Hashing It Out
Hashing It Out

Episode 27 · 3 years ago

Hashing It Out #27: Radical Markets - Dr. E. Glen Weyl

ABOUT THIS EPISODE

Blockchain hipsters, we have a treat: Dr. Weyl, co-author of Radical Markets. His book quickly became a popular with us in decentralization. The book proposes new ways to create marketplaces to provide better opportunities for optimal redistribution of resources. This has especially strong implications for those designing decentralized systems and applications. We talk with him about his book, the motivations behind radical markets, and potential futures involving his schemes.

Links http://radicalmarkets.com/ http://glenweyl.com/

Now injury CNDATWORK welcome to hashing it out apocast forretalk to the teck intovators behind blocked in intrestructure anddecentralized networks. We dive into the weeds to get at Wyand how peoplebuild this technology, the problems they face along the way, ome listeningand learn from the best in the business. You can joine our ranks all right episode, twenty seven ofHashing it out. As always ' Dr Corrypetty with myco host, callingcuchet, say Wat'sup calling what's up Calin. Today we have a special guest,Dr Glen Wil, from the very popularized books, radical markets, Um. We wantedto have him on to kind of dive deep into the ipplications of the types ofMarkete he brings up in his book and how they may be used in de centralizedsystems and implications they'rein, and just talk generally about how he's howhe feels about this space, the market sa he proposes and the I guess,Petental of e them actually being applied. INTODAY's society so wecome tothe show Docor Bowell, Hey, I'm glad to be here with you, concory yeah. No,this is great. I'm I'm glad you came on. I I! I really loved your book. Um ReadI for effirst back in April M, just some amazing implications. We'vementioned on the show several times. A lot of the people in the space haveread your book Um in our and its continuing to be talked about. Even youknow at this point, so I one thing that was funny. As I read there was somearticle that was saying that sort of as part of the cripto hip, stor ook. Youwere supposed to have a copy of the book, so well count me in on that. Then I guessI'm Acra Hipster, but yeah. No, it's it's a wonderful book. I really reallythoroughly enjoyed it Um. So I guess I guess it began. I think it'sinteresting when I read the title radical markets. I was thinking a racllike crazy, but you actually had a different meaning for that title. Theword radical didn't mean, like you know revolutionary, although it does havethat implication W W. Why did you name the BOK cradical markets? Yea? Thetitle has about five different meanings at the same time. One meaning is what you just saidrevolutionary or bold, or something like that. A second one is m getting tothe root of issues, so radical etymologically means root. So e. Thebook is trying to get to the sort of fundamental things about the ways thatmarkets Al Ray, but probably the strongest meaning, is that in the nineteenth and late eighteenth centurythere was a movement called the philosophical radicals and in factthere were parties all over the world called radical parties, and it wasradical in roughly the sense of radical liberalism. Liberalism is, you know,liberalism, liberal democracy and this wis, a political movement that includedpeople like Germy, Bantham, John Stuart Mill, Adam Smith, Um, Beatrice Webb and others who weretrying to really change fundamental things about social institutions inorder to free them from the legacies of feudalism, and that's probably the mainmeaning. But it also refers to the fact that we have this sinkled quadraticvoting, which uses square function so there's like square roots in there tooUM. There are several other meetings as well. So I itwas very carefully chosen word to reflect all those things at one time,but also to be sort of edgy and lefty a...

...little bit at the same time that it wasreferring to markets which usually associated with sort of the libertarianright man an I think, Wat's interesting aboutall. That is that you capture it quite well in the book with the things thatyou bring forth Um. Can I don't know how to start this,because we have so many questions. Why don't we maybe just give an idea of survice level introduction to the market she proposein the book Ahso. Should I just run through theideas? Yeah hthat's great. I think it's a reat way to just give the audience ageneral like over the overview of of what we're talking about here. Yeah, Ithink Y I've identified like four major ones, is a Vickry action, Texas,shootolt, seselfassess, technie taxation and quadratic vuoting, and allof t US seem to have direct implications on what we're doing so. Imean I'd really like to break break down into those Thas Orr, and the otherthing I would say is that you know those are the ideas that are literallyin the book, but then there's also a number of follow up things that I'vebeen working on with vitalic Budrin and others that might be of Relevante,including ways to use these ideas to find open source software developmentor, more generally, self organizing communities, Um ways to deal withsignaling and status. Positioning M Wasty, distributed identity and auction.So Um there's the book and then there's a broader space of Um ideas that wereincreasingly calling radical exchange around that yeah. So wh, when you say radicalexchange, you mean to say something that doesn't require a lot of trust in order to make sure that that the market isoperating see. This is just something that's kindof like throwng me off. Are we striving in in your book? Are we striving forthe goal of the quality or just provable fairness? What the fundamental principle of thebook is not either a quality or fairness, but theopposition to Concentrat it historically derived hierarchicalauthority, Um, something that people in this pace might call de Centralization. I would call it liberalism in the swasical, Sensia yeah and more likeLibertarianinsm in the: U S: Well, not quite ecause modern libertariannism ismmodern. Libertarianism is not necessarily fully reflective of thattradition, because it often assumes that we can take forgranted a number of fundamental social institutions that actually impede thosegoals of preventing the diffusion of you know preventingthe concentration of power. So a lot of Libertarians assume that we can maintain acentralized, competitive, open society while allowing absoluteprivate property, and we don't believe that we think that idea was discreditedin the late nineteenth century by the liberal philosophical radicals of thatperiod. Um, and that therefore modern libertarianism is confused. But but in terms of the principles we havethey're the ones that are the common basis of both modern libertarianism andmodern progressivism, and we're trying to really reunite those types of ideas. See that's really cool. So I've beenreading a lot of Hika freemen latening lately just to see I' notice, economics,N nd. You know, computer science are...

