The Breakdown - Economic Freedom in the World After Capital, feat. Albert Wenger

Episode Date: May 19, 2020

Albert Wenger is a partner at Union Square Ventures as well as a prolific thinker and writer. His “World After Capital” is an evolving digital book project that looks at a set of megatrend shifts as the world moves between economic paradigms from the Industrial Age to the Knowledge Age.  In this wide-ranging conversation, he and NLW discuss:  Why attention is at the center of the new Knowledge Age Why markets can’t price crucial needs such as pandemic preparedness Why the new era will be defined by three categories of freedoms: economic freedom, information freedom and psychological freedom Why universal basic income has an important role to play in economic freedom How UBI could avoid political capture  Why technology is inherently deflationary  Why real estate, education and health care should be much cheaper than they are Why community currencies could be a key innovation from the current crisis 

Welcome back to The Breakdown, an everyday analysis breaking down the most important stories in Bitcoin, crypto, and beyond. This episode is sponsored by ArisX.com, the Stellar Development Foundation, and Grayscale Digital Large Cap Fund. The Breakdown is produced and distributed by CoinDesk. Here's your host, NLW. Welcome back to The Breakdown. It is Monday, May 18th, and today we have a really awesome show to kick off your week. I'm joined by Albert Venger, who is a partner at Union Square Ventures in New York City. Albert is a prolific thinker and writer and kind of profiler of our world in the moment that we're living through and how it transitions to something different. A couple years ago, he started a project called World After Capital, which is effectively a book that he's publishing online as he writes it. And really the central thesis of

this book is that we're moving from the industrial age to a knowledge age. and that there are significant transitions that will inherently come with that, and we would do better as a society to be intentional about them. Now, the context of the coronavirus crisis in terms of both the health implications, but also the economic dimensions, have really accelerated a number of those trends. And you'll recognize, if you're a regular listener to the breakdown, a lot of the themes that we've covered in the past few weeks. We talk about this idea of technology as an inherently deflationary force,

and why that runs up against the existing power structure. We talk about what it looks like to have human attention be focused not just on what Albert calls the job loop. I spend my time earning income so that I can consume things that may or may not be relevant to me, which describes 90% of our lives, and instead is focused on other pursuits and is enabled by things that have had the Overton window on them shifted through this crisis, such as universal basic income. So we talk a lot about these big ideas,

and what I think amounts is really a conversation that looks at the possibilities for a differently organized world, what it would take from a political perspective, what it would take from an individual psychology perspective, and what it would take from the standpoint of developing a new social contract. I hope you enjoy this conversation.

I know I did. And one last note, as always, when I do these long interviews, we edited only very mildly to keep the tone of the conversation as close to as it really was. Let's dive in. All right, Albert, so good to be with you this morning. How are you doing? Doing very well. The sun is shining, which always is a good start for the day. Yeah, we were just talking about how maybe in New York we've finally kind of broken through the 70s barrier, but it looks a little cold out there today.

Indeed. I wanted to start. There's a huge number of things to talk about. You're a prolific writer, thinker, commentator, but I want to start with a concept that you've clearly taken time to bring together, which is this idea of a world after capital. You basically are writing live a book that you're kind of sharing bit by bit, showing its evolutions and changes online. What is the core idea of world after capital?

The core idea is that the expiration date of the industrial age, has expired, probably some 20 years ago, and yet we are acting as if we were still in it, when in fact we need to invent a new age, which in the book I call the knowledge age. And the reason the book is called World After Capital is because it has sort of a big historical thesis, which is that human affairs are kind of determined by binding constraints, and that what technology does is it shifts what the binding constraint is. And when one of those big shifts occurs, that's when we need to change pretty much everything about how we live.

We've done that twice already. We went from being foragers, we went to the agraran age, we went from the agraran age. So the premise is that capital, by which I mean, physical capital, isn't the thing that fears anymore. We can build entire cities very rapidly, as the Chinese have amply demonstrated. not the scarce thing anymore. Instead, the scarce thing is human attention. Yeah, so this is a, this feels like the crux of it to me. So I want to read a line that I think really sum this up. We've become overly reliant on the market for allocation, especially the allocation of human

attention. This is deeply problematic because prices do not and cannot exist for crucial needs, such as pandemic preparedness and finding purpose in life. So I'd love you to dig into this a little bit more in terms of, it sounds like effectively, it's not even so much a critique of markets per se as they're organized. It's more a recognition of where they end in terms of our ability to organize human experience. I should point out, I wrote that line several years ago. Yeah, exactly. As well in advance of the current pandemic. Yeah, I mean, my day job is I'm a partner at Unisgra Ventures in New York. So I very much believe in markets. I very much believe in capitalism as a model too, except we have to understand its limitations. It's been very,

very good at some things. In fact, it's been exceptionally good. The fact that we can record this podcast over the internet, yeah, I have small earbuds in my head that communicate wirelessly with my computer. I mean, all of this stuff is fantastical at a certain level. If you showed any of this to anybody from the agrarian age, they would think it's magic. So it's very good. The market and market-based models are very, very good at some things. And then they're terrible at others. And I think we need to use this crisis to really reevaluate and understand what of the many

things markets are good at and what they're really bad at. And in order for markets to be able to operate, the most important thing is that, have to be prices. And for prices to exist, you need to have supply and demand. And they need to be, you know, fairly broadly spread so you can have sensible prices that are being formed. And it turns out that just a lot of things for which that condition isn't met. And some of those things, as we have made so much material progress, as we've made so much progress as capital, it has become I don't want to say abundant because it's not abundant, but it becomes sufficient. The thing that we really need to worry about the allocation of is human attention, right?

