Making Sense with Sam Harris - #259 — The Reckoning to Come

Episode Date: September 1, 2021

Sam Harris speaks with Balaji Srinivasan about several civilizational challenges and possible paths forward. They discuss the evidence of American decline, the rise of India and China, centralizing and decentralizing trends in politics, the relationship between politics and technology, the failures of the FDA and TSA, how regulation preserves monopolies, the significance of Bitcoin and blockchain technology, the problem of cybersecurity, the Chinese government’s attack on Bitcoin, the threat of US regulation of cryptocurrency, blockchain scalability, creator coins, life in Singapore, virtual government, the future of decentralized journalism, independent replication in science, wealth inequality, ubiquitous investing, social status, non-zero-sum capitalism, “start-up countries”, and other topics. If the Making Sense podcast logo in your player is BLACK, you can SUBSCRIBE to gain access to all full-length episodes at samharris.org/subscribe.   Learning how to train your mind is the single greatest investment you can make in life. That’s why Sam Harris created the Waking Up app. From rational mindfulness practice to lessons on some of life’s most important topics, join Sam as he demystifies the practice of meditation and explores the theory behind it.

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Okay, well our 20-year engagement in Afghanistan has come to an end. I think I might have more to say about this next week. We're coming up on the 20th anniversary of 9-11, which is obviously significant for the world, but it's also personally significant. 9-11 was definitely a hinge event in history, but it was also a hinge event in my life, even though I was not directly connected in any way that I'm aware of to the events of that day. I don't believe I knew personally anyone who died, but it really did change my life. I began writing my first book, The End of Faith, on the 12th or the 13th, the latest, and the events of that day really determined a lot of what I focused on

for more than a decade. So anyway, I think I'll probably have more to say about that next week. Perhaps I'll do an AMA there, too. But the topic of today's conversation is not entirely unrelated, because viewed from one vantage point, 9-11 certainly seems to have hastened the unraveling of everything, which is the topic of today's podcast. Today I'm speaking with Balaji Sreenivasan. As you'll hear, Balaji is a jack of many trades. He's a serial entrepreneur, an angel investor. He was a general partner at Andresen Horowitz, a major venture capital firm. He has a very technical academic background. He was a general partner at Andreessen Horowitz, a major venture capital firm. He has a very technical academic background. He's a PhD in electrical engineering and a master's in chemical

engineering, both from Stanford. And he also taught computer science and statistics at Stanford. He is all in for blockchain technology and cryptocurrency, which we talk a lot about. for blockchain technology and cryptocurrency, which we talk a lot about, and he was actually the first CTO of Coinbase. Anyway, Balanji is very active on Twitter, and that's where I think I discovered him first. He was very early to recognize the problem of COVID, and he may be very early to sound the death knell of much of what we once considered stable in our world. And there was a lot to talk about. Biology and I had a five-hour conversation, which I believe is my longest podcast ever. We had a few sidebar discussions, so the final edit came in at four hours. And there's certainly a lot here. In general, we talk about the challenges

to civilization and the possible remedies. We discuss the abundant evidence of American decline, the rise of India and China, centralizing and decentralizing trends in politics and elsewhere, the relationship between politics and technology, the failures of the FDA, the TSA, how regulation actually preserves monopolies, the significance of Bitcoin and blockchain technology, the challenge of cybersecurity, the Chinese government's attack on Bitcoin, the threat of US regulation of cryptocurrency, the problems with enterprise blockchain, blockchain scalability, creator coins, and related matters, life in Singapore, the idea of virtual government, the future of decentralized journalism, independent

replication in science, wealth inequality, his notion of ubiquitous investing, social status, non-zero-sum capitalism, the very strange and arresting idea that one could start one's own country in the cloud and then have it come crashing down to earth, and other topics. As you'll hear, there was a time zone difference due to his being in Singapore, so at some point around two in the morning I tapped out, but we covered more or less everything I wanted to get to. You'll hear me push back more and more as the conversation progresses. I think that starts around hour two or three. As most of you know, I'm very worried about the degradation of our institutions, but I'm even more worried about

the growing consensus on the left and the right that we don't need institutions. And what Bology is proposing here is a crowdsourced, peer-to-peer, blockchain-enabled, quasi-utopian alternative to our current institutions, governmental, financial, journalistic, etc. And I must say, I remain skeptical and worried. I wish I could share his optimism here. And who knows, I may yet get there. But I found the conversation fascinating. If nothing else, it's a harbinger of some very interesting things to come. And now I bring you Balaji Srinivasan. I'm here with Balaji Srinivasan. Balaji, how are you doing? Great. Good to be here.

Okay, so there is obviously a lot to talk about. I went out on Twitter and asked for questions, and I won't hit you with actually Twitter-shaped questions, but it did gauge a very high level of interest in our covering really the totality of your interests and our intersecting interests. And a lot of this focuses on, I guess, civilizational challenges and American decline, and then the possible response to all of this, how we move forward, how we reboot to something more hopeful. And you have thought a lot about this, but before we just jump into everything all at once, perhaps you can summarize your intellectual and professional background. How do you think about your place in the world and the tools you've acquired thus far? your place in the world and the tools you've acquired thus far? Sure.

So, you know, of Indian descent, parents from India. Basically, I grew up on Long Island, came to Stanford for undergrad. You know, got my B.S.M.S. Ph.D. in electrical engineering. I messaged chemical engineering. Taught computer science and statistics at Stanford for a few years, primarily in the areas of computational statistics and genomics and bioinformatics, and then started a genomics company, which ended up selling for more than 300 mil. And that was in the area of like Mendelian genetic testing. Actually, you know,

That was in the area of Mendelian genetic testing. Actually, Steven Pinker is a one-time collaborator of mine and friendly, who I believe you know. And then went completely from genomics into a totally different area. Got into venture capital and joined Edgerton Horowitz, which is a $20 billion venture capital firm. and joined Edgerton Horowitz, which is a $20 billion venture capital firm, helped set up our crypto and our bio arms there when crypto was not a thing. You know, Bitcoin was not a thing. And recruited Vijay Pandey to the firm, who's now the head of the bio fund there. And our investments have been really quite good on both the crypto and the bio side. Also an angel investor in bitcoin

you know ethereum zcash most of the major coins uh as well as lots of it's funny to call it traditional tech companies like you know soylent replit superhuman lambda school a mighty a bunch of other things you know cameo.com for example many of which have been quite successful and then uh took over uh one of our portfolio companies when i was at a16c and uh took that over turned that around into something called earn earn.com sold it to coinbase became cto of coinbase that was my kind of most recent thing. And in addition to that, I've sort of been, you know, I guess a part-time tweeter, writer, public, you know, it's funny to put it this way, public intellectual. I guess everybody's an influencer or whatever, you know, but, you know, at least I've put

some ideas out there. I think I've helped influence conversation in some ways. And I also taught a MOOC course online with more than 250,000 students back in 2013 and I've wanted to repeat that at some point and right now I've just got a little newsletter thing called 1729.com which is sort of the seed of maybe something bigger where I'm just kind of putting some essays out and you know tweeting and doing angel investing right now so all right that's that's me jack of all trades master of none brings us to the present day. Nice. Well, it's a polymathic picture, which is definitely a lot of fun and gives us a lot to cover. When were you at Stanford? What years were you there?

