Is Bitcoin Democratic, And Is Democracy Good?

Hi and welcome to Stephan Livera podcast, a show about Bitcoin and Austrian economics. Today for episode two hundred and twenty, my guests are Saftein and Alex Gladstein, and this is actually a debate that I moderated on Saftein's seminar, and the topic is about Bitcoin and democracy. But first, a word for the sponsors of the show, so swanbitcoin dot com. They're the best place to- To auto-stake your Bitcoin in the US with incredibly easy setup and low fees, I personally appreciate that Swan is Bitcoin-only and dedicated to Bitcoin education. They want you to hold your own keys and withdraw your coins. If you've got pre-coiner or new coiner friends in the US, this is a great place to send them. One of the big positives of regularly recurring buys is smoothing out price volatility, set it and forget, enjoy your life. With Swan, they pull the USD from your bank account, buy the Bitcoin, and withdraw to your cold storage. Go to swanbitcoin dot com slash livera to get ten dollars of free Bitcoin when you start stacking with Swan. If you're interested in the idea of Bitcoin native financial services, make sure you look into Unchained Capital. They are doing great work to make multi-signature accessible. Now, if you are an individual or a business and you're thinking about your Bitcoin security, why not consider going from zero to multi-sig with Unchained? You can get assistance, they've got a package called the Vault Concierge Onboarding Package. You can have the hardware wallet device Is mailed to you and have guided setup calls to build your vault together. So use the code Livera for a discount and the link is in the show notes. I've got an episode coming soon with Joe and Drew from the team. If you're interested, go to Unchained Dash Capital dot com to find out more. And finally, Knox, a Bitcoin custodian dedicated to ensuring their insurance protection covers the full value of their customers' assets. For example, suppose a fiduciary wants to hold two hundred and fifty million dollars of Bitcoin with Knox. Knox will seek to Obtain two hundred and fifty million dollars of insurance dedicated exclusively to that account and adjustable to volatility, no fractional coverage or narrow scope, insurance for what it's worth, a tool to transfer risk, and check out my recent interview with Alex from the team. If you are a Bitcoin company, investment fund, trust, or family office, check out Knox for your insured custody. The website is knoxcustody dot com. Thank you very much, Safetain. So, yeah, I'm excited to, you know, moderate this one. I think I'm really looking forward to Hearing some of the arguments that, you, Saftein, and Alex will put forward here. so yeah, as we mentioned, the topics will be around is Bitcoin democratic, and also related to that, it'll be the subject of is democracy a good thing? and so Alex is obviously gonna take the affirmative side there, arguing that yes, Bitcoin is democratic and good, and Saftein's gonna take the negative side. So, we'll, we'll keep this as a sort of loose- Moderated, but we'll start off with some opening statements and then a rebuttal from each side, and I think probably makes sense for Alex to start us off. So Alex, let's, let's, hear

it from you. Thanks. Really appreciate you guys making the time for this. Should be Should be fun. So I'll start with a quick argument of why I believe Bitcoin is democratic, and then I'll also include a little bit about why I think democracy is, is a positive force for humanity. So for Bitcoin, I wanna advance the argument on three fronts, historical, national, and technical. So historically, I propose that Bitcoin is a technology that basically prevents a small group of people from controlling the rules of money. So So sort of, something that democratizes access to money and helps make the same rules for everyone. So in sort of the same way that democracy, decentralized control over and access to politics, and in the same way that the internet Decentralized control over and access to information, I would want to argue that Bitcoin decentralizes control over and access to money, and we can unpack that, but that's basically part one. Part two is, is sort of on a nation state level. in our world today, there's a lot of different political regimes. My organization, the Human Rights Foundation, tends to break them down into, fully democratic, competitive authoritarian, and, and fully authoritarian. So you basically have this spectrum between democracy and dictatorship, open and closed societies. And I'd argue that Bitcoin is very bad for authoritarianism and, and good for democracy, and, and in particular, democratic movements within side authoritarian states. And recent examples include, of, of democratic movements use Using Bitcoin actually, to sustain themselves, include Belarus and Nigeria, where, there are protests happening in both countries, peaceful protests, and the government is, you know, using financial repression to try and stop those protests, and people have been able to, use Bitcoin to fight back. finally, technically, as it- On the protocol level, I, I would argue that Bitcoin has like a democratic power structure, kind of like a constitutional democracy, power is balanced. For example, a metaphor could be that the miners are kind of like the executive branch, the developers, the legislative branch, and the users, the judicial branch. you know, the miners, you know, have, have, have some power, and the developers can make some, propose some laws, but ultimately, the users get to decide, what laws are gonna stay and what blocks are gonna stay, right? So, and then finally, even more so, as the scaling wars taught us, you know, miners and developers, although they do have power in different areas, they don't control Bitcoin, the people do, and that's why I think it's democratic. So, so those are my three arguments about why Bitcoin is democratic. And then, as far as democracy, is it good or bad? I think it's important to have this debate on the practical level, in the world today, twenty twenty, as opposed to perhaps in a more philosophical way. In as much as, I mean, what are the other options, on a, from, from a, you know, nation state level? I mean Again, you have different kinds of political regimes, and I would argue that most people would wanna be in South Korea and not North Korea. I mean, most people would wanna be in Costa Rica, not Cuba. Most people would wanna be in, Lithuania, not Belarus. Most people, would want to be- In the more free and open societies, there are a lot of reasons for this, but primarily if you look at any sort of metric, of human activity, whether it be patent rates, whether it be Nobel prizes, whether it be life expectancy, whether it be, literacy rates, maternal health rates, whether you look at, you know, what countries, what kind of regimes produce refugees? All of these things, paint a very bleak picture for dictatorships and, and a much better one for democracies. This isn't to say that democracies are perfect, but constitutional democracies that have rule of law, afford people the ability to push back against their governments. So in, in moving forward, as just a concluding statement, I would say that while I'm not overly optimistic about financial freedom and privacy even, which may interest these viewers here, anywhere in the world, there's at least a small chance that, citizens of countries like Switzerland or, or the United States could actually lobby for, for, for freedoms to be kept in these areas. Unlikely, but possible, and that's what a democracy affords. In a dictatorship Leadership, there's no chance. I mean, the Chinese citizens, the Saudi citizens, the Russian citizens, you know, they're not gonna get to like lobby for financial privacy or, or, or freedom. It's, it's, it's not gonna be an option for them. So this is why I think democracy is really important and helpful in, in today's world.

