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

00:00:00.000 welcome to the making sense podcast this is sam harris just a note to say that if you're hearing

00:00:12.500 this you are not currently on our subscriber feed and will only be hearing the first part

00:00:16.900 of this conversation in order to access full episodes of the making sense podcast you'll

00:00:21.800 need to subscribe at sam harris.org there you'll find our private rss feed to add to your favorite

00:00:27.020 podcatcher along with other subscriber only content we don't run ads on the podcast and

00:00:32.500 therefore it's made possible entirely through the support of our subscribers so if you enjoy

00:00:36.540 what we're doing here please consider becoming one

00:00:38.840 okay well our 20-year engagement in afghanistan has come to an end

00:00:54.080 i think i might have more to say about this next week we're coming up on the 20th anniversary of 9-11

00:01:01.460 which is obviously significant for the world but it's also personally significant 9-11 was definitely

00:01:10.440 a hinge event in history but it was also a hinge event in my life even though i was not directly

00:01:17.980 connected in any way that i'm aware of to the events of that day i don't believe i knew personally

00:01:23.900 anyone who died but it really did change my life i began writing my first book the end of faith

00:01:31.840 on the 12th or the 13th the latest and the events of that day really determined a lot of what i focused on

00:01:41.580 for more than a decade so anyway i think i'll probably have more to say about that

00:01:47.480 next week perhaps i'll do an ama there too but the topic of today's conversation is not entirely

00:01:56.100 unrelated because viewed from one vantage point 9-11 certainly seems to have hastened the unraveling of

00:02:04.700 everything which is the topic of today's podcast today i'm speaking with balaji sreenivasan as you'll

00:02:13.640 hear balaji is a jack of many trades he's a serial entrepreneur an angel investor he was a general

00:02:21.880 partner at andreessen horowitz a major venture capital firm he has a very technical academic background he's

00:02:28.840 a phd in electrical engineering and a master's in chemical engineering both from stanford and he

00:02:34.680 also taught computer science and statistics at stanford he is all in for blockchain technology

00:02:41.920 and cryptocurrency which we talk a lot about and he was actually the first cto of coinbase

00:02:49.320 anyway balaji is very active on twitter and that's where i think i discovered him first

00:02:55.180 he was very early to recognize the problem of covid and he may be very early to sound the death

00:03:04.060 knell of much of what we once considered stable in our world and there was a lot to talk about

00:03:10.340 biology and i had a five-hour conversation which i believe is my longest podcast ever we had a few

00:03:17.540 sidebar discussions so the final edit came in at four hours and there's certainly a lot here in general

00:03:25.260 we talk about the challenges to civilization and the possible remedies we discuss the abundant evidence

00:03:33.860 of american decline the rise of india and china centralizing and decentralizing trends in politics and

00:03:42.300 elsewhere the relationship between politics and technology the failures of the fda the tsa how regulation

00:03:50.740 actually preserves monopolies the significance of bitcoin and blockchain technology the challenge of

00:03:57.980 cyber security the chinese government's attack on bitcoin the threat of u.s regulation of

00:04:04.100 cryptocurrency the problems with enterprise blockchain blockchain blockchain scalability creator coins

00:04:11.600 and related matters life in singapore the idea of virtual government the future of decentralized journalism

00:04:19.940 independent replication in science wealth inequality his notion of ubiquitous investing

00:04:27.480 social status non-zero-sum capitalism the very strange and arresting idea that one could start one's own country

00:04:36.540 in the cloud and then have it come crashing down to earth and other topics as you'll hear there was a time

00:04:44.880 zone difference due to his being in singapore so at some point around two in the morning i tapped out

00:04:52.620 but we covered more or less everything i wanted to get to you'll hear me push back more and more as the

00:05:00.760 conversation progresses i think that starts around hour two or three as most of you know i'm very worried

00:05:08.240 about the degradation of our institutions but i'm even more worried about the growing consensus on the left

00:05:14.660 and the right that we don't need institutions and what biology is proposing here is a crowd-sourced

00:05:23.720 peer-to-peer blockchain enabled quasi-utopian alternative to our current institutions governmental financial

00:05:33.560 journalistic etc and i must say i remain skeptical and worried i wish i could share his optimism here

00:05:43.060 and who knows i may yet get there but i found the conversation fascinating if nothing else it's a harbinger of some

00:05:51.260 very interesting things to come and now i bring you balaji sreenivasan

00:05:56.660 i'm here with balaji sreenivasan balaji how you doing great good to be here okay so there is a

00:06:13.620 obviously a lot to talk about i went out on twitter and asked for questions and um i won't hit you with

00:06:19.300 actually twitter-shaped questions but it did gauge a a very high level of interest in in our covering

00:06:26.160 really the totality of uh your interests and our intersecting interests and um a lot of this focuses

00:06:34.820 on i guess civilizational challenges and american decline and then the possible response to all of

00:06:44.280 this and how we how we move forward how we reboot to something more hopeful and uh you have thought a lot

00:06:51.280 about this but before we just jump into everything all at once perhaps you can summarize your intellectual

00:06:57.340 and professional background how do you think about your place in the world and and the tools you've

00:07:03.180 acquired thus far sure so you know you know of indian descent parents from india basically i grew up on

00:07:12.320 long island came to stanford for undergrad you know got my bs ms phd intellectual engineering

00:07:19.720 ms in chemical engineering taught computer science and statistics at stanford for a few years primarily

00:07:26.280 in the areas of computational statistics and genomics and bioinformatics and then started a genomics

00:07:34.600 company which ended up selling for more than 300 mil and um that was in the area of like mendelian

00:07:42.940 genetic testing actually um you know stephen pinker is you know a one-time collaborator of mine and

00:07:49.660 friendly who i believe you know and um then you know went completely from genomics into a totally

00:07:56.500 different area uh got into venture capital and uh joined aderson harwitz which is a 20 billion dollar

00:08:03.900 venture capital firm helped set up our crypto and our bio arms there when crypto was not a thing

00:08:10.460 you know bitcoin was not a thing and uh recruited vijay pande to the firm who's now the head of the

00:08:17.580 bio fund there and our investments have been really quite quite good on both the crypto and the bio side

00:08:23.020 um also an angel investor in bitcoin you know ethereum zcash most of the major coins uh as well as lots of

00:08:31.900 it's funny to call it traditional tech companies like you know soylent replet superhuman lambda school

00:08:40.220 a mighty a bunch of other things you know cameo.com for example many of which have been quite successful

00:08:47.780 and then uh took over uh one of our portfolio companies when i was at a16c and uh took that over

00:08:55.840 turned that around into something called earn earn.com sold it to coinbase became cto of coinbase

00:09:01.180 that was my kind of most recent thing and in addition to that of sort of being you know i guess

00:09:06.000 a part-time tweeter writer public you know it's funny to put it this way a public intellectual i guess

00:09:12.440 everybody's an influencer or whatever you know but you know at least i've i've put some ideas out there

00:09:17.600 i think i've helped influence conversation in some ways and i also taught a moot course online with more

00:09:24.020 than 250 000 students back in 2013 and i've wanted to repeat that at some point um and right now i've just

00:09:30.980 got a little newsletter thing called 1729.com which is sort of the seed of maybe something bigger

00:09:36.380 where i'm just kind of putting some essays out and you know tweeting and doing angel investing right

00:09:40.840 now so all right that's that's me jack of all trades master of none brings us to the present day

00:09:45.060 nice well um it's a polymathic picture uh which is definitely a lot of fun and gives us a lot to cover

00:09:52.500 when were you at stanford what years were you there

00:09:54.980 oh um 1997 to 0s really i guess 07 almost 10 years you know it's funny like the first

00:10:03.300 10 something years of my professional life was sort of spent in you know meditating on mathematics

00:10:09.200 right and you know i kind of thought that the world was just you know who could solve the most

00:10:16.200 difficult integrals and yeah the kinds of stuff that i do then you know for example actually just just

00:10:23.380 to talk about that for a second lots of stuff in undergrad you know when people learn it they'll

00:10:28.540 learn the algebra formulas but they won't really have an insight into what underpins that that's

00:10:34.680 perhaps most apparent in like probability versus statistics you know people will learn how to

00:10:39.840 manipulate probability distributions but they won't actually understand how a collection of data maps to

00:10:46.840 that and a lot of that is actually not taught it's just something you have to sort of figure out in