And so there, it turns out, for most of the really important things, the price mechanism doesn't work. And the two examples from the quote, pandemic preparedness, let's talk about that. The last major pandemic was about 100 years ago. So there is no price mechanism to prepare for something that happens every 100 years or so. that spans multiple generations. There's no clear source of demand. A generation that has not had a pandemic, like two or three generations,

or two or three generations, it's not going to go, oh, yes, we should, you know, we demand in the market that, you know, ventilators are being stockpiled somewhere. There's no demand for this. This is something that requires a non-market-based solution.

You know, this particular pandemic is in my mind especially a good example of how poor this works. We had two prior coronavirus pandemics, but not pandemic, outbreaks. The first one was SARS, roughly 20 years ago, and then the second one was MERS, roughly 10 years ago. So we basically had two warning shots, and still there wasn't a demand mechanism. People still weren't like, oh my God, I am going to, you know, demand ventilators, that ventilators get built ahead of time. I'm going to demand that there's going to be massive research into coronaviruses

so that we really can sequence them, that we can try many different vaccines, that we have a whole vaccine apparatus set up so that when the next one comes, we're prepared. There is no market for this. And then the second part of this quote was about individual purpose. If you think about why there's no market for that, it's just a market of want, you know, your individual purpose. There's no supply and demand here. So if you somehow wait for some price signal to say,

to say you should be paying attention to this question of what your purpose is, you will get to the end of your life and realize that you didn't spend any time on it. So it's particularly interesting in the context of right now. I was reflecting on the fact the other day on Twitter that we have this uncomfortable moment inside economic crises where we realized that recovery means convincing people to buy a bunch of stuff that they probably didn't need or wasn't good for them. And it was an article about grocery stores and how they're struggling to get people to buy things like potato chips or something like that. And it reminded me of a piece that you wrote last week about a chance to kind of reevaluate

priorities. And in some ways, I wonder how you think about this question of, you know, basically does this inability to allocate attention? or price attention in some way change, or does it bring up structural questions re-evaluating the consumption basis of the economy? No, absolutely. So in the book, I talk about two loops. The one I call the job loop, the other I call the knowledge loop. The job loop is where most human attention today is stuck.

And the job loop is where you go and have a paid job, and then you take that money and you spend it on stuff, which is goods and services produced by, other people who also have a paid job. And I would argue that the bulk of human attention is stuck on this. What I mean by that is, if you think about how much attention, human attention is in that system versus human attention being on things like pandemic preparedness, on things like dealing with the climate crisis, on just spending time with friends and family, if you

just, you know, people look at their own lives. We spent most of our waking hours inside of that job loop. So this is where a lot of the attention is trapped. And there are two sides. One is the jobs. And you know, it's the consumption side. And I think one problem that economics has is that over the last, you know, especially increasingly, I would say, starting in the families,

but even before that, it basically wound up equating wants and needs. There was no dividing line between the two. And there was also this idea that people somehow have a stable kind of utility across things that can't be manipulated from the outside through advertising. So global advertising industry is north of a trillion dollars annually. It's a trillion dollars being spent on television. people what they should want. And so this idea that all of economic growth is necessarily good growth because, well,

if people are buying it, that means they want it. And if they want it, it means they're going to be better off after they purchase it, because otherwise, why would they purchase it? That is built on a fairly, not on a solid foundation, but rather on a quick set. And it's built on this idea that somehow people have this sort of utility function that can't be easily manipulated from the outside. And I think what we know to be true today, though, is that we do absolutely have certain deeply built in needs. But then on top of those needs, you can sort of manipulate those needs. And a lot of advertising engages in exactly this.

it manipulates our deeper needs into making us think that we want certain things, even though all the psychological research shows that those things aren't, in fact, related to important things like life satisfaction. And so people wind up consuming a lot of things because the message that was conveyed to them was that this would address one of their more basic needs, for instance, the need for recognition, when, in fact, all it does is give them to part with money that they could spend. otherwise. Yeah, it's interesting. I feel like I was reviewing a lot of the, the, the work that you've

produced over the last, you know, months and years, really, as we're preparing for this. And I feel like there's this kind of twin common threads. On the one hand, there is this reflection upon, a kind of deeply personal reflection upon the purpose of life, right? Value in life, meaning in life, and working to restructure someone's personal economic endeavors or just the way that they exist in the world from that basis kind of ground up, right? But then on the other hand, there's this complement, which is an exploration of what the social contract should be going forward. And I feel like so the social contract is obviously this concept from the Enlightenment, that there is a relationship between individuals and government and that for individuals to give up any of their sort of natural rights

or just the way that they would be in the world, you know, without government, there's a reason. There's a payoff. There's tradeoffs that we're making. And a lot of then the next 150 years of debate among philosophers and political scientists was, well, what's the appropriate tradeoff? And how does that work? And in some ways, it feels like there's a, we've kind of just been graced or given down this, handed down this social contract or expectations of social contract without a reboot, without a reevaluation. And a lot of what I get in looking through your works is almost trying to provoke a discussion about what the relationship between individuals and governments and just the societies that they live in should be. Absolutely. I think if we go a step back and look at the huge technological breakthroughs that we've had in the past, each one of them, and there really only been two today,

has caused us to completely reshape society. So when we invented agriculture, which was roughly 10,000 years ago, it was the series of interlocking invention. We figured out how to put seats in the ground, irrigate them, domesticate animals, and so forth. And we went from the foragerian societies, and we changed literally everything.

