties of socialism from

9:27

evolutionary socialism, which

9:30

is basically what Sweden looks like

9:32

now, to revolutionary socialism, which

9:34

is basically, I don't know what North Korea

9:37

or something, Cuba maybe looks like now. And

9:39

then of course you had various other things, social

9:42

Darwinism and various kind of racial

9:44

supremacy theories. And then you had,

9:47

in the United States, the big idea that everyone was

9:49

pushing was that both free enterprise,

9:51

which is what we now call economic

9:53

liberalism, free enterprise and democracy

9:55

were both good things. And that was

9:57

the best way to organize society American

9:59

society. So there were sort of all these hats

10:01

on the ring of what society is going to

10:04

look like once we move from farms to factories

10:06

and offices. And I think

10:08

that by the end of the 20th century,

10:10

that question had been answered in favor of

10:12

liberal democracy by most people. In

10:15

China, which was still a

10:17

lot poorer than America at that time, they were

10:20

experimenting with various ways to liberalize the

10:22

society and people were

10:25

experiencing many kind of new

10:27

freedoms, new personal freedoms and

10:30

economic freedoms and sort of personal freedoms if

10:32

not democracy. They didn't have democracy, but you

10:34

could certainly do a Mao impersonation as a

10:36

joke in 2004 or something. And

10:38

lots of people did this professionally, these Mao impersonators,

10:40

they were women by the way, who would dress

10:42

up as Mao. And so in China. And

10:45

of course, Russia had the Yeltsin period and even in

10:47

the early Putin period, people thought like, oh, Putin's going

10:49

to be a liberal, blah, blah, blah, because he had

10:51

the support of educated sort of liberal thinking elites in

10:54

the city. And so by the end of the 20th

10:56

century, by the 1990s and early 2000s, I think that

10:58

people generally thought, okay, this is

11:00

what works. It was Francis Fukuyama's thesis, the

11:02

end of history, blah, blah, blah. And

11:05

so I think that now it's the strength

11:07

of China that's really challenging that.

11:09

And not just the strength of China, but

11:11

the weakness of the United States. So the

11:14

United States has looked remarkably

11:16

weak since at least 2008. In

11:19

the war on terror period, the United States looked kind

11:22

of angry and pissed off about 9-11,

11:24

was becoming less liberal. But then

11:26

in 2008, the United

11:28

States economic model sort of appeared

11:30

to have collapsed, the kind of

11:32

financialized capitalism that we had. And

11:34

then after the election of Trump

11:36

and the divisive rise

11:39

of social media movements, I would

11:41

say, people started asking, okay, is

11:43

this society just total chaos? And

11:45

then after that, we started discovering

11:47

all these things that our society

11:49

had seemingly lost the ability to

11:51

do, like build housing or build

11:54

trains or build literally

11:57

anything. And so America got this. images, the

11:59

build nothing country. And China almost seemed a

12:01

mirror image of that. Whereas in China, you

12:03

could build anything you want because the government

12:06

just says, do it and you do it.

12:09

And, you know, China was economically growing and

12:11

strong. And then if you go to their

12:13

cities, you see giant glittering new malls and

12:15

massive train stations and beautiful

12:17

high-speed trains. They can take you anywhere really fast.

12:20

And you see, you know, LEDs on all

12:22

the buildings, right? And then drones delivering stuff,

12:24

right? You're a doorstep, I don't know, or

12:26

a little delivery robots anyway. And so then

12:28

all of these things, I think have caused

12:30

people to question, was Fukuyama not

12:33

just wrong, but the opposite of right? Is

12:35

China style authoritarianism actually gonna win

12:37

now? Is that the

12:40

model that works now? And

12:42

so I was trying to think, okay, how could that be

12:44

true? You know, of course it's possible

12:46

that there's no model that really works and it's

12:48

all just contingent in the fact that China happens

12:50

to be this really big country that has historically

12:52

authoritarian instincts and happens to be only at a

12:54

third of American per capita GDP anyway. And,

12:57

you know, it's sort of in its rising phase and

13:00

it just happens to be really big. And it's all

13:02

just this big illusion and they put LEDs on the

13:04

buildings, but actually they don't really look that nice. But

13:06

I wanna steel man the idea that authoritarianism is gonna

13:08

win in the 21st century. I

13:11

thought, okay, so how do I do that, right?

13:14

And I thought, what was the strength of liberalism?

13:16

Why did we think it might've succeeded in the

13:18

20th century? And why might that strength

13:20

turn into a weakness now in the 21st century?

13:22

And the only thing I could think of was

13:24

the internet. That's the only thing that's different now.

13:27

Like people aren't different very much, right? We

13:30

have less lead poisoning maybe, I don't know.

13:32

But like industry isn't that different. Like there's

13:34

a few different things. The main thing that's

13:36

different now, between now and 1992 is the

13:39

internet. And

13:42

so I was thinking, how could the

13:44

internet have totally changed the game in

13:46

terms of whether liberalism or, you know,

13:48

sort of, I don't know, authoritarian totalitarianism,

13:50

whatever, naturally is stronger. And so

13:52

I thought, well, the internet's all about

13:54

information. So what's the strength of

13:57

liberalism with regard to information? The strength of

13:59

liberalism... regard to information, everybody will tell you,

14:01

Friedrich Hayek will tell you, and a lot

14:03

of people tell you, it's to aggregate information.

14:05

So briefly, Hayek's theory is that a market

14:07

aggregates information about costs and preferences, and that

14:10

you know what to produce. Producers know what

14:12

to produce because they know what people want

14:14

to buy, and they know what their costs

14:16

are going to be, and consumers

14:18

know what to consume because, you know, they know what

14:20

the producer's costs are going to be. And so analogously,

14:23

you can think of democracy as revealing information about what

14:25

voters want, and you can think

14:27

of civil society as revealing information about how

14:29

people want to live, right? People argue about

14:31

whether they like this or that music, I

14:34

don't know, or whether they think gay marriage

14:36

is okay. So then you aggregate this stuff

14:38

with public debate, the marketplace of ideas. So

14:40

you can think of liberalism as this giant

14:43

information aggregator. Now, how does the

14:45

internet change that? Well, the internet

14:47

makes information aggregation much easier, right?

14:50

So we can get information much

14:52

more easily. Maybe that actually

14:55

reduces the benefit of liberalism

14:57

because an authoritarian state can

15:00

get much better data about what to produce,

15:02

what to tell people to produce. And,

15:05

you know, an authoritarian state can get much

15:07

better information about whether the citizenry is angry

15:09

and you need to respond to what they

15:11

want. And you can get much

15:13

better information about what kind of things, what kind of

15:15

behaviors you can restrict with only pissing off a few

15:18

people versus what kind of

15:20

behaviors you would piss off everybody by restricting.

15:22

And so authoritarian states can get all this

15:24

information from the internet, especially with AI, especially

15:26

with sort of universal surveillance, kind of that

15:29

your phone is like a surveillance device that

15:31

tells you everything about what everything you do

15:33

in your whole life can send to a

15:35

central party apparatus or some authoritarian organ and

15:38

tell you everything about you. And so now

15:40

maybe that information gathering has gotten so easy

15:42

for authoritarian states. Now, that doesn't mean I

15:45

think they're better at it because of technology,

15:47

but maybe they're less bad. Maybe they'd still

15:49

have a disadvantage, but it's ameliorated, right? It's

15:51

less bad than it used to be. Meanwhile,

15:53

maybe there were some advantages that authoritarian states

15:56

always had over liberal states that have

15:58

gotten more pronounced in the age of the

16:00

internet. So for example, disadvantages of liberalism that

16:02

were always there that have been exacerbated by

16:04

the internet. And so I was thinking,

16:06

okay, well, in the internet, we spend all our time

16:08

on Twitter just arguing and the smartest people in the

16:10

world are wasting their time arguing on Twitter, like

16:13

with complete idiots who think that like, you know,

16:15

they're like, but did you adjust the inflation adjusted

16:17

graph for inflation? And like, how many times, like,

16:19

is it worthwhile to have the highest IQ people

16:21

on the planet sitting there explaining once again that

16:24

yes, inflation adjusted means you have adjusted for inflation.

16:26

Thank you very much. And so that's, you know,

16:28

giant waste of time. And so when I look

16:31

at financial capitalism, I look at, you know, Elon

16:33

Musk literally had to drive himself nuts to just

16:35

to get enough funding to build some cars. Whereas

16:37

the people who run BYD did not in China,

16:39

right? They did not have to drive themselves nuts.

16:41

Maybe they're nuts anyway. I've never met them, but

16:43

you know, Elon had to basically break himself with

16:45

stress over the model three rollout, raising money to

16:47

do this thing because the funding wouldn't give him

16:49

the money just, you know, because like, oh, cars

16:52

cool. And like, maybe this is

16:54

analogous to a lot of things in financial

16:56

capitalism. The idea that fundraising for

16:58

long-term projects is so goddamn hard

17:01

because everybody's out there saying, it'll never work.

17:03

It'll never work. And the people that

17:05

will work, you know, or just bullshitting, pumping

17:07

and dumping and blah, blah, blah, blah. That

17:10

in order to keep the fickle market

17:12

focused on providing capital for a very

17:14

long-term project for a large public company,

17:16

maybe that's just not possible. And that's

17:18

why GM and Ford and all these

17:20

old line companies seem so unresponsive is

17:23

because everything is just quarterly earnings. And

17:25

it's this information tournament. You know, if you really

17:27

want to invest for the future, you've got to

17:29

spend inordinate excessive amounts of

17:32

time, you know, on the internet

17:34

and yelling that you're good. And

17:36

so maybe this was always a problem with financial

17:38

capitalism. I think it probably was, but now that

17:40

the internet allows massive real-time dissemination of

17:42

bullshit information, like all the people who said the model

17:44

three would never work and would break Tesla and Tesla

17:46

would die. And it would never, nobody would buy it

17:48

and it would never succeed, right? There are all those

17:50

people and they're like, says it's going to fail. And

17:52

then, you know, that is required. Elon

17:55

Musk to drive himself nuts fundraising. So

17:57

I think of this as an information tournament. You've

18:00

got people yelling bullshit and you've got people

18:03

yelling truth and truth does not automatically drive

18:05

out bullshit because bullshit is very easy and

18:07

cheap to generate. It's really

18:09

easy to make a misleading graph. You

18:11

know, it's hard to make a graph that teaches you something. It's

18:13

easy to make a graph that if you decide on your point

18:16

ahead of time, you just want to bullshit. It's

18:18

easy to make that graph. It's easy to make bullshit

18:20

arguments from an ideological standpoint. It's like ideology is like

18:22

a muscle suit. So everybody just herps

18:24

their derp as I would love to say.

18:27

And so everybody just throws their ideology, you

18:29

know, into the ring and it just becomes

18:31

this giant shouting match. And so meanwhile in

18:33

China, they're just like, okay, there's just one

18:35

ideology. It's Xi Jinping thought. What is Xi

18:37

Jinping thought? Well, it's not really anything interesting.

18:39

It's just this one dude and he's sort

18:41

of a boomer conservative. And he's like, let's

18:43

make some cars. Der, let's not

18:45

make internet stuff. The internet stuff is

18:48

not real innovation. Let's make cars instead.