Excellent, thank you very much, Alex. And, Safi, and let's hear from you.

Yeah, so I think, I would, I'd begin by saying that, Bitcoin isn't a democratic system. Bitcoin isn't democratic because Bitcoin is based on consensus, and so, the, the, the definition of the word democracy is rule of the majority, and I think where I, disagree with Alex is that, today in the current world, democracy has come with a lot of other positive baggage that people kind of associate with it, things like the rule of Law and things like, freedom of speech and, human rights and so on, we tend to think of those things that they do go with democracy, but, both in practice and in theory, those are, I think, orthogonal and unrelated to a very large extent. In other words, you can be democratic and have rule of law, and you can be democratic and not have rule of law, Because democracy specifically refers to the, rule of the majority, the idea that the majority get what they want, and Bitcoin is, in, in terms of just the way that it operates, it's the exact opposite of that, because the majority can't get what it wants. t-there's no mechanism for all of the people in the world or all of the users of Bitcoin, you know, they can't stop my private keys from working, and t-there's no, there's, there's no way around that. Like if you want the Bitcoin consensus Access rules that you signed up for, you can continue to have them and, people can't really change them. And so that for me is much more of a natural order, than a democratic order, because the majority doesn't get to decide. The, individuals, decide for themselves. The-- And, and in terms of, so, so, so then becomes, you know, when Alex says Bitcoin democratizes access over money, it's using democracy in the kind of nice, framing of, freedom and equality which we associate Associate with it, but really not accurate in the sense of the strict technical meaning of the word democracy, which is that, which is the rule of the majority. So if we're talking about it being the rule of the majority, you know, Bitcoin, isn't democratic, and Bitcoin decentralizes control over money by making it anarchist, by making it an anarchist society where anybody can opt in and opt out as they see fit, and nobody can force others. So that's, that, that's the concept of free association. Creation, that's the concept of individual, sovereignty, and that is contradictory to democracy, because democracy, i-i-if you believe in the rule of the majority, well, what if the majority wants to violate somebody's sovereignty? What if the majority wants to take away somebody's stuff? What if the majority wants to deny somebody their human right? That's perfectly democratic, and, You know, advocates of democracy, tend to just, do the same kind of, shuffle that socialists do, which is, "But that wasn't real democracy, that wasn't real socialism." You know, every single example of socialism that we've ever had has ended up with people starving, and yet there still are idiots in this world who tell you, "No, no, no, no, but actually socialism can work." Now, I'll admit, obviously, democracy has a much better track record than socialism, if at least, although some would argue it's Just because, you know, democracy is the, early stages of socialism, so obviously it's going to not be as bad. But, still, the, the reality is, you look around the world, you see, the, the, this kind of system where we choose, where we just let the majority rule, it ha-- has given us all of the worst people that you can think of, you know? Stalin was democratically elected, Hitler was democratically elected, Mao was democratically elected, well, I'm not so sure if they held China, but I would presume so. But in any case, m-most of the worst criminals of the twentieth century were democratically elected, and, y-you could argue about, whether they had freedom of the press, freedom of speech, or, human rights, obviously those things didn't work, but they still had the rule of the majority. And I think we can't just, we can't perform this idea that it's the rule, the rule of the majority is the way to go, but then when the majority wants something that we don't like, well, then it's real rule of the majority, you know, it's, I, I don't think that's very, consistent because you see, you know, the, the majority will want bad things, and what ends up really working in the long run isn't the situation in which the majority gets what it wants. What works and the natural order of things is for this to be out of the question, you know, if we don't have the legitimating function of democracy out there, legitimating, The idea that, you know, government is a good thing, that government is out there looking out for you, government is there to help you, if we get rid of that horrible, dangerous lie and we just, a-and people understand that they're out there in the world on their own and that getting a bunch of other people to win a popularity contest with you, to, to, to, to, to help you win a popularity contest doesn't give you magical rights to violate the rights of others, I think that's a far better, way of understanding, the world. And If you look at it, you know, Alex presents it as if the alternatives are Costa Rica versus Cuba or, you know, the US versus China, but in reality, all of the examples of dictatorships and authoritarian regimes that are-- well, maybe not all of them, but the majority of authoritarian regimes and dictatorships around the world are actually, democratic. It's in the name of their country or political party, and they're all cl-claimed to be democratic. You know, it's the Democratic People's Republic of Korea. That's, that, that, that's the one that, you know, you can call it authoritarian, but it's, it still wins the elections. And then, you know, you're arguing about how do we have the right elections and how do we get the people in North Korea to have the right elections? And that's really where democracy is, you know, that, that's where it's compromised. It's, there's no-- Because the, the, there's no legitimate way in which you can make the will of the majority, become valid and become,