We went from the migratory to being sedentary, we went from these flat tribal societies to these incredible hierarchical, agrarian societies, we went from being basically, basically being promiscuous, we went to being monogamous-ish, we went from having animistic realistic, having phaistic religion.

So really completely dramatic change of just about everything. And then a couple hundred years ago, we had enlightenment and with it, we started building steam engines, electric engines and so forth, And we figure out chemistry and mining. And we wound up changing just about everything again.

So this time we went from living in the country to living in the city. We went from living in extended families to living in nuclear family and no family. We went from a lot of commons to private property, including private intellectual property. And we went from great chain of being theologies where the religion says, look, I'm going to tell you

had to be the best possible farmer, but you're never going to be a noble person because no people are born that way, right? We went from that to the price and work ethic. The harder you work, the better off you'll be. It doesn't matter where you start, right? So we have changed everything twice already. And digital technology that's the field that, you know,

the business invest in and the field that has now given us blockchain and cryptocurrencies, digital technology is as profound an addition as industrial technology was. And so it would be silly to think that the change in society should be incremental. The change in society needs to be dramatic and systemic. And when you get the dramatic and systemic change, you also need a new social contract. Just like we needed a new social contract when we went from the agrarian age, where much of society was basically you were protected by some, you know,

king or some other sort of, you know, in the trade-up was, you sort of, you know, produce wealth in that direction, but you're being protected from invading orders. We went from that to a completely different social contract that was based on facilitating work and facilitating the creation of capital. And now we need a new social contract that's going to facilitate the creation of knowledge, which is ultimately the thing that we are. all need that makes us uniquely human. Humans are the only species on this planet that have knowledge, and we're also uniquely dependent on knowledge. It's only through more knowledge, for example,

that we can fight this to death. So this concept of knowledge, I think, brings me to another point of yours, which I think is worth spending some time on. You talk a lot in the book about the idea of technology is inherently deflationary. And deflationary being something that is a force for driving price downs, right? So remove the kind of economist four-letter wordness of deflation. Just the simple fact of the matter is that technology inherently drives prices down. Just last week we had Jeff Booth on the show who wrote a book called The Price of Tomorrow, which is basically an argument that two forces are at war with each other in some ways in our society

or at least in our economic policy, which is inflationary economic policy on the one hand that tries to keep the price of certain types of assets high and technology deflation on the other. And it was interesting to me because three of the examples that you mentioned, you talk about real estate education and healthcare are some of the things that have, you've seen a price increased in, relatively speaking, despite the fact that technology should be absolutely, I mean, totally changing the cost structure in every way for these things. So tell me a little bit about how you think about this technology as a deflationary force and maybe speak specifically to these categories.

Yeah, so there's a great chart where you can see what's happened to prices over the last few decades. And in that chart, you can see pretty much everything getting cheaper except for those three areas, housing, education, and healthcare. And each of those are areas that have huge structural impediment. Let me talk about housing first. So there's also a chart that basically shows that by 2050, everybody will live in cities. And that chart is, of course, an extrapolation of current trends where people have been moving to cities. But it's an extrapolation, it's all extirpulations without thinking about the underlying reasons for this.

The reason people move to cities isn't because everybody alone living in a city. I have many people come and visit us in New York where, like, how can you live here? It's like loud, it's, you know, this pollution that can't get sleep. The streets are kind of dirty and so forth. So the reason this trend exists is because that's where people can live economically viable lives. So if we had some alternative to that, you know, whether that's in the form of universal basic income, or we see today for people of pensioners or people who can do remote work, designers, writers, and so forth, Many of them choose not to live in the countryside.

So I think our view of why housing has gotten more expensive has been very skewed by this drive-course urbanization, which in part is directly related to the currently in-place social contract. Education is another field where I think we are in a way at a maximum of the price development of the old system. and the old system has had a huge amount of inertia built into it. What do I mean by that? This education system we have today is fundamentally an industrial age system that was created over the last couple of hundred years. And it has many industrial age components and it's starting with K through 12. For example, much of K through 12 is aimed at instilling discipline in children.

Number one, and much of it is also aimed at babysitting children while their parents work. And we're seeing, now that kids are, you know, because of the virus, are forced to do homeschooling, we're seeing sort of the breakdown of that. But schools don't have an incentive to avail themselves of things like Duolingo or Khan Academy or Skillshare or, you know, Quislet, many of these are usually portfolio companies. But there's also many other things. YouTube, like there's an extraordinary amount of free education. videos on YouTube, but schools don't have an incentive to avail themselves of that because

they are built in a model that's an industrial age model. So I believe that with digital technologies, we can create incredible bespoke learning environment for anybody in the world at zero marginal cost, meaning the marginal learner or the martial hour of learning will be free. And you'll basically, if we get this right, be able to learn anything you want to, find a community of other people who want to learn this, so you're not alone, and be able to do that essentially for free. And now healthcare, healthcare too, has huge structural impediment, especially in the United States, where we've created the system of payers and healthcare providers, all of which