Oh, 1997 to, really, I guess, 07, almost 10 years. You know, it's funny, like the first 10 something years of my professional life was sort of spent in, you know, meditating on mathematics. Right. And, you know, I kind of thought that the world was just, you know, who could solve the most difficult integrals. And yeah, the kinds of stuff that I do then, you know, for example, actually, just to talk about that for a second, lots of stuff in undergrad, you know, for example, actually just to talk about that for a second, lots of stuff in undergrad, you know, when people learn it, they'll learn the algebra formulas, but they

won't really have an insight into what underpins that. That's perhaps most apparent in like probability versus statistics. You know, people will learn how to manipulate probability distributions, but they won't actually understand how a collection of data maps to that. And a lot of that is actually not taught. It's just something you have to sort of figure out in grad school. It's something which I've wanted to write a text on or something at some point, but it's kind of a general thing that people kind of understand symbols on a screen, but they do not understand how it maps to real life. So why did you go into EE and chemical engineering

rather than math or something? That's a great question. Well, Stanford actually did not have an applied math degree. So EE was sort of the closest to that since there's a pretty close correspondence between the signal processing in particular, and then what's actually useful in real life, you know, you know, Fourier transforms, functional analysis, you can throw a lot of math at it, you know, wavelets, hard bases, a lot of that stuff

actually has a tight correspondence between the math, and then what's actually useful in real life. And both of those were important to me that, you know, there was something that was interesting and challenging for a mathematical standpoint than useful in real life. And both of those were important to me that, you know, there was something that was interesting and challenging for a mathematical standpoint than useful in real life. As for chemical engineering, it was sort of the most quantitative way I could get into biomedicine because I was interested in life extension and stuff like that for many years. And, you know, I'm kind of coming back to that early interest. Plus they're both very broad, right? They touch a lot of different areas. You know, I have at least some grounding in, you know, everything from Navier-Stokes to antennas. You know, certainly not an expert in these areas, not all these areas, but I at least know enough to know what I don't know.

You know what I mean? Right. So that was helpful. Right. Okay. Well, let's turn you loose on the problems at hand. Yeah. You asked.

You asked. It's just, you know, since I just want hand. Yeah, you asked, you asked. It's just, you know, since I just wanted, yeah, go ahead. It's good. We'll be talking about almost none of that stuff, but it'll give a very technocratic inflection and a numerate inflection to much of what we do touch. Yeah, it's funny. It's funny. I like your second, you know, asterisk on that, which is, you know, John Allen Polos,

many years ago, in the 90s, wrote a book that was influential on me when I was growing up called Innumeracy. And I actually think that's a good way of kind of defining what the new class is, as opposed to the old class, because there's people who sort of are self-styled technocrats, or they're kind of called that, it's kind of got a bad name, but they actually can't do math. or they're kind of called that, and it's kind of got a bad name, but they actually can't do math. They style themselves policy wrongs or what have you, but they can't code.

I think this century, the numbers overpower the letters. That's a broad concept we can talk about. Amazingly, it still gives enough scope for motivated reasoning that you can get objectively, you know, perfectly numerate people who are no longer persuaded by numbers when they go against their cherished beliefs. True, true. I'm not saying it's a, you know, panacea, but I do think that there's a greater degree of check on flights of fancy if you're going with numerate people who are more likely to be logical or what have you. At least there's a greater check. You might disagree with that.

We can go and talk about that. Yeah. Okay, so let me just set up the problem as I see it. I think there's so many intersecting issues here. A main one for me is the failure of institutions from government to the media to universities to science journals to major corporations. I mean, this is just a story of bad incentives and incompetence and ideological capture, hyper-partisanship in our politics.

There are many things intersecting here. And we can see the failures more or less everywhere. I think in the last year and a half, our astoundingly inept response to COVID has been the clearest example of the problem here. Although now we have a misadventure in an exit from Afghanistan in the last week, which gives it a run for its money. last week, which gives it a run for its money. But it's just everything but the development of the vaccines, at least to my eye, we've proven unequal to the moment. And yeah, I do view this as a dress rehearsal for something that is more or less inevitable and will be quite a bit worse. And I mean, there's an obvious American failure here, but the international system generally has failed. And we see the issue on a dozen other fronts. I mean, there's this moral panic of wokeness that has captured ourulations of our major corporations to these increasingly Orwellian demands that come from the Chinese Communist Party. I mean, we've got LeBron James literally doing the bidding of the CCP.

We had four years of Trump, which culminated in a mob of QAnon adult lunatics storming the Capitol. But then under Biden, we have, which was billed even from the perch of this podcast as a very likely return to competence. But as I said, we have this suddenly spooked exit from Afghanistan that has alarmed our friends and charmed our enemies all over the world. So across the board, we seem to be advertising what a ramshackle superpower we are. So there's so many aspects of this that we could start with. I guess let's start with just the phenomenon of American decline as you see it, and then we'll eventually get to possible remedies and the path forward. So what's your 30,000-foot view of America at the moment? Great question. So one thing that you said that I wanted to sort of slightly poke at for a second is you said that the one thing that we were successful on was the

vaccine. And I think it's important to determine what we was there, because what we was was really, in many ways, it's funny to put it this way, the private sector or technology, you know, biotechnology. And the state mostly got out of the way. And, you know, they, you know, it wasn't the FDA that was developing the vaccine per se. They were sort of forced to get out of the way of blocking it, you know. Yeah. So so I think broadly speaking, what we're talking about is a decline in American state capacity. speaking, what we're talking about is a decline in American state capacity. And what's interesting is this is mirrored on the other side of the world in China. And actually, this is surprising,

very surprising to me, to a lesser extent, but a real extent in India, both China and India have had a rise in state capacity over this period. And, you know, the Chinese story is well understood, you know, they've built all this stuff. And, you know, there's a lot of negative things that I can and will say about China. But it's also important to understand the things that they are doing that are unambiguously, like, impressive, right? You know, the build-out. So they have risen in state capacity. And India actually also has where, for example, do you know what India's tech is? No.

Okay. So there's an article you might want to Google. It's called The Internet Country. I think it's tigerfeathers.substack.com. I believe that's right. And it basically just kind of describes how sort of out of the global eye, India's built national identity and payments and so on APIs for a billion citizens. Okay. And they're not as good necessarily, I would argue, as the Chinese versions, but they exist.