18:50

Der, and that's not optimal, right? You

18:52

haven't really optimized, but maybe that's less

18:54

bad than having a bunch of people

18:56

screech that like, you know, arise in

18:59

the price of literally anything is because

19:01

corporations are profit gouging and the, you

19:03

know, the evil corporations are hoarding all

19:05

the stuff. And you know, like maybe

19:07

obviously we're dealing with many very flawed

19:09

systems here, there's no perfect system, but

19:12

maybe in the age of the internet,

19:14

the internet helps authoritarians get real information,

19:16

you know, for all his authoritarianism, Xi

19:18

Jinping was also able to see the

19:20

white paper protests and COVID lockdowns and

19:23

know really early, really quickly

19:25

through the internet, when to cancel zero COVID,

19:27

right? As soon as people started getting a

19:29

little bit upset, there were like a few

19:31

hundred people at those protests and still it

19:34

moved national policy. So maybe authoritarianism has become

19:36

more responsive in the age of the internet

19:38

while liberalism has been paralyzed by

19:40

people shouting disinformation and bullshit all day. That's

19:42

a great articulation of it. And I want

19:44

to continue to steel man this. Eventually Vitalik

19:47

want you to kind of weigh in and

19:49

try to articulate what Noah is saying here,

19:51

but no, let's continue to steel man the

19:53

argument. Cause you made a whole bunch of

19:56

connections that I just want to reinforce, but

19:58

your basic idea is that totalitarianism. might be

20:00

better adapted to this world that we find

20:02

ourselves in the 21st century. And

20:05

the core reason why is because, as

20:07

you say, the internet or the

20:09

cost of information has gotten

20:12

very cheap, right? Is whereas

20:14

in the 20th century, maybe the

20:16

cost to produce information was a

20:18

lot higher. And so

20:20

this technological shift of cheap

20:22

information has really possibly

20:24

given totalitarian authoritarian regimes a fitness

20:27

advantage, like kind of in this

20:29

Darwinian struggle of which society is

20:31

going to produce the most economic

20:34

output. And so let's just

20:36

reinforce that a little bit. This

20:38

idea that liberal democracies are

20:40

information aggregators. I think bankless listeners

20:42

will be more familiar with the

20:45

idea of capital markets as

20:47

information aggregators. You know, there's that clip

20:49

that Milton Friedman pencil clip, where he

20:51

talks about how it's from the 1980s

20:53

and we'll include a link in the

20:55

show notes. But he basically holds up

20:57

a pencil and he says, you

20:59

know, no single person knows how to

21:01

make this pencil from scratch. And then he

21:04

goes through all of the different components of

21:06

the pencil, you know, the graphite inside, the

21:08

rubber, all of it sourced from

21:10

different places in the world. And

21:12

he makes the point that all of these

21:14

things require specialized skills and labor. And so

21:17

something as mundane as a

21:19

pencil is really this unique creation of

21:21

capitalism. And isn't it great that we

21:23

can all coordinate around price systems and

21:25

have market signals, we could do this

21:27

without war, you know, we could do

21:29

this in a peaceful way. And

21:32

so that is kind of like information

21:34

aggregation theory as applied to capital. But

21:37

what about applying that to democracies?

21:40

So what about the idea that

21:42

I think is core to your

21:44

argument here, that liberal democracies are

21:46

information aggregators? And so they have

21:48

a superiority in their ability to

21:51

aggregate information effectively, like leading to

21:53

better decisions and like more buy

21:55

in and public goods. That

21:57

wasn't necessarily clear to me going into

21:59

this episode. Could you steel man that

22:01

a little bit? Why are democratic liberal

22:03

democracies information aggregators and why have they

22:05

in the 20th century had an advantage

22:08

there? Right. So I would direct

22:10

you to Bruce Bueno de Musquita's Selectorate theory, which is

22:12

a really interesting theory. The idea is in

22:15

a democracy, right? So we have the same

22:17

understanding of how markets aggregate information. But let's

22:19

talk about democracies also aggregate information just a

22:21

different way. Say you have two

22:24

parties, right? And one party's like, I'm going to raise your taxes, I'm

22:26

going to lower your taxes. And the other party says, I'm going to

22:28

lower your taxes. And the party says,

22:30

I'm going to raise your taxes says, okay, I'm going to raise your

22:32

taxes and I'm going to buy you health care with that. Right. And

22:35

the other party is like, no, I'm going to lower your taxes and you can

22:37

go buy your own health care if you want, you can buy whatever you want.

22:40

And so those are the two ideas on offer.

22:42

And so the question is, what are the masses want? Right?

22:45

Then you have people vote based on that.

22:47

This is an incredibly simplified, stupid model, obviously.

22:50

But this is the first model you learn

22:52

in public economics because it's just illustrative, right?

22:54

It's an illustrative example. And

22:56

so then you have people vote on which of these they

22:59

like better. And so you do like the

23:01

high tax, high services candidate, do you like the low tax, low services candidate

23:04

better. And then you vote on them. And if

23:06

more people want high tax, high services, they'll vote

23:08

for that candidate and less people want

23:11

it, they'll vote for the other candidate. And so

23:13

then by voting, you aggregate information about what people

23:15

want about people's preferences. And

23:18

by the way, this is called the median voter

23:20

theorem. You've heard of it. And so that's the

23:22

idea of the median preference gets into policy because

23:24

then the candidates do what

23:26

they say they're going to do and everything works nice.

23:28

You get your high tax, high service, Denmark, or you

23:30

get your low tax, low service, I don't know, Hong

23:33

Kong, whatever it got. I know they didn't

23:35

really have a democracy, but like, anyway,

23:37

you can't use the United States for that

23:39

anymore because we're not that anymore. The UN

23:41

Singapore is way different. There's no real libertarian

23:43

example I can use versus that, but this

23:46

is how people used to talk about this. So that's how democracies

23:49

aggregate information. Now, are democracies perfect

23:51

information aggregators? Well, no, but neither

23:53

are markets. There's reasons why this

23:55

information aggregation fails. And so

23:58

the idea that democracy is the least bad.

24:00

system, you know, which is a famous Winston

24:02

Churchill quote, this idea came from the idea

24:04

that well, when you have a totalitarian state,

24:06

when you have, you know, Nikolai

24:08

Chachisku is in charge, right? You know, he's like,

24:10

oh, I'll ban abortion. I'll do these other things

24:12

that he like thinks are right because he and

24:14

his buddies think that all the guys around him

24:17

are like, that sounds legit. Let's do that. Then

24:19

the normal people don't like it. And he's

24:21

like, oh, well, okay, they bitch and moan, but

24:23

it's just a few loud people, blah, blah, blah.

24:26

But because you don't have the aggregation, because they

24:28

can't vote for Chachisku and you can't see him

24:30

punished at the polls. You can't see him thrown

24:32

out, you know, in favor of some other leader,

24:34

blah, blah, blah. The leadership just doesn't realize what

24:36

the people really want. And so does things that

24:39

the people don't want and then gets thrown out

24:41

violently via revolution, which causes chaos in society, which

24:43

leads to problems. Although maybe in the long term,

24:45

it's good, but then, you know, it's better if

24:47

you can throw the bums out with

24:50

an election than throwing them out by hanging them

24:52

from a gas station and by burning the Capitol.

24:55

And so that's the idea of democracies, agreeing

24:57

information about what voters actually want. Vitalik, you

24:59

put this into a pretty interesting metaphor that

25:01

I kind of want to bring up in

25:03

this point of the conversation on Warpcaster, which

25:05

is where we saw your interest in this

25:07

article. You say, this might be the

25:09

strongest case for authoritarianism. And then you link to Noah's

25:11

article. Basically, the war for people's

25:13

hearts and minds has no stable equilibrium except

25:16

local hegemony of one dominant elite, much

25:18

like and for the same reasons as what

25:20

Hobbes points out for regular war. And so

25:22

this is Thomas Hobbes Leviathan concept that I

25:24

think you're alluding to. And you're saying Hobbes

25:27

alludes to this idea that first, there's a global

25:29

state of anarchy, and then there's

25:31

a war against all, which suppresses the anarchy,

25:33

which leads to a governing elite with a

25:35

monopoly on force, which is kind of like

25:37

how we have the stable equilibrium of countries

25:40

to this day. And you allude to the

25:42

fact that this produces a same pattern with

25:44

instead of a state of physical anarchy, you

25:46

have a state of information anarchy. And

25:49

I think, again, alluding to the fact that

25:51

like putting out a tweet is so cheap

25:53

these days. And so the same pattern exists

25:55

where like, if we want truth, we kind

25:58

of need a governing elite of a monopoly

26:00

of memes is kind of how you say

26:02

it. Maybe you could also just like add

26:04

to this illustration of just like what happens

26:06

when like information markets and capital markets interact

26:08

with each other and how they can kind

26:10

of get distorted and overall just how you

26:12

resonated with Noah's article. Yeah. And so I

26:14

think you definitely gave a pretty good introduction

26:16

to, I guess, the thesis

26:18

already, right? But basically, if

26:20

you think of like what the

26:23

public discourse game is, and like

26:25

you imagine the most pessimistic possible

26:27

interpretation of the public discourse game,

26:29

there is basically no truth seeking.

26:31

And instead, what you have is

26:34

you have multiple tribes. And

26:36

each of these tribes

26:39

basically fires off a type

26:42

of missile or warship

26:45

or a tank or

26:47

whatever. That could be a meme

26:49

or it could be an article,

26:51

could be a tweet or a

26:53

video or whatever. And often, you

26:55

know, these million of these infomissiles

26:57

fired at you would have some

26:59

common themes. And so you

27:01

have one group that's like basically trying

27:04

to essentially have their memes colonize your

27:06

brain. And then you have a different

27:08

group that's also trying to have their

27:10

memes that are completely different memes go

27:12

and colonize your brain. And

27:14

so you basically have this like zero-sum

27:17

conflict, right? It's like, you know, if

27:19

we say, you know, one side is

27:21

pushing capitalism, the other side is pushing

27:23

socialism. Or if

27:26

let's say, you know, it's a foreign

27:28

policy issue and like, let's say, you

27:30

know, Greenland and Sweden are

27:32

at war. And you know,

27:34

you have one group saying, you know,

27:36

support Greenland and the other saying support

27:39

Sweden. These are just like very zero-sum

27:41

things. So like you have people pushing

27:43

in one direction, you have people pushing

27:45

in the other direction. And it basically

27:47

all kind of roughly stums up to

27:50

zero. And you just have like a

27:52

huge amount of wasted effort, huge amount

27:54

of stress, a huge amount of people

27:56

not getting literally killed, but you know,

27:59

like definitely getting like much

28:01

worse, you know, life's emotional experiences than

28:03

they otherwise would. And so you basically

28:06

ask the question of like, okay, so

28:08

you have this war of all against

28:10

all that looks very similar to a

28:12

war between two armies to conquer territory,

28:14

except instead of it being two armies

28:16

battling over a forest, you have two

28:18

meme armies battling over each and every

28:20

person's brain. And you ask

28:23

like, what is the equivalent

28:25

of a peace treaty,

28:27

right? And the equivalent

28:30

of a peace treaty is so

28:32

basically in the Yahubzian case, like

28:34

you have local territorial monopolies, right?