are for-profit, all of which are in pharmaceutical companies, all of which don't, at their heart, have an incentive to keep you healthy in the first place. They keep you healthy, they wouldn't be making money. If they could give you a one-time drug that cures something, they wouldn't be able to sell you something that you have to take for the rest of your life. So the incentives are completely wrong in terms of how to use technology to radically drive down

the price of healthcare. But here too, I think we're seeing early green shoots. And the human toll of this virus is obviously massive, but it has tremendously accelerated distance learning. has tremendously accelerated telehealth. And so I do think these are areas where we will see prices and costs coming down substantially over the coming years. So what do you think, I mean, in these areas, and the answer might be different for

different areas, but what do you think the real ultimate catalysts of change are? Is it consumer demand? Is it structural misalignment in the economy? So, for example, education, right? This is one where people are so overly burdened with student debt for jobs that don't necessarily demonstrate ROI, that perhaps that's one where you have the right sort of skills training and at liaes and all these different systems that it just becomes un-economic. And consumer demand just forces people to shift their model. It could also be something else.

I mean, healthcare, it feels like a different trap. I guess across these areas, what's the catalyst for change? because it's hard to imagine in some of these areas a radical shift from here to where it feels like they should naturally rest. Well, this is all bound up. These are all facets. All of these are interlocking parts of the industrial age. The reason these shifts of getting from one age to the next are so hard is because we are not talking about changing educational. while keeping everything else constant.

We're not talking about changing healthcare or the cost of real estate while keeping everything else constant. We're talking about changing everything. And let's face it, politicians don't like to talk about that. Politicians like to talk about being incremental, about making small changes. Obama was an incrementalist.

His economic policy advisors were all incremental. They were all people who believed that you make a little tweak over here, maybe a little job skilling program, and then you fiddle with the interest rate a little bit, and all will be well. And the reality is not all as well, and not all has been well for several decades. And we see this when we look at the income and wealth distribution, and we see that this late stage past the expiration date, industrial age, has been working for fewer and fewer people. It's been working incredibly well for those people, but the number of people from them has been working has been small and smaller.

And so the problem with anything, any system that's passed its expiration date is that the longer you artificially prop it up, the bigger the eventual fall will be. And so you can think of this as suppressed volatility. When you suppress volatility artificially, then eventually you've built up so much force that you'll have a cut of less change. And the change from the agrarian age to the industrial age was absolutely horrendous. It first was a series of revolutions, but ultimately we did not get into the industrial age until the end of World War II. The two world wars were really what destroyed the power base of the agrarian age.

So the power base of the agrarian age was the control of land. And all across Europe, for example, the people in power were the land in aristocracy. And that was not destroyed that power base until after World War II effectively. So I believe that at present course in speed, I don't see enough of a function to get us to the degree of change that we need, barring events such as a global pandemic. And of course, the other big one is the climate crisis, which in terms of its scale is, is. will make the pandemic seem like a stroll in the park. Do you think that it's, is your sense that it's going to take such huge cataclysmic external events because there's a power shift that's needed and for people to be willing to shift the power

structure in such a radical way it's going to take that sort of catalyst? Well, that was the story of going from the aggrandiz of the industrial age, right? So the people who were empowered towards the end of the occurring age were the people controlled land. And when they saw what industry could do, they didn't go, oh, here comes the industrial age, let's come up with a new social contract. They were like, oh, it's great. We can have tanks and battleships so we can have more land. And I think a little bit of, you know, it's not exactly the same as Mark Twain's history doesn't repeat, but it rhymes. Today we see everything through the lens of capital.

Again, why the book is called World After Capital is because capital has worked so well for us for quite a long period of time. It's been our ability to make factories, to build roads, to construct home. That has produced much of the material progress that we've made. And so it's been a lens that's been a very powerful lens. But we see everything through capital now. And so when we see what digital technology can do, we're not going, oh, we should usher in the knowledge age. Instead, we go, oh, how can we, you know, create more capital? How can we carry more financial capital?

Because this is another big confusion in the world at the moment. Financial capital is an important intermediate stage, but none of us, you know, eats gold bars or drives around in dollar mills. Like financial capitalists in the immediate stage, what we care about it. physical capital. So I do think that today a lot of power in the world is concentrated in the interests of capital. And those interests are not properly aligned with what we should be doing with the capabilities of digital technology. And so as a result, they've been pursuing these incremental policies, and that's why we wind up with Trump. That's why we wind up with Brexit. And we need to face the fact that we need a more systemic change rather than incremental

policy. So on that front of systemic change, I almost want to ask how do you worry that the critics of the system that we live in now are still trapped in the same old way of thinking and just proposing the inverse? And I'm thinking about, you know, it didn't come to pass, but the Bernie v. Trump battle that we almost had in terms of the kind of democratic socialist critique of the power structure, rather than something that's kind of a radical reimagination, right? It's, I mean, you know, even the idea, let's just take free college.