...starting to have the blurred line incertain areas. So I really wanted to understand the other side of things. SoI v Hean reading hiakan Freedman and one of the interesting distinctionsthey made was bstracting away. The word communism, socialism, capitalism and issaid, focus on terms like central planning and decentralized systems, andyou know the identified one of the advantages to central planning is: IsDecisiveness and Willit'll always work like in a pinch to solve an immediateissue, but the issue with D seay systems that they take time to evolveand correct and find an ultimate pathor process? So do you feel like with theevents of these trustless systems? We can create like a new way, approvablydecisive, like decentralized market. Well, I think the truth is that italways will take in order to maintain to centralization a constant struggleto find ways to organize things that maintain that discentralization and Um.It will always be easy um to resort to some sort of fully centralized decisionmaking, but it's not robust. It's something. That's very fragiea to theintentions and the vision of those interusted withthat authority. 'cause,it's very difficult to change central good planning. You know once once apolicy's made yeah, it's not just difficult to change, but it's also, Irespons Ho ever does it you know so, for example, Singapore runs very welllargely because it uses a lot of market orin mechanisms, but who was it thatchose to put those in? It was pretty much dictator D, dictatorial orsemidictotorial system rather than some sort of democracy. Now you might saywell, let's go imitate that let's set up a lot of charter cities or Cstudying where we inadictatorial way impose market mechanisms, and I thinkthe problem with that is that that works, maybe in Singapore, but forevery Singapore we have a hundred, imbobwoys and Um. I prefer to Um use the mechanisms that we want to seeorganized society to bring about that organization so that we don't Um. You know hope that will throw some dictatorship of theproletaria institute some ideal world. We need to actually harness the Centralizhn harnessratically democratic principles, to build a radically democratic society,yeah and and you've CR t the cool thing about this book is that it it reallycrosses into so many different aspects. I mean you start off talking aboutproperty ownership, just ha very fundamental concept of owning property,which you mention earlier as a tenant of Um. You know core principale behindthe modern literitarian movement. Is You know my property, an my problem? Um,you know so h. You know your first chapter kind ofclaims. A proper iwnership is a type of monopoly Um. I thought this was somekind of tongue and cheek statement when I first read it, but you made a verycareful and clear argument to support that statement and it's actually kind oliteral. The way you wrote it Um. So I was wondering if you get a loose nateon an audience why property is a monopoly, so Um. I think everyone intuitivelyidentifies with the notion that intellectual property is the right toexclude people from using some idea, but we don't think of physical propertythat way as a monopoly over a piece of land M, but of course that to the extent we don't think aboutthat, it's cause. We assume that there's just as good land that otherpeople could use or take and in some circumstances maybe that's true, but inmany cases that's not true. Think about he cities that we live in Um...

...every block. Every plot of land is sortof unique because it's situated in neighborhood that plays a particularrole in relationship to everything else. If you want to build its highway, ifyou want to build a shopping mall, if you wan to build a skyscraper, it maynot be that there are just equally good places to do that. This may really bethe right place for it and as such you'l whoever happens to own. Thatthing has a monopoly over it and there can be very little check on theirability to exercise that monopoly power, and that's not just true for land. It'strue for the radio spectrum, where, if you own some little over the airbroadcastor, you can just Um, use your ownership of that to potentiallyblock the whole ability of Risin to establish a nationwidefive GE networkright, and it's that arbitrary and unchecked powerto control an asset which ou didn't create in the first place and is really part of the earth. Um, which is agovernment granted privilege. T's O government granted monopoly just likethe monopolies that Adam Smith decried and that Milton freedmen rails against. So one of the ways you propose that wekind of like look at this problem or or kind ofreevaluate how we organize the concept of ownership, because clearly peoplepeople don't want to not have things not have shelter. For instance, Um wasthe idea of a selfasest taxation system, and I thought that was reallyinteresting Um. My understanding of it is that someone assesses the value oftheir property kind of with the condition that they pay a certainamount of value of that valuation like every month, Kindof like amortgage and if someone is willing to value it for more by a certainthreshold, the owner must sell to this person. They have to sell to thisperson Um and, like that kind of turns everythingon their head. 'cause people don't want their houses to suddenly like slip outfrom under them. For instance, people don't want somebody to suddenly taketheir car Um, and so I was wondering if you could maybe discuss a little moreabout the market. You propose for SELFA SSTOR. You know described for self,assess taxation and m its implications and how maybe a central authoritywouldn't be the best way to necessarily organize that kind of system yeah. So you mentioned that people might not wantsomeone to take their property and that's true. They don't want them totake their property for no price right. Obviously, on theother hand, if someone offered you a billion dollars for your pencil, you'dprobably be pretty happy about that right. So really, the thing is that every assethas some willingness that we would have to accept for that asset and when you have a tax charged, then you don't want to set too high of aprice ecause. You have to pay taxes on it, but you don't want to set toolowfor pricebus. Then they might take it for you for less than it's worth toyou, and if you set this tax right, if you said it at a rate, that's equal tothe average turnover rate of an asset, the average rated which I you know, getsold onto a new use. You can exactly balance these things and give people anincentive to Um report exactly how much they'd bewilling to accept for the asset so that whenever anyone buys it from them,they're not upset, they just say well, okay, I was willing to accept thatamount of money for, if you put it in the hands of a central authority, onthe other hand, they're going to have to come in from the outside without anyknowledge of what that individual...