You know, the majority wanting to violate the rights of the others becomes acceptable. And, in, in terms of the alternative, the alternative, I think historically, it's, it's, it's an alternative that has coexisted with democracy for thousands of years, because democracy is not something new. We've had democracy for many, many years in many different versions. And generally, there's the natural order of societies, which is monarchy. And then, when it starts to go toward the republic of form, when it starts to go toward democracy, that's when societies really fall So you look at monarchies, you know, you see, if you look around the world, the problem with, most political science today is that when they look at democracy, they put, Western, you know, liberal societies in the banner of democracy, and incidentally, all the good things-- or maybe not all, but the majority of the good things in these societies don't come from being democratic, they come from the classical liberal tradition, which was, you know In a sense democratic and in another sense anti-democratic in certain way, but it's really the idea of, just liberal, you know, the liberal tradition is what, makes these societies prosperous. but i-if you think about it in terms of monarchies versus democracies or versus republics versus places where people get to vote, you see historically, you know, you see the examples of how countries went to Shit basically after they got rid of their kings and replaced them with democracies. It's, you see it all over the world, you know, i-in my region of the world, you look at Syria, well, Iraq and, Egypt, and, and you compare how they were under monarchies to how they became under republics, I, I, I, you know, you compare them then to places like Jordan and Morocco, which remained monarchies, and you see just an enormous difference in the quality of life and the peace and the prosperity. And I think that's because it's, you know, you, you, you have a very strong limitation on the fiction of democracy, and people don't want to rule each other. We don't have this legitimate, legitimation of government

Yeah. Yeah, well, thanks very much, Saf, Dana. So I think perhaps what we can have is, a first round of rebuttal from each side. So, Alex, if you wanted to, go back to Saf here, and maybe a good point to touch on would be there seems to be a slight definitional conflict around what we define as a democracy, so maybe that would be a good point for you to touch on in your response.

Yeah, absolutely. So I think there's a lot I agree with what Saf just said, but I, I think that it

You or that you, that you're advancing that democracy means majoritarianism. So if you look at the word, it just means ruled by the people. It doesn't say anything about voting or majority rule or minority rule, et cetera, et cetera, is what I would argue. And I, I would actually agree, majoritarianism is very bad. I, I will absolutely agree on that. And Bitcoin protects against majoritarianism. I would also say that, and, and I, I, I agree that you'll, you'll be able to accuse me of kind of,

like the socialists, but, but, but this is a very specific version of democracy that I'm speaking about. in general, we start from the concept of rule by the people, not by the few. And again, the word vote isn't in the word democracy. And for me, a-as a student of, of freedom around the world, in terms of the way I see political regimes act and the way I see, different civil liberties advocates function in many different, different kinds of environments, I- I believe there's like different layers of, of what I would call democracy, and the most important layer is actually free speech, then civil society, then a balance of power, and then only at the end, our elections important. They're kind of like the cherry on top of this sort of thing. As you point out correctly, every dictator is elected. Even Kim Jong Un in North Korea has an election. He's of course the only, you know, person on the ballot, but it, it is an election. Hitler was elected. All these, Stalin, they all have these rigged elections.

Rights, democracy point of view, that none of these are legitimate and that elections aren't legitimate unless they're free and fair and unless there's a free press. So I think it, it is definitely-- you could accuse us of, of, you know, trying to have it both ways and trying to be very specific about the interpretation, but for me, democracy is a, is a what we call liberal democracy, which is a marriage of, these liberal enlightenment values, which I think we both agree are very important, things like free speech and property rights, with a The, you know, occasional voting mechanism that allows the people to shuffle those in power. this is sort of liberal democracy, which is the thing that I'm gonna defend today, and, and you know, I, I, I will make that more clear. But, a lot-- again, just to touch on a couple other things you said, I agree that the history of democracy in the Middle East has been a disaster, for example. And, and we can, we can say, obviously in other parts of the world it's been better, like, you know, Far East