Well, that presumes that college is, for your college is still the right mechanism, you know? And so I worry sometimes that, you know, the world really needs good critics and good critique, not just the alternative, you know, and sometimes the critique is of the system as a whole. I think that's spot on. And Susan and I were supporters of Andrew Yang for that reason. There's a lot of thinking about a return to the past on all current major political sides. So if Trump talks about making America great again, and there's some idea of going back to a hypothetical, probably 1950,

50s era America. That's a similar type of nostalgia in many people on the left that want to go back to democratic socialism that I associate with Europe in the 1980s, 70s, 80s. And I don't think either one of those shows a natural patch forward. A big reason for writing world-leftic capitalist that I believe there is this narrative vacuum. that we haven't tried to explore what a new social contract might look like, what a new system might look like. And because we've created this narrative vacuum, we've allowed it to exist. And as we all know, nature, of course, a vacuum.

It gets filled with these narratives that are about going back to a past because it's way easier to come up with that narrative than it is to do the hard work of trying to envision the news. Now, I don't pretend to know exactly what the knowledge page ought to look like. So instead, what the book talks about is how to create policies that would free up human attention so that human attention could be directing towards inventing new things. And in particular, I always care about inventing new knowledge. I have a very broad definition of knowledge. It's not just scientific knowledge, but it also includes the arts.

I sort of think of that as sort of a logical, interesting bifurcation where science is the thing that allows us to live, and art is the thing that we live for. It's sort of the motivation and the other is the means. And so I talked specifically about increasing what I call economic freedom, which is some form of universal basic income. We talk about increasing informational freedom, which is we're surrounded by supercomputers. Every one of us carries one around with us, but we don't really have. the means to properly program these is that we're largely being programmed by a few corporations around the world. And then psychological freedom, which is some notion of how do you, what do you do yourself

so that your brain, which is really completely maladapted for the information environment that we now live in, so that your brain can continue to function properly. That's some form of mindfulness practice. So I talk about these three big pillars as pillars that we need so that we can take attention out of that job loop and put it into this knowledge loop that will hopefully let us create a new system. What exactly that system looks like? I think we need lots and lots of experiments to find what works, just like we needed lots of experiments to get to the industrial age.

Let's not forget that we tried, you know, massively different experiments between, so planned economies and market economies. It's really interesting. So one of my favorite lines ever written is this, from this poem by any, Dillard called and the first line is there were no formally heroic times there were no formally heroic times there were no formerly pure generations and it's just the best single line critique of kind of the golden age fallacy so I want to talk about this idea of economic freedom the first of the three freedoms you mentioned and uBI obviously universal basic income and that whole concept

has had a major shift in the overton window in the past two months within within weeks really of of Yang dropping out, interestingly enough. Talk to me, I guess, about what you think, what is the biggest driver, the biggest motivation for some form of a universal basic income? And then I want to talk about the critiques because I think that the critiques of the UBI concept are interesting and range from really easily dismissible in my mind to ones that I think are more interesting. But let's talk first about the motivation.

What is the argument for UBI? Well, so just so everybody's on the same page, the idea of UBI is that everybody gets a certain amount of money, call it every month, and people debate how much it should be. I think it could be at the less $800 a month. And everybody just gets it automatically. No questions asked and no conditions attached. Now, I think the fundamental argument for it is, is that, we want more automation. So some people frame it as a fear of automation,

but I think we want automation. The reason you and I can have this conversation right now is because we're not working in the fields, and the reason we're not working in the fields is because we've largely automated agriculture. If you go back to 1780, roughly 80% of all work, all human attention, if you so want,

was stuck in just feeding the remaining 20% who were the people who were the artists and administrators and so forth. Today, that's gone down to sub-5%. So that is what we can do with automation. Now, I believe that we should be automating a lot more things. And in order to get to that automation, we need to free people up so that they don't need to sell their labor at super low prices.

right so the incentive to invent a toilet cleaning robot which is a very difficult problem from our robotics perspective is quite low when the alternative is to pay somebody minimum wage and when minimum wage is seven bucks fifty or you know their amount an hour so so I believe that we want UBI so that we can have more automation and so we can free up more human attention if it works well I envision that 50 years a hundred years into the knowledge age will look at this age today. We'll look back at 2020 and say, wow, in 2020, 80 plus percent of human attention was stuck in this job loop. Like every morning, they rushed off, went to work,

you know, some of them had to work at night, you know, there's all this time spent in this economic activity, and so little was spent on art and so little was spent on science. You know, they had to do all of this just so that a few people could be artists, and so a few people could be scientists. And now, look what's happened. That's gone from 80 percent. to whatever, 20%, 10%. So I'm not suggesting that sort of jobs somehow need to go away. I'm just saying, I think we can do with a lot less of it,

just like we're doing with a lot less agriculture today. And so that to me is sort of a fundamental reason to want to have UBI. It's in order to free people to be free about how they allocate their time. Another way I've sometimes described it because of an venture capitalist, it's a little bit like seed money for everybody. A fairly little known fact,

because most tech entrepreneurs just think about tech. And tech seems to have this boom of entrepreneurship. But entrepreneurship in the U.S. has actually been declining and been declining substantially when you include small businesses. Very few people are opening like a new hair salon or a new daycare center, something like that. Why? Because in the U.S. at this point, most people can't come up with $500 if they have a medical emergency. So how are they going to go start a business, which is taking a risk?

So there's a lot of reasons why UBI may be. sense of the policy and we can go into some more of them, but fundamentally it's because we can now do a lot of things with machines that we ought to be doing with machines so that we can free humans up to do things that only humans can do. Support for this podcast and this message come from Eris X. With Aris X, you can trade spot and regulated futures on cryptocurrencies through a licensed, U.S.-based exchange. ErisX believes in fair access for all. Sign up today to take advantage of zero fees and learn more at erisX.com slash consensus. This episode is also sponsored by the Stellar Foundation.