00:10:53.140 grad school you know this is something which i've wanted to write a text on or something at some point

00:10:57.520 but it's it's kind of a general thing that people kind of understand symbols on a screen but they do not

00:11:04.200 understand how it maps to real life so why did you go into ee and uh chemical engineering rather than than

00:11:11.580 math or something that's a great question well stanford actually did not have an applied math

00:11:16.500 degree so ee was sort of the closest to that since there's a pretty close close correspondence between

00:11:22.000 you know the the like signal processing in particular and then what's actually useful in

00:11:27.800 real life you know you know fourier transforms functional analysis you can throw a lot of math

00:11:33.120 at it you know wavelets hard bases a lot of that stuff actually has a tight correspondence between the

00:11:38.420 math and then what's actually useful in real life and both of those were important to me that you know

00:11:44.020 there was something that was interesting and challenging for a mathematical sample and then

00:11:46.760 useful in real life as for chemical engineering it was sort of the most quantitative way i could get

00:11:52.100 into biomedicine because i was interested in life extension and stuff like that for many years

00:11:56.740 and you know i'm kind of coming back to that early interest plus they're both very broad right

00:12:01.520 they touch a lot of different areas you know i have i have at least some grounding in you know

00:12:07.100 everything from navier stokes to antennas you know certainly not an expert in these areas not all

00:12:13.860 these areas but i i at least know enough to know what i don't know you know what i mean right so that

00:12:18.400 was helpful right okay well let's um turn you loose on the problems at hand yeah you asked you asked

00:12:25.020 it's just you know since i just wanted yeah go ahead it's good we'll be talking about almost none of

00:12:29.520 that stuff but uh sure give a um a very uh technocratic inflection to and a numerate inflection

00:12:37.580 to much of what we do touch yeah it's funny it's funny i like your i like your second you know

00:12:42.600 asterisk on that which is you know john allen polos many years ago in the 90s wrote a book that was

00:12:47.660 influential on me when i was growing up called uh innumeracy and i actually think that's a good way

00:12:53.540 of kind of defining what the new class is as opposed to the old class because there's people who sort

00:12:57.600 are self-styled technocrats or they're kind of called that it's kind of got a bad name but they

00:13:02.820 actually can't do math right you know they style themselves policy wonks or or what have you but

00:13:09.320 you know they can't code they can't you know that i think this century the numbers overpower the

00:13:15.740 letters yeah that's a broad concept we can talk about amazingly it still gives enough scope for

00:13:21.280 motivated reasoning that you can you can get objectively uh you know perfectly numerate people who

00:13:26.980 are no longer persuaded by numbers when they go against their cherished beliefs true true i'm not

00:13:32.500 saying it's a you know panacea but i but i do think that there's a greater degree of check on flights

00:13:38.680 of fancy if you're going with numerate people who are more likely to be logical or what have you at

00:13:43.880 least there's a greater check you might you might disagree that we could we can go and talk about

00:13:47.980 that yeah okay so let me just set up the problem as i see it i think there's so many intersecting

00:13:54.940 issues here i mean a main one for me is the the failure of institutions from government to the

00:14:03.040 media to universities to science journals to major corporations i mean this is just a it's a story of

00:14:11.380 bad incentives and incompetence and ideological capture hyper partisanship in our politics and there

00:14:19.900 there's there are many things intersecting here and we can see the the failures more or less

00:14:25.320 everywhere i think in the last year and a half our astoundingly inept response to covid has been the

00:14:32.820 clearest example of the problem here yep although now we have a a misadventure in our in an exit from

00:14:39.200 afghanistan in the last week which is gives it a run for its money but um it's just in everything but

00:14:46.320 the development of the vaccines at least to my eye we've proven unequal to the moment and yeah i do

00:14:53.340 view this as a dress rehearsal for something that is more or less inevitable and and will be quite a bit

00:14:59.420 worse and i mean it's you know there's an there's an obvious american failure here but you know there's

00:15:05.320 the international system generally has failed and i just we see the issue on a dozen other fronts i mean

00:15:11.440 there's this the moral panic of wokeness that has captured our institutions which i've spoken about a lot

00:15:15.980 on the podcast there's the rise of populism at home and abroad there's this slow-moving collision

00:15:22.800 with china and the capitulations of our major corporations to these increasingly orwellian demands

00:15:30.280 that come from the chinese communist party i mean we've got lebron james literally doing the bidding of

00:15:34.940 the ccp we had four years of trump which culminated in a mob of q anon addled lunatics storming the

00:15:42.280 capital but then under biden we have which was you know build you know even from the purge of this

00:15:49.880 podcast as a very likely return to competence but as i said we have this suddenly spooked exit from

00:15:56.980 afghanistan that has alarmed our friends and charmed our enemies all over the world so across the board we

00:16:03.380 seem to be advertising what a ramshackle superpower we are so there's so many aspects of this that we

00:16:11.080 could start with i guess um let's start with just the phenomenon of american decline as you see it and

00:16:18.320 then and then we'll eventually get to possible remedies and and the path forward so it's just what

00:16:24.880 what do you what's your 30 000 foot view of america at the moment great question so you know one thing

00:16:30.940 that you said that i wanted to sort of like slightly poke at for a second as you said the one thing that

00:16:35.960 we were successful on was the vaccine and i think it's important to determine what we was there because

00:16:41.700 what we was was the uh was really in many ways you know it's funny to put this way the private sector

00:16:46.840 or technology you know biotechnology and the state mostly got out of the way and you know they you

00:16:52.220 know it wasn't the fda that was developing the vaccine per se they were sort of forced to get out of

00:16:56.240 way of blocking it you know yeah so so i think broadly speaking what we're talking about is a

00:17:02.560 decline in american state capacity and what's interesting is this is mirrored on the other

00:17:07.560 side of the world in china and actually this is surprising very surprising to me to a lesser extent

00:17:14.140 but a real extent in india both china and india have had a rise in state capacity over this period

00:17:19.280 and you know the chinese story is well understood you know they've they've built all this stuff and

00:17:24.440 you know there's a lot of a lot of negative things that i can and will say about china but

00:17:28.980 it's also important to understand the things that they are doing that are unambiguously like

00:17:34.300 impressive right you know the build out so they have risen in state capacity and india actually also

00:17:40.400 has where uh for example do you know what india stack is no okay so there's an article you might

00:17:46.180 want to google it's called uh the internet country i think it's tiger feathers.substack.com i believe

00:17:51.100 that's right and it basically just kind of describes how sort of out of the global eye

00:17:56.840 india's built national identity and payments and so on apis for a billion citizens okay and

00:18:04.580 they're not as good necessarily i would argue as the chinese versions but they exist and that's

00:18:10.840 incredibly impressive and that you know and are in some ways they're better because they're public

00:18:15.940 as opposed to sort of the wechat ish you know private versions i'm not beating them up but

00:18:19.780 india stack guys are probably probably will listen to this it's actually quite quite impressive that

00:18:24.700 you could do something like that for india which did not have a functional public sector for many

00:18:29.280 years and on the uh you know moreover like 4g lte uh they they have uh they've done something

00:18:35.260 there's or not there's a project there a private project called reliance geo which has given

00:18:39.760 wireless internet to hundreds of millions of people so basically on the other side of the world

00:18:45.100 we're seeing essentially something where the winners of the 20th century right the u.s and

00:18:50.860 western europe have gotten like you know one way of thinking about it is civilizational diabetes

00:18:55.740 you know so fat and happy at the end of history that they had to sort of invent internal conflicts

00:19:02.000 and drama to make things meaningful again and now they have you know they've you know to the they've

00:19:07.000 set a fire and they're burning down the house that's one perspective on i think there's others

00:19:10.380 there's a technological one but the the other part of it is on the other side of the world

00:19:14.380 you know the indians and chinese that sat out the 20th century are going to be extremely important

00:19:21.020 players in the 21st and right now in 2020 you know there's sort of this uh overdue american you know

00:19:29.300 cross-partisan like understanding that whoa this china thing it's actually become a big deal but i think

00:19:35.940 the realization in 2030 is going to be that india is actually also a big deal because india is actually

00:19:40.620 on an amazing growth trajectory right now that's not being reported on it

00:19:44.380 you know there is an interesting aspect where thanks the vagaries of history you know there are

00:19:51.140 now millions of english-speaking indians who are broadly west aligned and uh you know of course