28:36

And then after that, you know,

28:38

you had things like the

28:41

treaty of Westphalia, which like formalized a

28:43

lot of this, and then they skipped

28:45

going further and further from there, basically,

28:47

you know, saying that, okay, you know,

28:49

we have this notion of territory, and

28:52

within each territory, then,

28:54

you know, you have a local

28:56

monopoly. And actually, the Westphalia example

28:58

is interesting, right? Because I think

29:02

that was also when the concept of

29:04

a coyos regio, a s relegio, right?

29:06

Like who has the region has the

29:08

religion came about, right? Basically,

29:10

yeah, that one of the ideas

29:12

is that kind of the local monarch

29:15

would also have the ability to choose

29:18

the religion of the country. So it's

29:20

an interesting example to harken back to

29:22

you, because we're basically saying like, even

29:24

back then, it kind of, you know,

29:27

like recognize that like this concept of

29:29

thing, like one person

29:31

having hegemony over a piece of territory,

29:33

and then different people having hegemony over

29:36

different pieces of territory is something that

29:38

applies to a physical war. And it's

29:40

also something that can, in

29:42

the same way, apply to information war, right?

29:45

And so the way that this works in,

29:47

you know, the space of information war is

29:49

basically like, okay, yeah, you know, you have

29:51

one country, and, you know, in the cell

29:53

one country, you're supposed to, you know, the

29:55

only memes that are allowed to spread are

29:57

the Xi Jinping thought memes, and you other

29:59

country and then in that other country the

30:01

only memes that are allowed to spread are

30:03

some different memes. In the third country you

30:06

have some different memes that are

30:08

allowed to spread. You

30:11

have this equilibrium where

30:14

basically you don't have at least

30:17

as much zero-sum mimetic warfare

30:19

because for every country there is

30:21

one dominant elite that has a

30:23

reliable hold over the meme war.

30:25

There might be other groups that

30:27

want to get their memes out

30:30

into the meme war but they're

30:32

just so much less powerful than

30:34

the dominant party. It's like the Asia-ISU-S

30:37

governments versus a random cultist syntax or

30:39

whatever. The second group has no chance

30:42

and so most of the time they

30:44

don't try and so there's no bloodshed.

30:46

That's the analogy

30:49

that I made between

30:53

authoritarianism though it's a very

30:55

related concept. Info-hegemony

30:57

as opposed to infohigeminy might be

30:59

one of the ways to think

31:01

about it and how

31:03

things ended up turning out with

31:05

physical warfare. One of the things

31:07

that this thesis then implies is

31:09

that if there is

31:12

this analogy then if we

31:14

want to argue that infohigeminy is

31:16

something that's actually better than infohigeminy

31:18

then we might

31:20

want to look for deep and

31:23

enduring reasons why physical

31:25

war and meme war actually are

31:27

different from each other. Okay so

31:29

Vitalik you were just framing things

31:31

in this Hobbesian world where we

31:33

have this anarchy of information because

31:35

the cost to produce information has

31:37

been very cheap and the only

31:40

remedy is that we have some

31:42

sort of centralized monopoly on information

31:44

almost like a ministry of truth.

31:46

That's the force that will bring equilibrium and

31:48

cure the anarchy and so that's the idea

31:51

here. Noah could you make

31:53

the jump for us because I'm still not clear

31:55

on the jump between you said the internet may

31:58

have possibly brought this about. And

32:00

so the cost of information, the

32:02

price to create information has maybe

32:04

plummeted or the cost to distribute

32:06

information has plummeted. Why

32:09

is the cost to distribute,

32:11

propagate information going down? Why

32:13

does that help totalitarian types of

32:16

regimes and ministries of truth? That

32:18

link is not quite clear, I think, in the

32:21

case we've made so far. All right. So there's

32:23

a cell phone maybe in your pocket or

32:25

close to you right now. Unless

32:28

you've taken extraordinary precautions, that

32:31

cell phone records information about your entire

32:33

life. Everything you do, everything you buy,

32:36

everything you search for, everyone you talk

32:38

to, everything you say to people online.

32:40

Maybe in real life too, if it

32:43

is sneaky enough, but certainly online,

32:45

where you are day to day,

32:47

minute to minute, that cell phone,

32:49

that little brick knows everything about

32:51

you, right? And so what can

32:53

that tell someone? Well, if you're

32:55

a large corporation or if

32:58

you're a government who owns a bunch of large

33:00

corporations or a government, it can tell

33:02

you what you'd like to buy. You know, it

33:04

can mine your data and say, oh, you know, I think

33:07

this guy really likes broccoli now, maybe

33:09

I'll go produce some broccoli. So

33:12

that can aggregate information about what you

33:14

want. Right. Of course, it

33:16

can do it in the Hayekian way. Right. In

33:18

Hayek you need prices. Right. How do you know

33:20

whether people like broccoli? You look

33:22

at price data. If the price of

33:24

broccoli goes up, that means maybe people

33:27

like broccoli more now. But

33:29

on your phone, you can see exactly who liked broccoli,

33:32

when they bought broccoli, what they were doing, when they

33:34

bought broccoli, whether they were talking about broccoli, whether they

33:36

searched for broccoli, blah, blah, blah. You get a lot

33:38

of information about that. And that information

33:40

that you couldn't get in 1957. That's

33:43

information you couldn't get in 1995. And

33:46

that's information that's now available. Noah, can I just

33:49

like regurgitate that just to make sure I totally

33:51

understand the way that I wasn't trained in as

33:53

an economist like you were, but just like as

33:55

a meme, I always understood like, why did communism

33:57

fail? Oh, because like central planning

33:59

is. inefficient, right? It just doesn't have

34:01

the information that a free

34:04

capitalistic market has. But I think what you're

34:06

saying is like, there's such a strong centralization

34:08

of information due to modern technology that all

34:10

of a sudden, like central planning, perhaps has

34:12

a lot more of information that it previously

34:14

would not have had thanks to technology. I

34:16

think that's just like what you're saying in

34:18

a short way. Right. And the hypothesis here

34:21

is that it's gone from being, say, 20%

34:23

as good as free markets

34:25

to being 60% as

34:28

good as free markets. It's still significantly

34:30

worse, but the disadvantage is less. And

34:33

perhaps that disadvantage is now small enough where it

34:35

can be more than compensated for by advantages and

34:37

other domains. And that's the hypothesis. Of

34:39

course, I think that personally, you know,

34:41

I was briefly a finance professor and

34:43

I think, you know, about capital allocation, things

34:46

like that. Personally, obviously, whether people want

34:48

to buy broccoli or not, that's the

34:50

classic example. Right. But if you think about

34:52

productive efficiency, each companies are best. Right.

34:55

Suppose you have one country where the government is

34:57

allocating money to companies and saying, okay, you can

34:59

have this much funding. You can have that much

35:01

funding. And another country where how much

35:03

funding you get is based on, you know, a

35:05

whole bunch of investors deciding what's priced to value

35:07

your stock at and what interest rate to charge

35:10

you in the bond market. Right. And then in

35:12

the other one, you just have some banks which

35:14

are owned by the government saying, okay, we think

35:16

you're going to have good opportunities or you get

35:18

money, you get investment capital. And so

35:20

the internet can provide the people doing,

35:23

you know, loan evaluation or whatever with

35:25

massively more amounts of information about both

35:27

who's buying their products and how their

35:29

stuff is organized and what their technology

35:31

is like and all these things about

35:33

a company that you just couldn't get

35:35

that information in 1995, even if you

35:37

like. And I know because the Japanese

35:39

bureaucracy really tried and they

35:42

weren't, they, you know, Mitty was constantly behind the

35:44

curve on this and they were the best of

35:46

the best. Back in the 90s, they were just

35:48

racking up one L after another doing this. And

35:50

of course, when the Japanese economy thrived, it was

35:52

often, you know, kind of because people just

35:54

went around Mitty. You

35:56

know, sometimes Mitty did have some big success, but that's another

35:59

topic. And that was most earlier, but then, so

36:01

I guess the idea is that maybe

36:03

the internet, when we say the internet, we don't

36:05

just mean like people arguing on Twitter, right? We

36:07

don't just mean people podcasting like

36:09

we're doing now. We also mean things

36:11

like the massive data collection. So the

36:13

amount of data about, you know, buying

36:15

behaviors and demand and what people are

36:17

doing with their workday, you know, and

36:19

whether people are productive and all these

36:21

things and about who has what technology

36:24

in their company. The amount

36:26

of information is vastly greater. We store massive

36:28

amounts of information. So databasing is really the

36:30

thing here. And so databasing and then

36:32

the fact that it's all networked means that you can

36:34

transmit it easily, but you know, you can run regressions

36:36

on it too. We have much better

36:39

information. I'm sorry, much more, I don't know whether it's

36:41

better, much more information about what companies are doing, how

36:43

they do it, and what they might be able to

36:45

do in the future than we did 20 years ago,

36:47

30 years ago. And so an

36:50

authoritarian state might be able to use that to allocate

36:52

capital, say that before they were only 20% as

36:55

good at allocating capital as a, you know,

36:57

market economy. Let's say now they're 60% as

37:00

good at allocating capital as a market

37:02

economy. Well, that has significantly eroded their

37:04

disadvantage. You know, there's still disadvantage. Maybe

37:06

markets are still the best, you know,

37:08

and Hayek's still formally right. But the

37:10

difference has shrunk to the point where

37:13

authoritarian states as other strengths that were

37:15

always there can now shine through more.

37:18

That's the worry. You know, I don't think

37:20

this is true necessarily. I just think it's

37:22

worth thinking and worry about. I don't think

37:24

any of this is true. You know, I'm

37:26

making a case here. I'm being a bit

37:29

of a lawyer for this idea because I

37:31

don't really strongly believe that this is right.

37:33

And I also think that like, you know,

37:35

I fervently hope that in 20 years we'll

37:38

be saying, well, that's why Xi Jinping's, you

37:40

know, regime collapsed because, you know, obviously liberal

37:42

democracies are much better. I

37:44

hope we're saying that. I want to be able to say

37:46

that in 20 years, but I don't know standing right here.

37:48

I don't know what's going to happen. And so I'm sort

37:50

of pushing this scary idea so that we can think about

37:52

it. This is the hypothesis.

37:54

Okay. So Vitalik, if you remind, have we

37:57

sufficiently explained the argument that no, is. making

37:59

or would you add anything else? I know,

38:01

Noah, you touched upon information tournaments a little

38:03

bit and kind of like the drive by

38:05

explanation, but you know, like maybe we could

38:07

touch upon that. Or just like in general,

38:10

do you think we've articulated the case he

38:12

was making in his article, Vitalik? Or what

38:14

would you add? Yeah, I mean, I think

38:17

I would only add one small thing,

38:19

which is like, you know, we talked

38:21

about info Hobbsianism, but there's definitely a

38:23

kind of generalized, you know, Hobbsianism that

38:25

you can talk about and like, to

38:28

the extent that you can model aspects

38:30

of finance as a war against all then

38:33

like, fine, you know, throw that in there.

