The world is undergoing pressures that are inflationary, but also deflationary forces. Which one will win out? What is driving humanity’s progress forward? Jeff Booth, tech entrepreneur and author joins me to discuss our deflationary future.

Jeff Booth:

• Twitter: @JeffBooth
• Book: thepriceoftomorrow.com

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Stephan Livera links: 

• Show notes and website 
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• Subscribe to the podcast 
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Podcast Transcript:

Stephan Livera:

Hi everyone. And welcome to the Stephan Livera podcast. A show about Bitcoin and Austrian economics. Today. We’re going to be exploring some of these questions around deflation, inflation. What is our future looking like? What are some ways that society can adapt to this kind of, to this change that’s happening very rapidly. Alright, so now just bringing in my guest, Jeff, he is a technology entrepreneur and the author of the excellent book, the price of tomorrow. Welcome to the show. Jeff.

Jeff Booth:

Thanks Stephan. Thanks for having me.

Jeff Booth:

So, Jeff look, let’s get started. I want to start with, why did you write this book?

Jeff Booth:

This simple answer is for my kids. You could see what was happening in the world. I could see what was happening in the world of technology and things are moving faster and faster, and this epic response to try to stop that deflationary pressure coming into the market, just warping society, and all of the second order derivatives of that kind of entering society. And I realized my kids will not grow up in the same world that I grew up in, or have chance of unless something’s done. So this simple answer, is that it’s, I would say probably more complex. It’s not a book I wanted to write. I’ve been talking about this for 10 years. I think you’re Austrian economics background and everything else. And there’s a lot of people that have come to this conclusion in different ways. And, there were a bunch of people in the technology sector that couldn’t see what was happening. There was a bunch of it. And, so I just got tired of talking about it and figuring out I gotta step into the fray and do something about it.

Stephan Livera:

Fantastic. And I think it is one of those things where people growing up in today’s world, This speaking to their parents and their parents are often telling them, Hey, go and buy property, go and buy stocks. That’s what worked for me. But I think this is potentially a good point where in your book, you make the point that, you know, people talk about how, you know, it’s like this time is different, right. Are there, ways in which, you know, what worked for that generation will not necessarily work for say the millennial or Zoomer generation?

Jeff Booth:

Yeah. Well, I think it’s really important to understand what’s happening, right? So ,why do we use technology number one, right? Isn’t it, to make our lives simpler, easier reduce labor, right. I don’t know a company that integrates technology, so their costs go up. So, the point is when we use technology, we get a massive efficiency gain and that brings costs down. It also destroys jobs. And we used to run an economy where technology was a smaller input of everything else, kind of deflationary forces and governments can get away with kind of, what was happening against that technology. But as technology has grown and grown in magnitude and kind of exponentially. So now technology is the biggest driver by far of deflationary pressure or efficiency that is also taking jobs, but it also providing, or could provide an abundance and governments are trying to stop that at all costs.

Jeff Booth:

So when you used to be able to buy a house in an inflationary environment, and then pay back that house with cheaper dollars, because of that inflation tomorrow, and your wages go up through your whole life. That was a good bargain for our parents. They did really well on it. And I would say the world that did pretty well on it. A bigger force has come to play then any central bank can stop and the end. And that’s the force of technology, the exponential force of technology wanting to bring prices down.

Stephan Livera:

Yup. And you mentioned there that there’s almost this conflict there because it’s sort of like governments and central banks of the world under this ideology of inflationism. Right. So they’re kind of trying to print at the same, but at the same time, you’ve got the technology, which is kind of pushing costs down. So how do you sort of see the result of that playing out and in your view, why is it that the deflationary forces in some ways are stronger than the inflationary forces? Or do you, would you agree with that statement?

Jeff Booth:

The deflationary forces are way stronger, but central banks can create an inflation is a central bank created a phenomenon, right? So so central banks can create eventually destroy the currencies have hyperinflation and they can create inflation. On the other side of that outcome, you would have deflation again, to trying to just stop deflation from happening now is going to end in misery because all it’s doing is transferring massive amounts of wealth from the middle-class and poor to the rich. In the last two months of COVID the billionaires in the US gained $552 billion at, a 20% unemployment. It seems ludicrous, right? But what’s happening is as you’re stimulating into an environment that wants to go down, once prices are falling, the by product is everybody knows that the value of their dollar is being weakened and actually every business to wasting money into technology faster to destroy.