00:19:57.660 you know part of what the chinese use is their justification for being anti-west are you know

00:20:04.660 the opium wars and you know the boxer rebellion and these are things you know actually adam twos who i

00:20:10.020 don't agree on many things with and is actually in some ways communist sympathetic wrote a pretty

00:20:14.820 good history of kind of china in you know i think the new statesman recently that's worth browsing for

00:20:20.780 people because you know most most folks very few americans i speak to have any idea of how china got rich

00:20:28.580 for example or you know how you know like like india's rise in state capacity it's just a complete

00:20:33.780 nullity you know and this is kind of related to you know the some of the phenomena that you mentioned

00:20:39.600 which is you know pre-2016 there is there is an american internationalism and of course it'd been

00:20:46.180 declining before then but you know reflected let's say george hw bush or the sort of democrat with a

00:20:53.660 broad view of the world is both on the republican and the democrat side of sort of understanding other

00:20:59.900 countries you know and understanding the other guy's point of view and overseas right it wasn't you know

00:21:05.580 trumpian chest thumping but it also wasn't you know sort of this woke narcissism which you know is this

00:21:14.300 is also narcissistic and inward looking in its own way right um it pretends to be really tolerant and

00:21:20.300 universal but assumes that everybody is basically you know has has the the values of a oberlin 2021 graduate

00:21:27.840 or whatever right and so because of that there's actually very little surprisingly hard news about

00:21:33.560 other countries it's just you know are they good are they bad you know these these basic facts have

00:21:39.680 simply not been communicated you know yeah anyway okay so coming back up the stack so the point basically

00:21:45.880 being that the i think in many ways the 21st century it's just for some angles which the 21st century is

00:21:53.900 a mirror of the 20th one of them is that you know if it was about like a capitalist west and a socialist

00:22:03.160 east it's sort of reversing you know where you know now in many ways like um you could say the new

00:22:11.160 political spectrum of the world is something where the u.s is at the left right basically europe is

00:22:19.060 center left india israel uh you know like their center right and china is far right and the spectrum

00:22:27.300 i would put there is ethno-masochist left to ethno-nationalist right and in the center would

00:22:34.480 be pseudonymity and that's crypto should i elaborate on that yeah i want to get into crypto let's keep

00:22:41.680 talking about the problem and then because crypto i know is a big part of the solution as you see sure

00:22:45.940 sure sure okay so but i'll describe the spectrum for a second basically um you know during the cold

00:22:52.040 war the first cold war you know you roughly had the u.s on the capitalist right and then europe was

00:22:57.840 on the like you know call it i don't know center right at least the u.s was the right pole of

00:23:02.400 capitalism and then you had a bunch of countries in the center maybe the third world that were like

00:23:07.520 kind of non-aligned and then you had you know there and some of them actually you could call them

00:23:12.800 the center left as well because they were soviet sympathetic but they weren't fielding troops

00:23:15.940 then you had the far left which is the ussr and the soviet bloc and whatnot right and in many ways

00:23:21.000 that spectrum is sort of flipped where you know eastern europe would be considered to the right of

00:23:26.080 the u.s in many ways the vice grad countries not necessarily i'm not saying this is good or bad i'm

00:23:29.800 just saying you know it's like flipped right china is certainly to the ethno-nationalist right their

00:23:34.800 their belief is china is the best and whereas the u.s is like you know the ethno-masochist

00:23:39.900 left where you know the the statement is that you know basically whites are the worst and

00:23:45.400 you know that's what's funny is it flips around into its own kind of supremacism you know where

00:23:51.120 once you've given yourself license to hate you know to send white people to the back of line for

00:23:55.940 vaccines rather than people of another color right which is actually policy in some states if you saw

00:24:00.440 that it's its own form of sort of racial obsession and um so in that way like this the spectrum of the

00:24:07.140 20th century has flipped around and in another way it's also flipping which is that i think of

00:24:13.520 the 20th century is the centralized century and a large part of what happened this is by the way

00:24:20.720 there's a book that's really worth reading have you ever heard the book the sovereign individual

00:24:24.140 yeah i haven't read it though okay so very worth reading you know it's on kindle your audience might

00:24:29.480 might want to read it i think it is an important book to understand where we're coming from where we're

00:24:33.600 going it actually holds up very well despite being written about 20 years ago but briefly speaking

00:24:39.360 one way of thinking about you know the time period from you know you could say from 1492 or you know

00:24:47.020 depending on how far back you put it up till about 1950 is that technology favored centralization

00:24:52.560 and that meant you know for example the centralized union won over the confederate states

00:24:59.040 you had uh mass media and mass production you had you know by 1950 you had peak centralization which

00:25:06.460 was you know one telephone company which is at&t and two superpowers us and ussr and three television

00:25:12.600 stations abc cbs nbc and all kinds of diversity all kinds of you know intellectual diversity schools

00:25:20.280 of thought all these kind of funny princes and principalities all of that was crushed and you know

00:25:26.440 you had these giant homogenous masses by 1950 right which were sort of controlled by and you know

00:25:33.280 antenna towers broadcast towers and people couldn't really talk to each other very easily because it was

00:25:37.940 capital expensive to go and set up a television station or a factory or something like that right

00:25:43.380 and uh this is also reflected in sort of the political organization where you had these gigantic

00:25:48.400 polities you know you had the us and you had the ussr and you had china and you know

00:25:52.920 basically it was just like these geiga states you know slugging it out and the ideologies were

00:25:58.060 adapted for the technology there were ideologies of you know mass media and mass control and you

00:26:02.800 know a huge number of nazis and communists and then fortunately democratic capitalists as you know

00:26:07.680 basically the three factions okay and uh so then what you see though going from 1950 to the present day

00:26:14.060 with the invention of the transistor things start things start changing and i wrote an essay on this

00:26:20.220 or gave an interview rather at uh satonya s-o-t-o-n-y-e dot substack.com um i gave an

00:26:28.180 interview with with him where i talk about this uh in a little more detail but basically you know from

00:26:34.480 1947 to the present day you have the transistor you have the personal computer you have the internet

00:26:38.740 you have remote work you have smart smartphone you have cryptocurrency these are all decentralizing

00:26:43.980 right and because of that institutions that were set up during the centralizing era are out of their

00:26:52.400 depth and you know basically the entire regulatory state that fdr set up in the 1930s which you can

00:26:59.400 think of as sort of the last major tectonic plate moving of the u.s right like the u.s government

00:27:04.440 arguably dates back to that um and the reason i say that is so many aspects of the constitution

00:27:10.420 other things were sort of overturned during fdr's reign like the 10th amendment the idea that you

00:27:15.960 know states basically can do anything that isn't the the federal government doesn't explicitly have

00:27:22.400 that's that was basically a non became a became a non-issue or a dead letter during fdr's reign right

00:27:29.400 and you know one way of thinking about it by the way is uh fdr was a dictator who ruled till he died

00:27:34.260 okay now you know it's funny to put it that way right but basically notice the economy started picking

00:27:39.640 up a few years after he he left and you know he had done all this stuff like naira like the you know

00:27:45.200 the national um industrial recovery act and you know he tried to pack the courts and you know there

00:27:50.880 was the uh the poultry case uh you know schecter poultry company i believe where you know he tried

00:27:56.280 to get them like to kill chickens if i'm if i'm not mistaken he actually did a lot of things that various

00:28:01.220 dictators would would do uh you know he didn't put well i shouldn't say he didn't put people in camps he

00:28:07.100 did um you know which was the japanese internment it wasn't as bad as um you know the the other

00:28:13.560 countries but essentially what was happening was there was uh you know nor near as bad obviously

00:28:17.980 but you know essentially what's happening there's a pressure for centralization you saw similar things

00:28:23.000 happening around the world and the us was just like the least bad of them there were enormous

00:28:28.220 reasons both ideological and technological for the formation of these centralized states and i think

00:28:34.100 of the technology as being upstream of it you know how like there's a sort of common thing that says

00:28:38.420 you know culture is upstream of politics you've heard that before yeah right and that's true but

00:28:44.880 technology is upstream of both them technology influences you know there's a different view

00:28:50.160 which says technology is the driving force of history and every ideology has been out there for

00:28:54.940 all time they're just way you know around in the matrix but technology determines which of them are

00:28:59.380 feasible and infeasible by parts okay so are you are you arguing that the that centralization itself

00:29:05.580 was not the problem is that we had a centralized system of of authorities that became incompatible