38:35

Like, you know, if you

38:37

think about like, some like billion dollar

38:39

hedge funds, and like using, like high

38:41

leverage to try to like attack and

38:43

like break particular companies positions and like

38:46

if you interpret that as a zero

38:48

sum behavior, then like, you could

38:50

kind of squint and make a

38:53

case for like putting up financial

38:55

walls to protect against that, then

38:57

you know, you can apply similar

38:59

ideas to potentially,

39:02

yeah, offline,

39:05

internet things potentially to the

39:08

biospace, like basically, yeah, it's

39:11

a pretty generalizable argument. And so

39:14

you can try to like apply

39:16

it issue by issue to like

39:18

different kinds of things and basically

39:20

see them and like is that

39:22

say, zero sum game that's like

39:25

analogous to physical warfare in the

39:27

right ways. And that it

39:29

feels like it has the same equilibrium and like

39:31

if it feels like it doesn't then you know,

39:33

you can like actually look like dig into the

39:36

specific example and explore the reasons why. Yeah, one

39:38

example that Noah gives maybe this gets into the

39:40

idea of like wasteful information tournaments that might be

39:42

going on in like Western liberal democracies is the

39:44

idea of an election. And you

39:47

know, you competent that the average US

39:49

politician spends about 30 hours of their

39:51

work week actually just trying to raise

39:53

funds, raise capital in order to what

39:55

in order to go get elected again.

39:57

And it's like which leaves you the

39:59

question of how much of their time

40:01

is actually spent on governing. And the

40:03

question of, well, is this just wasteful,

40:05

right? It's like, will a regime that

40:08

does not need to have elections, will

40:10

that regime just out-compete, maybe govern more

40:13

and spend the 40 hour work without

40:15

actually governing, not wasting all this capital

40:17

on getting elections? So is

40:19

part of the idea here, Noah, that we have

40:21

this waste going on in liberal

40:23

democracies? And how would you pattern match that

40:26

with what we've discussed so far? Let's think

40:28

about why Congress people are out there fundraising

40:30

their entire time. If you're holding national office,

40:32

what do you use money for? Use

40:35

it for television advertisements, use

40:37

it for internet advertising, use it for

40:40

ads, right? So now suppose

40:42

the other side also raised a bunch

40:44

of money and uses that for ads,

40:46

okay? Now, television isn't the

40:48

internet, but the fact that the

40:50

internet makes it very easy to

40:52

spread misinformation. So for

40:54

example, we've seen a lot of

40:56

people spread, misinformation about

40:58

how good the economy is doing. Often

41:01

in order to discredit Biden, but sometimes

41:03

to defend Biden too. We've

41:05

seen people use alternative methods of inflation

41:07

that are just absolute terrible methodology, but

41:09

broadcast that with scary, scary charts or

41:12

numbers to like a whole bunch of

41:14

gullible people. We've seen people

41:16

do charts where you adjust one of the

41:18

lines for inflation, the other isn't to show

41:20

that people's purchasing power is collapsing when actually

41:22

it's not, because you've just inflation adjusted the

41:24

wages and you didn't inflation adjust the prices.

41:27

Those are just a couple of things I encounter in my daily

41:30

life on the internet arguing, massive disinformation

41:32

and these memes take hold, and a

41:34

lot of people believe them, right?

41:37

And so how do you counter them? How

41:39

do you counter these memes? As a politician, if someone

41:41

shows a viral chart showing that wages

41:44

are flat and prices are way, way up, and

41:46

it's because they adjusted the wages for inflation. So

41:48

the wages only increased slowly while they didn't adjust

41:50

the prices for inflation. So the price, you know,

41:52

and so they show this chart and it goes

41:54

around and now you're a politician and you've actually

41:56

done a good job and wages have

41:59

gone up adjusted for inflation. You know,

42:01

real wages have gone up and you've done a good

42:03

job and now you have to counter that message that

42:05

it's as easy to misunderstand that chart. Like

42:08

it always goes viral because it looks really dramatic

42:10

at total fucking disinformation bullshit. Like

42:13

I know you should adjust the inflation

42:15

for both. You adjust both time series for inflation if

42:17

you're going to compare this. You

42:20

know, this is not an ambiguous case, right? This is

42:22

just a mistake. And often it's an intentional mistake. People

42:24

intentionally do this just to get clicks. I could do

42:26

it tomorrow. I could just show you

42:28

how it's done. Right. But I'm

42:30

not going to. But you can and people do

42:32

it all the time. The Wall Street Journal did it by

42:34

accident once and had to like retract it. So

42:36

what I'm saying is how do you counter that? Well,

42:38

perhaps you can pay to put your own message out there.

42:41

Actually, real wages went up and you know, you can pay to

42:43

do TV ads saying real wages went up. You know, wages went

42:46

up by this much for the cost of living only one. But

42:48

that costs money, money, money, money. And

42:50

you have to be out there fundraising

42:53

for that money all day long while

42:55

someone else, you know, a 27 year

42:57

old staffer does the job of governing.

42:59

So the cost to create misinformation is

43:01

just like very cheap. And it takes

43:03

a very high cost to sort of

43:05

validate or verify that information is true

43:07

or not. Right. So in all

43:09

of this, I'm curious, Vitalik, you called this like sort

43:11

of what we're up against.

43:14

You seem to find Noah's argument

43:16

that he's making pretty compelling as

43:18

to why totalitarianism, maybe let's call

43:20

it, could dominate and beat the

43:23

idea of like Western civil liberties.

43:26

And this is all very ironic, I think,

43:28

because it would be sort of defeating a

43:30

device that was supposed to propagate democracy

43:34

and liberal values, let's say, which is like

43:36

the Internet. And so the idea that a

43:38

tool of liberal democracy creation

43:40

could actually be used by totalitarian

43:42

regimes to beat them at their

43:45

own game is somewhat counterintuitive. So

43:47

why did you call this argument

43:50

sort of what we're up against?

43:52

And maybe you consider it a

43:54

good argument against liberalism in the

43:56

21st century. I think the idea

43:58

of like info war as. a

44:01

zero sum game is one of

44:03

those ideas that's like at

44:05

the top of a lot of people's minds. It's

44:08

definitely something that is concerning a lot

44:10

of people. And it's definitely something where

44:12

if you just go and look

44:15

out onto the Twitter verse

44:17

yourself, you can very clearly

44:19

see evidence for it. I

44:22

think also just one of the interesting

44:25

things about the being in the

44:27

crypto space is that in

44:29

a lot of ways, we get to be a

44:31

couple of years ahead to some of these trends.

44:34

There is definitely huge

44:37

amounts of zero sum info

44:39

warfare that's happening between

44:41

Ethereum and Bitcoin maximalists,

44:43

Ethereum and the XRP

44:45

army, Ethereum and Solana,

44:47

Ethereum and whoever. At

44:50

least between the more hawkish

44:52

and maximalist factions in each

44:54

of which, under

44:57

the surface, there's a lot of

44:59

devs that actually get along quite well. That's

45:02

not visible if you just look at Twitter. But

45:05

the info war of all against all layer

45:07

is definitely a

45:09

layer that exists. We

45:12

see how all of these

45:14

info wars are coming out

45:16

and we see the

45:18

obvious need for some kind

45:20

of better

45:22

way of actually

45:24

doing this function of aggregating

45:27

and eliciting a lot of different

45:30

people's wisdom and thinking power and

45:32

information. A lot of what we

45:35

have today is just not actually meeting

45:37

that. It is worth thinking

45:40

about basically, what is the worst

45:42

case scenario? I would evolve this

45:44

and the worst case scenario definitely

45:46

seems to be an

45:51

outcome where all of these problems don't get solved

45:53

at all. It turns out the more serious versions

45:58

of all the problems actually. are

46:00

true and actually will continue

46:03

to be true and like basically

46:05

nothing survives aside from essentially

46:09

islands of various sizes that are

46:11

run in a very centralized way

46:13

internally, right? Have you ever

46:15

felt that the tools for developing decentralized

46:18

applications are too restrictive and fail to

46:20

leverage advancements from traditional software programming? There's

46:22

a wide range of expressive building blocks

46:24

beyond conventional smart contracts and solidity development.

46:26

Don't waste your time building the basics

46:28

from scratch and don't limit the potential

46:31

of your vision. Cartesi provides powerful and

46:33

scalable solutions for developers that supercharge app

46:35

development. With a Cartesi virtual machine you

46:37

can run a full Linux OS and

46:39

access decades of rich code libraries and

46:41

open source tooling for building in web3.

46:44

And with Cartesi's unique roll-up framework you'll

46:46

get real-world scaling and computation. No more

46:48

competing for block space. So if you're

46:50

a developer looking to push the boundaries

46:52

of what's possible in web3, Cartesi is

46:54

now offering up to $50,000 in

46:57

grants. Head over to Cartesi's grant application

47:00

page to apply today. And if you're

47:02

not a developer, those with staked CTSI

47:04

can take part in the governance process

47:06

and vote on whether or not a

47:09

proposal should be funded. Make sure you're

47:11

vote ready by staking your CTSI before

47:13

the votes open. Are you worried about

47:15

the security of your cross-chain transactions? Cross-chains

47:18

with confidence using Transporter, the revolutionary token

47:20

bridging app designed to give you peace

47:22

of mind. Powered by Chainlink CCIP, Transporter

47:24

is your trusted gateway for securely moving

47:27

assets like ETH, native USCC, and Link

47:29

and so many more across some of

47:31

your favorite blockchains. Over $2.8 billion has

47:33

been hacked from token bridges to date.

47:36

Transporter puts a stop to this by

47:38

ensuring your transfers are protected by the

47:40

most robust security features available. Chainlink CCIP

47:42

provides level 5 security backed by multiple

47:45

decentralized Oracle networks and an independent risk

47:47

management network. Transporter also provides real-time tracking

47:49

throughout your transaction with its newly engineered

47:51

user experience so you'll never have to

47:53

second-guess the safety or location of your

47:56

assets ever again. And the best part?

47:58

Transporter makes it simple. Whether you're a

48:00

blockchain beginner or a seasoned trader, Transporter's

48:02

intuitive interface lets you execute cross-chain transactions

48:05

with just a few clicks. No additional

48:07

fees, just a low cost for using

48:09

CCIP which can be paid in link

48:11

or your blockchain's native gas token. But

48:14

don't just take my word for it,

48:16

see for yourself why Transporter offers a

48:18

stress-free bridging experience. Experience the future of

48:20

token bridging at transporter.io and just send

48:23

it. Arbitrum is

48:25

the leading Ethereum scaling solution that

48:27

is home to hundreds of decentralized

48:29

applications. Arbitrum's technology allows you to

48:31

interact with Ethereum at scale with

48:34

low fees and faster transactions. Arbitrum

48:36

has the leading DeFi ecosystem, strong

48:38

infrastructure options, flourishing NFTs, and is

48:40

quickly becoming the web-free gaming hub.