...really values it up and determine whatthe individual should be willing to accept for the asset, and that is not going to do a very good job ofactually allocating things to the people who value them the most andprotecting people against things being taken. Were they ar really the bestowners O it. I see like in the outcome or theproposel outcome of this- is that m property flows to the people who canmutilize it most Secra yeah best in in terms that theythemselves determine, rather than some outside authority determining yeah nd,something that I see. Maybe I wouldn't call it a problem, but a possible issue or what could create l elosers in this system? Is People not um capable of self assessing well enoughand endepth losing things that they could potentially or like you know,maybe ideally ta the best use of, but can't because they can evaluate tproperly and that may that may go across a lotof the things that you you propose in the book is that the intelligence ofpeople to participate in these markets is higherthan what that maybe average yeah so m. first of all, there's somere relatively easy things that individuals could do. They could justoverassess the value of their assets, Bya factor of two or three or for and then it's can be veryunlikely that things are going to be taken now. They'll play more taxes forthis, but for most pople, who aren't extremely wealthy. That will still bevery much in their interest because Um, you know, given that most of the wealth is heldby very wealthy people. If, as we propose in the idea, you redistributethe value, that's Raysd by the tax to be born equal shares, people will beable to use that to maintain their assets now UM. I think that in practicewe shouldn't think of individuals doing this themselves. We should think ofthere being a variety of different communities or organizations thatpeople are part of that assist them in doing this and participate in helpingthem figure out all these values and the goal. There is really to say, lookW, not everyone has to be on their own. You don't have to be alone and justfigure out all the stuff yourself, but on the other hand, we're not just goingto Creta system that defectively puts all that authority in the hands ofeither e central government or in the hands wo. Whoever happens to have themonopoly on that asset right now, we're going to diffuse that power throughoutthe economy and allow new, H organizations to build up that can helpindividuals and that can bevoluntary bases for figuring those questions out.So I'm not relying on individuals all alone to figure things out. I'm justsaying we shouldn't, because individuals might have some challenges,just assign all that power to some central authority. WHO's thought to doit in a benevolent way. An one of the ways I could kon to see. That happeningis so right. Now we have Hoas like, let's just say, you're talking about Hohousing market. You know real estate Um, you know, ith oays are Kindo in certainways, but like similar idea could come together, whereI neighborhood can do some sort of quadratic voting system where they cankind of assess the value of property on the neighborhood and set sort of abaseline, and then everything you do op that ages. I I step back. ND explaind,quardract Votan ar e pleted into earle to yeah yeah. So quadroticqoting is the systemof making decisions as groups that's based on a similar type of auction likeprincipal, where everyone is allocated the same number of voice credits thatthey're able to use, but rather than you having one vote on every issue, youcan have many votes on one issue and fewer voteson another, but in particular it's not...

...like you can. Just put all your voteson one issue and Um get that proportionately more influence. Instead,it becomes increasingly expensive, as you put more influence on one givenissue, to influence that one more and, if you put less on another, it becomescheaper, and so that leads you to ant to value things in proportion to howimportant they are to you, rather than allocating everything to the one issuethat you care most about, and you call it quadratic footing because one voteis equal to one VO token lets say this: In Reference: Antokens Boyce token, two votes is equal to four voice.Tokens. Three votes is equal to nine voice tickets, an so far so and soforth. So it's literally the square of the number of tokens that you you, I'm sorry the square root of the numberof tokens that you spend. So if you spend nine tokens, you get three votes,um a and I think that's really interesting, because it really meansyour extra emphasis has a cost to it. A marginal cost associated with it tsat.You can kind of you know you do this. Only if you're very serious about it Um,so I thought that was really interesting. Have you seen any of thesequadrotic voting systems in play in the real world? Oh there's lots of them. One of themost prominent ones is that x am chain which is a theoryan based B, sort of import export regulatorycompliance and supply chain management platform is using quatratic voting toElec blockmakers, but M. it's being thought about quite seriously, actuallyat the protocol layer for a theorium, it's being thought about it's beingused in just a whole range of different HAVprojects. Within the block chain space. There are activist groups using it toform pticipratory government platforms, we've used it for polling, so therethere's a whole range of of potential applications. I see I see a potential issue here, metBen on a issue Um, but in order to Sibolatac this mayb,not sibll Atech, but like if Youd look at this in the n h a confine SOM, theetherin system itwould be trivial to see. If you wanted twenty votes asopposed to doing twenty square, you just make twenty accounts and do onevout. Each and so in order to have quadroto boning work, Yo need some typeof like know your customer associated with it and then is scarcely associatedwith hew votes ar or of voting tokens or then dispersed across that thatknown set of people who can vote yeah, that's absolutely correct. Umquatriatic voting is very liable to civil attacks. If you don't have someidentity solution o when identity solution is absolutely critical forthis, and by the way for many other things, you'd want to do underanetheory on one of my biggest problems with existing crypto currencyecosystems is that they formalize the notion of ownership, but they don'tformalize the notion of individual human beings and any system thatformalizes money and doesn't formalize. People will serve money and not servepeople, and that's not what any of us want to see. Well, a lot of the reasonbyhind. That is it's a very difficult problem. Um You know it it's it's IT'SNOT! It's not easy. Without a central authority to verify an individual. Idon't think that's necessarily true. I've. I've had a lot of thoughts aboutways that you could potentially do that so um, I don't know if how much you want toget into it, but I'm increasingly working on things like this, and Ithink that there are ways through social networks effectively that youcan do this and then effectively. The centralized authority is really justone architecture for such a social network and not even the one thatreally goes on in the real world, because you know even when M, I verify, for example, someone I mightpotentially employ in properties about...