Jeff Booth:

Why do you think the S & P, is at all time highs? And what do you think Amazon Google and everything else? The money is actually taking the jobs faster cause the only way you can compete as a business is to drive to technology faster. So not only do you have this massive debt burden that is disinflationary in itself, because taxes have to go up to cover the debt. And that brings down growth rate, or takes companies out of the US as, chase other lower tax regions. So, but it has to be disinflationary itself. You have, the pressure of the technology that’s rising into the most important. It used to be demographics. It used to be data. It used to be everything else. Now it is technology, is just moved up the curve and central banks are still using old models to guide their thinking, not realizing what technology is doing underneath. And it’s just driving a break into society.

Stephan Livera:

Yup. And look in your book, you talk about technology deflation, right? So we’re experiencing economic growth. We are more productive. I am curious your view. I can’t remember exactly which it’s one of those rich tech billionaires, someone like Elon Musk or Peter Thiel, one of those people. And I think they were essentially making the point that part of the reason we’ve seen so much of this growth into the technology sector is probably is arguably because it’s less regulated than other sectors of the market. And that might be also a reason why we’re seeing this investment.

Jeff Booth:

I don’t think it’s that at all. I think it’s a really great investment. Like if you understand how to build technology companies and the network effect around technology companies, you can play one of my investments. I put $25,000 in two years ago. It’s 2 million right now.And so those, if you understand the pattern behind technology and how to create this stuff, you can create a ton of wealth in technology companies. And so look at the Googles, look at the Facebooks, look at the Shopifys, look at Amazons, why they’re growing so fast as they’re consolidating massive amounts of information at a scaled, unheard of they’re monopolies. And they have more power than most people know, and you can start them for not a lot of money.

Stephan Livera:

Right? It is just this massive, people can create massive platforms and then monetize once you’ve kind of reached a certain level or a certain place in society, you just earn in some sense the right to just earn a massive, super profit and that kind of well, whether we like it or not, that’s essentially, what has happened in many large platform businesses. Let’s say Amazon, Google, YouTube, et cetera.

Jeff Booth:

Yeah. And it reinforces on itself. Here’s the irony. Capitalism would work perfectly if you let the system cleanse and all that would happen, as you let technology deflation do its job. The benefits of the, of technology would be wider. You wouldn’t concentrate wealth like you’re doing. So is it the policy response, trying to stop deflation at all costs is actually causing the problems that the policy wants to stop the inequality, the massive transfer of wealth. They they’re making it happen faster. They’re making it happen at lightning speed because of the way technology works.

Stephan Livera:

Yeah. And I guess the other factor here is, if you talking to the typical mainstream economist or finance person or the government, they might not like the idea of deflationary pressure. What are some of the typical arguments? I mean, as an example, they might say something like, Oh, but we’re going to go through this deflation. And a lot of businesses are going to go under, so we need to stop that. So what’s your response on that point?

Jeff Booth:

So, yeah, It’s interesting. I have not heard one actual real argument against what I’m saying. Not one, that you couldn’t, say what, right. But the problem is you have to where we are right now, they keep making the problem so much bigger. By you’re going to enter a depression to be able to see the other side of this, if you let deflation happen and they’re right. Businesses. I think they look back to the thirties and they say, deflation is a terrible thing. You have to stop it at all costs. Without realizing that it was the twenties, the debt buildup and all of the, and all of the same thing, all the goofing around with a monetary policy that created that cleansing that needed to happen. And there was no way out the cleansing had to take place.

Jeff Booth:

And we’re in the same situation. And that cleansing is going to take place in one way or the other in one form or the other, it’s going to take place through central banks, keep on doing what they’re doing. And at some point hitting a runaway inflation right? That destroys value. And then the other side is going to happen through revolution or it’s going to happen through choice, and a managed, outcome to deflation, but it’s going to happen. There’s nothing they can, nothing governments can do to stop it now.