00:29:12.440 with the prevailing technology yes exactly right so with india and china they had sort of refounding

00:29:18.880 moments right india you know china was sort of refounded in 1978 under ding xiaping india in 1991

00:29:25.560 so still young enough as states to sort of ride the decentralization curve which was in apparent like

00:29:34.180 basically they were refounded on capitalism you know which is part of the sort of latter half 20th

00:29:39.860 century trend away from centralization right and so they you know for all their many flaws many many

00:29:45.880 many flaws they're sort of riding the right wave of decentralization now there's many asterisks and

00:29:53.320 reversals and things you can put on this because of course china's built this gigantic surveillance

00:29:57.480 state and india's built a centralized you know payment stack and so on but and i'll get to that

00:30:03.340 but even with those sort of reversals and you know things overall they were sort of founded or

00:30:10.280 refounded in the decentralized era and they're sort of riding that wave to a better extent than the

00:30:16.160 modern us which was set up pre you know like like 1950 right like in the 1930s it's about 50 to 60

00:30:24.020 years older let me illustrate what i mean when i say fdr's regulatory state was set up for the

00:30:29.120 centralized world so you know the fda for example it's set up to go and regulate merck and pfizer

00:30:36.440 right not a million people doing personal genomics the faa is set up to go after boeing and airbus

00:30:43.960 not a million drone hobbyists right the sec is set up to go and regulate you know goldman and morgan

00:30:51.460 and you know the nice and nasdaq not millions and millions of crypto people trading at home

00:30:57.400 right the presumption is that you can have this tla this three-letter agency that pulls the ceos of

00:31:05.780 the major things in the room and jawbones them and says this is the way it's going to be

00:31:09.180 and that's sufficient there's two reasons for that first is you know the it's sort of easier

00:31:15.200 to have the points of control be corporations that the regular story state can kind of give

00:31:19.240 instructions to to do x y and z as opposed to individuals but second and much more subtly but

00:31:23.700 very importantly there's a book called reputation and power by daniel carpenter and he is you know fda

00:31:30.420 sympathetic um it's a good it's a good book though because he is honest enough to actually give first

00:31:36.080 party testimony of the executives who are regulated by fda and their testimony is similar to that of

00:31:42.060 like uh somebody who's like a captor you know captive of a vietnamese you know torturer during

00:31:48.460 during you know the uh the 70s and you know they'd be blinking you know i'm being tortured even if

00:31:54.980 they're forced to say something you know positive right so these executives you know are basically

00:32:00.800 blinking i'm being tortured and some of them are saying it outright and then daniel carpenter kind of

00:32:05.260 says like but they were of course exaggerating you know but he includes the quotes from them right

00:32:09.640 and so the thing is that the the fda was kind of you know for many years used to being able to

00:32:16.000 torture these executives for for various reasons one of the most important is that companies are

00:32:21.860 unsympathetic right this is a big bad corporation obviously it's trying to cheat you you know we have

00:32:27.940 seen thousands and thousands countless numbers of movies and you know books and so on where the

00:32:34.680 villain is some mega corporation right i mean think of how many movies you've seen where that's the

00:32:39.660 plot the reveal at the end is that was an evil greedy mega corporation that you know turned the

00:32:44.840 mutants loose or something like that right yeah but but villains aside we we have to confront this

00:32:49.520 problem of bad incentives and the negative the negative externalities of people's greedy quote

00:32:56.520 greedy profit motive i agree i totally agree with that i totally agree with that and i'm not i'm not

00:33:00.480 somebody who is against regulation writ large i just think that the current regulators like you can go

00:33:06.900 from nation state regulators to cloud regulators and actually achieve a better result a very obvious

00:33:12.240 version of that is all right and you might disagree this but i think it's true is for example the

00:33:18.040 transition from taxi regulations where you have a rare medallion inspection maybe every six months

00:33:26.780 there's a cozy relationship between the taxi drivers the union and the taxi regulators and the the

00:33:33.760 customers of those taxis they don't put in any star reviews or anything like that and then you move to

00:33:38.940 an environment where every ride is gps tracked uh driver knows that the rider can provide payment

00:33:44.380 uh rider knows the driver is being rated and can be decommissioned you have real-time star rings and

00:33:49.280 reviews on both sides you know there's a uniformity of service to some extent and so on and so forth

00:33:53.880 like uber and lyft are not just better you know like taxis they're better taxi regulators and this

00:34:01.340 is actually a broader concept if you think about it what is paypal doing what is ebay doing what is

00:34:06.060 amazon doing what is apple doing what is google doing these are all actually all cloud regulators

00:34:10.580 for a significant part of their business where you know apple provides but what do i mean by regulation

00:34:16.480 there i mean star star uh reviews right basically ratings of you know actors and then bands of bad

00:34:24.700 actors right so you're doing quality scores and bands of bad actors those are the two components

00:34:28.600 of regulation or regulated marketplace the distinction is in the first you're giving like

00:34:32.780 a star rating one to five like this is good or bad and the second you're identifying an actually

00:34:37.140 fraudulent actor who you know is not incompetent not a one-star actor they're a zero-star actor okay

00:34:42.340 and so it's a currency of it's a reputational currency and and a level of transparency that is

00:34:49.020 causing yes what otherwise would be a trustless situation uh it's allowing for something like trust

00:34:56.240 exactly that's right so the the subtlety is not that we are against all regulation it's that we are

00:35:05.160 against this technologically inferior form of regulation based on paper and

00:35:12.340 based on these 20th century obsolete processes when you can do it way better you know like why

00:35:19.100 lots of people use amazon why just to look at the start ratings of products right they have built a

00:35:24.340 sophisticated regulatory system that is better than you know the ftc or the bbb or anything like that

00:35:31.500 which is you know on its back foot except when you go to when you have to buy batteries on amazon i

00:35:36.180 don't know if you've noticed that but everything is awful everything is none of the batteries were real

00:35:40.900 these are chinese fakes the cap right right so the counter argument is now people have learned to

00:35:46.940 game some of those things okay and i would agree with that that some of those reviews online can be

00:35:51.640 gamed because there's a huge financial incentive to do so and then i think we're going to see the next

00:35:56.220 generation of crypto reviews which make it harder to game where you have proof of human and you have

00:36:01.880 web of trust and you have so on and so forth but i think broadly speaking being able to get a

00:36:07.940 product review for anything under the sun for free in seconds is superior to the you know 1980s or

00:36:15.680 1990s environment where one could not do that okay but if we if we revert back to the fda for a moment

00:36:21.060 yes popping back up so just to close up just a question i think many people would consider it a

00:36:27.540 problem even a looming one that the fda is not built to regulate the true democratization of

00:36:36.800 crispr technology say or sure the desktop manipulation of novel viruses right and the fact

00:36:45.800 that it's not built to handle that is one problem the other problem is it's nowhere written that the

00:36:54.260 ongoing survival of our species is compatible with the true democratization of that tech right it's like

00:37:01.060 some tech just shouldn't be spread right and and we need something like the fda to put its foot down

00:37:08.440 now if it may be incapable of doing that or we'll do it too late or maybe it's not even possible given

00:37:15.100 just the nature of the spread of technology but it's not intuitive to many people that the solution

00:37:20.720 here is necessarily to ride this curve of decentralization down to you know truly peer-to-peer

00:37:29.520 free-for-all so you raise an important point and basically i think it's something where

00:37:37.080 we're going to a very high variance world because the fda is also stopping life extension and stopping

00:37:45.460 anti-aging and stopping reversing of aging um for many different reasons but you know the the

00:37:51.140 bureaucratic roadblocks that it puts in place the idea that everything has to be sort of forced into the

00:37:55.080 new drug application you know format you know all of that is something which is also preventing people

00:38:00.680 from living forever and when i say living forever i mean at a minimum reversing aging you can demonstrate

00:38:06.740 that that lab david sinclair has written about this there's long you know books on this but no but why

00:38:11.240 would that be the case because again this is just a first principles intuition but there should be a

00:38:16.940 massive incentive let me take one component of life extension so someone there's some path by which

00:38:22.520 we're going to cure alzheimer's right there's so much money to be made in a cure for alzheimer's there's so

00:38:30.520 much money being spent in the in trying to mitigate the appalling suffering due to alzheimer's why would

00:38:37.540 the fda in any way stand in the way of that progress excellent question so this actually gets back to the