...them. I don't really do that throughthe government. I mostly do that through a letter of recommendation orsomething like this right, so I actually think if we can formalizesome of those irl dynamics, we have the possibility to actually building evenmore robust solution to the identity problem than currently exists incentralized architectures. So what you're proposing then is a this issomething so in two thousand an five I threw up a website called online KarmaDanet. I was trying to basically attack just kindo like an sort of an identityproblem. Where you know you have all these CARAMO systems across multiplesites and you want to KINDOF unify them under one umbrella m. The technologywasn't there to do that effectively. So I gave up on the idea, but M to me. Itseems like your personal rating is, who you are and you'd want to not diversifythat across multiple profiles. 'cause, THAT'S BAD UM! Is this kind of what you're ssayinghere or is I'm saying something bigger and deeper than that? I think thatactually you want to have a representation of the social networkmay be stored locally, that people have and use friends and friends of friends,ND and t these sorts of trust relationships that exist in that socialnetwork to be a savistrate over which a verification message of a property ofan individual flows, and that, once you have that infrastructure in place, thenUm it's actually pretty easy to do the disimbiguation ancer to avoidsipil attaks, because you can ask for verification of various principlesuntil you reach the point where the individuals are uniquely identified. Isthat is that m against the notion of privacy and in anonymity? Can you hangow all those things ive there? Well, so, first of all anonymity, I don'tknow exactly what anonymity means I mean if animanimity means I'm allowedto do anything without verifying any properties of who I am at all yeah.It's against that. But I think that that he's an anti human notion, becauseit says that the only thing that is relevant for you is some materialpossession that you have and not anything about who you are, and I thinkthat that we we don't want that. That's not a desirable world, an almost anycircumstance. On the other hand, does it require you to revealeverything about yourself? Absolutely, not imagine that you're trying to m distinguish whether I'm civilattacking you. You could ask for various variousquestions about me like what is my birthday or when was my first kiss orwhat is like. You know you could just aggregate my fingerprint into a hundred,or you know a hundred thousand bits or whatever, and you could ask what B Ahundred and seventy five or two thousand and sixty four is, and youcould have a set of questions that are like that and you could ask those untilh. You know you get to a point where we're disambiguated, but in thatprocess there are probably about a billion questions that define meuniquely as an individual, and you probably only need to go through ahundred of those by the commonatorics of it to with high probability uniquelydistinguish every human being and knowing a hundred randomly selectedquestions about, you does not reveal you to the person who's verifying you.It only reveals a very, very, very tiny fraction of what you are to them and itcan be chosen in a way that is um not useful to them in other contexts.So I think, with appropriately designed such protocols, it's possible to bothhisimbiguate individuals and avoid civil attacks while not revealing thewhole picture of the individual to...

...anyone else. That's very interesting. I have tothink about that for a while I wrote a Bot. I read a Blod post a long time agothat try to like create the analogy of a mertalizationof an individual as like all the experiences and and thoughts andbiology of an individual kind of comes together to form a a final hash of whothat individual is- and you know that kind of speaks to what you were justsaying is like heading lical, profs o. have that college thing? Does it tellyou about the entire tree? Just it culd prove that the hash is the hash withouthaving to show the entire tree right. So, let's just say you have anindividual Um, a collection of individuals working together towards acommon goal is in a corporation, an organization, some type Um. Do you so you feel like identityis, just kindof a foundational need. We have in this decentralized space once we have thatwhat would identify a particular corporation, some sort of charter, orhow does T it? You know so just to give you an idea of where I'm I'm gettingthis from. I really loved your parable of Abamov and Hajar. I thought it waslovely. It was great, it was fantastic, so anyone who kinda has owned a companyknows that choosing your board members is essential, for you know a successfulbusiness if you don't choose wisely, that's bad, Um and, and furthermore,like even that goes deepinto like institutioal investors. They canraquire quat clout by just owning a significat porte of your organizationUm. How do you see organizations being formed in the future, given thisecentralized trustless system, assuming we have the identity, Proem Oo, vitalic,Um, Buderin, Zoi Hitsig, and I have a papercalled liberal radicalism in which we give, I think, quitquite a radical newvision of what organizations might look like and how they might be structuredin the future. The idea has a lot of similarities, both withmarket processies and some similarities with democracy and some similaritieswith charitable organizations. The notion is that individuals would makecontributions towards these organizations or projects sort of likecrowd funding, but that there would be matching funds that would support themand make up for the fact that the individuals of an incentive to freeride and just allow others to make the contributions andthat the tax is necessary to provide those subsidies would be. You know,collected by something like the process that we were describing before with theproperty and Um in that world. Um Organizations are really some sort of a collectiveformation, but not based on ownership, but rather based on collective actionof some sort. Now, what do you mean by collectiveaction? Exactly I don't. I don't necessarily understand that. I know theidea of like tows and stuff which direct funds to particular causes orbusinesses that the the Dalla supports in proportion to. However, people arevoting. I know that is. Is that kind of what you're talking about here? Or doyou mean actually? Well, you can imagine an organization putting up any charter that it wants ofhow it's going to operate, or the principles on Wich roperts ot could bea Dow. It could be a charity, it could be, it could be democratically governedor quedratically voting governed or in a HIERARCHOC AY governor hover. Youwant, but the funding model for it, rather than being like contributionsthat people make or ownership stakes that people take,...