Europe, it's certainly been better. But in the Middle East, yeah, I mean, I think that again, if you're talking about this idea of liberal democracy, yeah, I mean, Egypt's had a couple elections after Mubarak, but we wouldn't call them democratic necessarily. I mean, look what happened when the Muslim Brotherhood came into power, the military just came in a little while later and just kind of took 'em out. So there wasn't really an opportunity for a real democracy to emerge there. certainly not in Syria either. At least this is kind of what I would say to that. and then getting back to a couple other things, again, just to underline, yeah, I don't believe elections mean democracy. I think they're one piece of it, but you can't just have an election without all the other, more important stuff underneath. All the enlightened value stuff is much more important than the actual vote. And then, when it comes to majoritarianism and democracy, I'll actually argue that democracies protect minorities better than dictatorships do. If you look at Christians in the Middle East East or Jews or things like that, I think you'll find that like democratic societies over time protect the rights of minorities better than, than dictatorships, generally speaking. You could of course find exceptions to the rule, but, you know, a lot of what liberal democracies are built on is this idea of protecting minority rights, actually. You know, when it comes to bringing that into Bitcoin, it is, again, something that I believe, you know, at the end of the day, the word democracy just simply means rule by the people, and again, I think the scaling- Wars really demonstrate that, that Bitcoin is ruled by the people, not even by the developers. I mean, the developers didn't want, want to do the, the user activated soft fork, or at least they claim they didn't want it to happen. So, you know, you had the miners and the corporations and the developers, and none of them wanted it, and it happened anyway. And, and I think that that is a very democratic, democratic thing. And, and just as a final thing, final rebuttal, it is true that, that we on our side are, I guess, Disagreement rests, and you say they're ortho-- they are orthogonal, and in some cases they are, but there is this, again, this marriage of liberal values and voting called liberal democracy, which, which I think there's a very robust tradition of, and there's a very-- many, many examples of around the world, in every major world region, where these things aren't orthogonal and they actually sort of work together, and that's kind of what I'm saying is, is a really good thing for humans, and that's what I'm comparing to Bitcoin. That protects the rule, the, the minorities. and, I'll finish there.

Excellent. well, yeah, I like, the point you were making there, Alex, around, it's an interesting one, and I think, the, the point can be made both ways around what's called the no true Scotsman fallacy of people saying, "Oh, I, I believe in, oh, but that wasn't a true example." And, in fairness, that can be applied in both ways. People can apply that to a capitalist

person

Blah, blah. So, Saftey, and I'm wondering, what your response is, on those points?

Yeah, I mean, I think, so, so, so we seem to agree on the things that we like, and I think, you know, Alex and I see eye to eye a lot, i-in terms of values and in terms of the things that we like, and, we, we both agree that it is the liberal part of liberal democracy that is, the most important. So, you know, if you You're going to be disappointed today. but, I think, what I would say is that the parts of the liberal democracy that, that, that we both like and that we both want to see are all subsumed under property rights, and that's what it really comes down to. So civilized society is built on the, foundation of the respect of property rights. You know, you respect the, physical, body of other people You, you respect their sovereignty over themselves and their sovereignty over all of their legitimate property. And the, the concept of legitimate property isn't something that is, that, that you need a nuclear scientist to figure it out. It's something that exists in all societies in the world. You know, whatever is, whatever you make out of nothing, out of, you know, i-if you find a piece of land that is unclaimed and then you claim it, then that's legitimate property. Or if you get it from somebody when you give them something in exchange. But by their consent or if somebody gifts it to you, those are the ways in which you acquire legitimate property. And so the concept of, legitimate property, i-is widely understood among everybody except, you know, children under three years old and socialists basically. everybody gets the concept that, you know, it's, it's your stuff, and, and you should get to do what you do with it. And when, when, when that understanding pervades a society widely, everybody respects everybody Else's stuff, and then everybody has the, you know, has the security in their property to think about it and invest in it in the future and, a-a-a-and, you know, take care of it, and that leads to people thinking of the future, people having a lower time preference, and that leads to investment, it leads to growing productivity, that's essentially civilizational progress. So for me, and, and I think for the, economists in the liberal tradition like Mises, what they focus on is the property rights. And I- I agree with you that, yes, there was in, in the nineteenth century and in the early twentieth century, there was a, there was a movement that made those two things go together, you know, you, you voted as a liberal democrat, because you wanted a government that respected property rights and allowed people to work freely and didn't impose, restrictions on others. And so maybe for, a, a, a nice few years there, there was, there was a move where democracy was- Leading more and more toward, more liberal, outcomes. But I think if we're going to be, if we're going to be actually a little bit more, thorough in our investigation, we'll see that the dynamic usually works the other way. As societies moved away from monarchical structures toward, democratic structures, they, started, protecting property rights less and less. And, I think the, the main point here is Is, what I, what, what I took from, Hans Hermann Hoppe's incredible book, Democracy the God That Failed, the entire first chapter is on time preference, and I think this is just an, an enormously important idea that democracies are inherently high time preference, whereas monarchies are much- More of a low time preference focus, because the monarch thinks of the country as their property and expects it to pass on to their children, and generally monarchs have, you know, obviously a lot of monarchs get killed and they don't, pass on, but, you know, most monarchs have passed it on, so they have good reason to expect that the, the odds of you passing it on peacefully to your child if you're a king are much higher than if you're the president of a republic and you're trying to rig the constitution so that you can put your son in charge or whatever you know, you, you see when these things happen, civil wars break out and so on, but under monarchies, y-you basically mute all politics because, you know, nobody w-is, all of the megalomaniacs have to find something else to do in their life because they're not gonna be king because they're not the child of the king, and if they wanna be king, you know, they have to go and kill the king, which is, you know, i-i-it's- For whatever happens, it's, it's a situation that sorts itself out quickly. Either they succeed and they become king, and we're back to living under a king, or they fail, and, you know, we're still living under a king. But there's no, there's, there's no constant struggle for who gets to rule over who. And I think, this is why, you know, the, the security of property rights ends up mattering much more than the, voting, in my opinion, because the voting, is not just that it it, it's worse than that. It, it gives everybody the idea that we are in charge, we should be in charge, I get to decide what happens with everybody else's stuff, I want to control everybody else's stuff. It's, you know, we as a society need to decide what should happen with, say, the beach and, or what should happen with this, bridge or what should happen. The, we, we move away, the more we have a, of this democratic, mind virus, the more we move away from thinking of private property right Of public property and thinking of government as being an, an, an omnious and omnipotent force that can manage the lives of others. And so this is why I think, you know, i-i-if you focus on the property rights and you, as an anarchist, and the reason I sympathize with monarchy as an anarchist is because as an anarchist, I don't think government is a good thing. I don't think that having somebody able, with the coercive power to influence people's decisions or to change people's decisions on their private property I don't think that's conducive to a healthier society, to a prosperous society, to a peaceful society. I think that's destructive. And so I don't want there to be any government, ideally, but having a monarchy is the closest we can get to that, because yes, we have one guy who is in charge, but we have millions of people who are, completely muted essentially, who have their, all of their political drive, almost, You know, extracted from them because they just find other things to do. That's generally the case in monarchies. Nobody, well, not nobody, but people are far less concerned about politics than under democracies. And so, this is, this is really why I think, a-and if you look at what happened in the twentieth century, you know, the nineteenth century, brief marriage between democracy and liberalism quickly gave way to democratic socialism and democratic nationalism and national socialism. All of these These things which came through the ballot, you know, they came because of the strengthening of, dem-democratic reforms, I think.