00:38:43.980 so i'll give a couple of concrete examples which are observable variables right do you recall how

00:38:48.560 the fda basically with the johnson johnson vaccine despite extreme large-scale benefit from having it

00:38:54.940 out there went and amplified these very rare edge cases and used it to yank the vaccine causing people

00:39:01.620 to in part become vaccine uh skeptical or or whatever you want to call it remember that a few months ago

00:39:07.360 yeah i mean around uh thrombosis issues yeah thrombosis is a very rare edge case yeah but

00:39:15.300 basically they're not optimized for making the correct trade-off between type one and type two

00:39:20.500 errors all right another example that's even more egregious was last february the fda was you know and

00:39:27.320 by the way you know when you say the fda the fda is made of institutions and those institutions are made

00:39:31.320 of people right so you know jeffrey shuren at cdrh is actually like it's funny how it's always reported

00:39:37.640 as like this abstract thing as opposed to a guy right isn't that interesting right because the

00:39:42.780 reporting doesn't actually people but by reporting as an abstract institution it makes it seem like

00:39:46.600 nobody was making a decision when you report the person right so crh is run by a guy jeffrey shuren

00:39:51.000 and last february there was a decision that was made basically to make it very hard for people to run

00:39:58.700 diagnostics on the novel coronavirus that is to say they weren't actually given an emergency use

00:40:05.220 authorization that was that was really appalling yeah yes but it was critical because during those

00:40:12.380 critical few weeks the information supply chain was messed up that's to say the state was inhibiting

00:40:19.160 decentralized testing for the novel coronavirus um until the seattle flu study i believe literally just

00:40:26.800 did civil disobedience broke the law tested for the coronavirus yeah um using you know the tools

00:40:33.100 they had even if they didn't have the respective certificates and you know in that unusual situation

00:40:38.380 what happened was the new york times company sort of you know retroactively blessed their civil

00:40:43.020 disobedience because you can bless civil disobedience as good or as bad based on that holy writ right

00:40:48.040 and by kind of writing an article where they said that this was good that indicated to the fda that

00:40:53.180 they couldn't go and enforce on them and beat them up later that actually the fda was wrong they were

00:40:57.060 you know the the journalist was the adjudicator in that scenario which i'll come back to but now

00:41:01.120 wouldn't you ascribe this more generally just to the dynamics of bureaucracy and the principle of

00:41:08.560 it's um you're not going to get fired for the good thing that didn't happen that nobody on your watch

00:41:15.320 that nobody knows about but you will get fired for the terrible thing that happened so there's just a

00:41:19.820 risk aversion built in you know or or a loss aversion i mean it's a loss loss aversion built

00:41:25.220 into the human psyche but there there may be even greater principle of loss aversion built into

00:41:31.200 bureaucracies well yeah but basically one way of thinking about it is you've seen a thousand movies

00:41:38.180 on evil capitalists you have lots of different you know you also seen movies where the police go bad

00:41:44.500 and so on and so forth so you have that mental model of greed is what makes them go bad okay just in a

00:41:49.020 sentence what makes a regulator go bad in the current environment i guess overzealous regulation

00:41:54.340 in a time of emergency yeah so you could you could call it power okay yeah that's their failure mode

00:42:00.240 yeah right and if the if the ceo's you know like failure mode is too much profit the regulator seeks

00:42:07.260 too much ambit you know ambit like too much also just territory following the letter of the rule

00:42:13.620 when obviously a life-saving exception is warranted i mean there's no there's it's the rigidity problem

00:42:20.000 and there's just no flexibility to intelligently respond to the moment they're conscious of that

00:42:25.240 so when they choose to be they can be flexible right it's really about power for them that's why you

00:42:31.020 should read the book reputation and power by carpenter like we're familiar with this let me give an

00:42:36.660 example which is more familiar to people because most people have not actually encountered the fda so you

00:42:40.520 only know about them through what you read right right and you know everything that one has not

00:42:45.360 sensed directly you know one has not actually acquired information on ideally tables of data that

00:42:50.960 you kind of systematically correct but at least personal experience you you're in you're vulnerable

00:42:55.400 to the intermediate the media corporation or media entity that is reporting on them because they can

00:43:00.240 be a very noisy camera they can distort what's on the other side it's a noisy sensor you have to kind of

00:43:05.100 go back to to sensors okay so let me go to something which we definitely have interactive

00:43:10.020 which is a tsa right yeah so with with the tsa okay back when we were all flying much more but you

00:43:16.300 know let's say warp yourself back to 2019 okay and uh the tsa basically you you walk up to you know the

00:43:23.780 airport and what do you do you don't make any jokes in the line okay when you're being uh you know

00:43:30.020 forced to take out three ounce bottles you know there's this new terrorist technology called

00:43:35.080 mixing that can take two three ounce bottles and mix them into a six ounce bottle it's the most

00:43:39.640 insane and illogical regulation in the world that one alone that take off our shoes and kind of go

00:43:44.900 through this you know metal detector or the the the actual like this the sort of somewhat radiative

00:43:50.560 scanner i forget that exact name for it and you you don't make any jokes you don't talk about how

00:43:56.440 ludicrous you know anything is uh you just kind of comply and get on the plane why because if you

00:44:01.900 were to make a fuss well you might suffer what's called a retaliatory wait time where you're forced

00:44:07.800 to go and sit in the corner you know and they ask you a bunch of questions and you miss your flight and

00:44:11.980 the cost of that a few hundred dollars and you know the opportunity on the other side is not worth it

00:44:17.180 to you so you just sort of quietly comply with these illogical regulations um until you deplane on the

00:44:24.240 other side and you leave and the thing is it's a cost that is imposed on literally millions of people

00:44:29.300 every day for 20 years so the cost is in the many incalculable billions of dollars but you remind me

00:44:36.760 of the time when i came back from india with a um long hair and uh probably wearing korta pajamas and

00:44:44.320 uh at that point a fairly long established commitment to not lying under any circumstance and

00:44:50.900 when asked by customs whether i had used any drugs overseas i said yes yeah definitely and and uh

00:44:57.260 the custom officials eyebrows rose to the back of his head and he said well what drugs did you use i

00:45:02.680 said well i took acid in nepal and i um smoked some opium in in india then i could i could see you

00:45:10.720 know the full table of guys preparing to search my bags down to the last molecule i i hope i hope you

00:45:16.880 got to the airport very early yeah this was on my return so i just had to get out of there without

00:45:21.680 being strip searched but well to that point though basically you know if you look at how the tsa

00:45:27.240 justifies themselves say it's all about the guns and the drugs that they've seized and of course if

00:45:31.880 you repeal the fourth amendment you will search everybody and you'll find some bad guys hey look

00:45:37.300 at this look at this table of all these guns and knives and drugs and so on we found you you know but

00:45:41.800 the the thing is that you know what is not seen it's a bust yet seen and unseen is the is the not

00:45:48.640 just the economic loss the loss of privacy and all of the abuses of that system and you know more to

00:45:54.520 the point the initial raison d'etre like stopping terrorism people have done things like sanctioned

00:45:59.360 tests where they try to get things on a plane and like fool the tsa and it's like this very high

00:46:04.200 percentage chance that you can fool them yeah okay and uh moreover by the way something the fda did

00:46:09.660 fast track through were those uh detectors right so basically i think back in 2010 like you know

00:46:16.380 ours technica had a long article on this if i can find it backscatter x-ray detectors that you uh

00:46:23.140 yeah exactly the body scanners there were yeah professors who wrote in on the safety of these things

00:46:28.500 right um and wrote a letter and because see the thing is the fda's mentality the mentality of these

00:46:34.740 these agencies is if it's a dot com it's evil because it's for a profit if it is a dot org it's

00:46:42.860 good because it's not for profit if it's a dot gov it's a sister agency so it's not for profit and so

00:46:48.920 we should let it on through and approve it and if it's a dot mil well uh they're not exactly the same

00:46:53.720 culture but at least they're not for profit so we'll wave it on through right and essentially when

00:46:59.200 it's tsa.gov to fda.gov you know basically they were given the benefit of the doubt and so what's

00:47:05.880 happened is the fda waved through these body scanners that are irradiating all these people

00:47:10.020 and we'll see what the long-term health effects of those are but it's not obvious that they actually

00:47:15.340 do anything relative to you know the israeli style of actually looking for the person as opposed to the