...it would be. Basically, they would make something like a standard charitablecontribution, except that most of the funds would actually come from amatching that would be given by some a process that is external to thecontributors themselves, Um something like Uh. You know the ethereum grant,making foundation et CETERA and the matching would be done an algorithmicway so that all the funds would be distributed in a discentralized waywithout any central grantmaking authority having to be in charge. Now, when you wrote the book how much?How much are you aware of the like the systems like a therium in place that inform a good portion of how youthought about these books in the future, or did that or that the intrigacies ofhow these things work kindo come later on when Vatalic kind of Censationalisyour pook and brought you to the public eye of of this, the Compunity Yeh? So Iwasn't thinking about wat chain stuff at all. I was vaguely aware that somepeople involved with something called the theoryum were interested in usingquadratic voting for like social networking or whatever, but that wasabout the extent of my knowledge and then there, as this guy called theBatalic booteran, who tweeded out one of my papers once we'd alreadybasically ridden in the book, but it hadn't been published yet and when Ifirst looke this guy up, I sort of thought he was a bond villain orsomething you know he's like a twenty four year old kid. You know with a billion dollars orwhatever living in zoog Switzerland. Who knows where that is Um, and so I just assumed that Um. You knowhe was some sort of a scammer or something like that and then Um I nonertheless, because when youtreated my thing out, I got more traffic on that that I've gotten on basically twitter for the whole rest ofthe time. I've been untwitter, and so I said, do you want to look at mymanuscript I'd be interested in your commenes and he sent me about twentypages about it? U M just sarted talking about how he thought it was. You knowthe future of liberalism and so forth and ask me lots of questions and Um. Then that was the beginning of what'sbecome. Probably my closest collaboration atthis point is with him working on many things together. So yeah, that's yeah,like that's how I really knew your book was kind of the real deal too. It waslike winantolic said something I was like okay, this is this is serious, soI took it very seriously, went out and got a copy Um. So what kind of things are you inPotilic working on m? Well, the main thing that we workedon so far as this paper- liberal radicalism that I mentioned, but we're also working in apaper called taking vickory seriously, not literally, which is like amethodology paper trying to talk about what is the methods lying underneaththese types of things we've been working on together, so other peoplecan do them. You can almost think of it as a crypto economics type methodologypaper, but we're also working on some morepractical initiatives. Wer We, you know, we've been appearing together in avariety of context, no from political to corporate, to try to promote theidea of you know more dicentralization of power, Withn, the didual economy andthe poder world economy. U He's involved with this radical exchangeevent that weare planning, I think, he's going to be a KENOTE speaker thereUm so H. I view him. As you know, one of thethree or four people who's like most important to all the things that we'redoing around these ideas.

So would you say, taking vickoryseriously Um sor audiences is nos. A think reactionis where everybody kind of bids and the person who wins who bins the highest,gets it, but they pay the price of the second highest bid. Maybe you could gointo some of the economic details behind that and why it's so interestingwellso. That's an example of Vickory's scheme. But it's really not the mainpoint. So vickory's general principal is that everybody reports you know takes actions. They reportwhat they wantto do and they are forced to pay the consequences that that hasfor other people in the society into a pool. So in the case of the auctionmeveryone bids and they pay the second highest bid, but that's just becausewhat is the cost, the society of you winning that thing it's taking it awayfrom the Pursun Ho valued Ot, the second most and would have wonotherwise right and so um. That is the principle behind the vickory auctionand the idea of the difficulty behind that is is quantifying the the socialcost of winning well. So, in the case of the second price auction, it'srelatively clear, but in a more complicated case like an election andso forth, then provid finding a way that isn't easily menipulable to quantify that cost of you winningrequires careful mechanism, design and Vickory gave a general solution, but avery fragile one, and what I and vitalic and many others have beenworking on is coming up with more robust solutions that give you anapproximation to that social opportunity cost associated with a year.Winning I sa- and I was scarious like T as you've e since you've written thebook and had this collaboration with Italican have learned more about these,like these centralization systems or blockchade systems and networks. Hasthat swayed any of your opinions that you wrote during the book 'cause? Ithink it might in regards to your data labor and how people own datawithin these bloccain networks versus how corporations own data within thesentialize networks for the Siren Servics, as you call them in the bookye H, I mean a lot of my views on many things have been evolving Um. Theimportance of identity has become much more clear to me. The the importance of collectiveorganizations and the role of public goods has becomemuch more important to me. Issues about status and signaling have become muchmore central to my thinking and within my concepts of data's labor, the notionof Um, first of all, moving beyond justDataa's labor, but thinking more broadly about the centralization ofpower over our attention and over news quality and all this sort of stuff,on the one hand, but also thinking about the role of building uporganizations that are not the platforms, not thi overwhelming Behemuh,but that are large enough to help protect people. Um has becomingincreasingly important to me and clear, so you talking about protecting peoplekind of triggered. Something else me that it minds me of the book y. Youspoke a lot about how democracy is organized Um, like immigration. I think it was a bigpoint. You brought up brought up in there where you propose an alternatescenario to say H, one B, visas Um do you feel like governments will bebenefiting from these? You sentralisystems on what wall they looklike M. Well, I think that I don't even like the idea or termgovernment necessarily I I increasingly...