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It's the only publicly traded investment product that offers diversified exposure to large cap digital currencies, all from your brokerage account. For more information, visit grayscale.co slash coin desk. That's g r a y scale.cale.co slash coin desk. One of the things that's so interesting about this is, and I think a significant challenge, you have for any sort of UBI argument, you have a policy and a kind of a political hurdle in terms of getting it there. But you also have this psychological hurdle. And it has been so long since anyone can imagine a paradigm of that isn't predicated on your worth somehow being tied

to your full-time job. Our self-conceptions and our jobs are so, at this point, it feels intrinsically linked, but it's not intrinsic, right? This is a byproduct of the modern age. The idea that somehow you are what you do to make money is a very quintessentially, you know, mid to late 20th century, early 21st century thing. I mean, if you go back, this is, I mean, anyone who studied economic history has done this, but in 1930, John Maynard Keynes was writing about the expectation of a 15-hour work week in, you know, his grandkids generations, based on the progress that he saw coming in terms of technology. And that wasn't something to be, to be scared of. It was about how do we design an economic system that kind of, like, where you're allowed to be a

full member of society at a 15-hour work week, right? Like, if we snapped our fingers overnight and said full-time, full participation in the economy means you work your 15 hours, and that was just normal. You know, there's nothing, ultimately something like 40 hours a week or whatever it is is arbitrary, right? Especially arbitrary in the context where most people have to work two jobs if they're at minimum wage, you know, or more to make ends meet. So I think that there's this psychological barrier even before you get into the question of political efficacy on breaking, and disentangling people from, you know, having their sense of self and their sense of self-worth

tied up in the thing that they do to make money. Absolutely. And I think this is going to be a multi-generational change. I mean, we have spent many generations now telling people that their job is, you know, what their self-worth ought to be about, right? I mean, we have this, you know, where people are like, my father was a coal miner,

my grandfather was a coal miner, so I want to be a coal miner at the family tradition and so forth. And so without a doubt, we've made this a central idea of what it means to be human. And as you point out, it's still a new idea, and it would be in many ways strange to people. For instance, if you went back into the agrarian age, yes, somebody might be a shoemaker and define themselves. thing. I'm proud to be a shoemaker, but a lot of the purpose at that time came from religion, and people would look to religion to tell them why they were here and what their purpose in life was. So this idea that somehow this has been the state of human existence that we've defined

human purpose through paid labor, through a job where you're employed by somebody, that is a very, very new idea. And I think we can kind of. come up with better ideas. In fact, I spend a fair bit of time in the book talking about knowledge because I think, as I said before, knowledge is sort of central and it's also what makes human uniquely human. Only humans have knowledge.

Dogs don't write books, much as I love dogs. They're the best, but they don't write books. And so we can, I think, successfully redefine human purpose. to be the project of participating in knowledge. And I haven't talked about the knowledge loop. The knowledge loop is where you essentially learn something. And you use what you learn to create something, and then you take that thing that you've created and you share it back out.

And that loop powers all of our progress, whether it's artistic progress or scientific progress or scientific progress. And so freeing people up to participate in that loop and creating a new value system where our sense of purpose is derived from our participation in that loop. I do think it's a feasible project, but it's not a kind of snap your fingers and make it happen project. It's a generation, multi-generational. Do you think, so the critique of UBI that I am kind of leased on board with is the one which you kind of intimated against this idea that somehow, if you give people money, they'll just become lazy. I think that betting on, betting against people by definition

is just a generally bad way to engage with the world. And I think that there's plenty of counter-evidence that, you know, people freed up will do things that are interesting and valuable, even if not priced by the market. So I'm not such a fan of that critique. One that I hear more often as people are having a more serious conversation about UBI is fear of political capture, where UBI becomes a game of brinksmanship between the parties where, you know, once basically, one, you know, a party institute's UBI and citizens will never vote against them because they're worried about losing their check. Or two, on the other hand, you have this like rapid kind of inflationary spiral where one party offers $1,000 and the next party offers $2,000 and it becomes

this, that becomes the only issue that anyone cares about. So this is actually, I think this is a more interesting mental space to play because at least it's considering it like kind of rather than dismissing it out of hand. But I wonder if you've spent any time thinking about that kind of the political dimension of this. Yeah. Well, I think there's some interesting political aspects before we get to the one that you raise. I do think one criticism of UBI that's often provided is, oh, it's such a small amount of money. What could it possibly mean? And one thing that it can mean, though, is that a lot more people can be politically engaged, right? So in the U.S., one reason for low-order turn out is that we don't make voting a national holiday.

And a lot of people have a lot of jobs, and we've made voting maximally inconvenient for a lot of people. So, like, they would try and figure out how to squeeze that between going from one job to another, and so they just don't vote. So also, they don't have a lot of time to be informed on what the issues are. So I think one way in which UBI can be politically empowering in ways that people vastly underestimate it's by giving more people the time to be politically engaged and potentially do that as a full-time thing as an organizer or as a politician.