Yeah, so really interesting. And so, Saf, I think this is one of those areas where I agree with you, but, in the spirit of being a fair moderator, I'm gonna try and ask you a couple hard questions anyway. So I could say, let's say I'm, you know, I'm putting on, the pro-democracy hat, I could say to you, "Well, hang on, doesn't it--

The king, if he's doing a good job of the management of the, the kingdom, or on the other hand, I could say from Alex's point of view, well, it's about having a free press and scrutinizing what's going on. Could we not say, well, it, it could also just come down to people's attitudes, and we could also say, even look, during all of this recent COVID or hysteria nineteen, whatever you wanna call it, a lot of people have simply not scrutinized, you know, the government.

so it's, it's Doesn't it come-- could, couldn't we make that argument that it's about really people scrutinizing the people in power, whether it's a monarchy or it's a liberal democracy?

I think so. yes. the-- but I think, you know, the problem here is that democracy doesn't just allow you to scrutinize, it sells you the, it, it sells you the temptation of you being the one in power, and I think this is the really dangerous thing, and what, what Hopper calls the, I forget the exact terminology, but it just makes it Desire other people's stuff and decide what they want to do with it. So, you know, I don't think that people should be able to, leave their homes because there is a virus or whatever. And so, you know, it's, since I believe that, then, well, we live in a society, it's a democracy, our elected representatives and our, and their appointed bureaucrats, decided to issue a law, and that's the rule of the majority, and so, you know, stay home, save lives. Don't be a granny killer. Admittedly, you know, this worked all over the world this time, but I think, you know, the, the, the concept of democracy strengthens in people, the, the idea that they get to decide for others what they should do. And I think, like, i-i-a lot of the examples that are, given as, you know, successes of democracy, if you really scratch under the surface, a lot of Western Europe is still a monarchy. And, a place like Switzerland, you know, I, I don't think it's, I, I, I, it's, I don't think it's a-- Well, this is where I would, to be fair, I was gonna say it's not a real democracy, but that would be me, doing the old socialist, not a real socialist trick. It is a democracy, but I think, what I emphasize in Switzerland is the fact that it's very localist, and so you have, a lot of sovereignty in the

Which people can know each other, I think, you can make a case for, you know, democratic decision making. In particular, I think, you know, i, i imagine I think the best way would be, is that, between property owners, you know, and if you have a town, the property owners, get a vote in ex- in proportion to how much property they have, and then with that, you know, y- You could maybe have some kind of collective decision making. I'm not entirely sure that this is the, this is necessary even, because you can just have private property rights and people, mutually and agreeing to things. But, but the point is that, you know, there's localism in Switzerland. Japan is a two thousand plus year monarchy, and, you know, it's only been a democracy recently, but, you know, it, it's, it's been thousands of years as, as, as, as a monarchy under the same family. The ruling family in the world. So a lot, a lot of the credit that democracy likes to take for a lot of things is probably not entirely, the outcome. And of course, there's the, the, the kind of general, the, the overarching theme, which is that democracy basically is taking credit for the benefits, for, for the products of, the industrial revolution, which, let's face it, came out of England, which wasn't democratic in the seventeenth and eighteenth century. that's when the engines came out, that's when really, our Utilize so much more energy into our lives, and that gave us all these amazing technologies. it happened that democracy came as an outcome of the increased prosperity. I think that's a more likely explanation, but then it took credit for it anyway. Yeah.

Alex, maybe I'll throw a question to you as well. So, you know, we've got this idea of democracy, and, you know, we've got a free press and so on. How do we stop a democracy from becoming overreaching or tyrannical as they historically have done?