And that's incredibly impressive. And that, you know, and in some ways they're better because they're public as opposed to sort of the WeChat-ish, you know, private versions. I'm not beating them up, but India Stack guys are probably,

probably will listen to this. It's actually quite, quite impressive that you could do something like that for India, which did not have a functional public sector for many years. And on the, you know, moreover, like 4G LTE, they have, they've done something, there's a project there, a private project called Reliance Geo, which has given wireless internet to hundreds of millions of people. So basically, on the other side of the world, we're seeing essentially something where the winners of the 20th century, right, the US

and Western Europe have gotten like, you know, one way of thinking about it as civilizational diabetes, you know, so fat and happy at the end of history that they had to sort of invent internal conflicts and drama to make things meaningful again. And now they have, you know, they've, you know, to the set of fire and they're burning down the house. That's one perspective on I think there's others as a technological one. But the other part of it is on the other side of the world, you know, the Indians and Chinese that sat out the 20th century are going to be extremely important players in the 21st. And right now in 2020, there's sort of this overdue American cross-partisan understanding that, whoa, this China thing, it's actually become a big deal. But I think the realization in 2030 is going to be that India is actually

also a big deal because India is actually on an amazing growth trajectory right now that's not being reported on. There is an interesting aspect where, thanks to the vagaries of history, you know, there are now millions of English-speaking Indians who are broadly West-aligned. And, you know, of course, you know, part of what the Chinese use is their justification for being anti-West are, you know, the opium wars and, you know, the Boxer Rebellion. And these are things, you know, actually Adam Tooze, who I don't agree on many things with and is actually in some ways communist sympathetic, wrote a pretty good history of kind of China in, you know, I think the New Statesman recently that's worth browsing for

people because, you know, most folks, very few Americans I speak to have any idea of how China got rich, for example, or, you know, how, you know, like India's rise in state capacity. It's just a complete nullity, you know? And this is kind of related to, you know, some of the phenomena that you mentioned, which is, you know, pre-2016, there was American internationalism. And of course, it had been declining before then. But, you know, reflected, let's say, George H.W. Bush or the sort of Democrat with a broad view of the world. It was both on the Republican and the Democrat side

of sort of understanding other countries, you know, and understanding the other guy's point of view and overseas, right? It wasn't, you know, Trumpian chest other guy's point of view and overseas, right? It wasn't, you know, Trumpian chest thumping, but it also wasn't, you know, sort of this woke narcissism, which, you know, is, this is also narcissistic and inward looking in its own way, right? It pretends to be really tolerant and universal, but assumes that everybody is basically, you know, has the values of a Oberlin 2021 graduate or whatever, right? And so because of that, there's actually very little surprisingly hard news about other countries.

It's just, you know, are they good? Are they bad? You know, these basic facts have simply not been communicated, you know? Yeah. Anyway, okay. So coming back up the stack so the point basically being that the i think in many ways the 21st century so for some angles which the 21st century is a mirror of the 20th one of them is that you know if it was about like a capitalist west and a

socialist east it's sort of reversing, you know, where, you know, now in many ways, like you could say the new political spectrum of the world is something where the U S is at the left, right? Basically Europe is center left India, Israel you know, like they're center, right. And China is far right. And the spectrum I would put there is ethno-masochist left to ethno-nationalist right. And in the center would be pseudonymity, and that's crypto. Should I elaborate on that? Yeah, I want to get into crypto. Let's keep talking about the problem. And then because crypto, I know, is a big part of the solution, as you see.

Sure, sure, sure. OK, so but I'll describe the spectrum for a second. Basically, you know, during the Cold War, the first Cold War, you know, you roughly had the U.S. on the capitalist right. And then Europe was on the like, you know, call it, I don't know, center right. At least the U.S. was the right pole of capitalism. And then you had a bunch of countries in the center, maybe the third world that were like kind of non aligned. And then you

had, you know, there and some of them actually, you could call them center left as well, because they were Soviet sympathetic, but they weren't fielding troops, then you have the far left, which is the USSR and the Soviet bloc and whatnot, right. And in many ways, that spectrum is sort of flipped, where, you know, Eastern Europe would be considered to the right of the US in many ways, that spectrum is sort of flipped, where, you know, Eastern Europe would be considered to the right of the US in many ways, the Visegrad countries, not necessarily, I'm not saying this is good or bad. I'm just saying, you know, it's like flipped, right? China is certainly to the ethno-nationalist right, their belief is China is the best. And whereas the US is like, you know, the ethno-masochist left, where, you know, the

statement is that, you know, basically whites are the worst. And, you know, that's what's funny is it flips around into its own kind of supremacism, you know, where once you've given yourself license to hate, you know, to send white people to the back of line for vaccines rather than people of another color, right, which is actually policy in some states, if you saw that, it's its own form of sort of racial obsession. And so in that way, the spectrum of the 20th century has flipped around. And in another way, it's also flipping, which is that I think of the 20th century as the centralized century. And a large part of what happened, by the way, there's a book that's really worth reading. Have you ever heard the book,

The Sovereign Individual? Yeah, I haven't read it though. Okay. So very worth reading. It's on Kindle. Your audience might want to read it. I think it is an important book to understand where we're coming from, where we're going. It actually holds up very well, despite being written about 20 years ago. But briefly speaking, one way of thinking about the time period from, you could say from 1492 or depending on how far back you put it, up till about 1950, is that technology favored centralization. And that meant, for example, the centralized union won over the Confederate states. You had mass media and mass production.

You had, by 1950, you had peak centralization, which was, you know, one telephone company, which is AT&T, and two superpowers, US and USSR, and three television stations, ABC, CBS, NBC, and all kinds of diversity, all kinds of, you know, intellectual diversity, schools of thought, all these kind of funny princes and principalities, schools of thought, all these kind of funny princes and principalities, all of that was crushed. And, you know, you had these giant homogenous masses by 1950, right, which were sort of controlled by, you know, antenna towers, broadcast towers. And people couldn't really talk to each other very easily because it was capital expensive

to go and set up a television station or a factory or something like that, right? And this is also reflectance for the political organization where you had these gigantic polities, you know, you had the US and you had the USSR and you had China and, you know, basically it was just like these Geiger states, you know, slugging it out. And the ideologies were adapted for the technology. There were ideologies of, you know, mass media and mass control and, you know, a huge number of Nazis and communists, and then fortunately, democratic capitalists as, you know, basically the three factions. Okay. And so then what you see, though, going from 1950 to the present day, with the invention of the

transistor, things start, things start changing. And I wrote an essay on this, or gave an interview rather at Sotonye, S-O-T-O-N-Y-E dot substack dot com. I gave an interview with him where I talk about this in a little more detail. But basically, you know, from 1947 to the present day, you have the transistor, you have the personal computer, you have the internet, you have remote work, you have smart smartphone, you have cryptocurrency. These are all decentralizing things, right? You have smart smartphone, you have cryptocurrency. These are all decentralizing things, right?

And because of that, institutions that were set up during the centralizing era are out of their depth. And, you know, basically the entire regulatory state that FDR set up in the 1930s, which you can think of as sort of the last major tectonic plate moving of the U.S., right? Like the U.S. government arguably dates back to that. And the reason I say that is so many aspects of the Constitution, other things were sort of overturned during FDR's reign, like the 10th Amendment, the idea that, you know, states basically can do anything that isn't, the federal government doesn't explicitly have. That was basically a non, became a non-issue or a dead letter during FDR's reign, right? And, you know, one way of thinking about it, by the way,

is FDR was a dictator who ruled till he died, okay? Now, you know, it's funny to put it that way, right? But basically, notice the economy started picking up a few years after he left, and, you know, he had done all this stuff like Naira, like the, you know, the National Industrial Recovery Act. And, you know, he tried to pack the courts. And, you know, there was the poultry case, you know, Schechter Poultry Company, I believe, where, you know, he tried to get them like to kill chickens, if I'm not mistaken. He actually did a lot of things that various dictators would do. You know, he didn't put, well, I shouldn't say he didn't put people in camps. He did, you know, which was the Japanese internment. It wasn't as bad as, you know,

the other countries. But essentially what was happening was there was, you know, nor near as bad, obviously. But, you know, essentially what was happening, there's a pressure for centralization. You saw similar things happening around the world, and the U was just like the least bad of them. There were enormous reasons, both ideological and technological, for the formation of these centralized states. And I think of the technology as being upstream of it. You know how there's a sort of common thing that says, you know, culture is upstream of politics. You've heard that before. Yeah. Right. And that's true. But technology is upstream of both of them.