48:43

Explore the ecosystem at portal.arbitrum.io. Are

48:45

you looking to permissionlessly launch your

48:47

own Arbitrum Orbit chain? Arbitrum Orbit

48:49

allows anyone to utilize Arbitrum's secure

48:51

scaling technology to build your own

48:54

Orbit chain, giving you access to

48:56

interoperable, customizable permissions with dedicated throughput. Whether

48:58

you are a developer, an enterprise, or

49:00

a user, Arbitrum Orbit lets you take

49:02

your project to new heights. All of

49:05

these technologies leverage the security and decentralization

49:07

of Ethereum. Experience Web3 development the way

49:09

it was always meant to be. Secure,

49:11

fast, cheap, and friction-free. Visit arbitrum.io and

49:14

get your journey started in one of

49:16

the largest Ethereum communities. Yeah,

49:19

isn't the worst case scenario what

49:21

Noah pointed out, which is basically

49:23

like liberal democracies are on their

49:25

way out? So in a similar

49:27

way that agricultural societies disrupted hunter-gatherers

49:29

and like, you know, industrialization kind

49:31

of like beat out the monarchies,

49:33

then maybe information tech just, you

49:35

know, spells the end of

49:37

liberal democracies. Isn't that the worst

49:40

case scenario for fans of liberalism? Yeah,

49:42

yeah, I think it absolutely is. Well,

49:44

I hope that that's not true. Maybe

49:47

we can get into how this argument

49:49

could be wrong. And

49:52

I'll throw this over to Noah to

49:54

start. So you've put forth the argument,

49:56

which is, you know, the cost to

49:58

create information as it plummets. Maybe

50:00

it gives an advantage to totalitarian

50:02

regimes and disadvantage is liberalism and

50:05

the idea of liberalism and these

50:07

totalitarian regimes just outcompete liberal democracies

50:09

in the 21st century. So

50:11

let's talk about how this argument could be

50:13

wrong. And I just want to maybe throw

50:15

this to you Noah. So we've had technologies

50:18

in the past that have brought the cost

50:20

to propagate information like down to zero. Like

50:22

one of those technologies was the printing press,

50:25

right? And so it did not

50:27

lead to totalitarian regimes kind of

50:29

taking charge and winning. More or

50:31

less led to renaissance, more or

50:33

less led to the splintering

50:36

and forking of sorts of

50:38

different religions, Protestantism sort of

50:40

had its way with the

50:42

introduction of the printing press.

50:45

So it seems like we've had technologies

50:47

like the internet in the past and

50:49

it bred more liberalism, it bred

50:52

more freedom. Like why is that

50:54

not the case here? I'm asking you to

50:56

maybe argue with yourself. Do you think that's

50:58

a compelling reason for why this thesis might

51:00

be wrong? Well good. So I think that

51:02

that's basically something

51:04

about lowering information costs made liberalism

51:07

strong in the 19th century and

51:09

then really in the 20th century.

51:12

And maybe in earlier centuries too, you know, you

51:14

can make an argument that the 30 years war

51:16

was won by the less illiberal side and they're

51:18

both pretty illiberal, but you could make an argument

51:20

that the protestant states at least, you

51:22

know, didn't have the overarching and at the

51:24

time quite corrupt Catholic church and that made

51:26

them more liberal and that the Habsburgs were

51:28

really in some sense the bad guys. But

51:31

so you can make that argument. But I think

51:33

to make the argument that I'm making, you need to look

51:35

at non-linearities, right? You need to look at a U curve.

51:39

The idea is that as information becomes

51:41

cheaper, it becomes possible to aggregate

51:43

information with mechanisms like markets more easily. With

51:45

the printing press, you can have people on

51:47

the telegram and all this stuff. You can

51:50

send information about prices farther and faster and

51:52

this allows you to get, you

51:54

know, aggregate information through the price mechanism

51:56

faster. Same with like voting. It's easier

51:59

to get information about what the candidates

52:01

actually want. Of course

52:03

you had plenty of disinformation there too at the

52:05

time, but still you can make this argument that

52:08

information aggregation becomes easier with just a

52:10

little bit of reduction of information aggregation

52:13

costs, but then that plateaus over time.

52:16

You know, so you have this thing where at

52:18

first a little bit of information technology like the

52:20

printing press and the TV and the radio make

52:22

it easier to aggregate preferences, but

52:25

then the internet doesn't necessarily make it

52:27

much easier on top of that to,

52:29

you know, figure

52:31

out what people want to buy and

52:33

stuff like that for the market, say,

52:36

to aggregate information about preferences, democracy. It

52:38

doesn't make it much better. And then

52:40

let's say that the disadvantages might

52:42

be a concave function like this, right? They

52:45

might be an upward bending function where

52:48

the social resources that you waste on

52:50

information tournaments might simply

52:53

increase a lot. And so

52:55

you have this crossover point, right? At

52:57

first your information tournament cost is only

52:59

increasing slowly while your information aggregation benefit

53:02

is increasing very quickly. And here's where

53:04

liberal democracy wins. But then when they

53:06

cross over here, here's where a liberal

53:09

democracy starts losing because the costs keep

53:11

growing and growing and growing while the

53:13

benefits asymptote or let's say decline in

53:15

its convex or I

53:18

mixed up concave and convex, but it's

53:20

whether the set under it anyway, but

53:22

the curve go up. So convex costs,

53:24

right? Or in concave utility is

53:26

the whole idea here. And you get this

53:28

pattern with a lot of things, right? You get

53:30

this pattern with like investment in the solo

53:32

model of growth, right? You have diminishing returns

53:34

to capital, but you have straight line depreciation costs

53:37

or even increasing depreciation costs as you build

53:39

more and more capital. And so eventually there's

53:41

some crossover point where building more capital hurts you

53:43

instead of helps you. It's like, do you

53:45

need one more bridge? Do you need one

53:47

more office building? At

53:49

some point the balance flips, right? So to get

53:51

this argument, you need to get an argument where

53:54

you have this crossover and this flip. And

53:56

the idea is that when information costs get,

53:58

you know, They start out very high because

54:00

you're just like Grog the caveman running around

54:03

your club. And then as you get better

54:05

technology, you get information costs gets lower and

54:07

lower because people learn how to write and

54:09

things like that, and printing press and television

54:11

and radio, blah, blah, blah, and liberal democracy

54:13

better and better and better. And then you

54:15

hit some crossover point with the internet where

54:18

suddenly your benefits have really just

54:20

asymptoted out while your costs continue to

54:22

explode from information tournaments. So in order

54:24

to make this argument, you need to

54:26

make an argument for a nonlinearity. You

54:29

can't just say more information equals more

54:31

good or or more liberal or right.

54:33

That's straight line thinking. Right.

54:36

So you have to think non-linearly and have some

54:38

crossover point in order to make this argument. I'm

54:40

wondering if you could give your perspective. I'll pull

54:42

in a metaphor from the AI safety people of

54:45

just like, what do you think your like P

54:47

doom is when it comes to like

54:49

totalitarian structure being the most fit as

54:51

a result of the curves that Noah

54:53

is illustrating. You talk about in your

54:55

warp cast, just like some reasons about

54:57

why this argument could be wrong. Maybe

55:00

you can like, give us some assurances

55:02

about why this is a thought experiment

55:04

and not reality. Well, I mean, I

55:06

think one thing that we

55:08

have to kind of nail down first is

55:10

the difference between being the best fit and

55:12

winning, right? Because one

55:15

property that a lot

55:17

of like systems that are organized

55:20

in a very centralized way have

55:22

in practice is that like economies

55:25

of scale and extraction are higher

55:27

than economies of scale in actual

55:29

production. And so even

55:32

if they're kind of less fit in

55:34

some utilitarian sense of

55:36

improving human flourishing, like it's

55:38

really could easily still ends

55:40

up like extracting more and

55:42

succeeding more in zero sum

55:44

conflicts for various reasons. So

55:46

that's like one big caveat

55:49

that's really important to make,

55:51

right? But yeah, I mean, in terms of like,

55:53

P totalitarianism or

55:55

P whatever, I think,

55:58

what are the challenges of giving this number? that

56:00

it's so hard to define what all of

56:02

these terms are even going to mean 50

56:05

years from now. Because we're

56:08

talking about transitions through some

56:11

pretty massive technological changes, whatever

56:13

AI is going to do, whatever

56:16

that's going to do with the

56:18

global economy, whatever advances in biotech

56:20

are going to do, whatever advances

56:23

in other kinds of digital technology

56:25

are going to have. The

56:28

concept of something like

56:30

private property, in some

56:33

sense, becomes less and less meaningful with

56:35

every passing year as things become more

56:37

and more digital. And

56:39

as we're just basically turning

56:41

into everything being network effects.

56:44

It's hard for me to

56:46

give percentages because

56:49

there's definitely a case to

56:51

be made that if you took someone from 150

56:54

years ago and you woke them up today

56:56

and you showed them how any modern society works,

56:58

then they would say, obviously, totalitarianism has won.

57:02

What do you mean? You can't legally hire someone

57:04

without filling in a whole bunch of forms and

57:06

giving them 40. It's the

57:08

most totalitarian thing out there. It's

57:11

difficult to make a numerical comparison

57:13

for even just some of the

57:15

reasons. Maybe

57:18

just to start going into the

57:21

counter arguments a bit. Yeah,

57:25

I think basically if

57:28

we go back to the

57:30

info Hobbesian thesis, which basically

57:32

says that the info war

57:34

of all against all, one

57:36

is a war, meaning it's

57:38

a negative sum game rather than zero or

57:40

a positive sum. Two,

57:45

it does not have stable equilibria that

57:47

are not physical borders. And

57:50

three, it does have stable equilibria

57:52

that are physical borders. I

57:54

think those are the three claims. I

57:57

think you can ultimately attack each one of them

57:59

in the future. And, you know, we

58:01

can start from the end, right? No, it

58:04

does info Hobbesianism even have equilibria that

58:06

are physical borders, right? Well, go on

58:08

Twitter. And one of the

58:10

first things that you see is, you

58:13

know, you'd still see people from,

58:15

and like, or bots of different

58:18

countries that are very hostile toward

58:20

each other, that are still

58:22

fighting the memoir against each other in all

58:24

kinds of different contexts, right? Even

58:27

if they have a very strong

58:29

censorship internally, like, you know, the memoir

58:31

continues, right? Like, that's one question, right?

58:33

And then, you know, we kind of

58:36

joke about how, like, oh, you know,

58:38

the only names that you're allowed to

58:40

spread are, you know, the local governments,

58:43

and like approved thought or whatever. But I

58:45

feel like actually go to like any one

58:48

of these countries, and possibly

58:50

with the exception of North Korea, though,

58:52

like, probably even there, like, it's not

58:54

actually like that at all, right? And

58:56

like, it's actually, you know, the meme

58:58

ecosystem is still actually quite

59:01

porous in practice. So that's like the

59:03

first question, right? Like,

59:05

basically, in a

59:07

digital environment, then, look, is

59:09

the natural equilibrium even like

59:11

national borders, or is

59:14

it the case that like, oh, well, actually,

59:16

the only equilibrium that makes sense from

59:19

a Hobbesian perspective is one where

59:21

there's basically a single elite that dominates the entire world. Right?