Now, coming back to the question, won't this become captured and won't you get just one party upping it and so forth? It's definitely, I think, a legitimate worry, but I think there are ways of introducing it that would solve that. I mean, you could introduce it and you could require a two-thirds or whatever, you know, majority or three-quarter majority to subsequently change it. So I think there are ways you could do that. I would add two important things. One is UBI is not a panacea, right?

We cannot take all the other components of the system, leave them if they are, introduce UBI and go, our work here is done. This would be a disaster. it's like when you have an overall coherent strategy as a company and then you take one element from some other company strategy and you just try to emulate that. It's like when I forget what that chain was, but it was a very low cost chain and they were retail chain and they saw what Target was doing and it was like Kmart I think and then they wanted to emulate what Target was doing but only in one dimension. So you can't do that.

You can't, and we shouldn't expect that UVI is somehow going to be this kind of. and by itself catapulted into the knowledge week. And so I think we need to change education. We need to change even how we run democracy. I mean, we have very few people voting. We have a lack of students who are informed. The type of politicians we've been electing are often lawyers instead of scientists or engineers. So there's a lot of problems, and we shouldn't pretend that UBI is going to fix any of those problems.

And so there is a scenario where we leave some of these other issues unaddressed. We have a non-functioning or barely functioning democracy and we introduce UBI and it backfires in exactly the way you described that it becomes a ping-bong ball between parties. So yeah, I see it as one pillar of a larger systematic change and we need to be careful on how we introduce it so it doesn't become that, but we shouldn't expect that we can then just say our work here is done mission accomplished and we're now in the knowledge of it. It's not going to happen. I think that's a really important contextualization, right?

That the whole point is that if we're talking about a shift in epoch and eras, you know, in a lot of ways what you're describing in terms of these freedoms is what kind of the natural underpinning of them might be, not kind of what the immediate transition looks like in some way. And the other, one of the other freedoms that you speak about is information freedom. What do you mean by that? Well, we all carry in the form of a smartphone, essentially a supercomputer in our pocket. And even more than that, we're carrying a supercomputer that can talk to every other supercomputer

than any other person in the world is carrying it with them. And yet, our ability to make that device truly act on our behalf, to be our representative, is extremely limited. So, you know, if you bring up your home screen, you tap an app icon with it, Facebook, Google, what have you, at that point, that app takes over your supercomputer. And yes, it provides some functionality to you, but it is not programmable by you. So we have this strange situation now where you're having a supercomputer and you're reduced to, like, tapping with your, you know, thumbs or whatever it does you use and using your brain. Whereas on the other end, there's a company that's operating, you know, millions of servers. in the cloud, all gathering up your data and massaging it, but not really necessarily on your

behalf, but rather on the behalf of, for instance, advertisers. And so that is a fundamentally broken state of the world. And we need to make these devices so that they're programmable. To have a model of that in mind, I think the brief era of the open web and the web browser is a great example on the browser in the HTTP protocol. call is referred to as a user agent. I can program the web browser and it accesses the web by open protocols. And the way we can see that I have real power in the era of the web is I can strip out

advertising, for example, if I want to. So we lost all that freedom when we went to native apps on the phones. And on the phones, you have to go through an app store to install an app. You can't script that app. So a lot has gotten lost. A lot of power has shifted and shifted away from the end user. And I'm not expecting every end user to be a program and write their own software. I mean, for the most part, we can download software that other people have written for us

that would do this job for us. But we need to get to a state where the control of computation isn't essentially centralized in the hands of a few corporations on the world. Short of actually having every user be able to program software, what does that alternative look like? Or what might it look like? I guess it's a better answer. Well, I think there's two paths for getting there. One path is to create new legislation and basically require that any big system have an API,

an application program interface. So if Facebook had an API, if anything I can do in the app, I can do via API, then third-party can write software for me. So let me make this concrete. Why do we worry so much about what Facebook's timeline algorithms is? Well, because there's only one Facebook and only one timeline algorithm. But if Facebook were fully programmable, I could have somebody write a timeline algorithm for me. It would just go in through the API and say, oh, Albert is friends with these people.

I'm going to, again, via the API, retrieve those people status updates. and I'm going to develop a timeline that's constructed based on different criteria than the one that Facebook is using. And in that kind of world, there could be a million different timeline algorithms. And so this idea that one corporation will solve as power and also is subject to so much manipulation by third parties, who are all targeting the same algorithm, it would immediately go away in that world. By the way, mind you, it doesn't solve all problems. For instance, the whole problem of people being in their own bubble might actually be made slightly worse by that. But fundamentally, it's a shift of power.

So that's one way. Do you require it? The other way you could get there is simply by deleting laws. Now, historically, we've been very bad at deleting loss. So I'm not optimistic that that's how we could get there. But we could get there. Right now, if you have the technological capabilities, if you're sufficiently skilled, you could go in and take Facebook's app and you could extract their encryption keys and you could write software that pretends to be the Facebook app. Now, if you did that in the U.S., you'd be breaking three separate laws.

And of those three separate laws, two carry mandatory federal prisons. So we could remove those laws, like the Computer Fraud and Abuse Act is one of them. and the Millennium Copyright Act is another one of them. So we could have fewer laws and people could just hack away it. That would also be a solution. Somehow I suspect that that solution is less palatable to most people than the solution of requiring API. And the solution of requiring APIs isn't as crazy as seen.