Technology influences... There's a different view which says technology is the driving force of history. And every ideology has been out there for all time. They're just way around in the matrix, but technology determines which of them are feasible and infeasible by parts. So are you arguing that centralization itself was not the problem, is that we had a centralized system of authorities that became incompatible with the prevailing technology? Yes, exactly. Right. So with India and China, they had sort of refounding moments, right? India, you know, China was sort of refounded in 1978 under Deng Xiaoping, India, you know, China was sort of refounded in 1978 under Deng Xiaoping, India in 1991.

So they're still young enough as states to sort of ride the decentralization curve, which was inapparent, like basically they were refounded on capitalism, you know, which is part of the sort of latter half 20th century trend away from centralization, right? And so they, you know, for all their many flaws, many, many, many flaws, they're sort of riding the right wave of decentralization. Now, there's many asterisks and reversals and things you can put on this, because of course, China's built this gigantic surveillance state, India's built a centralized, you know, payment stack, and so on. But, and I'll get to that. But even with those sort of reversals and things, overall, they were sort of founded or refounded in the decentralized era. And they're sort of

riding that wave to a better extent than the modern US, which was set up pre, you know, like 1950, right? Like in the 1930s. It's about 50 to 60 years older. Let me illustrate what I mean when I say FDR's regulatory state was set up for the centralized world. So, you know, the FDA, for example, it's set up to go and regulate Merck and Pfizer, right? Not a million people doing personal genomics.

The FAA is set up to go after Boeing and Airbus, not a million drone hobbyists, right? The SEC is set up to go after boeing and airbus not a million drone hobbyists right the sec is set up to go and regulate you know goldman and morgan and you know the nisey and nasdaq not millions and millions of crypto people trading at home right the presumption is that you can have this tla this three-letter agency, that pulls the CEOs of the major things in the room and jawbones them and says, this is the way it's going to be. And that's sufficient. There's two reasons for that. First is, you know, it's sort of easier to have the points of control be corporations that the regular state can kind of give instructions to do X, Y, and Z as opposed

to individuals. But second, and much more subtly, but very importantly, there's a book called Reputation and Power by Daniel Carpenter. And he is, you know, FDA sympathetic. It's a good book, though, because he is honest enough to actually give first party testimony of the executives who are regulated by FDA. And their testimony is similar to that of like, somebody who's like a captor, you know, captive of a Vietnamese, you know, torturer during, during, you know, the, the seventies and, you know, they'd be blinking, you know, I'm being tortured, even if they're forced to say something, you know, positive. Right.

So these executives, you know, are basically blinking, I'm being tortured and some of them are saying it outright. And then Daniel Carpenter kind of says like, but they were, of course, exaggerating. But he includes the quotes from them, right? And so the thing is that the FDA was kind of, for many years, used to being able to torture these executives for various reasons. One of the most important is that companies are unsympathetic, right? This is a big, bad corporation. Obviously, it's trying to cheat you. We have seen thousands and thousands, countless numbers of movies and books and so on where the villain is some megacorporation, right? I mean, think of how

many movies you've seen where that's the plot, the reveal at the end is that it was an evil, greedy megacorporation that turned the mutants loose or something like that, right? Yeah, but villains aside, we have to confront this problem of bad incentives and the negative externalities of people's greedy, quote, greedy profit motive. I agree. I totally agree with that. I totally agree with that.

And I'm not somebody who is against regulation writ large. I just think that the current regulators, like you can go from nation state regulators to cloud regulators and actually achieve a better result. A very obvious version of that is, and you might disagree with this, but I think it's true, is, for example, the transition from taxi regulations, where you have a rare medallion inspection, maybe every six months, there's a cozy relationship between the taxi drivers union and the taxi regulators and the customers of those taxis. They don't put in any star reviews or anything like that. And then you

move to an environment where every ride is GPS tracked. A driver knows that the rider can provide payment. A rider knows the driver is being rated and can be decommissioned. You have real-time star rings and reviews on both sides. There's a uniformity of service to some extent and so on and so forth. Uber and Lyft are not just better taxis. They're better taxi regulators. And this is actually a broader concept. If you think about it, what is PayPal doing?

What is eBay doing? What is Amazon doing? what is PayPal doing? What is eBay doing? What is Amazon doing? What is Apple doing? What is Google doing? These are all actually all cloud regulators for a significant part of their business where, you know, Apple provides. But what do I mean by regulation there? I mean, star reviews, right?

Basically, ratings of, you know, actors and then bands of bad actors, right? So you're doing quality scores and bands of bad actors. Those are the two components of regulation or regulated marketplace. The distinction is in the first, you're giving like a star rating one to five, like this is good or bad. And the second, you're identifying an actually fraudulent actor who is not incompetent, not a one-star actor, they're a zero-star actor, okay? And so if you think about- So it's a currency of, it's a reputational currency and a level of transparency that is causing what otherwise would be a trustless situation, it's allowing for something like trust.

Exactly. That's right. So the subtlety is not that we are against all regulation. It's that we are against this technologically inferior form of regulation based on paper, based on these 20th century obsolete processes, when you can do it way better. You know, like, lots of people use Amazon. Why? Just to look at the start ratings of products. They have built a sophisticated regulatory system that is better than the FTC or the BBB or anything like that, which is on its back foot. Except when you have to buy batteries on Amazon. I don't know if you've noticed that, but everything is awful. None of the batteries were real. These are Chinese fakes.

Right, right. So the counter argument is now people have learned to game some of those things, okay? And I would agree with that, that some of those reviews online can be gamed because there's a huge financial incentive to do so. And then I think we're going to see the next generation of crypto reviews, which make it harder to game where you have proof of human and you have web of trust and you have so on and so forth. But I think, broadly speaking, being able to get a product review for anything under the sun for free in seconds is superior to the 1980s or 1990s environment where one could not do that. Okay, but if we revert back to the FDA for a moment. Yes, popping back up. So just to close up. Just a question. I think many

people would consider it a problem, even a looming one, that the FDA is not built to regulate the true democratization of CRISPR technology, say, or the desktop manipulation of novel viruses, right? And the fact that it's not built to handle that is one problem. The other problem is it's nowhere written that the ongoing survival of our species is compatible with the true democratization of that tech, right? It's like some tech just shouldn't be spread, right? And we need something like the FDA to put its foot down. Now it may be incapable of doing that, or we'll do it too late, or maybe it's not even possible given just the nature of the spread of technology.