Stephan Livera:

Yup and, it’s almost like they’ve sort of locked themselves into this continual creation of debt. And as you point out in the book, I mean, governments around the world, many of them are in record levels of debt. And they see it like the only way is to continue the creation of that debt. So why, is that? Why they have to keep creating more debt to keep there, to kind of keep that system to keep kicking the can?

Jeff Booth:

Well, just kind of it, sometimes, it’s worth using examples or, and let’s say you have a systematic problem and you, and they think they can grow their way out at 2% inflation to make the debt worth it cheaper in real terms, or is it because if you let deflation happen, the debt explodes and has to be reset. So the debt gets more expensive. Banks fail businesses, banks fail everything else. It’s ugly. I’m not arguing the fact that a depression at this size of the problem today, isn’t ugly. It’s terrible. But the problem is by fighting that you’re actually making it, worse each time. So you lower interest rates, to misprice out assets, right? You keep lowering interest rates to negative interest rates, governments, individuals, corporations load up on debt because effectively you’re telling those same businesses and governments and everything else.

Jeff Booth:

Debt’s your friend. Currency, owning currency is a bad thing. Don’t have savings load up on debt. And then when there’s any blip in an economy, then they, then those same businesses that don’t have cash cause they use the cash to buy back shares and everything else have to lean in to government and say, protect me so I can protect my jobs. And by protecting them, you keep asset prices high. And a whole bunch of people that are losing their jobs anyways, because of technology, you have to then give social assistance, to give them more money, to pay for the high food prices, high asset prices, high rent prices that you created in the first place. So eventually that comes home to, somebody pays the Piper, and that’s kind of, and that’s coming really quickly to a town near you. It’s coming everywhere.

Stephan Livera:

It’s everywhere, right?

Jeff Booth:

The globe is experiencing that.

Stephan Livera:

Yeah. Right. I think you make a lot of good points in the book around where things are going in terms of automation, AI, people’s jobs and so on. And obviously this discussion over the last few years it’s starting to rise a lot more. The discussion around UBI, universal basic income, this idea that people are going to lose their jobs and they need some income or otherwise , they’re going to violently, you know, rise up and so on, I guess, could you touch on a little bit around where, what sort of jobs you see getting automated first? What kind of responses that you would see that society should be doing in relation to that?

Jeff Booth:

Okay. So if we, I need to back up, because people assume when they read my book or not just that, but they, a lot of people think, okay, AI is coming like a light switch. One day, we have it one day we don’t have it one day, we have it. And they’re pointing that point in time where, where computers take over and they’re smarter than all of humanity. And here’s the point that is totally irrelevant. AI is built through faster learning cycles because of bringing two data sets together that learns on itself faster and faster, and the whole path towards artificial intelligence one day being smarter than humanity, the entire path is deflationary and exponentially so. It’s a continuum. It is not a light switch and all of these industries, one after another, why you don’t see bookstores anymore, why as you digitize information, that information can be sold for pennies around the world.

Jeff Booth:

Instead of hard copies that are harder to transmit, and you have technology now creating its own technology. You have, algorithms and technology. So, people say, Oh, the only reason your flashlight or guitar tuner is free on your phone is because it’s supported with ads. And that is so not true. What do you think it costs to make that app and then like nothing 10 minutes. And it’s put out somewhere and it has global reach across it. So, and while there’s a dollar to be made for something. Do you have an endless army of people that are going to try to race in, and the prices are coming down and that’s what’s happening.And so those prices are coming down everywhere in every industry. That’s how technology is built. So again, nothing is going to stop that trend in the, and governments still think they’re capable of stopping that or preventing that from happening. But ironically, they’re making it happen faster.

Stephan Livera:

With this trend of technology, making it easier and cheaper to produce things. As you mentioned, the Guitar Tuner app or whatever App or product, we could also say it amplifies the value creation possibility of an individual, right? One individual who is skilled, they can really amplify their impact across, many people. And maybe one person can do the job that used to take 10 people or a hundred people, or a thousand people in some extreme cases. So in some ways we’re moving towards a world we’re all going to be much more, at least materially richer.

Jeff Booth:

Well, that’s the point of the book, think about what we do to spend all of our time trying to work our whole lives so that we can retire the last 10 years safely, right? And the entire time we’re working harder and harder and harder trying to keep up with artificially prices are rising prices that are created artificially, right. Just to push away from us. So we have to work harder. And so we need better jobs. We need everything else to be able to chase on that mouse wheel faster and faster when technology is actually wanting to give us the exact opposite, when prices should be coming down to you, don’t pay for the oxygen you breathe. Why not? It’s the most valuable thing in your life.