So for example, in Europe, bank accounts now require an API. And if you can require it up banks and it's not exactly clear to me why you could also require it update it. wired updates on Twitter and whoever else. Well, it's interesting because, you know, for anyone who's kind of listening and being like, oh, this sounds like the power is so high among these platforms that you can never imagine something like this happening. Last December, Jack actually kind of surprised people with a tweet storm about exactly this. He wrote on December 11th, he wrote that they're funding a team of five open source architects,

engineers and designers to develop an open and decentralized standard for social media. The goal is for Twitter to ultimately be a client of this standard. And he goes through and he actually talks about this. So there is at least some conversation about this at those highest levels. Now, Jack is a relatively unique and distinct figure in a lot of ways from these kind of leaders. But I still think that it shows that, again, when you're talking about Overton Windows on some of these ideas, they may not be as far away as it seems, I think. One would hope.

Twitter started life as a protocol in a way and anybody could write a Twitter on client. And so if we were to return there someday, that would be great. You know, much of my interest in blockchain and crypto technology comes from the ability to build systems that are decentralized and yet maintain consistent states. And so I do believe we're creating a new set of technologies that will allow the creation of that system. I just suspect that in absence of also making the existing centralized systems fully programmable, I think the transition to those new systems will be very difficult. The network effects of these systems are extraordinarily powerful. And so most users are not going to want to figure out, oh, I have a few friends who are over on this new decentralized thing,

but most of my friends are over here. I should really check both. And so if we don't make the place where most people are today programmable, then I fear that these new decentralized systems will always remain small and sub-scale. Yeah, you just create niche archipelagos. I mean, we've seen this, you know, the Bitcoin community got really into trying Mastodon, and that's a community that is probably more intellectually aligned with kind of, you know, controlled system and proprietary, you know, self-controlled systems than just about any other,

and it still didn't stick, right, because of that network effect. So one that I think is interesting coming off of the conversation that we're just having is you're a venture capitalists, the model of these proprietary algorithms, right, that have created these powerful network effect lock-ins has been enormously successful for the model of technology companies. How do you think about a willing attempt to kind of destruct that model. Isn't it economically disaligned in some ways from the interest that you have? Well, I do think that the large incumbent corporations have no interest in giving up their power. As far as venture capital is concerned, I do think that there may be ways of people

still making a financial return, even when investing in new decentralized systems, to the extent that by putting capital at risk early on, you can help create such a system and maybe own some small percentage of the tokens that are used in such a system. I don't think that venture capital is immune to disruption, and I do think that venture capital,

if we were to enter a truly decentralized era, would look quite different from the venture capital of today. And I'm even leaving open that some of it might be decentralized in itself in the form of a Dow, for example. So venture capital isn't immune from disruption. And I do think that there might be some DCs who would like to protect the existing model of the market. But by and large, I think VCs have been genuinely interested in innovation. fostering innovation, even if that means that they themselves have to change their model of how they operate. Well, I think we could have a whole additional conversation. I'm going to have to invite

you back for another hour on the shifting model of capital allocation in the world after capital. But maybe by way of wrap up, just one last question. Out of the great financial crisis a decade ago, we got Bitcoin and a number of other innovations, but a pretty huge one in Bitcoin. What are some of the things that you're seeing potentially coming out of this economic challenge period that have you the most excited? Well, I do believe we're seeing a big acceleration of trends that were already in place that are important trends, trend to remote and decentralized work, trend to remote and more decentralized education, same for healthcare.

And I do believe that we will see continued and further adoption of blockchain and cryptocurrency technology. And one area that I'm currently interested in in that regard is the creation of local and community currencies, largely because I think that the way the existing system is trying to solve this crisis is through massive money printing, which are sort of the only means that are currently available to the system. And those are available at the federal level of the U.S., but not at the state or local level. And so I do believe we can use blockchain and crypto technology to make local currencies,

give them an important upgrade, and make them more accessible and maybe also more interoperable. And I think that's a very exciting possibility that could come out of this crisis. Well, Albert, thank you so much for spending a little bit of time today with us. It's a really, really great conversation, a lot more that we could explore. But for those of you, for those who want to find you and hear more of your ideas, where can they where can they find you? The book is at world aftercapital.org, and my blog is at Continuations.com. And I'm on Twitter at Justice Albert Baker.

All right. Thanks so much, Albert. My pleasure. Take care. Reflecting upon that conversation, the idea that I want to come back to is this idea of a renewed, re-evaluated, revised social contract. To me, the idea of a social contract is a set of a set of, of guiding expectations that allow people to understand what they get from and what they're expected

to give to a society. And I think the important thing about the idea of social contracts is that they are not just something that emanates from the ground, right? They are created, they are debated, they are organized by people, and there's no reason that we can't reorganize our expectations to be different. I think we fall into the trap, something that Albert has written about that we didn't even get to talk about, which is normalcy bias, where things are the way that they are, and that's the way they've always been, and that's the way that they will always be, despite the fact that if you take any sort of historical perspective, the story of the world is radical periods of change with very small interludes of calm stability. The positive side of that is that there's

no reason that we can't reimagine pretty fundamentally different futures. Anyways, guys, I hope that you enjoyed this conversation. I hope it was a great way to start your week. I'm really, really looking forward to the rest of this week's interviews as well. A huge number of very different, very kind of directionally different speakers and interviews. So thanks as always for hanging out and listening. And until tomorrow, guys, be safe and take care of each other. Peace.