59:24

That, in some ways, is like an

59:26

even scarier thought, right? Because we're not

59:28

even talking about hegemony within

59:31

one country. We're talking about like a

59:33

single hegemonic actor that just takes over

59:35

the entire world. And at that point,

59:37

even if they're completely unfit, there's like

59:39

basically, yeah, no pressure that can effectively

59:41

unseat them, right? Like, world government is

59:43

deeply scary in a way that national

59:46

government does not. Then the

59:48

question is like, well, if that's

59:50

actually the case, then like maybe,

59:52

yeah, there's enough people around

59:54

the world to just find that kind of

59:56

scenario as horrible as I do that they'll

59:58

actually start fighting again. against it. So

1:00:01

that's the first thing that I think

1:00:03

is worth being skeptical about. Are there

1:00:06

actually equilibria that don't involve or that

1:00:08

do involve borders? And then the second

1:00:10

one is, are there

1:00:12

equilibria other than war that don't

1:00:14

involve at least physical borders? And

1:00:18

I think here what's interesting

1:00:20

is this is where a lot of

1:00:22

the differences really start to shine. And

1:00:25

this is, I think, something that's

1:00:27

very second nature to the crypto

1:00:29

space. Which is basically that the

1:00:31

possibilities for defense exist in the

1:00:34

digital world that just do not

1:00:36

exist in the physical world. Theoretically

1:00:39

in the physical world, people can

1:00:41

wear body armor. But in practice,

1:00:43

body armor is super inconvenient. It's

1:00:45

sweaty. It's incredibly annoying in a

1:00:48

whole bunch of ways. It's unfashionable.

1:00:50

I'll say that. Yeah, it's not

1:00:52

cute. Yeah. I mean, you can

1:00:54

stick body armor into suits if

1:00:56

you want. But these days, even

1:00:58

suits are becoming more and more

1:01:00

lame. But then in the digital

1:01:03

world, if you think about your Internet

1:01:05

experience using HTTPS in

1:01:07

2024 versus your Internet

1:01:09

experience using HTTP in

1:01:12

2009, do

1:01:14

they feel different? Obviously, the

1:01:16

applications feel different. But does the difference

1:01:18

between HTTP and HTTPS feel like anything?

1:01:20

And I think the answer is

1:01:22

currently no. Now, that's a

1:01:25

bit of us, I think, somewhat

1:01:27

of an artificially unreasonable example,

1:01:29

right? This gets into the

1:01:31

divide between what I

1:01:33

call cyber defense and what I

1:01:36

call info defense in my big,

1:01:38

long, techno optimist manifesto from last

1:01:40

year. Right. And basically, it's

1:01:42

like, cyber defense is the

1:01:44

type of defense where every reasonable person can

1:01:47

agree who the bad guy is. And

1:01:49

info defense is when there is room

1:01:51

for an interpretation. But even in

1:01:54

the case of info defense, right, you know, you

1:01:56

can ask things like, what even

1:01:58

are the physical world equivalent? What

1:02:02

are the physical world equivalence of

1:02:04

prediction markets? Or to even go

1:02:06

low tech, what even are the

1:02:08

physical world equivalence of different

1:02:11

groups of people being able to be on different social

1:02:13

medias and be on group chats, right? One

1:02:18

of the kind of lines of skepticism

1:02:20

that I think you can really legitimately

1:02:22

raise against inferring the extents to which

1:02:24

the in-house fears of war of all

1:02:26

against all on Twitter is basically that

1:02:28

Twitter is the worst of it that

1:02:31

you see, and it's the worst

1:02:33

of it precisely because you can see it. If

1:02:36

you think about private group chats, for

1:02:38

example, private group chats consistently maintain higher

1:02:40

levels of quality and high levels of

1:02:42

productive discourse. Smaller social media platforms, whether

1:02:44

it's Farcast or whatever else, they maintain

1:02:47

higher levels of discourse. Actually,

1:02:55

Noah even wrote an article about

1:02:57

how the internet wants to be

1:02:59

fragmented. The

1:03:01

counter argument is, what if this

1:03:04

vision of the global water cooler that

1:03:06

we all got addicted to in the

1:03:08

2010s just happens to be the worst

1:03:10

possible version of all of this from

1:03:13

an info warfare being negative, some perspective.

1:03:16

And now we actually are learning and we

1:03:19

actually are adapting and the internet is already

1:03:21

in a whole bunch of smaller

1:03:23

and larger ways reconfiguring itself to

1:03:26

already starts to become

1:03:28

less warlike in ways

1:03:30

that have no equivalence again in

1:03:32

the physical world because the

1:03:35

mechanics of constructing digital walls and constructing physical

1:03:37

walls are just so fundamentally different. So I'll

1:03:39

stop here. Noah, what do you think of

1:03:41

those arguments against the thesis here that Vitalik

1:03:43

just made? I like

1:03:45

the observation about the internet becoming more

1:03:48

fragmented. That will reduce information

1:03:50

tournament costs, as in we

1:03:52

don't spend all our day arguing on Twitter. We

1:03:54

spend our day talking to people in Discord who

1:03:56

have useful information for us and who... are

1:04:00

not just some angry jerk blowing off

1:04:02

steam by talking bullshit, and then everyone

1:04:04

else has to jump in and refute

1:04:07

that bullshit. And then

1:04:09

we just talk to interesting people with interesting ideas, and maybe

1:04:11

we lose a tiny bit of that long tail of

1:04:13

information because maybe there's some totally random person

1:04:15

who'll pop up and tell you a little

1:04:18

bit of extra information you didn't

1:04:20

know that wouldn't have been invited to your Discord. But

1:04:23

now, at least we've reduced the information

1:04:25

tournament. So I think that's that

1:04:27

point I really like, the idea

1:04:29

that perhaps there's some natural

1:04:31

self-equilibration mechanisms in the marketplace of

1:04:34

ideas. I like that idea. The

1:04:36

analogy to Hobbsianism, I think we

1:04:39

shouldn't lean too hard on that analogy

1:04:41

to show why this idea is wrong.

1:04:44

I think, yes, the idea of

1:04:46

information tournaments has some superficial similarity

1:04:48

and some real similarity to

1:04:50

Hobbsianism, but it's not a complete analogy. And

1:04:52

I think saying, okay, here's

1:04:54

why, if we make everything seem exactly

1:04:56

like Hobbs's, Leviathan, if we

1:04:58

just make a one-to-one analogy between these

1:05:00

concepts, and then we show how the

1:05:02

classic sort of assumptions of Hobbs don't

1:05:04

hold, well, then we've disproven the information

1:05:06

tournament thesis. I think we shouldn't do

1:05:08

that. We shouldn't lean too

1:05:10

hard on that analogy. And so, for

1:05:13

example, one idea is

1:05:15

that the analogy of information competition

1:05:17

to violence. If

1:05:19

two people meet in a town square and

1:05:21

have a physical fight, right? One

1:05:23

knocks the other, like if Ryan and David

1:05:25

meet in the town square with clubs and

1:05:27

go at it, and then one

1:05:30

of them will bounce the other with a club, and

1:05:32

then he falls over unconscious, and then you're done, right?

1:05:35

But then in information, quote unquote warfare,

1:05:37

yes, there's a competitive thing, but it's

1:05:39

like, imagine if both people had infinitely

1:05:41

powerful suits of armor and were just

1:05:43

wailing on each other, like in some

1:05:46

Marvel movie. So I can yell correct

1:05:48

information, someone else can yell disinformation, or

1:05:50

we can yell two competing forms of

1:05:52

disinformation, right? I can tell you, so

1:05:55

suppose that you tell me that the job

1:05:57

market is terrible under Biden, was amazing under

1:05:59

Trump. And I tell you that the job market

1:06:01

was terrible under Trump and is amazing under Biden. Well,

1:06:03

those are both wrong because it has been great under

1:06:06

both. Like the job market

1:06:08

has been great throughout both of those president's terms.

1:06:10

And so that's the truth. But suppose we have

1:06:13

competing disinformation, right? And we just wail on each

1:06:15

other and wail on each other and wail on

1:06:17

each other. Physical violence, you

1:06:19

know, naturally ends in one person winning and

1:06:21

the other person getting clubbed to death. I

1:06:23

mean, yes, I know World War One lasted

1:06:26

a long time. It's not always quick victory.

1:06:28

But then information warfare can go on forever.

1:06:30

You know, that's just one difference between real

1:06:32

violence and, you know,

1:06:35

disinformation war. And so

1:06:37

the cost of disinformation war, there may

1:06:39

be no natural resolution. So the thing

1:06:41

about Hobbes, the idea is that everyone's

1:06:44

always running around trying to fight everyone.

1:06:46

And so you need this Leviathan, right?

1:06:49

That's similar to the idea that maybe

1:06:52

having information, you know, filtered through some

1:06:54

monopolist at the New York Times and

1:06:56

CBS News in like 1960, maybe

1:06:59

that was actually good. That's the analogy there.

1:07:01

But there's other dimensions in which the analogy

1:07:03

breaks down. For example, borders, right? Do we

1:07:05

really need to have information

1:07:07

hegemon? Do we really

1:07:09

need information to stop and start

1:07:12

at national physical borders? No,

1:07:14

we don't. So yes,

1:07:16

we have Twitter and you go on Twitter

1:07:18

and you see people from all countries, right?

1:07:20

But the Chinese government and the Russian government

1:07:22

have a lot of resources devoted to pushing

1:07:24

their message out there. And the US government

1:07:26

doesn't, right? Liberalism doesn't. US

1:07:29

government sits back and says, you know, from

1:07:31

an Olympian remove and is like, I am

1:07:33

the overall mighty hegemon of information. And so

1:07:36

I'm going to let all these tiny little

1:07:38

actors play it out, you know. And then

1:07:40

one of those tiny little actors is the government

1:07:43

of China, a country four times the size of

1:07:45

the United States with arguably a higher GDP in

1:07:47

the United States. And so that's

1:07:49

one of the tiny little atomistic actors. And so

1:07:51

the rest of us are these tiny little guys

1:07:53

having to run up against that behemoth, having to

1:07:55

run up against Russia, who has less resources, but

1:07:57

still a lot more than your average American. and,

1:08:00

you know, it has a little bit more practice

1:08:02

pushing up bullshit to Americans. And

1:08:04

so I'm having to fight those guys

1:08:06

every day on Twitter and

1:08:08

in the information space and they're much better

1:08:10

resources than I am. And there's no physical

1:08:13

border there, right? There's a physical border for

1:08:15

where those armies can go, but there's not

1:08:17

a physical border for where their information things

1:08:19

go. And so you can have cross

1:08:22

border information warfare in a way that it's

1:08:24

very difficult to have cross border physical warfare.