Stephan Livera:

It’s not scarce.

Jeff Booth:

because exactly, it’s not scarce. It’s abundant and technology creates abundance everywhere. And so, as you, as that happens more and more things become abundant. You don’t, I don’t pay for my guitar tuner. I don’t pay for my Google information. I don’t pay for a whole bunch of information because it becomes abundant. And there’s, if you let capitalism work, there’s an army of people. While there’s still money in it that race to make it more efficient. Right. And when it’s not efficient anymore, when there’s no money to be made there anymore, it’s free.

Stephan Livera:

Yup. It’s an interesting discussion there around when things are free and then some they’re monetizing in some other way. Right. you know people might you know, the freemium model is another example of that kind of thing that we see but I guess just around automation and jobs and the way people should think about that, I would also suggest a part of that. The concern really is that Oh, some people might not be able to retrain into some other job, but in my view, I think part of that is also things like occupational licensing, or just generally regulations and licensing, stopping people retraining into a new job. You know,

Jeff Booth:

So here’s the thing that I think two different concepts that you might be confusing. You don’t need the jobs. If everything, if you could feed yourself everything else you could get away with way less time when people think Keynes, are so against Keynes, because a lot of his stuff has, been warped over time. He was pro deflation. And he believed that by today, we would be working about a 15 hour work week. What he didn’t conceive is a manipulation of policy, that pushed some people to not have to work at all massive wealth transfer. And some people have to work infinite hours to try to keep up. So he predicted because he predicted things tied to gold reserve. He predicted the abundance from technology being more evenly spread. And the manipulation of currencies is what it made not evenly scrapped.

Stephan Livera:

Right. And I think so. Yeah. So people would look at the Keynesian theory and say, well, for example, some of the arguments around like sticky wage and so on, and that’s why people have this kind of inflationary concept, but to your point around living in a world of abundance, I think, yeah, certainly that was a, I think there’s a few things to tease apart there. One thing there could also be almost like a status game aspect, right? So people let’s say you’re in a rich town and people are working really hard, not necessarily because they need to, for their survival, it’s that they want to be richer than, their friend in the house next door, that kind of aspect. And that could also be why people are working more than 15 hours a week. Right. You could, for instance, you could lower your standard of living. And instead of working 40 hours a week work 20 hours a week, and many people can do that. Right?

Jeff Booth:

Yup I’m just saying when you, so capitalism takes into account, all of the things you talked about, we have, when you have government manipulating free prices and everything else, and the government similar that as in the entire market, it looks way more like communism, it’s a managed society. Right. That’s, what it looks like today. We don’t have a capitalist system at all, right. In a capitalist system. It makes it what it says. It’s the same thing you said people will work well.They can make more. Right. You put a, really good tweet out at one point, you know, that you’re not advocating for equality, you’re advocating for fairness. And I think that was and I think that’s exactly right. I think the game board has to be fair today. The game board is anything but fair by the way, I’m a winner. Right? So, there’s a whole bunch of me and people, my friends that have all these assets, technology companies and everything else, and the wealth is just being piled faster and faster and faster. Cause we’re sitting on that sitting on the assets. But, so through that lens, I can really easily see why somebody over the other side says, I can’t feed my family and they want to break the game. Right. I can understand the response.

Stephan Livera:

Right. Yeah. And I think there’s a lot to be said there because I mean, part of why I was saying that was, I think there’s too much discussion about inequality per say, when really we should be thinking more about justice. What is just, and I think there’s a lot about the Fiat money system that is not just, and that is why you know, I’m so much about Bitcoin and ways that people can get out and get away from that sort of system. And I think in, you know, if we were to imagine the world of a, you know, a fully like a free market, deflationary world, a capitalist world, we would see a lot of, let’s say, you know, the boring work would just get automated away and then people could actually be in some sense, free to work on things that were more creative in nature.