But it's not intuitive to many people that the solution here is necessarily to ride this curve of decentralization down to truly peer-to-peer free-for-all? So you raise an important point. And basically, I think it's something where we're going to a very high-variance world because the FDA is also stopping life extension, world because the FDA is also stopping life extension and stopping anti-aging and stopping reversing of aging for many different reasons. But, you know, the bureaucratic roadblocks that it puts in place, the idea that everything has to be sort of forced into the new drug application, you know, format, you know, all of that is something which is also preventing people from living forever. And when I say living forever, I mean at a minimum, reversing aging, you can demonstrate that in the lab.

David Sinclair has written about this. There's long books on this. But why would that be the case? Because again, this is just a first principles intuition, but there should be a massive incentive. I mean, take one component of life extension. There's some path by which we're going to cure Alzheimer's, right? There's so much money to be made in a cure for Alzheimer's.

There's so much money being spent in trying to mitigate the appalling suffering due to Alzheimer's. Why would the FDA in any way stand in the way of that progress? Excellent question. So this actually gets back to the... So I'll give a couple of concrete examples, which are observable variables, right? Do you recall how the FDA basically with the Johnson & Johnson vaccine,

despite extreme large-scale benefit from having it out there, went and amplified these very rare edge cases and used it to yank the vaccine, causing people to in part become vaccine skeptical or whatever you want to call it. Remember that a few months ago? Yeah, I mean, around thrombosis issues. Yeah, thrombosis issues. A very rare edge case. But basically, they're not optimized for making the correct trade-off between type 1 and type 2 errors. Another example that's even more egregious

was last February. The FDA was... And by the way, when you say the FDA, the FDA is made of institutions and those institutions are made of people, right? So, you know, Jeffrey Sheeran at CDRH is actually like, it's funny how it's always reported as like this abstract thing as opposed to a guy, right? Isn't that interesting, right? Because the reporting doesn't actually, but by reporting as an abstract institution, it makes it seem like nobody was making a decision when you report the person, right? So CRH is run by a guy, Jeffrey Shuren. And last February, there was a decision that was made basically to make it very hard for people to run diagnostics on the novel coronavirus. That is to say, they weren't actually given

an emergency use authorization. Yeah, that was really appalling. Yes, but it was critical because during those critical few weeks, the information supply chain was messed up. That is to say the state was inhibiting decentralized testing for the novel coronavirus until the Seattle flu study, I believe, literally just did civil disobedience, broke the law, tested for the coronavirus using the tools they had, even if they didn't have the respective certificates. And in that unusual situation,

what happened was the New York Times company sort of retroactively blessed their civil disobedience because you can bless civil disobedience as good or as bad based on that holy writ, right? And by kind of writing an article where they said that this was good, that indicated to the FDA that they couldn't go and enforce on them and beat them up later, that actually the FDA was wrong. The journalist was the adjudicator in that scenario, which I'll come back to., wouldn't you ascribe this more generally just to the dynamics of bureaucracy and the principle of it's, you're not going to get fired for the good thing that didn't happen on your watch that nobody knows about, but you will get fired for the terrible thing that happened. So there's just a risk aversion built in, or a loss aversion, I mean,

it's a loss aversion built into the human psyche, but there may be an even greater principle of loss aversion built into bureaucracies. Well, yeah, but basically one way of thinking about it is you've seen a thousand movies on evil capitalists. You have lots of different, you know, you've also seen movies where the police go bad and so on and so forth. So you have that mental model of greed is what makes them go bad. Okay. Just in a sentence, what makes a regulator go bad?

In the current environment, I guess overzealous regulation in a time of emergency. Yeah. So you could, you could call it power. Okay. That's their failure mode, right? If the, if the CEO's, you know, like failure mode is too much profit, the regulator seeks too much ambit, you know, A-M-B-I-T, like too much ambit of territory. Following the letter of the rule when obviously a life-saving exception is warranted. I mean,

it's the rigidity problem, and there's just no flexibility to intelligently respond to the moment. The thing is, they're conscious of that So when they choose to be, they can be flexible, right? It's really about power for them. That's why you should read the book, Reputation and Power by Carpenter. Like we're familiar with this. Let me give an example, which is more familiar to people, because most people have not actually encountered the FDA. So you only know about them through what you read, right? And, right? And everything that one has not sensed directly, one has not actually acquired information on, ideally, tables of data that you kind of systematically correct, but at least personal experience, you're vulnerable to the

intermediate, the media corporation or media entity that is reporting on them because they can be a very noisy camera. They could distort what's on the other side. It's a noisy sensor. You have to kind of go back to sensors. Okay. So let me go to something which we definitely have interacted with, which is a TSA, right? So with the TSA, okay, back when we were all flying much more, but let's say warp yourself back to 2019. Okay. And with the TSA, basically you walk up to the airport and what do you do? You don't make any jokes in the line. Okay basically, you walk up to the airport, and what do you do? You don't make any jokes in the line, okay, when you're being forced to take out three-ounce bottles. There's this new terrorist technology called mixing that can take two three-ounce bottles and mix them into a six-ounce bottle.

It's the most insane and illogical regulation in the world, that one alone. insane and illogical regulation in the world, that one alone, that take off our shoes and kind of go through this, you know, metal detector or the actual, like, this sort of somewhat radiative scanner, I forget the exact name for it. And you don't make any jokes, you don't talk about how ludicrous, you know, anything is, you just kind of comply and get on the plane. Why? Because if you were to make a fuss, well, you might suffer what's called a retaliatory wait time where you're forced to go and sit in the corner, you know, and they ask you a bunch of questions and you miss your flight. And the cost of that, a few hundred dollars and, you know, the opportunity on the other side is not worth it to you. So you just sort of quietly comply

with these illogical regulations until you deplane on the other side and you leave. And the thing is, it's a cost that is imposed on literally millions of people every day for 20 years. So the cost is in the many incalculable billions of dollars. But- You reminded me of the time when I came back from India with a long hair and probably wearing corto pajamas. And at that point, a fairly long established commitment to not lying under any circumstance. And when asked by customs whether I had used any drugs overseas, I said, yes, yeah, definitely. And the custom official's eyebrows rose to the

back of his head. And he said, well, what drugs did you use? And I said, well, I took acid in Nepal and I smoked some opium in India. Then I could see the full table of guys preparing to search my bags down to the last molecule. I hope you got to the airport very early. Yeah, this was on my return. So I just had to get out of there without being strip searched, but it worked out. Well, so to that point though, basically, if you look at how the TSA justifies themselves, it's all about the guns and the drugs that they've seized. And of course, if you repeal the Fourth Amendment, you will search everybody and you'll find some bad guys. Hey, look at this.

Look at this table of all these guns and knives and drugs and so on we found. But the thing is that what is know, what is not seen, it's the Bastiat seen and unseen, is not just the economic loss, the loss of privacy and all of the abuses of that system. And, you know, more to the point, the initial raison d'etre, like stopping terrorism, people have done things like sanctioned tests

where they try to get things on a plane and like fool the TSA. And it's like this very high percentage chance that you can fool them, okay? And moreover, by the way, something the FDA did fast-track through were those detectors. So basically, I think back in 2010, Ars Technica had a long article on this, if I can find it. The backscatter X-ray detectors that you see people naked? Yeah, exactly. The body scanners. There were professors who wrote in on the safety of these things, right?