...have come to have the view that Um, the sort of anarchist notion that weshould have a government is not just a Um, is not so much a ideal as a reality.The truth is that Um different types of organizations have different power overdifferent things, and what we should try to avoid is any particular sourceof power becoming too overwhelming or too entrenched and H. All sorts of collectiveorganizations can potentially benefit from these ideas, but on the other hand,all will have to, as you know, was, is true, with theeconomic value justified by the cost, produce value commensurate to theirposition of power and not be able to just in an arbitrary way just becausethey've always been. There continued to exist so um in in the world that Iimagine there will be all sorts of governments in some level, the familyis a government over its members. At some level, H, internationalorganizations are governments over some aspects of life and states and national governments and internationalorganizations so th. The vision I increasingly believe in is what I wouldcall Poly Politan, so I'm not cosmopolitand, I don't believe in aworld government, but I also don't believe in the absoluteness of nationalgovernments. I believe in complex overlap, ING collective organizationsthat help protect us make us individuals, precisely because of allthe different things were engaged in and protect us from the overwhelmingpower of any persistent, centralized or protected historically derivedhierarchical authority. It seems as though M that that alines quite well witaha youporchthing reason about how the sistems we have now came to beg and that AaSmith and the an the constitution, where a were a radical idea at thattime, but over time in the DEVELOPMENF technology in our society, those don'twork anymore, and so we need a new radicalization of markets to thenchange the way we exist today and that's kind of the future you're.Seeing now in terms of what you just painted is that is that a correctingtosay yeah? I think that's right, and I think it also fits into the vision ofidentity that we were talking about before this notion that it's throughthe social network, through a mircalization of the individual or allthose things, are ther the contributions of different communitiesto them. That's what makes them an individual, that's my view ofcentralization. What dicentralization is really about is not about isolatedindividuals, it's about the diversity of communities and how differentiatedindividuals can be precisely because of the way in which they're theintersection of all these different things in the market you create to havethem interact that, like that, that defines the social interactions andrelationships they have with respect to each other and value F, exchange kind of has an emergen property of whatthe government of those markets is. Is that I think that's Kindof what you'retrying to say er, I oleheartedly agree, but I I don't seea clear path on how to get there and- and I think, he'll se at first of likewe can't just do this. We need to do it in small places where it makes sense totry and experient with these things and as we then iterate that, like aseffectiveness of them, they can grow and grow and grow. I see etherium andnetworks like a theoryf being right and ideal for this because of the way youcan determinitically code and the relationships of various,I guess at markets, if you will and thet' just ther great playing groundfor trying to do these sypes of things yeah absolutely, and but you know it'snot enough, we can't just have ontro monorship. We can't just have the ideas.We also need things that help those...

...markets be designed in terms of the waythey feel to people in a way that's resident with their experience, and weneed science fiction H, help Peopll, imagine these worlds and we need Um h. You know other forms of our. We needvirtual reality. experences. We need activists who can help organize thesethings into a movement we and we need all those to be intersecting with eachother, and so that's the reason why we've set up this movement in a waythat tries to connect all those different pieces to each other butse.It's only together that they're going to succeed, so science fiction touches a great pointwith me. I mean I I'm a huge fan of taking science fiction and using it asa model for building the future, but something that people consider sciencefiction in the economics field is economic eep pilibrium. Do you feellike these markets will help us obtain that, or is that even a realistic goalto strive for Im yeah, I mean, I think the fundamental flaw of modern economictheory is that the vision of some competitive generally gilibrium economywas viewed as a description of the reality rather than as a optimisticpiece of science fiction and Um. That's much more the spirit of my book. I viewthat as a North Star, that towards which raiming not a point that we'veachieved, is it a mathematical ideal, Ich istsomething we can achieve. Is it something that we'll always strive toget to, but never get ther. Do you feel like we can? I think our view of evenwhat it is is going to continue to evolve and and and change but um, but no I don't I, I don't think I don'tthink I'm not a utopian. I don't think that there is a final thing. I think,as technology evolves, it'll change our our moral compass and as our moralcompass changes what we aim at we'll change and that's the R A and- and Idon't Tien at any given moment that there is a final or ultimate good. Ithink that ultimate good is derived from the diversity of the people whohold those values and it covolves with it. So I don't want to see ajust implement, afinal notion of autopia hat that makes sense. N T I see like the path is the right way to go,but you have to strive towards something. Is there some fundamentalcharacteristic of these systems that you think is like most sacricaint,something that we are striving towards, regardless of the technology of we usedto get there? Well, I think my the basic principal that I lay down in thisbook is the notion of Um breaking up concentrated,historically derived M hierarchical authority and allowing for a fluid flow of Um, heterogeneous, diverse and growing ever larger andmore complicated human organization. There's a wonderfulqot from Al Iver Wendell homes that I think, summarizes something of myphilosophy and is the epigraph or Jane Jacob's,Wonderful Book, the deat and lifes of great American cities M. Let me see ifI can find it and read it to you Um, so he writes until lately the best thing that Icould think in favor of civilization, apart from the blind acceptance at theorder of the universe, was that it made possible the artist poet, thephilosopher and the man of science, but I think that it is not the greatestthing now. I believe that the greatest thing is a matter that comes directlyhome to all of us when it is said that we are too much occupied with the meansof living to live. I answer that the chief worth of civilization is justthat it makes the means of living more complex, that it calls for great andcombined intellectual effort instead of...