Jeff Booth:

You don’t have a Cultural Revolution. You’d have a you would have an enlightenment of people having time. And things would be getting cheaper and cheaper. It’s true. Why do you use technology in your house? Why do you need it? Because it saves you time, right? It’s that across the board and shouldn’t we be amplifying that to take away the labor instead of having an old construct that says, we need more jobs and we need more artificial growth to create more artificial jobs, to be able to against that’s what every single government all over the world is. They have policies that say, how do we get more jobs, right. How do we get full employment? And they’re all using their currencies as weapons against other currencies to try to achieve that outcome. And it’s just not possible. It’s not realistic anymore.

Stephan Livera:

Yeah. Actually I recall in your book, you made a point there around currency war leading to trade war and in unfortunate cases, sometimes leading to full-blown war. So do you see that sort of trend playing out now in terms of currency, war, trade war?

Jeff Booth:

That’s what’s happening right now. Right. And remember, the book was written over the last pre January. It was released in January, but it was written a year and a half before that. So all of these things, they’re just being accelerated as COVID. But look around the populism that is growing, in every region in the world, as people are dividing against each other and believing the narrative that the politicians are saying on both sides of the aisle and the politicians on both sides all are wrong because they’re missing the point. And then once you, gain enough power in your own country, you have to create a bigger enemy and to retain power. So that bigger enemy becomes China or that bigger enemy becomes Russia, or that bigger enemy and that’s happening. So for a lot of your listeners in the US they would see it from their perspective in the US it’s everywhere. And every, and people are listening to different rhetoric in another place thinking the same thing about US citizens or vice versa.

Stephan Livera:

Yeah. I think another aspect is also, you know, we’re all agreed on this idea of the technology is, well, most people are on this idea. That technology is a good thing. It’s making us wealthier. It’s giving us more time to be more creative. I think it might also be interesting to chat a little bit about some areas where technology might make us misguided, or there might be some risks around that. So I think maybe when I was a kid, it was sort of saying like, Oh, well, see, now that we’ve got the internet information, will just spread so easily and quickly, but the reality now is yeah information spreads quickly, but it also means misinformation and you know, fake news. And it’s, it’s difficult sometimes to sort out and figure out what’s the truth of the matter, because now there’s just so much material out there now it’s about how do you cut through that and filter through the noise?

Jeff Booth:

Yeah. And, you know, I talked about this extensively in the book cause as well, it’s hard to, a feature of the system. It’s not a bug, is you see more things that you agree with. And, it is was really easy to get stuck in that loop. And when you come up for air and look at somebody else, they’re stuck in a different loop and you think they’re insane and it might be you that’s insane and it’s really hard to actually step back. I’ll give you, I gave you one of the tweets. I really liked about that user. I’m going to give you one that I disagree with a whole bunch of the first principles talk came from my book, and then the reason you see it more, and you see it is because there’s a whole bunch of people in the Bitcoin community that have already gone down that path.

Jeff Booth:

And they’re deeper thinkers, and they’ve gone to the bottom of the hole, come back up and said, this makes a lot of sense. So, your bias in first principles and thinking, and first principles is seeing a whole bunch of community rally around my book, and think deeper. And you think it’s more people are seeing that are say, are doing that are in virtue signaling because of it when most people aren’t thinking like that. And, so I would go the opposite way. I would say, I would hope a whole bunch more people ask deeper questions and say, why wouldn’t you want to think in first principles? Wouldn’t you want to say, is inflation a good thing without just believing it is? Why wouldn’t you ask, why is it a good thing? And is that true, and come to your own conclusions? I think in a world that you are here so much attention, is trying to drive you down a certain path. And you’re naturally likely to click on that and drive you further down that path. It’s your responsibility to ask deeper questions and look around the corner because the technology won’t do that for you.

Stephan Livera:

Of course. Yeah. And yeah. So my comments earlier about first principles and so on that wasn’t directed at you.

Jeff Booth:

No, I realize that, but again, what I’m getting at is there’s a whole bunch of your community that are deeper thinkers on this. Right? And, and we there’s, that needs to be brought to a broad audience. There’s a whole bunch of people that are just like, they got their hook in their mouth and they’re just listening to rhetoric And they’re not thinking it through. They’re not thinking, what’s the next step of this. What’s the next step of that? I would hope that we go the other way. I would hope everybody starts pushing out. Let’s think about it, this conversation that we’re having right now. What if the conversation you just said, we all agree that technology is deflationary. I haven’t found one person who doesn’t agree with that. We all, and I also haven’t found one person that doesn’t agree that it’s exponentially deflationary. If those two things are true.