1:08:27

And that's a structural difference between the two things

1:08:29

that makes the analogy break down a little bit,

1:08:31

I think. And so the idea that, okay, well,

1:08:33

information is borderless and therefore you're not going to

1:08:35

get a Hobbesian situation. Well,

1:08:38

but information warfare is borderless in

1:08:40

a way that violent physical warfare

1:08:42

is not. And so I

1:08:44

think that that means that the analogy can't, you know,

1:08:47

we can't just lean too heavily on that analogy and

1:08:49

say, well, since information doesn't have borders, you're not going

1:08:51

to get a Hobbes situation. Well, yeah, but Russia and

1:08:53

China are going to continue to just

1:08:55

use their resources to push out their

1:08:57

messages to everywhere. And if you look

1:09:00

at, I think as an apple bomb

1:09:02

had a great article in Atlantic recently that shows that

1:09:04

the combination of Russian message crafting

1:09:06

and Chinese money around the

1:09:09

world is actually proving a fairly effective

1:09:11

propaganda tool. So for example, this idea

1:09:13

that there were all these secret bio

1:09:15

labs in Ukraine, you know, that's made

1:09:17

up by the Russians, secret American bio

1:09:19

labs in Ukraine. And that's why Russia

1:09:21

had to like go invade Ukraine. There's

1:09:23

made up other Russians, but it is

1:09:25

being spread in, you know, poor

1:09:27

country and developing countries and in developed countries,

1:09:29

but people in developing countries are buying it

1:09:32

a bit more because they don't have that

1:09:34

as robust a counter information ecosystem. You

1:09:36

know, it is being spread by Chinese networks and

1:09:39

China really picked this up and ran with it

1:09:41

and distributed this and China's commercial connections to the

1:09:43

world allowed it to do this. Ryan and David,

1:09:45

have you ever heard the Ukraine bio labs idea?

1:09:48

I have not. No. Okay. But

1:09:50

talk you for that one. Yes, I have. Right.

1:09:53

And it's borderless, but these well-resourced states

1:09:55

that have borders for the collection of

1:09:57

taxes and, you know, and borders

1:09:59

for the enforcement. of crime and borders for where

1:10:02

their army goes, do not have borders for where

1:10:04

their information goes. And yet they in some sense,

1:10:06

raise the information cost to the rest of us

1:10:09

because I'm sitting there battling whole governments

1:10:11

on Twitter. Yeah, okay. I mean,

1:10:13

I think I get the feeling that, Noah's

1:10:16

somewhat disagreeing with me, but actually agreeing with quite

1:10:19

a lot of, I mean, like what I said,

1:10:21

right? Which is that like, one

1:10:23

is that it's like a major

1:10:26

difference between physical warfare and internet

1:10:29

warfare is definitely the internet

1:10:31

war is significantly,

1:10:34

like much less of like actually

1:10:36

war like, and I mean, like,

1:10:38

especially once you get off Twitter

1:10:41

and like that's a place where the analogy fails.

1:10:43

But I think on the first one of like the

1:10:46

issue of borders, that's one

1:10:49

thing that's kind of valuable to disentangle there,

1:10:51

I think is like the

1:10:53

idea of like info hegemony as this

1:10:55

abstract concept, right? Which can exist at

1:10:58

any level of a stack, right? Like

1:11:00

you can have info hegemony in a

1:11:02

country, you can have info hegemony inside

1:11:04

one of the one Musk's companies, you

1:11:07

can have info hegemony in your family

1:11:09

or in your cult or across the

1:11:11

entire world. And then there is kind

1:11:14

of this very,

1:11:17

like much more specific ideology

1:11:19

that like really emphasizes the

1:11:21

idea of national sovereignty and

1:11:24

basically treats info hegemony as

1:11:26

being one part of national

1:11:29

sovereignty alongside like physical military

1:11:32

hegemony was in a local area, right? I

1:11:35

think these kind

1:11:37

of disanalogy is between or

1:11:40

like the breakdown in the analogy

1:11:42

between like physical and info Hobbesianism,

1:11:44

like it basically, yeah, to me,

1:11:46

it definitely suggests that specifically

1:11:49

the nation state bound version

1:11:51

of all of this is

1:11:54

one that's less likely to be a

1:11:56

long-term stable equilibrium, which could mean something

1:11:58

good or it could mean something bad.

1:12:01

The good thing that it means could

1:12:03

be that we find some kind of

1:12:05

better approach and some kind of better

1:12:07

equilibrium that's not involved,

1:12:10

like basically unlimited info

1:12:13

hegemony that any particular person

1:12:15

is subjected to. Or

1:12:17

it could also mean something worse.

1:12:19

And the something worse is basically

1:12:21

info hegemony at an actually worldwide

1:12:23

level. And so the question to

1:12:25

basically think about is, if you

1:12:27

have all of the different

1:12:31

actors, and we can think of

1:12:33

them as being nations, or in

1:12:35

some cases, there are meme plexus

1:12:37

that have partial overlap with nations.

1:12:39

Sometimes there are meme plexus that

1:12:41

overlap collections of nations or even

1:12:44

parts of nations. If

1:12:46

you are one of these meme plexus,

1:12:48

what to do is the ultimate safety.

1:12:50

The ultimate safety is basically banishing all

1:12:52

competing meme plexus from the world

1:12:54

forever. Because if they're not from the world, then

1:12:57

wherever they're not banished from, they can come back.

1:12:59

And so this is the

1:13:02

bigger risk, which is basically going

1:13:04

out even into the long, long term, into

1:13:08

a time when even the

1:13:11

words like democracy and

1:13:13

totalitarianism and United States

1:13:15

and like Russia and

1:13:18

so on are long forgotten. What is

1:13:21

the long term equilibrium? And

1:13:23

is that a global

1:13:25

info hegemon? And is that

1:13:28

a situation that eventually we

1:13:30

fall into and once we fall into, it's super hard to get

1:13:32

out of? Yeah, I think

1:13:35

basically, the porousness of borders

1:13:37

and the way in which digital borders

1:13:39

are much weaker than physical borders, it's

1:13:42

both a blessing and a curse

1:13:44

in that exact way. It's like

1:13:46

the blessing is basically that it

1:13:48

enables other possibilities and the curses

1:13:50

that there's

1:13:53

definitely something worse than nation

1:13:55

scale authoritarianism that might be

1:13:58

looking at it. eventualism.

1:14:00

Yes. So in other

1:14:02

words, right now we're seeing

1:14:04

so-called sharp power by China reach

1:14:07

into many areas of the

1:14:09

rest of the world. We're seeing companies

1:14:12

censor what they say in their own

1:14:14

home markets because China threatened to

1:14:16

cut off access to the Chinese market. And

1:14:19

various actors basically, China's conditional

1:14:21

opening saying, well, dangle the promise of this giant

1:14:24

Chinese market, which usually does not materialize, but let's

1:14:26

say we can dangle it and once in a

1:14:28

while it will, for anyone who's just willing to

1:14:30

go push our message back in your own countries,

1:14:33

blah, blah, that's called sharp power. And

1:14:35

so we're seeing the effects of that across borders.

1:14:37

The question is, so what's the scenario? I guess

1:14:40

my question, again, I don't really strongly believe in

1:14:42

this thesis, right? It's just an idea I had.

1:14:44

I'm not going to be like, yes, liberal democracy

1:14:46

is going to fail. I'm not that guy, right?

1:14:49

I think that there's a good chance that

1:14:51

everything I'm saying here is overblown and that

1:14:53

this is not even a good way of,

1:14:55

and that liberal democracy has other advantages. In

1:14:58

addition, like a feeling of inclusiveness and

1:15:01

public goods provision, those are other arguments

1:15:03

for why liberal democracy is good. Maybe

1:15:06

those are more important and I just haven't even

1:15:08

considered them. Maybe the information tournament problem isn't actually

1:15:10

that big. And what looks like all these people

1:15:12

wasting these resources is actually just people having fun.

1:15:14

Well, actually, we're just as good at getting information

1:15:16

as we ever were, which never was really great,

1:15:19

but we're just watching people have fun shouting each

1:15:21

other for consumption purposes. And that's how we're using

1:15:23

our leisure time. And it looks like we're, in

1:15:25

actuality, you go back to like 1950 and

1:15:28

the average person was worse informed than now. And

1:15:30

that the actual amount of time and effort we

1:15:32

spent was maybe about the same because now we're

1:15:34

just consuming, we're just having fun. So these are

1:15:36

counter arguments that I can make to this, right?

1:15:38

I can make counter arguments to everything I just

1:15:40

said, but I think it's

1:15:43

worth asking if this

1:15:45

thesis, if the scary theory is

1:15:47

wrong and if the new totalitarianism

1:15:49

is going to lose, you know,

1:15:51

if Xi Jinping is going to

1:15:53

lose, what's the scenario by

1:15:55

which it loses? And so I think economically

1:15:57

the scenario by which it loses is that.

1:16:00

Well, China still does not nearly as rich

1:16:02

as the West. And as this Chinese state

1:16:04

gets more controlling of the Chinese economy, it's

1:16:06

going to get worse and worse. It's already

1:16:09

slowing down much faster than

1:16:11

other developed countries did back in their

1:16:13

day. It's slowing down early and China's just, you know,

1:16:16

yeah, they can produce a bunch of EVs, but they're

1:16:18

all going to rest in the parking lot. And,

1:16:21

you know, unless they're massively subsidized and in the

1:16:23

end, all we have to do, you know, is

1:16:26

wait and maybe they'll be Soviet Union too.

1:16:28

And so that's economically, I think that's the

1:16:30

argument politically. The argument is eventually

1:16:32

when the economy slows down and when people

1:16:34

realize that Xi Jinping isn't that competent and

1:16:36

he's like been around for like 20 years

1:16:39

and people get really restless, you're going to

1:16:41

see the same pressures you saw in Korea

1:16:43

and Taiwan, you know, for democratization, blah, blah,

1:16:45

blah. So those are the

1:16:47

counter argument. The counter arguments are just like, just

1:16:49

wait, bro. Like people said that totalitarianism was going

1:16:51

to win in the 30s. They

1:16:53

said it was going to win in the 70s. They

1:16:55

were full of shit both those times and they're full

1:16:57

of shit now. Just wait, you know, wait and like

1:16:59

do the normal thing. But

1:17:02

in terms of the marketplace of information

1:17:04

with the massive messaging apparatus

1:17:06

of China and to some degree Russia,

1:17:09

which are now coordinating hegemonizing

1:17:11

the American Internet with bullshit

1:17:14

and the European Internet with bullshit and the

1:17:16

Latin American in and the Middle Eastern with

1:17:19

bullshit, you know, how do we beat

1:17:21

that? Like, what's the scenario? So this is

1:17:23

my question to Vitalik. What's the scenario

1:17:25

where that loses and how does it lose?

1:17:28

So I think one of the

1:17:30

sets of arguments that we haven't talked

1:17:33

about at all is just the possibly

1:17:36

very large benefits of

1:17:38

inflow pluralism in a

1:17:40

context where when people are sharing info, they're

1:17:42

doing something other than fighting each other. Right.