Yeah. Yeah. There That I also wanted to unpack. So I'm just gonna write that I just wanna hit a couple things before we're there. Again, I, again, I agree, I agree with Safiine that, that civilization is sort of based on property rights, and I think that that's, it's hugely important, and a lot of people in the human rights community don't understand that property rights are so essential. And when we, we used to do work, for example, like sending educational materials into Cuba. The property rights thing was always the key thing. We would like explain to people that, you know, this is one of the absolutely basic freedoms. And at the end of the day, you know, who protects the property rights better, Switzerland or Singapore, or Canada or China? I mean, we fight over eminent domain in the United States, of course, but in China, the CCP just, you know, comes in and they say, "I wanna build a dam here," and you're all screwed. Like, there's literally no way for you to fight back. So I would say actually in liberal democr

protests that allow people to actually protect their property. However, I will concede that no government is, is, is good, even, even good here, I would say. And that's why we have Bitcoin. And Bitcoin is true property rights. I mean, everything else is just a statement from those who have a monopoly of violence that they promise they won't do X or Y. and I do agree that societies around the world are protecting property rights less and less and less. And, and again, that's why I think Bitcoin's so important. On the time preference thing, this is really interesting I'd argue that democracies are actually kind of like, more anti-fragile. They're, they're kind of harder to change than dictatorships, where everything is arbitrary and can change in literally a moment. In democracies, things are just kind of slower and harder to change. True democracies, w-w-again, the, the Scotsman fallacy, liberal democracies, like in the United States, I mean, despite all the stuff you read in the media, I mean, we're not gonna have a civil war. There's gonna be a peaceful transfer of power in If you want to kill our democracy, it's gonna take a lot of time and a lot of money and, and same thing could be said for Japan or any of these other like established democracies, Germany. I'm not saying they can't be killed, and indeed, in the last twenty years, I'll name three countries which regressed terribly in this area with a half billion people. The Philippines, Thailand, and Bangladesh all went from being more kind of open and democratic to back to being dictatorships, and it's been a disaster for those people. But, but, and so it can certainly happen. But in general, democracies are harder to kill and, and harder to change, and, and I think monarchies and dictatorships are the ones that are more fickle and, and changeable and less stable, and therefore, like, I don't think they plan super well for the future. With regard to this, and then this final idea of like, that, that democracy kind of implants this, idea that you can like have your neighbor's stuff

I think it's, it's definitely an interesting idea, but again, I would just say that like in these liberal democracies, if my neighbor wants my stuff, I, I think there's like, I have more protections than, perhaps in a dictatorship where there's so much corruption that like the neighbor that wants my stuff can just go to the dictator and, and offer some money and probably get my stuff. So again, like I, I'll probably have more protections in a liberal democracy against the temptations like that. And then on the lockdowns thing, look, if you don't Lockdowns, you'll certainly, I'd certainly rather be in California than China. I mean, I, I, the, I, whatever, I could, you know, disobey with the law and at worst get a fine. In China, you'd be fricking disappeared and sent off to a prison camp if you tried to evade the lockdown. So again, I think, you know, if you don't like things like lockdowns, you'd certainly prefer to be in a democracy, not a dictatorship. And just on the Western Europe point, I mean, yes, theoretically, a lot of these

I mean, you know, the monarchs have been stripped of their political power over time. Look at Norway's a great example. I mean, it's still a kingdom, the king still has a, a meeting with the foreign minister every week in Norway, but he can't really make any decisions. They're more like figureheads, which actually I think has been very healthy for society. These like constitutional monarchies are actually really powerful structures, and, and they balance like a lot of the tradition of these countries with, again, the liberal values, and those are probably the best governments in the world Other political power clipped. okay, so finally, to get to your actual question, how do we stop a democracy from overreach? yeah, how do we stop like mob rule in a democracy is a great, a great question. And, again, I think I agree with Safi Dean that here the protections have to be from the liberal value side, not from the voting side. Oftentimes you see like mob rule coming after a big political revolution. Like a good example would be like Venezuela or like Zimbabwe, where you had- A populist come to power like Mugabe or Chavez on the back of, hey, you know, there's this small group of people who control everything, let's steal all their stuff and give it to all the poor people. And this is like basically Chavismo or what Mugabe did throughout the eighties and nineties, both have resulted in absolute devastation and obviously hyperinflation and all kinds of other social ills. But I would argue that they, they-- those two leaders got there, they, they instituted mob rule through- Authoritarianism, not through democracy. They, what, how did they get to where they wanted to go? They destroyed democracy. Chavez over time, over, you know, over the two thousands and until he died, two thousand thirteen, he, you know, packed the courts with his cronies. He, you know, created his own legislature 'cause he didn't like the one that the democratic legislature, he didn't like the laws they came up with. He took licenses away from the free press, so he dismantled it. And same thing with Mugabe. I mean, both of these people are War criminals basically who took their countries back in time a hundred years, but I think they did it through authoritarian tactics, not democratic ones.