Jeff Booth:

Then all the other bullshit. I actually, why are we talking about anything else? If those things are true, then the world’s going to look very different, right? Why don’t we spend all our time in, how do we build a path to the other side? Why don’t we do what a business would do and say, let’s, if these things, with these new things being true, how do we,transition instead? It’s just like monetary policy. This, if those two things we just said were true, then nothing else matters. We need a rewrite.

Stephan Livera:

Great. Yeah. And look, I think most Bitcoin people certainly would agree that those are, those two statements are true. I think that perhaps the real debate or the real question and the argumentation online is more about people acting in a zero sum mindset. And they’re arguing over who gets what? Who gets the gains.

Jeff Booth:

I love that. You said that. So,I love that to build coalition. And so there some in the Bitcoin community that just want to rewrite right? And say, now I have million dollar Bitcoins and I now I have 10, $15 million. If it happens that fast, they won’t want to live in that world. They will not want it that way. How do you pay for lighting down your street? What is the, what is it that chaos look like? You won’t be able to keep it. So I would argue for me, I hope it happens slower. I would way rather a whole bunch of really smart people talking about a transition to this, then fighting against and calling names. Right. Because the more, that this goes, the further along this axes, we go on the current path. I suspect Bitcoin’s going to do extraordinarily well. Right. So that we agree with. I just don’t know if I want to live in a world.That’s looks, that has much upheaval overnight.

Stephan Livera:

Yeah, look, absolutely. We don’t want a, I would agree with you. We don’t to live in a world where like, everyone’s like having to constantly look over their shoulder and all that. Absolutely. I think it’s the way I’m seeing it though, is more like, there’s the difference between what we want and what we think is likely, right.

Jeff Booth:

That’s a really good point, really good point.

Stephan Livera:

So we may, well, not want it to happen that way, but we might also think of it like, Hey, this thing is coming regardless. And we just going to have to prepare for it.

Jeff Booth:

There’s certainly some of that. And there’s no question that some of that’s why I look at my portfolio, the way I do that, it’s a playing probabilities. But to the point, and actually that’s, why I make these points on the podcast, you can play the probabilities for your personal gain, right? You should. What or where that your personal gain, everything else, but what you should be advocating for is a global game, right? You should be advocating at a bigger level. And so what I try to do is I try to advocate uniting, rather than division, I’m not worried about kind of money out of this. I’m looking way more at the societal consequences.

Stephan Livera:

Right and I think this comes back to, for me, this comes back to that point. We were talking about what, you know, inequality versus justice or fairness. Right. And I think that to me is we’re going through this time. And I think most with a few let’s call them Neo luddites aside. Most people will see that the technology is coming and we’re just going to have to deal with it. But the question then is more like, how does society respond to that? And I think this is potentially where there’s a bit of a tension between let’s call it the techno libertarians and the technocrats right? The people who believe that we should use technology to surveil you and to, you know, to like try and control society in a certain way. And then the countervailing pressure, which is obviously a lot more of my listeners are in that kind of camp, which is more like the technology as the liberating force that enables people to be more free as opposed to technology being used to kind of control people into this kind of social credit system or cancel culture, or you get what I’m saying, right?

Jeff Booth:

Yup. And, this is a monetary phenomenona, so your listeners, what your listeners want to say, your camp of listeners would be the natural order of things. If technology was allowed to do its thing without monetary interference, that’s what would happen, right? You wouldn’t create this type of centralized power because the money wouldn’t be chasing it as fast, there would be more opportunities and they would be spread out wider. There would still be concentration. And the reason there’d be concentration is because human beings, we say, we want democratized access or where else you have it.

Stephan Livera:

Sorry, Jeff. You just cut out there for a minute. Yeah. So you were just saying, we want this access, we want to democratize access. You have it. And then you just cut out

Jeff Booth:

At that point. Yeah. So you just, you just never go to page 450 on Google.

Stephan Livera:

Yes, Right.