And wrote a letter. And because, see, the thing is, the FDA's mentality, the mentality of these agencies is if it's a dot-com, it's evil because it's for a profit. If it is a dot-org, it's good because it's not for profit. If it's a dot-gov, it's a sister agency, so it's not for profit. And so we should let it on through and approve it. And if it's a.mil, well, they're not exactly the same culture, but at least they're not for profit, so we'll waive it on through, right?

And essentially, when it was TSA.gov to FDA.gov, basically, they were given the benefit of the doubt. And so what's happened is the FDA waved through these body scanners that are irradiating all these people. And we'll see what the long-term health effects of those are, but it's not obvious that they actually do anything relative to, you know, the Israeli style of actually looking for the person as opposed to the object, you know, and, uh, you know, Israeli style has, you know, its own merits and demerits, but Israeli, you know, airport security is focused on who could actually be a terrorist. And, you know, the American is very much not. It tries to enforce this sort of

egalitarian thing that irradiates everybody, you know, equally, right? Well, listen, you're talking to someone who once wrote an article in favor of profiling at the TSA. Yeah. So, I mean, the issue is you can imagine how comfortable the aftermath was on social media. Right. Right. Right. So look, you know, the problem basically is that if, you know, any kind of, you know, profiling itself has gotten a bad rap, but any kind of humment, right, like human intelligence, you know, where you're actually looking at the person as opposed to the process has been made, you know, kind of like a, like a taboo thing to even think about.

And so the result is that everybody is not just inconvenienced. The, the, the process supposed to detect, you know, quote terrorism doesn't even work. Right. So it's just this giant tax on society where terrorists could actually get past the TSA. Okay, so what's my point, though? As evidenced by those tests, if you need evidence, that show that people could get past it, right? So the thing has type one errors. It has type two errors.

It's not actually set up to be what you want, which is sort of a metal detector for terrorists, not a metal detector for terrorists, not a metal detector for objects. You know, you want like a scintillation detector, like something that's detecting this extremely rare event of an actual terrorist, right? And, you know, the thing is that despite this complete irrationality, despite the enormous destruction of value, despite the fact, by the way, that many well-heeled executives and politicians and so on must submit to this, We're in a bad equilibrium where to talk about abolishing the TSA, you know, would be, oh my God, you know, you can't possibly do that, right? And it's a very hard thing to change.

Are you saying we have something like, so people are familiar with the concept of security theater at the TSA. So we have something like regulatory theater elsewhere in the government, including the FDA? Exactly. And the difference is that with the TSA. So we have something like regulatory theater elsewhere in the government, including the FDA. Exactly. And the difference is that with the TSA, you know, why don't you say anything? Because there's retaliatory wait time, right? You can complain after you get out, right? But if you're FDA regulated or FAA regulated or SEC regulated or something like that, you know, especially FDA, but you know, you, you enter this dark tunnel at the time that you start a company, and then you're beaten with truncheons through the duration, and you can't say anything because to say anything is to invite total destruction of your company because you can just be passive-aggressively shunted to

the back of the line with infinite dials until your venture backing runs out, and then you're throttled to death. When you fail in such a way, it looks like you just sucked, right? It looks like, oh yeah, your thing couldn't pass FDA clearance, and so that's why you've got sour grapes. But are you arguing that we actually don't want an FDA? Because I want a TSA, right? I mean, I want a TSA that functions rationally. So this gets to my point of, I think you can build something much better. Okay. And just as an example, let's take post-market surveillance, which is phase four. Okay. So why can you not take your phone, scan a barcode of a drug at the store and see every single review that anybody's ever had of that drug, right? Ideally linked to their personal genomics

and ideally linked to yours. So if you have AA, you know, at this spot and you can actually see, meaning, sorry, it's a technical point. If you have a genetic variant of a particular kind, you can see a table which shows everybody else who has the genetic variant. And then what they, you know, reported, was it a five-star or one-star for this drug? Basically, you could see the pharmacogenomics in real time. Right, but short of that integration with the full genome sequencing of the entire population, what you have is something like the VAERS database, which now is being gamed by anti-vaxxers who are reporting that our COVID vaccines are killing them. By the way, the high-level thing here is what you're identifying is something

true and important, which is that the internet means more variance, more upside and more downside, right? More highs and more lows, right? And so on almost any issue, we can identify a downward deviation. We can identify QAnon. Right. But we can also identify often an upward deviation. We can identify Satoshi Anon. So to your point, yes, there's going to be people who come up with crackpot medical things. Maybe just drop the two-sentence explanation of who Satoshi is, because I guess most people know it, but not everyone.

explanation of who Satoshi is, because I guess most people know it, but not everyone. Sure. Satoshi Anon, but it's like a funny way of referring to it as parallel to QAnon. Satoshi Anon, meaning Satoshi Nakamoto, was the pseudonymous programmer that created Bitcoin and then disappeared. And we know he existed because there's a lot of contemporary evidence and people who spoke to him electronically, but he maintained perfect operational security, was able to develop something that has changed the world and, you know, created trillions of dollars in wealth and, you know, is the subject of every, you know, banker and, you know, financier and, you know, government, you know, they care about, right? So that was something where, you know, is a very different anonymous online kind of thing. Another one, by the way, was the lab leak

theory. Last year, there was a website called, I think, projectevidence.github.io. And what that is, is basically a compilation of all the evidence for the lab leak, I think, last April. And it took about a year before that bubbled to the mainstream. But the critical thing, it was pseudonymous global scientific publication. And in a sense, we're going back to the mainstream. The critical thing is pseudonymous global scientific publication. And in a sense, we're going back to the future because Newton and others used to do this. He used to publish something where it was under a pseudonym. So people would sort of have to go after the ideas rather than the person, you know, and we're sort of back to that future. And so that there's, there's an upside as well to like anonymous internet stuff, not just a downside. So coming back to your point, and we're like several things down the stack and we'll pop back up, right? But absolutely,

I think it's naive to say no FDA, right? It's sort of like, you know, Ron Paul saying, end the Fed. I'm actually sympathetic to that in some ways because, you know, like the Fed prints all this money and so on and so forth. But I'm a pragmatist as opposed to a doctrinaire libertarian. And, you know, the problem with, let's say, ending the Fed or ending the FDA is they're the center, they're the hub at the center of like millions of spokes. The entire system is built around them, you know, like to an incomprehensible extent, you know, every wire transfer, you know wire transfer is ultimately linked to Fedwire or something regulated by it.

And every single biotech company, drug company, device company has something pending with the FDA, might use an FDA database. It's not like they do zero things of value. They do a fair amount. And so just simply having that be a black hole is so impractical as to be laughable.

And so you can't really say, end the Fed or end the FDA. That's like what people will hear sometimes, but that I don't think is practical. What you can do, however, and this is very important, is you can exit the Fed, exit the FDA. And what that means is figuring out a way, which is non-trivial, to build a different system in parallel and have that be buggy and incomplete and risky to use at the beginning, such that only early adopters are in. But over time, it proves itself out and handles more and more and more of the criticisms, and the V2 and the V3 and the V4 and the V10 and so on ship over years and decades.