...simple and uncoordinated ones, in orderthat the crowd may be fed and clothed and houses moved from place to place because more complex in intenseintellectual efforts mean a richer and fuller life. They mean more life. Lifeis inended in itself, and the only question is to whether it is worthliving is whether you have enough of it yeah and th. That really rings home. Ifanybody works in the? U S right now, where workweeks are insane and ourexpectations are pretty high in our vacations, very who're, not living very well, you know,but you know we make that money so something that's so like I said, I've been crossing mymy field of expertise, a little bitfollowing the model of metholic and renching out from hard computerscientist. Understanding Economics and some things that you know I read zero Wollan by Peter Teel and hehe hails the virtue of monopoly M, and I feel as though, when he speaks of it.We're not actthey're talking about a free market that doesn't exist, it'skind of like a fantasy marketplace that they make up when they talk about thesekind of things M. do you say it's a fair statement that you're trying toavoid monopoly, because I kind of almost feel like the more even with youknow. C Any competitive market will have gravitating power in one directionand isn't that just some kind of monopoly and isn't isnt that havenegative consequences that affects the many h in you know, in e benefit ofthe few yeah I mean. I think that perhaps thefundamental principle of the book is antimonopoly Um, and that doesn't meanthat you don't need some temporary power to be given to some people inreward and to protect the things that they've created. That's true but Um. So I think the myth that everything onedoes everything just for free and so wor probably wrong. But I think thatmonopoly is incredibly inefficient and just stupid way to organize collectiveactivity. It's much better. You know it it it'swastefall. It excludes people Um. It requires all sorts of expendituresto maintain that exclusion. It's just a sort of very stupid way and wastefulway to organize UM activity. So what we need to do is get beyond that and umfind better ways to organize people collectively and that's the fundamentalprinciple of the book and I think an opposite of that is people like I don'tknow if anyone listening is familiar with the neo reaction movement Um, butthey are really about sort of doubling down on that monopolistic control, andthat's precisely we want to avoid. We won't avoid the monarchies and thatconcentrated authority. So I think that brings up a quote that I hear veryoften is that government is a monopoly over violence, R, coatrogon or Howere. You want to putthat, but you're, very Y U're. You don't support the modern or the currentnotion of government in that in the future. You feel as though thatill bean antiquated kind of way of looking at things, but how do we regulate asociety when we don't have a monopoly even over the asset of violence or look? The truth is that the notion that the government has amonopoly oer violence is a little bit misleading. If someone steps onto yourproperty, you have a right to shoot them. So it's not literally thegovernment that has a monopoly over violence. It all private property is a monopoly overviolence within a limited sphere. Right, Um, there's, really no differencebetween monopoly and a monopoly over violence. They're the same thing:...

All property is violence, because it'sa violence to stop someone else from using that property. So I think in thefuture, um different organizations will control different scarce assets andthey will have the right to use violence to maintain that control, butthat control will be checked by the fact that they have to pay a selfassessed tax and stand ready to surrender that assets control tosomeone else if they're willing to pay them for it. So I think there won't be a monopoly of violence.There won't be a monopoly period. All these things will be dinfused acrossVridey of different organizations and in fact we don't have a monopoly ofviolence right now, Um, because there are many different governments in theworld. So that's not a monopoly. It's a local monopoly over violence, but again,even within the governments, territory thei are estates and within statesthere are property owners, and so the notion that the government has amonopoly over violence is it's a it's a myth, but it's Otosimplthecality yeah yeah and I think when they say thatthey mean collective violence, meaning that it's Oneit's different. If youcreate a menti lynch mob, it's then, when the government throws in n sendsin the National Guard Um and Ri, but the thing is like there are things that the governmentcan do and there's other things the government can do can't do umconstitutionally right, H, so and and in fact, like to the extent that a corporation has alegal right to control certain assets. Actually, the corporation has monocolyover violence, because it can stop the government from doing something. So Ijust I just think that the whole language is misleading and and actuallyfundamenally confused. I wanna want to say, like every system you create ofsix and carrots ends up, leading to an Emergen like phenomenon of of socialbehavior and over time, as that same system of six and parots exists. Peoplelearn to optimize around it and you kin allude to this inside. The book ofpeople continuously like Regulat Regulation Corporation continuously,tries to run an ne run as fast as possible to stay in one place, and theidea of this book is to design like using the knowledge that we have andexperience. We have fron the systems we have and creating new systems of bettersticks and carrots to than make more m sociable systems later on down the line. But wejust don't know, what's going to end up happening because thos system don'texist and you can't predict the emergent phenomenon you can try butyoure of not you're wrong, well, N, and what you really want to do is for thatreason, try to keep things at a high level of abstraction in setting thefundamental rules. You don't want to be too prescriptive. You don't want to saythe future should or is going to look like this. You want to keep the basicprinciple of diversity and dicentralization in mind and then leaveas much as possible to that process to actually reveal itself and emerge what,if the emergen property is kind of atrocious and that's a kind of likeokay who's going to take care of like the mentally challenged, we would haveto rely on the generosity of the public to do that, and that's kind of adifficult thing for me to believe in right now, Um. Well I mean in thissystem h. The notion is precisely that you would be um. You know all the funds would berecycled in an equal form, maybe through collective organizations ormaybe through you know, an individual universal basicincome or something like that. Two individuals so um by the very rules ofthe system. There would be a reasonably Galitarian sharing of the value of ourcollective wealth and that's going to be a difficult sell in the UnitedStates, because I don't think I kind of a rebranding of communism really wellyeah and of free markets. At the same...