00:47:21.440 object you know and uh you know israeli style has you know its own merits and and demerits but

00:47:28.200 israeli you know airport security is focused on who could actually be a terrorist yeah and you know

00:47:33.800 the the american is very much not it's try it tries to enforce a sort of egalitarian thing that irradiates

00:47:39.700 everybody you know equally right well listen you're talking to someone who once wrote an article in

00:47:45.220 favor of profiling at the tsa yeah so i mean the issue is you can imagine how comfortable

00:47:51.260 the aftermath was on social media right right right so look you know the problem basically is that if

00:47:58.080 you know any kind of you know profiling itself has gotten a bad rap but any kind of

00:48:03.220 pummeled right like human intelligence you know where you're actually looking at the person as opposed

00:48:09.360 to the process has been made you know kind of like like a taboo thing to even think about and so the

00:48:16.360 result is that everybody is not just inconvenienced the the process supposed to detect you know quote

00:48:22.780 terrorism doesn't even work right so it's just this giant tax on society where people terrorists could

00:48:28.000 actually get past the tsa okay so what's my point though um and as as evidence by those tests if you

00:48:33.380 need evidence that show that people could get past it right so the thing has type one errors it has type

00:48:38.640 two errors it's not actually set up to be what you want which is sort of a metal detector for

00:48:43.600 terrorists not a metal detector for objects you know um you want like a like a scintillation detector

00:48:48.380 like something that's detecting this extremely rare event of an actual terrorist right and you know

00:48:53.640 the the thing is that despite this complete irrationality despite the enormous destruction of value

00:48:59.100 despite the fact by the way that many well-heeled executives and politicians and so on must submit

00:49:04.200 to this we're in a bad equilibrium where to talk about abolishing the tsa you know would be oh my god

00:49:10.540 you know you can't possibly do that right and it's a very hard thing to change are you saying we have

00:49:14.800 something like so people are familiar with the concept of security theater at the tsa so we have

00:49:20.940 something like regulatory theater elsewhere in the government including the fda exactly and the

00:49:26.980 difference is that with the tsa you know why don't you say anything because there's retaliatory wait

00:49:31.860 time right you can complain after you get out right but if you're fda regulated or fa regulated or

00:49:37.120 sec regulated or something like that you know especially fda but you know you you enter this

00:49:42.640 dark tunnel at the time that you start a company and then you're beaten with truncheons through the

00:49:47.900 duration and you can't say anything because to say anything is to invite total destruction of your

00:49:54.360 company because you can just be you know passive aggressively shunted to the back of the line with

00:50:00.120 infinite dials until your venture backing runs out and then you're throttled to death and when you fail

00:50:05.240 in such a way it looks like you just sucked right it looks like oh yeah your thing couldn't pass fda

00:50:11.260 clearance and so that's why you you've got sour grapes but are you arguing that we actually don't

00:50:16.620 want an fda because i i want a tsa right i mean like i want a tsa that functions rationally so this

00:50:23.760 gets to my point of i think you can build something much better okay and just as an example let's take

00:50:29.600 post-market surveillance which is phase four okay so why can you not take your phone scan a barcode

00:50:35.760 of a drug at the store and see every single review that anybody's ever had of that drug right ideally

00:50:44.420 linked to their personal genomics and ideally linked to yours so if you have aa you know at this spot and

00:50:50.880 and you can actually see meaning sorry it's a technical point if you have a genetic variant

00:50:56.220 of a particular kind you can see a table which shows everybody else who has the genetic variant

00:51:01.520 and then what they you know reported was it a five star or one star for this drug you know basically

00:51:06.940 you could see the pharmacogenomics in real time right but short of that integration with the full

00:51:11.520 genome sequencing of the entire population what you have is something like the vares database which now

00:51:18.180 is being gamed by anti-vaxxers who are reporting that you know our covid vaccines are killing them

00:51:23.000 by the way so by the way the the high level thing here is what you're identifying is something true

00:51:29.960 and important which is that the internet means more variance more upside and more downside right more

00:51:36.760 highs and more lows right and so on almost any issue we can identify a downward deviation we can

00:51:43.500 identify q anon right but we can also identify often an upward deviation we can identify satoshi anon

00:51:49.300 right and you know so so to your point yes there's going to be people who come up with crackpot you

00:51:55.720 know medical maybe maybe just drop the two sentence explanation of of who satoshi is because i guess

00:52:03.280 most people know it but not everyone sure satoshi anon but i'm just kind of it's like a funny way of

00:52:08.740 referring to it as parallel to q anon satoshi anon uh meaning satoshi nakamoto was the pseudonymous

00:52:14.620 programmer that created bitcoin and then disappeared right and we know he existed because there's you

00:52:20.060 know like a lot of contemporary evidence and people who spoke to him electronically but he maintained

00:52:24.620 perfect operational security was able to develop something that has changed the world and you know

00:52:29.900 created trillions of dollars in wealth and you know is the subject of every you know banker and you

00:52:35.440 know financier and uh you know government that you know they care about right so that was something

00:52:39.900 where you know is a very different anonymous online kind of thing another one by the way was the the

00:52:45.540 lab leak theory last year there's a website called i think project evidence.github.io and what that is

00:52:53.440 is basically a compilation of all the evidence for the lab leak i think last april and uh you know took

00:52:59.320 about a year before that bubbled to the mainstream but the critical thing it was pseudonymous global

00:53:03.440 scientific publication and in a sense we're going back to the future because newton and others used to do

00:53:08.000 this used to publish something where it was under a pseudonym so people would sort of have to go

00:53:12.260 after the ideas rather than the person you know and so we're sort of back to that future and so that

00:53:18.680 there's there's an upside as well to like anonymous internet stuff not just a downside so coming back to

00:53:23.840 your point and we're like several things down the stack will pop back up right but absolutely i think

00:53:29.680 it's naive to say no fda right it's sort of like you know ron paul saying end the fed i'm actually

00:53:36.080 sympathetic to that in some ways because you know like the fed prints all this money and so on and so

00:53:41.680 forth but i'm a pragmatist as opposed to a doctrinaire libertarian and you know the problem with let's

00:53:48.460 say ending the fed or ending the fda is they're the center they're the hub at the center of like

00:53:53.720 millions of spokes the entire system is built around them you know like

00:53:58.880 to an in like incomprehensible extent you know every wire transfer you know is you know it's

00:54:06.080 ultimately linked to like fed wire or something regulated by it and you know every single biotech

00:54:11.320 company drug company device company has something pending with the fda might use an fda database it's

00:54:16.160 not like they do zero things of value um they do a fair amount and and so just simply having that be

00:54:22.020 a black hole is so impractical as to be laughable and so you can't really say end the fed or end the

00:54:28.760 fda that's like you know what people will hear sometimes but that i don't think is practical what

00:54:33.460 you can do however and this is very important is you can exit the fed exit the fda and what that means

00:54:39.140 is figuring out a way uh which is non-trivial to build a different system in parallel and have that

00:54:48.420 be buggy and incomplete and risky to use at the beginning such that only early adopters are in

00:54:56.020 but over time it proves itself out and handles more and more and more of the criticisms and the v2 and

00:55:03.220 the v3 and the v4 and the v10 and so on ship over years and decades and then eventually it can stand up

00:55:09.700 and take over from the the previous entity okay so we're actually doing that that's what bitcoin was

00:55:15.080 right bitcoin inverted the premises of the financial system satoshi he said hey actually yes deflation

00:55:23.080 is good gold is good user level custody of your own keys is good as opposed to having a bank custody

00:55:28.600 for you and so on and so forth and he flipped the premises and by flipping the premises he put the ball

00:55:32.840 at the hundred yard line and a completely different system with different axioms was built up from

00:55:37.480 that and that system has proven to be superior to one that was just edits around the current system

00:55:45.080 right edits around the current system get you dodd frank edits around the current system get you

00:55:49.640 you know what happened in the you know the aftermath of the financial crisis you know how they regulated

00:55:54.520 the banks by banning competition entirely no new bank charters were issued for almost a decade

00:55:59.400 okay so it was you know i mentioned this a priest it was a coronation disguised as regulation

00:56:05.360 where you know essentially they're like oh you're so bad let's ban all your competitors

00:56:10.720 and enshrine you in law as the monopoly providers for eternity this by the way is a fundamental thing

00:56:16.120 is a lot of people think that regulation is like against big companies it's actually for them