And then eventually it can stand up and take over from the previous entity. Okay. So we're actually doing that. That's what Bitcoin was, right? Bitcoin inverted the premises of the financial system. Satoshi, he said, hey, actually, yes, deflation is good. Gold is good. User level custody of your own keys is good as opposed to having a bank custody for you

and so on and so forth. And he flipped the premises. And by flipping the premises, he put the ball at the 100 yard line and a completely different system with different axioms was built up from that. And that system has proven to be superior to one that was just edits around the current system. Edits around the current system get you Dodd-Frank. Edits around the current system get you what happened in the aftermath of the financial crisis. You know how they regulated the banks?

By banning competition entirely, no new bank charters were issued for almost a decade. Hmm. Okay. So I mentioned this previously. it was a coronation disguised as regulation where, you know, essentially they're like, oh, you're so bad. Let's ban all your competitors and enshrine you in law as the monopoly providers for eternity. This, by the way, is a fundamental thing is a lot of people think that regulation is like against big companies. It's actually for them. And it's a way of locking them in place and setting up barriers. Like all this antitrust stuff and so on against Facebook and Google is ultimately something that's meant to make them fuse with the state. And when I say meant to, let's say that is the emergent effect. It's not

like they're going to shut down Google search or Facebook. What they're going to do is A, set up regulatory barriers to any competitor and B, have a direct backlink or backhaul connection to the NSA so they can hoover up all the data. The national security state will get every single thing they want as part of any settlement. All the problems they've had with Google or Facebook executives resisting them since the Snowden revelations in 2013 will all go away. So they'll get this sort of pure link. The only way to actually compete with that is not by regulating them, but by having a bunch of startup piranhas and decentralized competitors

go and devour them and build something better. And that's coming back to this point. We understand that in the context of a company, that you can have a startup that starts out with nothing. And it is, but you might have 100 of these startups, by the way, and 99 of them fail. It's actually not that high a failure rate, but let's just say 99 of them fail, but one of them has the right ideas and it gains strength over time and it reforms the existing incumbent, right? We understand that's a legitimate way of doing things for companies. Yes? Yeah. I mean, it seems like we're in a situation where it's not always possible. I mean, hence antitrust.

Well, so, I mean, but the thing is that what's interesting is there's so many folks who are chewing at pieces of Google and Facebook. Like from the tech standpoint, right, from the VC standpoint, it is very much not obvious that antitrust is necessary or useful to disrupt. Antitrust is ostensibly pro-competition, but really it's pro-power. They say like the people who are interested in this kind of thing are not the people who have actually built companies that have been such a disruptive threat to these incumbents, they've had to pay billions of dollars for them. You know, just to hover on this, I know we're kind of going all the way down the stack and we'll come back up. Okay. But, you know, one meme out there was, oh, you know, we need to regulate these big companies to stop them from buying up all their competitors like Instagram and, you know, so on to, because they're too, you know, they have too much money to stop the competition.

And the thing is that Zuck's acquisition of Instagram was something where like a billion dollars at the time was like a quarter of the cash on hand. It was a few weeks before the IPO. Instagram had zero revenue. Instagram was valued at $500 million a few days before he valued it at a billion. He didn't even get the boards like, you know, sign off on it. He had to do it himself.

And Jon Stewart at the time mocked it. And he said, oh, Instagram? Well, the only thing that's worth a billion dollars for an Instagram would be something that instantly gets me a gram of cocaine. Right. So so it's mocked and derided at the time. It was actually like an extreme, you know, extremely non consensus thing for him to do to buy the thing.

And Aaron thought it's a huge waste of money. And now, of course, 10 years later, everyone's forgotten that. Now it looks predatory and obvious, but it was. Yeah, exactly. It simply it simply wasn't. And when you are next to the CEOs and the founders of these large companies, the entire environment looks much more unstable than it looks from the outside because you have disruptors coming at you. I mean, why did Google not win with Google video? Because YouTube was basically more risk tolerant than they were. And so they had to actually go and buy YouTube for a 1.6 bill. And here's the critical thing. People think, well,

let's just stop those big companies from buying these up-and-comers because then the up-and-comers will become successful. Actually, no. What you do is you then cut off the pipeline of the up-and-comers. And here's why. As a venture capitalist, when you fund a company, you have a few options for an exit, right? One of them, yes, is an IPO, but one of them is an M&A. And if you cut off every intervening gas station where there's a possible fill up, it becomes less likely you've reached that destination. Right. Right. And if there wasn't a YouTube exit, if there wasn't an Instagram exit, there isn't funding for every exit like that results in funding for a thousand more competitors. Right. And that's why we have Snapchat.

And that's why we have, you know, like Discord and all these messaging apps. Why doesn't Google run messaging? They have Allo and Duo. some of my friends there, but they had this very confused messaging strategy because they're a gigantic company that, you know, can only do the things that, you know, they were able to do, you know, 10 years ago, and they can't easily do new things. And all those things are done by startups. But are you denying that there's a potential problem of monopoly that needs to be responded to? I mean, you seem to be mostly, yes, you think there's a problem of centralization? Yes. Can't you imagine a monopolistic takeover of one sector of the economy that needs to be broken up? As the saying goes, right? The

thing about tech monopolies is there's so many of them. But there are not that many competitors to Amazon or Facebook or Google at this point. Well, there are actually with Facebook. First, let me give the sort of first order version on that. And let me give the second order, right? Where I give something to your view. Okay. The first order version is there are a lot of competitors to them where, you know, first of all, obviously there's Chinese competitors, but leave those aside for the average American. Do you have to buy something at Amazon?

No, you really don't. There's all these e-commerce specialty stores and stuff out there. Amazon is the most convenient in some ways, but it is like, you know, if you buy, if you're buying a chair, you do not have to use Amazon. It gives you an extra level of convenience, but it's really not that much easier than, you know, going and buying it online. There's almost no product. Except Amazon is in a position now to, if any one of those competitors really start succeeding, and I think they even did this with. I mean, Shopify is doing extremely well versus Amazon. Isn't there a story with diapers.com

where they just said, okay, we're going to start selling diapers at a loss forever? It's a predatory pricing thing. Yeah. And let us buy you for the price we think is appropriate. I mean, the thing about this is, I've heard that story. It may be true. And it's something which a large company can do to you. But this is life in the NFL. You know, if you're doing a startup, you are basically going against giant companies that will do all this stuff. That's why startups are hard, right? The funny thing is, the kind of people who say that story are also the people who hate

tech entrepreneurs, typically, right? They're not like pro-entrepreneur. The kind of person who's funding or founding a new diapers.com would be like, yeah, no, that's a tactic they could use. They could also cut off API access. They could go and muscle this or that, right? And the thing is to retroactively deem that to be illegal to cut prices is, I mean, this is the whole antitrust thing, like when is hard competition illegal and so on and so forth. And a lot of this stuff is just, you know, deemed illegal in retrospect, right? Where, you know, the winner to win is to lose, right? You know, if you win in the market and you provide a better product to the customers, notice, by the way, they're not

saying Amazon was bribing. They're not saying Amazon was, you know, like, like, sending saboteurs. And they weren't like, you know, breaking the law in that sense, right? What they were doing was, oh, they were cutting prices to give cheaper diapers to the customers of diapers.com. Okay, well, the diapers.com customers are benefiting and Amazon is like holding its breath to do that. Now you might say, well, they're big and that's unfair and so on and so forth. But like that's just like one one thousandth of what you deal with when you're, you know, a tech founder going up against incumbents. It's not meant to be fair. Like the whole point is, have you heard the term unfair advantage?