...time I mean it's Um, I think T. I think that the disvisionbetween Communism and free markets has been extremely artificial and it was aresult of a Cold War and installinis dictatorship and all this sort of stuff.But if you actually follow the logic of the free market through to its naturalconclusions, it ends at a place, that's very similar to what happens. If youfollow socialism through to its logical conclusions, yeah and that's somethingthat I I was very shocked when I read Freemon Um, is that h? He reallyemphasized on the necessary batlance between centralization andDecentralizaton E on discard centralization. He saw the benefits ofsomething like Fema Um, but um h. You know he was kindof like balancing thistoo now I know you might not be specifically a Freedman and economist,I'm not quite sure where you stand on that, but Um to me. I always seethere's an immediate sea o central centralization and then there's a more of a experimentation and oevolution through dcentralization, and it feels like there's more of abalancing act than anything else and we still will need some sort ofcentralization. Well, I think what we need is diverse collective organizations rather than an extreme focus on either the individual or the collective whole.I think we need that balance, not just say, there's some roles for the wholeand ther som roles for the individual. No, what we need is true diversity inthe forms of organization where we get to the maximum amount of Heterogenaty,an accommodation of individual difference, precisely through having avariety of different collective organizations that are protectedagainst freewriting, with hic organization having so pecificcause or purpose or desire and roles and assets that are notabsolutely owned by that organization. But contestable through the process ofcommon ownership- and I think that's the real interestingpart here- is this psychological? I can't remember which champn mention it.There is a psychological attachment to property and by removing the concept ofproperty, as we currently know it to more of a renter kind of system, whichis what I feel like it. It feels harlike people kind of detach from theway that they treat um the the things tha. They have thethings that they own their assets Um. You know, I think it sounds great, butwe are addicted to the concept of property and so to go back to Quori'squestion I iam struggling to find a solid path that will get us there, sortof a catastrophe and complete reganization, and even in that case Ifeel well, I think, Wesomfar already getting there. I think the way thatit's happening at the present moment is through the sharing economy. It's through allthe ways that technology is changing our lives. It's through Um, the h. You know the block chain that is givingpeople different notions. I think this is starting to happen, and privateproperty is actually not such an old idea. It's a relatively new one. Itstarts you know with agriculture and so forth, and it's still very unusual andsurprising in many eastern societies. So I think the truth is that our attitudes on these things have ofoled and will continue to affall for the better, assuming we have good ways of getting there. I M An, Ithink: A theoriym is an outstanding example of this type of thing ofexperimentation. Um An the SI, but it's not the only one. You Know Thet FederalCommunications Commission can experiment with the specktrum andthey're seriously thinking about doing that. Um. The British government isthinking about doing it for um oil drilling and landing flots of Heathrowand so forth. So I think, there's many...

...pathways for experimentation M. I think it's a great gun to start towrap up. Is there any questions that you wish? We would have asked you thatwe didn't get around to ask you. No. I thought this was a great conversation.It covered many different things, both t deeper philosophy and newer thingsand and the some of the topics in the book so yeah. I was really great to have you anman. I I love the book again, cannot recommend it enough everybody go outand buy about radical markets. It's amazing! If you disagree with a lot ofwhat we said, he plays a very cogen argument for each of the things wetalked about and with a lot of detail. Data in aackao, EVIDENC, a theveryevidence space, and I was very happy about that. So, if, if you don't likeany of the things that we talked about, let's go out and read the books. Youhave at least Um a way to understand to fully understand his argument beforeyou have like may be possible to sent yeah- and I I gotta say you know thecool part about it. Is it's finally testable in my mind? I don't think wecould have tested your ideas properly prior to having something like atheoryum out there, and we could begin. I feel like it's g. It would have beenmore difficult. I think we could but have been a way more difficult, and Ithink it's it's great- that we have this sort of foundatio architecturedeveloping which can allow us to start playing around with some of theseconcepts. O It's a really exciting time, and it's really great book came out atthe right time and yeah they keep for writing it yeah. Thank you. Take CareDoctor. While before you leave, how can people get hold of you or contact youanything you like to plug yeah. The thing I think people should know about is we havethis new movement called radical, lower case x, capital change and it has fourtracks: ideas in research, earts and communications, Mutch of renership andtechnology and activsm in government. I hope people involved in any of thoseareas or even curious by being involved in any of those areas, will try to pluginto the movement, consider attending the conference or contributingsomething to it, or even we have some opportunitis sti left a volunteer forthe count so Um, I'm I'm really looking forward to that.EXCHANGETHATTOUGHTA a Lotticke.

In-Stream Audio Search

NEW

Search across all episodes within this podcast

Episodes (108)