But first they had to use the democratic ones. They wouldn't have gotten the authoritarian power had they not gotten through with democracy. I think that's true. That's the, that's the kind of the, the elephant in the room of all of these, mass murders that are democratic, that are dictatorships, that are authoritarians. You know, all of these places at one point in time, everywhere, w-was A peaceful, happy monarchy with a king and, you know, people who minded their own business and life went on. And then, a bunch of idiots went and got educated in the US and the UK and learned some, stupid, socialism and decided, hey, what our country needs is for me to kill the king and be in charge and take over all of the stuff, and then we will become a civilized, advanced country like the Europeans. So let me just start by killing the king, and then, you know, all these places go to shit after that. I think this is, this is kind of the, the, the, the real, point that's missing, which is, you know, y-y-uh, I appreciate that you, pointed out constitutional monarchies as being a good form of government, but I think w- you, misidentified what the advantages. You said because constitutional monarchies clip the wings of the, Of the monarch. I think it's the other way around. Constitutional monarchies are good because the king is always there as a check preventing the democracy, preventing the emergence of a Chavez or a Mugabe or a Hitler or a Mussolini or an FDR from that, democratic system, because that's what democracy naturally tends to. It's just, it's, it, it, it's an entire power structure that is in charge of itself. You know, once you're in power, you know, you're the one who decides who gets to count the votes, you're the one who Decides who gets to run the, elections, who gets to open a newspaper, who gets to say what, who gets to run any factory, of course, and of course, you know, the, the, the, the major, one and the most important one is who gets to print the money, you know, that's, that's the dynamite in the hand of the children of democracy all over the world in the twentieth century. Just, you know, winning that popularity contest means you get to literally print money. And so, if you have a king, you know You can't get to that level, the king will always, undermine every next tyrant just before they become a tyrant, in order to just fire them and get a new one. And I think if you look at, you know, for instance, look at the, early twentieth century, when all the world essentially, or the mid-twentieth, you know, twenties and thirties, when after World War One and after the Great Depression, all these, countries started to go toward these authoritarian regimes, the monarchies were the ones who, didn Germany, Italy, and US, they essentially went toward, c-completely collectivist, economic systems and Russia as well, 'cause they didn't have monarchies. Britain, on the other hand, had a monarchy, and so it continued to alternate, one prime minister after the other, and never, you know, the closest you could come up with was Churchill, but Churchill was no Hitler. In, in, in terms of, and, and, and the British economy never had a Mussolini figure, and I think, the same is true for Sweden, the same is true, I think, you see it in monarchies all over the world. I, I, I look at Jordan, you know, it's, it's very hard for a prime minister to come up and, take over power and, Develop a, a power structure of him and his supporters that is strong enough to take over the country and then start really, giving them a lot of financial benefits from it. It can't happen because as soon as a lot of discontentment happens about the prime minister, you know, the king just fires him. And so you have this, constitutional monarchy is a wonderful check on parliament, it's a wonderful check on democracy because it, it pre-- there's always a king and you can't be king, you can't be the one who- Who, who, who is the top dog in the country? And I think, you know, it, it, it doesn't sound nice from a, perspective of fairness, you know, why does he get to be king and why don't I get to be king? And I think if, if you think about it in terms of just the natural order of society, I think it makes much more sense in that, you know, I have my own life, everybody gets to have their own life, and then, you know, one guy has, the job

I don't think it's a good thing that, we have any kind of government, but if I were to have one, I'd much rather be farmed by a monarchy than be farmed by a democracy, because the monarchist, you know, they're, they've been in power for hundreds of years and their plan is to have passed this over to their children hundreds of years from now. And so they care about what happens to the country in ten years, they don't wanna, rob the country today and then suffer the consequences in ten years. So you look at monarch As you see, they're far less likely to engage in inflation than in democracies, because in democracies everybody, rallies around the leader, everybody thinks, "Yes, we need, you know, we need to feed the children and build the hospitals or, build roads or whatever," and that just legitimizes what the con- function of government is, whereas the king is thinking about the fiscal crisis that will meet their son in twenty years from now. They don't wanna give their son a hyperinflation to, to deal with in twenty years from now, so they're That's why monarchies have much lower inflation rates overall. Now, in, in terms of democracy being harder to change, I think, you know, maybe the US won't have a civil war, but I think it's, th-this is, it's kind of, strange how democracy gives people this illusion that, well, you know, you don't- Things are alright because we get to vote, and, you know, no matter how bad things get, people continue to be, sort of, suspending, The realization of it. I mean, I think it really what happened in the US this year in terms of just the, the economic devastation that happened to people and the, a-a-a-a-a-and the just the, the security situation in American cities is absolutely calamitous, and it's not something that is, you know, it's not something that was normal one hundred years ago. If you, if you told somebody living in the US one hundred years ago that in a hundred years you would, you know, in, in twenty- Twenty twenty, it'll be very difficult to walk in the streets of any city, any major city in the US, and be safe. It would, it, it would sound astonishing, like, "Who, who, who came and conquered this country and destroyed it in order for it to reach that stage?" And I think, it's, it, it, it's not something unique to the US, it's something that happens a lot once you move down that path of government as the arbiter of who gets to keep what, and once you have high taxation, once you have A, a, a central bank that, favors some people at the expense of the other, all sense of justice, corrodes and society begins to fall apart more and more, and this is really much more common in democracies than, than, than, I mean, if you think about democracy from the, well, no true Scotsman fallacy, you know, it's only democracy when it leads to,