Sure. Yeah. Like they have an unfair advantage when you start out. Okay. You know, it's unfair. What's unfair is Gmail has a billion users and your new email product has zero. Why don't they give you some users, right? That's unfair that they're only sending Gmail notifications to their users and not yours. This, this line of argument can be extended to any asset that any incumbent has.

And it's not actually pro founder orpreneur because it puts an effectively lawless state above every founder and entrepreneur, where really, even if that thing is marketed as being better for customers, who's actually serving the customers? It's not the government. It was Amazon and diapers.com. Laissez-nous faire, let us be. Laissez-faire actually has a logic to it where you let them slug it out in the market so long as they're not killing each other, right? So long as they're not doing things like sabotage or things like that, and then see where it comes out because that's actually better for customers. Now, this is actually related to, I believe, Lena Kahn's whole antitrust thing was that

customer harm was insufficient as a theory of antitrust, right? So they're moving away from, you know, customer harm and consumer welfare to like a different kind of thing. So the law is sort of being changed in a retroactive way, right? So just to finish this point, then let me argue the other side of it, right? So the key thing here is as a venture capitalist, you need to have the possibility of $100 million and billion dollar exit to fund the riskier $10 billion and $100 billion IPO. If you don't have, because those are rarer, right? That's like, you need to have the possibility of singles and doubles, not just swing for the fences every single time, because you'll get fewer hits right

there's there's you know and so if you cut that off what actually happens is it's not like oh there's way more companies that go ipo it's way fewer because when you remove the deepest pocketed bidders from the auction right when these big companies can't buy it anymore there's a whole buyer that's being taken out from the market and that means a venture capitalist makes less less money. And that means there's less money for venture capital. That means there's less money for startups. So the number of startups shrinks. So when you cut off acquisition, you cut off the number of startups. And so you actually cut off competition to these institutions. So it seems like a first order thing. It was compelling to some people. I think it's the stupidest thing in the world if you're on the other side. But it seems to some people, oh, if you stop the big companies from buying their competitors,

then we'll have more competitors. Actually, if you stop them from buying their competitors, there'll be far fewer because venture capitalists will fund far fewer of them. Okay. So now let me argue the other point of it, right? Which is Glenn Greenwald, who I'm friendly with on Twitter or whatever, but basically, him and I have sort of had kind of parallel migrations in some way, where over the last eight years, I have become much more skeptical of centralized corporate power. And I think he's become much more skeptical of sort of

legacy media. And, you know, if over the 2010s, you could see the conflict, a lot of the conflict was tech versus media. That was just one theater of our global social war. And that's what I think of it as, by the way, not the civil war, but the social war. I'll come back to that point. What it is now, it's not tech versus media. It's decentralized tech and media, like Substack and crypto and so on, versus centralized tech and media, namely the legacy incumbents who are losing a lot of their smartest people, but still have the distribution. And the reason I have become skeptical of corporate power is that the argument that folks will do things that are in the interest of their

customers and their shareholders and so on is not the case when you have these ideological mind viruses out there, or at least it's not obviously the case. They may be responsive not to their fiduciaries, but to the Twitter mob. They may be responsible not to the customers, but to the politicians who are funded by the Twitter mob. And I've seen that take over and brainwash and put employees and crazy people into many of these companies. And so for that reason, I can't give three chairs for antitrust, but I can give half a chair for it in the same way that sort of one can argue that the antitrust attack on Microsoft in the late 90s and early 2000s, what it did is, and this is, you know, there's people at Microsoft who might argue with this, but here's like one history of it, right? Essentially Gates, who is this, you know, Nietzschean will to power

CEO, um, you know, despite looking, you know, like, like a nerd in the digital realm, he's like a level 99 super jacked, you know, like avatar, right. You know, with all the muscles and gigantic flaming sword. So, you know, Gates basically had won everything going up into the, You know, with all the muscles and gigantic flaming sword. So, you know, Gates basically had won everything going up into the, you know, year 2000, but he, but he caused a bandwagoning among everybody who he'd beaten, right? From Sun to Netscape and so on and so forth. And the antitrust sort of, you know, what do you call it? Prosecution, persecution, whatever of Microsoft, distracted them enough. And then it led to Bomber's ascent. And then under Bomber, basically, you know, Microsoft sort of was number two in everything.

You know, that's to say they did Xbox because PlayStation was out there. So they couldn't be accused of being, you know, a monopolist. They're doing Bing because Google was out there. So not accused of being a monopolist. They did the Zune because the iPod was out there. So you can't be accused of being a monopolist, right? So like, I'm number two, right? I'm in a competitive market. And, you know, once you start thinking that the goal is just to maintain competition, well, the other person, you know, Google or, you know, what have you, is playing to win. You know, you just had a different mindset creep in.

Microsoft could no longer play to win. It is remarkable, you know, in a testament to Gates and to Bomber, frankly, you know, that he stepped down and that Satya was able to take over and turn the thing around. It's very, very difficult to turn around, you know, a tech company of any scale, let alone that scale. It's actually Satya Nadella, the CEO of Microsoft, is one of the most unheralded, like, super geniuses around for what he did. The surgery, the speed of the surgery he did on Microsoft to turn it into what it is now, where he gave it a second, you know, set of legs. He rebooted it for open source. It was like a refounding moment or

whatever. You know, he has this book on it called Hit Refresh, where it changes some of the elements on the page, but not all of them. That was why he said it was a refresh. Point being, though, that basically the antitrust attack on Microsoft, you can argue that it distracted them enough, it made the giant blink, and then it cleared the way for the tech disruptors to take place. But the critical thing was that without those tech disruptors there, the government action alone would have simply like frozen Microsoft in place. Okay. You needed the tech disruption component. And frankly, that was actually the more important component because simply regulating Microsoft would not have gotten you Google maps, right? Simply regulating Microsoft would not have gotten you the iPhone. Simply regulating Microsoft would

not have gotten you PlayStation or open source or GitHub or any of this other stuff. Right. And in the same way, like us, you know, the antitrust thing, what it will do is it will distract these, you know, five tech giants, right? The Google, Apple, you know, Facebook, Amazon, Microsoft, and the folks within will now be busy producing lots of documents for the federal government. That's somewhat amusing, you know, and basically what it will do is it will result in many of their best leaving, but for where, and that's a critical thing. There has to be that second component because you need a vision of something better. Again, going to the connection to the earlier point, it's not simply end the Fed or end the

FDA. That's impractical. End Google or end Facebook is impractical. You can exit them and build something better. And what does that look like? And I argue it basically looks like a crypto version of everything. So now should I talk about that, like the kind of crypto plan for disrupting every tech company? Yeah. Let's give maybe a 10-minute primer on blockchain and cryptocurrency. I don't know how much knowledge to assume on the part of my audience, but I think it's worth putting the most important concepts in view and just why migrating away from an environment of trusted third parties is important. Sure. Okay. So there's a ton, obviously, I can say on blockchain and cryptocurrencies and Bitcoin and so on. First, if you only understand one thing, just to motivate Bitcoin.

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