1:17:45

I think one of

1:17:47

the best things that you can

1:17:50

have in an ecosystem

1:17:52

is not just having like

1:17:54

one group that has a

1:17:56

tight internal consensus where they

1:17:58

all agree. with each other on

1:18:00

everything and then they just kind

1:18:02

of veer off

1:18:04

in their own direction and assume that

1:18:07

each other are right, have perfect confidence

1:18:09

in each other. And instead

1:18:11

actually have an ecosystem where

1:18:13

you have different groups that actually

1:18:16

have some form of competition with

1:18:18

each other. This

1:18:20

is something that the world

1:18:22

as a whole definitely

1:18:24

has as a unit. This is

1:18:26

something that the US as a

1:18:29

country definitely has quite

1:18:31

a bit of that as

1:18:33

a unit. You can identify

1:18:35

sub bubbles in a bunch

1:18:38

of ways. You have the reds and the

1:18:40

blues, you have the East Coast and the

1:18:43

intellectual cluster, then you have Silicon Valley,

1:18:45

you have people who care about different

1:18:48

branches of tech. And there's

1:18:51

lots of these subcultures that

1:18:53

actually have the ability to

1:18:55

actually take their ideas and

1:18:57

actually push them forward to

1:18:59

their conclusions and start executing

1:19:01

on them. This is something

1:19:03

that I

1:19:06

think the better crypto ecosystems

1:19:08

tends to actually have. And

1:19:11

the ones where it actually

1:19:13

literally is just a call

1:19:15

to personality around one

1:19:18

guy calling the shots or

1:19:20

the ones that pretty quickly

1:19:23

tends to fail. Sorry, Craig.

1:19:26

So the benefits of

1:19:29

actually having this pluralistic environment

1:19:31

where you actually have different

1:19:33

groups and where each of

1:19:35

those different groups actually has

1:19:37

enough breathing room that it

1:19:39

can actually take a couple

1:19:42

of steps and actually start

1:19:44

pushing its ideas forward

1:19:46

to some kind of conclusion. That feels

1:19:48

like something that it's very

1:19:50

plausible to believe that it's something that has

1:19:53

massive benefits and you just can't really come

1:19:55

up with good ideas without it. I

1:19:58

think what's interesting about that is that

1:20:00

the kind of world where there's

1:20:03

one leading dictator

1:20:06

and you can't get anywhere if you

1:20:08

disagree is obviously the exact opposite of

1:20:10

that. But then the

1:20:12

world water cooler is also the exact

1:20:15

opposite of that. So both the dictator

1:20:17

and the world water cooler are actually

1:20:19

not infoporalism. And so actually

1:20:22

figuring out how do we

1:20:24

optimize for infoporalism, which basically

1:20:27

means both pluralism existing and

1:20:29

at the same time the

1:20:32

interaction between the different groups

1:20:34

actually being not just

1:20:36

competitive but also you don't

1:20:38

want like folk kumbaya, you want some

1:20:40

kind of healthy mixture of competitive and

1:20:42

cooperative. So the answer of how do

1:20:45

we beat the info Leviathan of China

1:20:47

and Russia, the answer is we hide

1:20:49

from it. That it is very powerful

1:20:51

in the town square and rules the

1:20:53

town square. So we go to our

1:20:55

houses and talk in whispers to each

1:20:57

other where the monster cannot get us.

1:21:00

Well, there's this famous infographic or comic or

1:21:02

whatever you call it that got it that

1:21:04

was in a gasoline store code exposed. I

1:21:06

think it was actually the one on that

1:21:09

community that this dice this and civilization where

1:21:11

basically, you know, someone starts off making a

1:21:13

garden and then the garden expands and then

1:21:15

the garden expands. And then the fence kind

1:21:18

of eventually stretches out across the entire world.

1:21:20

And then at some point, you know, the

1:21:22

garden becomes the new reality. Yeah, so I

1:21:24

think I'm not advocating for

1:21:26

kind of like, you know, like

1:21:29

people constantly playing cat

1:21:31

and mouse games and expanding a

1:21:33

lot of energy running. I'm basically

1:21:36

advocating for developing the

1:21:38

tools to make the

1:21:40

internet landscape one

1:21:42

that actually is friendly

1:21:45

to multiple groups

1:21:47

that are not hegiments that

1:21:49

actually are able to. And

1:21:52

where the actual incentives aligned for them to

1:21:55

interact in ways that are more productive. I mean, I

1:21:57

think I know if there's a yeah.

1:22:00

But you can never get 100% of the way there, right? And

1:22:04

there will always be there to stay

1:22:06

crazy things and fight zero-sum games against

1:22:08

other people who are saying the opposite

1:22:11

crazy thing. But

1:22:13

you can clearly go much further than zero,

1:22:15

right? The world water cooler is

1:22:17

probably the closest to zero that we can have.

1:22:19

And then the question is like, well, even

1:22:22

if you look at the early

1:22:24

internet architecture, right? You

1:22:26

had a lot of blogs, you had a lot of forums, and

1:22:29

it did not look like anyone running and

1:22:31

hiding from a single main thing. But

1:22:33

it did look like something that produced a lot of

1:22:35

productive output, right? That's a great

1:22:38

point. What we're really running and hiding

1:22:40

from is maybe the inefficiency of centralized

1:22:42

information marketplaces rather than the

1:22:44

fact that Russia and China are in there trying to

1:22:46

do their thing. Right. I

1:22:49

mean, ultimately, again, the info

1:22:51

ecosystem has a mechanism by

1:22:53

which it's vulnerable to the

1:22:57

internet. And it's

1:22:59

also going to be vulnerable to the Democratic Party, and it's

1:23:01

also going to be vulnerable to the Republican Party. So

1:23:04

to a lesser extent, because we do

1:23:06

have more avenues to push on those

1:23:08

actors to be nicer, but to some

1:23:10

extent still, right? And so I

1:23:13

think there's an extent to

1:23:15

which those two things are similar

1:23:17

problems. And

1:23:20

to me, the ideal outcome is not

1:23:22

having healthy info ecosystems in

1:23:24

a particular subset of

1:23:28

countries that we label liberal democracies, and

1:23:30

then they can prosper and everyone else

1:23:32

goes to dust. The ideal outcome is

1:23:34

the world becomes a healthy

1:23:37

information ecosystem, right? Where a

1:23:39

pretty wide diversity of different

1:23:41

actors can participate, which inevitably

1:23:43

means a some that have

1:23:45

quite crappy intentions, but we

1:23:48

still figure out how to

1:23:50

model through and make that

1:23:52

work reasonably well. So here's my

1:23:54

question, and I have to go fairly

1:23:56

soon here, but you guys are

1:23:58

all fans of Block of

1:24:00

course. And so maybe blockchain

1:24:03

can help here because maybe so Americans

1:24:05

don't necessarily need blockchain to talk to

1:24:07

each other. I know there's there's Farcast

1:24:09

or whatever but maybe Chinese people do

1:24:11

or Russians maybe there are ways

1:24:14

for people to completely secretly talk to each other so

1:24:17

obviously you can use signal to just do

1:24:19

encrypted but then someone can like maybe raid

1:24:22

the office of signal or you know

1:24:24

kill anyone who's signal on their phones

1:24:26

I don't know but maybe are there

1:24:28

ways technologically for blockchains to help Chinese

1:24:31

people talk to other Chinese people about what they

1:24:34

don't like about Xi Jinping and for Russian people

1:24:36

to talk to other Russian people about what they

1:24:38

don't like about Putin etc etc have you seen

1:24:40

freedom tool no this interesting group

1:24:42

it's this company beta I think

1:24:45

based out of Kiev and

1:24:47

they have like people from a

1:24:49

bunch of ex-Soviet countries the

1:24:52

company is called Raramo and they

1:24:54

built this thing called freedom tool

1:24:56

it's so with I believe it

1:24:58

was a like pussy riots connected

1:25:00

lawyer Mark Fagan and basically what

1:25:02

it does is that if you

1:25:04

have a Russian passport then you

1:25:06

can digitally prove using I mean

1:25:08

like zero knowledge proof technology that

1:25:11

you're a Russian citizen without revealing

1:25:13

which one you are and then

1:25:15

if you can like go and basically participate

1:25:18

in an online vote and the results of

1:25:20

the online voter like visible and they're guaranteed

1:25:22

to be tamper-proof right so

1:25:24

basically yeah it is an anonymous

1:25:26

voting system that basically lets us

1:25:28

you know have like shadow votes

1:25:30

among the you know shadow Russian

1:25:32

nation and like actually yeah at

1:25:34

least they don't create consensus of

1:25:36

like you know like what to

1:25:39

Russian people actually think it's

1:25:41

very clearly that's kind of like a version

1:25:43

of the one the beta thing in a

1:25:46

lot of ways right but it's

1:25:48

interesting because to me

1:25:50

one of the big debates

1:25:52

that you sometimes get around the discussion

1:25:54

of like internet anonymity is basically like

1:25:56

the 1990s idea is like Freedom

1:26:00

comes from the fact that on the internet, nobody

1:26:02

knows you're a dog. But

1:26:04

then you have this debate of

1:26:06

either you're verified, but then if you're verified, people

1:26:08

know who you are, they can go after you.

1:26:11

Or you're anonymous, but if you're anonymous, then

1:26:13

no one has any need to trust you.

1:26:15

Unlike these days, it's pretty much impossible for

1:26:17

you to distinguish yourself from a bot. And

1:26:20

so the question is, can we actually

1:26:23

solve both of those two things at the same

1:26:25

time? And can we actually have through on

1:26:28

privacy and at the same time

1:26:30

various forms of trustworthiness, whatever that

1:26:32

means in a particular concept

1:26:34

and have those things together? And

1:26:37

it actually feels like this current

1:26:39

batch of zero

1:26:41

knowledge proof technology. And

1:26:44

there's a couple of blockchain

1:26:46

use cases in there

1:26:48

too, especially for making

1:26:50

these votes censorship resistant.

1:26:53

It feels like that batch of things

1:26:55

actually manages to solve both of those

1:26:58

problems. And so the frontier for creating

1:27:00

an info sphere that is at least

1:27:02

guarded against, shall we say both centralized

1:27:05

and decentralized cyber attacks

1:27:08

is actually better than ever in some

1:27:10

ways. So I think it's,

1:27:13

yeah, in this way, it's an exciting

1:27:15

time. We actually get to see

1:27:17

some of these things go live and see how they work. So

1:27:20

there's a partial answer for you there, Noah. We're

1:27:22

making some progress on that front. Guys, this has

1:27:24

been a fantastic conversation. I've really enjoyed to kind

1:27:26

of the interplay between the two of you. I

1:27:29

guess as we sort of bookend this,

1:27:31

maybe I'll read a quote. So even

1:27:34

if your thesis is right, Noah, you

1:27:36

still think it's a good idea to

1:27:38

continue fighting for liberal democracy. You say

1:27:40

this, we should continue fighting for liberal

1:27:42

democracy and hope that technology and human

1:27:44

nature allow for its continued victory. Maybe

1:27:47

that's a place to end this episode and

1:27:49

we appreciate both your time. Thanks so much. I've

1:27:51

muted himself, but I'm sure he's saying thanks as well. I

1:27:54

think he is as well. Thankless nation. We

1:27:57

will include a link to Noah's article that

1:27:59

we discussed throughout the day. duration of today's

1:28:01

episodes called how liberal democracy might

1:28:03

lose. We of course hope it doesn't.

1:28:05

And we are betting that crypto is

1:28:07

part of the solution and

1:28:09

part of the reason why it does not lose.

1:28:12

Of course, got to remind you, even though we

1:28:14

didn't discuss crypto today, it is risky. None of

1:28:16

this has been financial advice. You

1:28:18

could lose what you put in, but we are headed

1:28:20

west. This is the frontier. It's not for everyone, but

1:28:22

we're glad you're with us on the bankless journey. Thanks

1:28:24

a lot.