Jeff Booth:

So you have it, you don’t use it. So you trust a brand, you trust it because you don’t have the time to go to do it. So what ends up happening is we believe technology is going to be this great enabler, but it actually concentrates because the network effects are choices that consolidate over and over. We very rarely go to page two on Google. Right? We trust that the algorithm brings us the information that we want in the way, and it’s not, it’s not, that Google is bad and doing it. It’s just, that’s the way that we don’t have the time.

Stephan Livera:

Of course, I think that though, like Google and these big companies have also had a lot of government interference into them. Right. So, I mean, obviously all the Snowden and stuff, when it was, it came out that, you know, the US government was basically tapping into these big companies servers and so on. It might well be the case that, where it not for this kind of prevailing attitude that the government has to intervene to try and keep us safe so on companies might’ve had their own incentive, maybe we would have seen better privacy technology. Maybe we would already have much more advanced encryption in the way we communicate and collaborate. You know, I think it’s that, to me comes back to that kind of technocrat versus techno libertarian kind of view, and that’s kind of the battle that’s kind of playing out now, what sort of future do we want?

Jeff Booth:

So I think the bigger battle is, that’s why I said it’s a monetary battle. It is, there’s a whole bunch of technology that I think know that it’s deflationary, but haven’t connected the dots into our monetary system. Right. And don’t know that, if this is true, if it’s this deflationary, then they’re benefiting from this. You’re just rushing money into technology faster and faster as a result. And so you cannot have something that is deflationary at this scale against an inflationary, monetary policy. That’s, the source of most of the problems, you’re right, some of these other things at the edges. And we worry about big brother and we worry about the more power that you concentrate. What is it? Power corrupts, absolute power corrupts. Absolutely. and the more power that anybody has they, change the rules. Right. And that’s, and so what happens in it in a system in a capitalist system is they can’t change the rules because they never get that big. And there’s somebody else always willing to come in and.

Stephan Livera:

Keep them in check.

Jeff Booth:

Keep them in check and we’re stopping that system.

Stephan Livera:

Right. So I guess in your view, then what are your thoughts on how things start to play out? Right. I think in your book, the theme was essentially, and I would agree with you that essentially governments are going to do everything they can to kick the can down the road. So what are the likely outcomes of that?

Jeff Booth:

Yeah. I what you’re seeing them the did you read my monopoly post?

Stephan Livera:

Yes. That was a great post. Yeah.

Jeff Booth:

So, yeah so again, once you consolidate a game board, right, in monopoly. It reinforces the rich get richer, reinforces and the game ends, the poor get poorer and there’s a reinforcing loop. And with it’s poor racial divide, minorities, whatever it is, the people on the bottom of that are reinforcing on a negative loop. And they’re choosing not to play the game. Right. And there, and they’re rebelling against. So some are choosing Bitcoin, I’m going to play a new game where the new rules are fair. Some are anarchists that are rising up against the system and want to burn the game to the ground. Right. And some need UBI to be able to play the game. If we keep playing this game, right. Those three are absolutely predictable in what, and what happens then you’re having all of them happen at the same time.

Jeff Booth:

And so UBI won’t work. Socialism doesn’t work mind you, we have a communist system now, right. We have. When government is this much of, there is no free market. So it’s no wonder that a whole bunch of people are asking, why do I pay taxes? Right. If you can print money at any pace, why am I paying taxes? And then on the other side, well if you could give me $2,000, why don’t you give me $4,000 without any idea of where this money comes from? And a whole bunch of people, supposedly smart people feeding into that. Yeah. That’ll work. Right. So, but no wonder people gravitate to it when they can’t feed their families. Right. When they, when they look at somebody else consolidating wealth and they say the game is rigged, right? And so some are doing that, driving political divide, some are anarchists wanting to rise up against the system and some are choosing a different game.

Stephan Livera:

Right. And I think the Bitcoin game, as it were, you know, I see it like more and more people will just start operating outside of the normal financial system. Right. You can be in whatever country around the world, you can be a programmer, a web developer designer, whatever, and you can just take Bitcoin and nobody can stop you doing that. And I think that is a powerful factor in the favor of the individual. And it’s very aligned with the thesis from say, the sovereign individual. And potentially we see this world of more jurisdictional competition because governments around the world will eventually see, they can’t stop this thing. So now it’s about how do you best adapt to a world in which Bitcoin exists? What do you think?