00:56:20.560 and it's a way of locking them in place and setting up barriers like all this antitrust stuff and so on

00:56:25.840 against facebook and google is ultimately something that's meant to make them fuse with the state

00:56:30.200 and you know i say meant to you know let's say that is the emergent effect it's not like they're going to

00:56:35.720 shut down google search or facebook what they're going to do is uh a set up regulatory barriers to

00:56:41.520 any competitor and b have a direct backlink you know or you know backhaul connection to the nsa so

00:56:48.240 they can hoover up all the data the national security state will get every single thing they want

00:56:51.400 as part of any settlement you know all the the problems they've had with google or facebook

00:56:56.260 executives resisting them since the snow and revelations in 2013 will all go away so they'll get

00:57:00.720 like this sort of pure link the only way to actually compete with that is not by regulating them

00:57:05.360 but by having a bunch of startup piranhas and decentralized competitors go and devour them and

00:57:10.380 build something better and that's coming back to this point we understand that in the context of a

00:57:15.700 company that you can have a startup that starts out with nothing and it is but but you might have

00:57:23.260 100 of these startups by the way and 99 of them fail it's actually not that high a failure rate but

00:57:27.600 let's just say 90 of them fail but one of them has the right ideas and it gains strength over time

00:57:33.340 and it reforms the existing incumbent right we understand that's a legitimate way of doing

00:57:38.360 things for companies yes yeah i mean it seems like we're in a situation where it's not always

00:57:43.060 possible i mean that hence antitrust well so i mean but the thing is that what's interesting is

00:57:47.540 there's so many folks who are chewing at pieces of google and facebook like from the tech standpoint

00:57:54.100 right from the vc standpoint it is very much not obvious that antitrust is necessary or useful

00:57:59.980 to disrupt antitrust is ostensibly pro-competition but really it's pro-power

00:58:04.740 they say like the people who are interested in this kind of thing are not the people who have

00:58:09.640 actually built companies that have been such a disruptive threat to these incumbents they've had

00:58:14.640 to pay billions of dollars for them you know for just to just hover on this i know we're kind of

00:58:18.900 going all the way down the stack and we'll come back up okay but you know one meme out there was

00:58:24.800 oh you know we need to regulate these big companies to stop them from buying up all their competitors

00:58:29.720 like instagram and you know so on to because they're too you know they have too much money to

00:58:35.020 stop the competition now the thing is that zuck's acquisition of instagram was something where like

00:58:41.080 a billion dollars at the time was like a quarter of the cash on hand it was a few weeks before the

00:58:45.160 ipo instagram had zero revenue instagram was valued at 500 million dollars a few days before he

00:58:50.040 valued at a billion he didn't even get the boards like you know sign off on it he had to do it

00:58:54.980 himself and john stewart at the time mocked it and he said oh instagram well the only thing that's

00:59:00.440 worth a billion dollars for an instagram would be something that instantly gets me a gram haha of

00:59:04.700 cocaine right so so it's mocked and derided at the time it was actually like an extreme you know

00:59:10.440 extremely non-consensus thing for him to do to buy the thing and erin thought it's a huge waste of

00:59:16.840 money and now of course 10 years later everyone's forgotten that now it looks predatory and obvious

00:59:22.060 but it was yeah exactly foresight it simply it simply wasn't and when you are next to the ceos

00:59:29.040 and the founders of these large companies the entire environment looks much more unstable than it looks

00:59:35.000 from the outside because you have disruptors coming at you i mean why did google not win with google video

00:59:40.920 because youtube was basically more risk tolerant than they were you know and so they had to actually go

00:59:46.660 and buy youtube for 1.6 bill and here's the critical thing people think well let's just stop

00:59:51.840 those big companies from buying these and these these up-and-comers because then the up-and-comers

00:59:56.980 will become successful actually no what you do is you then cut off the pipeline of the up-and-comers and

01:00:00.740 here's why as a venture capitalist when you fund a company you have a few options for an exit right

01:00:07.960 one of them yes is an ipo but one of them is an m&a and if you cut off every intervening gas station

01:00:14.940 where there's a possible fill-up it becomes less likely you reach that destination right right and

01:00:20.560 if there wasn't a youtube exit if there wasn't an instagram exit there isn't funding for every exit

01:00:25.180 like that results in funding for a thousand more competitors right and that's why we have snapchat

01:00:31.080 and that's why we have you know like discord and all these messaging apps why doesn't google run

01:00:36.140 messaging they have allo and duo these like kind of you know sorry to some of my friends there but

01:00:41.220 they had this very confused messaging strategy because they're a gigantic company that you know

01:00:45.640 can only do the things that you know they they were able to do you know 10 years ago and they

01:00:50.080 can't easily do new things and all those things are done by startups but are you denying that there's a

01:00:54.340 potential problem of monopoly that needs to be responded to i mean you seem to be mostly yes you think

01:01:00.620 there's a problem of centralization yes can't you imagine a monopolistic takeover of one sector of

01:01:05.720 the economy that needs to be uh as the same as the same goes right you know the thing about tech

01:01:10.680 monopolies is there's so many of them but like what they're not that many competitors to amazon or

01:01:15.420 facebook or google at this well so so yeah well there are actually with facebook i mean so first let me

01:01:21.320 give the sort of first order version on that and let me give the second order right where i give

01:01:25.320 something to your view okay the first order version is there are a lot of competitors to them

01:01:30.440 where you know first of all obviously there's chinese competitors but leave those aside for the

01:01:33.980 average american um do you have to buy something at amazon no you really don't there's all these

01:01:38.200 e-commerce specialty stores and stuff out there amazon is most convenient in some ways but it is

01:01:43.780 like you know if you buy if you're buying a chair you do not have to use amazon it gives you an extra

01:01:48.660 level of convenience but it's really not that much easier than you know going and buying it online

01:01:53.380 there's almost no product amazon is in a position now to if any one of those competitors really

01:01:58.060 start succeeding i think they even did this with i mean shopify is doing extremely well versus amazon

01:02:03.380 isn't there a story with diapers.com where they just said okay we're going to start selling diapers

01:02:08.740 at a loss forever predatory pricing yeah yeah and let you let us buy you for the price we think is

01:02:17.020 appropriate i mean the thing about this is like i you know i i've heard that story it may be true

01:02:23.420 and it's something which a large company can do to you but this is life in the nfl you know if you're

01:02:30.120 doing a startup you are basically going against giant companies that will do all this stuff that's

01:02:37.400 why startups are hard right the funny thing is the kind of people who say that story are also the

01:02:42.180 people who hate tech entrepreneurs typically right they're not like pro entrepreneur the kind of

01:02:47.680 person who's funding or founding a new diapers.com would be like yeah no that's a tactic they could

01:02:53.020 use they could also cut off api access they could go and muscle this or that right and the thing is

01:02:57.980 to retroactively deem that to be illegal to cut prices is um i mean this is the whole antitrust

01:03:04.080 thing like when is hard competition illegal and and so on and so forth and a lot of this stuff is just

01:03:09.340 you know deemed illegal in in retrospect right where you know the winner to win is to lose right you know

01:03:18.000 if you win in the market and you provide a better product to the customers notice by the way they're not

01:03:23.120 saying amazon was bribing they're not saying amazon was you know like like sending saboteurs in they

01:03:30.240 weren't like you know breaking the law in that sense right what they were doing was oh they were

01:03:34.880 cutting prices to give cheaper diapers to the customers of diapers.com okay well the diapers.com

01:03:40.720 customers are benefiting and amazon is like holding its breath to do that now you might say well they're

01:03:44.740 big and that's unfair and so on and so forth but like that's just like one one thousandth of what you

01:03:50.640 deal with when you're you know a tech founder going up against incumbents it's not meant to be fair

01:03:55.360 like the whole point is have you heard the term unfair advantage sure yeah like they have an unfair

01:04:00.380 advantage when you start out okay you know what's unfair what's unfair is gmail has a billion users and

01:04:05.340 your new email product has zero why don't they give you some users right that's unfair that they're

01:04:09.880 only sending gmail notifications to their users and not yours this this line of argument can be extended

01:04:14.680 to any asset that any incumbent has and it's not actually pro-founder or pro-entrepreneur because

01:04:22.800 it puts a effectively lawless state above every founder and entrepreneur where really even if that

01:04:31.060 thing is marketed as being better for customers who's actually serving the customers it's not the