Jeff Booth:

I totally agree with you. I think that it’s at some point that government and some governments have to peg to it that and then it’s a network effect. And the more, more people, the more on roads to it and the more people that are trusting it. And why wouldn’t you trust it? Like, why do you trust a piece of paper with faces names on it? The only reason you trust it is a government’s simplistic guarantee of it as a legal tender. And if governments are choosing to destroy that guarantee and, you know, they’re choosing to destroy that guarantee. Why can’t with something else will replace it. Something else will guaranteed replace it. I suspect that something else has Bitcoin because it works on a network effect. And I suspect that the next step of that after more and more people on road onto it, that governments start to on road onto it as well.

Stephan Livera:

Right. And so we’ll see some governments who fight it and others who embrace it and potentially the ones that embrace it will do better in this new deflationary future.

Jeff Booth:

So that’s the interesting thing, to think, right? The, the, it gives an advantage to the ones that are early and the ones that are early or are more likely and penalized by being on the US currency for a long time and every time. And so you, might see some governments around the world jump onto this earlier. And you’re going to have a, this is going to be a big fight, right? Governments are going to try to stop this at all costs. But again because it’s digital in nature, they’re not going to be able to stop it.

Stephan Livera:

Right. I wonder though, because there are some, like, I think it was Patrick McHenry who, in one of the hearings, he was saying, there’s no capacity to stop Bitcoin. Right. And so, and he is like a ranking US government politician. So, but again, then on the other end of the spectrum, you’ve got the Brad Sherman’s of the world who are like, no, we’ve got to stop it. And who will pull out the typical Oh it’s use terrorist and whatever, right? Yeah.

Jeff Booth:

I’m not saying that you won’t try. So you asked the question about what are the probabilities, the probabilities are this thing, central banks all around the world are going to try to stop deflation at all costs because they can’t come to terms with the depression area effect of not stopping it. Right. Banks failing everything else they can’t come into. So they’re going to try to kick the can down the road, and they’re going to make the problem worse as a result, and that you’re going to need to keep driving this inequality. That’s going to drive more people into Bitcoin and gold for a time. At some point, it’s going to, somebody’s going to peg to it. Right. At some point, that’s what I would say. The problem, the high probabilities are.And if you look at different regions, if you’re in Lebanon right now, right, and you’re dealing with hyperinflation that you can’t pay for food, but you have Bitcoin, you look pretty smart and you can move it outside of the country, the will or Venezuela and everything else. And you can feed your family. And I suspect that people who have made that choice and spread what’s happened in those regions that they will never give up bitcoin again.

Stephan Livera:

Right. It’s a social learning thing as well, because it’s people learn from what their friends and family are doing. And if it, works for your friend or your mom or your brother, then you’ll take it on and you’ll just learn it that way. And I think it’s just going to play out in cycles where people learn from their friends and family.

Jeff Booth:

Yeah. We’re still really early in that adoption curve. I think we’re still really early. So the on roads offer it’s still hard to use. It scares a whole bunch of people. The but I actually, I love a lot of the Bitcoin community and what they’re doing to try to help that, and some of your advertisers in the beginning, right. Those on roads offered are getting easier and easier. And it provides a vehicle that is going to be way easier to use in the future.

Stephan Livera:

That’s right. Alright. So look, Jeff, I’ve really enjoyed chatting with you. I loved your book. If you’ve got any closing thoughts for the listeners and where can they find you online?

Jeff Booth:

Online @JeffBooth closing thoughts, just keep doing what you’re doing. I would say with one caveat, unite the communities. So one of the thing I love Bitcoin that it comes across has is people don’t want to listen to somebody that they think is just arrogant and full of it. You have to let them discover some of this and think about how you discovered it as well before you knew. Take that into your conversations going forward. And you’ll have a better, I think, a better outcome and bringing more people to the community.

Stephan Livera:

Fantastic. Well, thank you very much for joining me, Jeff. And listeners. You can find me online at stephanlivera.com. That’s it from us. And we’ll see you guys in the citadels.

Jeff Booth:

Thanks. Okay.