01:04:35.420 government it was amazon and diapers.com laissez-nous faire you know let you know let us let us be laissez-faire

01:04:41.280 actually has has a has a logic to it where you let them slug it out in the market so long as they're

01:04:45.860 not like killing each other right so they're not doing things like sabotage or you know things like

01:04:50.620 that um and then see see where it comes out because that's actually better for customers now this is

01:04:54.640 actually related to you know i believe lena khan's whole antitrust thing was that customer harm was

01:05:01.220 insufficient as as a theory of antitrust right so they're moving away from you know customer harm and

01:05:09.360 consumer welfare to like a different kind of thing so the law is sort of being changed in a retroactive

01:05:14.640 way right so just to finish this point then let me argue the other side of it right so the key thing

01:05:20.920 here is as a venture capitalist you need to have the possibility of a hundred million and billion

01:05:26.360 dollar exit to fund the riskier 10 billion and 100 billion dollar ipo if you don't have because those

01:05:34.180 are rare right that's like you know you you need to have the possibility of singles and doubles

01:05:39.300 uh not just you know swing for the fences every single time because you'll get fewer hits right

01:05:45.420 there's there's you know and so if you cut that off what actually happens is it's not like oh there's

01:05:51.260 way more companies that go ipo it's way fewer because when you remove the deepest pocketed bidders from

01:05:56.660 the auction right when these big companies can't buy it anymore there's a whole buyer that's being taken

01:06:01.320 out from the market and that means a venture capitalist makes less money and that means there's

01:06:05.940 less money for venture capital that means there's less money for startups so the number of startups

01:06:10.000 shrinks so when you cut off acquisition you cut off the number of startups and so you actually cut

01:06:14.860 off competition to these institutions so it's it seems like a first order thing you know it's it was

01:06:21.100 compelling to some people i think it's the stupidest thing in the world if you're on the other side but

01:06:24.200 it seems some people oh if you stop the big companies from buying their competitors

01:06:27.400 then we'll have more competitors actually if you stop them from buying their competitors

01:06:30.520 they'll be far fewer because venture capitalists will fund far fewer of them right okay so now let

01:06:36.820 me argue the other point of it right which is you know glenn greenwald who you know is has uh i'm i'm

01:06:43.720 friendly with on twitter or whatever but basically him and i have sort of had kind of parallel migrations

01:06:49.240 in some way where over the last eight years i have become much more skeptical of centralized corporate

01:06:54.500 power and i think he's been much become much more skeptical of sort of legacy media and you know

01:06:59.620 if over the 2010s you could see the conflict a lot of the conflict was tech versus media that was just

01:07:04.480 one theater of our global social war you know and that's what i think of it as by the way not the

01:07:09.420 civil war but the social war i'll come back to that point you know what what it is now it's not tech

01:07:14.300 versus media it's decentralized tech and media like substack and crypto and so on versus centralized

01:07:21.000 tech and media namely the legacy incumbents who are losing a lot of their smartest people but still

01:07:25.980 have the distribution and um the reason i have become skeptical of corporate power is that the

01:07:32.320 argument that you know folks will do things that are in the you know interest of their customers and

01:07:37.020 their shareholders and so on is not the case when you have these ideological mind viruses out there at

01:07:42.200 least it's not obviously the case they may have you know they may be responsive not to their

01:07:48.140 fiduciaries but to the twitter mob okay they may be responsible not to the customers but to the

01:07:53.040 politicians who are funded by the twitter mob and i've seen that take over and brainwash and put

01:07:58.700 employees and crazy people into many of these companies and so you know for that reason you know

01:08:04.820 i i can't give three chairs for antitrust but i can give half a chair for it in the same way that sort

01:08:11.180 of uh one can argue that the antitrust attack on microsoft in the late 90s and early 2000s

01:08:18.820 what it did is and this is you know there's people at microsoft who might argue with this but here's

01:08:24.660 like one history of it right essentially gates who is this you know nichian will to power ceo um

01:08:31.800 you know despite looking you know like like a nerd in the digital realm he's like a level 99

01:08:36.800 super jacked you know like avatar right you know with all the muscles and gigantic flaming sword

01:08:42.660 so you know gates basically had won everything going up into the you know year 2000 but he but

01:08:51.540 he caused a bandwagoning among everybody who he'd beaten right from sun to netscape and so on and so

01:08:57.120 forth and the antitrust sort of you know what you call it prosecution persecution whatever of of

01:09:03.780 microsoft distracted them enough and then it led to bomber's ascent and then under bomber basically

01:09:11.120 you know microsoft sort of was number two in everything you know that's to say they did xbox

01:09:17.180 because playstation was out there so they couldn't be accused of being you know a monopolist uh they're

01:09:22.200 doing bing because google was out there so not accused of being monopolist they did the zune because

01:09:27.020 the ipod was out there so they can't be accused of being monopolist right so like i'm number two right

01:09:31.780 i'm in a competitive market and you know once you start thinking that the goal is just to maintain

01:09:37.560 competition while the other person you know google or you know what have you was playing to win

01:09:42.000 you know you just had a different mindset creep in microsoft could no longer play to win

01:09:47.080 it is remarkable you know in a testament to gates and to bomber frankly you know that he stepped down

01:09:54.740 and and that satya was able to take over and turn the thing around it's very very difficult to turn

01:09:58.440 around you know a tech company of any scale let alone that scale it's actually satya's satya nadella

01:10:03.760 the sea of microsoft is one of the most unheralded like super geniuses around for what he did the

01:10:08.420 surgery the speed of the surgery he did on microsoft to turn it into what it is now um where he gave it

01:10:12.660 a second you know set of legs he he rebooted it for open source it was like a refounding moment or

01:10:17.380 whatever you know he has this book on it called hit refresh uh where it changes some of the elements

01:10:21.300 on the page but not all of them that was why he said it's a refresh point being though that basically

01:10:25.400 the antitrust attack on microsoft you can argue that it distracted them enough it made the giant

01:10:32.100 you know blink and then it cleared the way for the tech disruptors to take place but the critical

01:10:37.300 thing was that without those tech disruptors there the government action alone would have simply

01:10:43.040 like frozen microsoft in place okay you needed the tech disruption component and frankly that was

01:10:49.320 actually the more important component because simply regulating microsoft would not have gotten

01:10:53.120 you google maps right simply regulating microsoft would not have gotten you the iphone

01:10:56.740 uh simply regulating microsoft would not have gotten you playstation or open source or github or any of

01:11:02.200 this other stuff right and in the same way like uh you know the antitrust thing what it will do

01:11:08.460 is it will distract these you know five tech giants right the google apple you know facebook amazon

01:11:15.200 microsoft and the wokes within will now be busy producing lots of documents for the federal government

01:11:21.660 that's somewhat amusing you know and um basically what it will do is it will result in many of their

01:11:29.040 best leaving but for where and that's a critical thing there has to be that second component because

01:11:34.260 you need a vision of something better again going to the connective to the earlier point it's not simply

01:11:38.540 end the fed or end the fda that's impractical end google or end facebook is impractical you can exit

01:11:44.380 them and build something better and what does that look like and i argue it basically looks like a crypto

01:11:49.500 version of everything so now should i talk about that like the kind of crypto plan for disrupting

01:11:53.280 yeah yeah let's um let's give a maybe a 10 minute primer on blockchain and cryptocurrency i guess you

01:12:01.760 know i don't know how much knowledge to assume on the part of my audience but i think it's worth

01:12:05.920 putting the most important concepts in view and just why migrating away from a environment of trusted

01:12:14.180 third parties is important so sure okay so there's a ton obviously i can say on blockchain and currencies

01:12:22.880 and bitcoin and so on but first you know if you only understand one thing just to motivate bitcoin

01:12:26.880 if you'd like to continue listening to this conversation you'll need to subscribe at samharris.org

01:12:35.460 once you do you'll get access to all full-length episodes of the making sense podcast

01:12:39.760 along with other subscriber only content including bonus episodes and amas and the conversations

01:12:45.940 i've been having on the waking up app the making sense podcast is ad free and relies entirely on

01:12:51.480 listener support and you can subscribe now at samharris.org

Making Sense - Sam Harris - September 01, 2021

#259 — The Reckoning to Come

Episode Stats

Length

Words per Minute

Word Count

Sentence Count

Misogynist Sentences

Hate Speech Sentences

Summary

Transcript