roses and rainbows Then, yes, democracy protects against that. But if you think about it in terms of,

if you think of democratic politics and more broadly, you see that what has protected most places from degenerating into, open societal warfare has usually been the presence of a monarchy. So you look all over the world, you see that many of these monarchies continue to be stable in regions that are very unstable. You look at Jordan and Morocco. you know, the last one hundred years in Arab politics, you-- Jordan and Morocco have basically been, almost entirely peaceful throughout this time. You know, they have peace, they have prosperity, they live as monarchies. You compare to their neighbors who had gone through republics and just how much things continued to get worse. I think particularly over the last ten years, as things have gotten absolutely horrible in, in Syria and Lebanon and Iraq, while Jordan continues for another almost one- century of almost uninterrupted peace, I think it's becoming quite clear that there's something fundamentally in, in-- there's something about democratic politics that fundamentally leads to societal conflict, which you don't get in monarchies. And I think to bring this back to Bitcoin, which we've forgotten about, I, I think the, the, the appeal of Bitcoin for me, is in the fact that it's just- Makes it so that whatever the government is, whatever form of government is there, it makes the craving for other people's stuff much harder because if you can't print money, then you can't-- that-- and that's really the, the, you know, the main way of expropriating people and the main way of using property rights is through inflation more than anything else. And so if Bitcoin can, You know, take that, take that magic printer away from the hands of governments. It's, you know, it's good because it reduces, I think the democratic drive, the, the notion that, you know, if the majority wants something, then it's legitimate, no matter what it is, you know, theft or murder are legitimate if the majority wants them. This becomes much harder to finance if you, no longer have a magic printer.

Alex, let's hear your, thoughts there.

Yeah. So I, I think that a lot of This has to do with our interpretation of what a monarchy is also, and what, what the track record of monarchies are recently. Yes, there is this idealized version of a monarchy, again, to mention this fabulous TV show, The Crown. There's a scene in which the Queen of England plays a role in, in a scenario that may ac-- have actually happened in the UK in the 1960s, where she stops a coup from happening by basically overruling, what, what, what the, what What politicians and business interests were trying to do, and therefore that serves what Safedeen is, is, is showing is this sort of check on, on the people or whatever. And, and that may happen, but I would say that's a very rare situation. most monarchs aren't the Queen of England, most monarchs are like horrible thugs at, who have no, interest in their people, at least in the last hundred years, I would say. and he says that high taxation and a central bank that favors one pe-person over another are bad things, I agree, I would say that these are absolutely more prevalent in autocracies than in democracies. So think about hyperinflation. I mean, with the exception of the Weimar Republic, arguably no democracies have ever had hyperinflation, only dictatorships. Soviet Hungary, Iran, Somaliland, Zimbabwe, Venezuela. I mean, say what you want about the EU and the US and Japan in the last thirty years, but they've managed their economy way better than North Korea and Cuba. I think that, that autocracies are much more likely to engage in inflation, especially because there's- There's no independence of the central bank from the ruler. If anything, the slight nominal even independence of the central bank from, the political power structure in places like the UK and the US is really helpful. Like in Turkey, when Erdogan literally just gets to decide how much money to print. I, I mean, this is a country where the vice president was literally found with a money printing machine in his basement. I mean, these people have no separation at all in autocracies. this is one of the reasons why Venezuela got so bad is 'cause Maduro could just- Print whatever he wanted to, there was no one saying no, and at least in liberal democracies, today, there is that sort of somewhat of a separation between the central bank and the people who are voted into power. I would also just say that, look, the Jordan and Morocco point is compelling, certainly. However, those are, again, very unique situations, and I think they have been relatively better off than, than other countries in the region, 'cause they've allowed actually a little more freedoms for their, for their, for their people. That's a patronizing way to say I guess, but a-and I think there's a chance in the next ten years that those two countries could actually shift into more of a, a constitutional democracy. But let's not pretend it's all roses in those two places. I mean, there's horrible secret police torture. I mean, you get disappeared if you disagree with the government in many cases, and there are good reasons to, to think that those two countries aren't maybe having such a bright future. But, but I will certainly agree with you that they're better off than, than their neighbors. So maybe that's a point in your favor. And when it, when it comes to like the unrest in the United States lately, I mean, yeah, it's scary in a way, but I think a lot of it's being overhyped by the media and In general, it's much better than it was. I mean, a hundred years ago, again, it's not like the US was great. I mean, a large percentage of the population in the United States was being lynched and hanged and had no rights at all a hundred years ago. there were literal, literally mobs roving around, like murdering people, and the government wouldn't do anything about it. And, and, you know, today, while that still seems to happen in some areas, you know, most of the time there's accountability, I mean, or at least there's Finally, the last point I'll make is, you know, actually the appeal for Bitcoin for me is that it's not a monarchy, that your background means nothing, your bloodline means nothing. Bitcoin, I think, is for the people, it doesn't discriminate, and that's why it's, you know, democratic, I guess, in this word, you know, ruled by the people, if you actually just look at the Greek word democracy. So that, that's why Bitcoin's actually exciting for me, I guess, is the opposite of why, in some ways,

You, you, by the time that you've gotten a hyperinflation, by the time that you have somebody in charge who's able to just commandeer the central bank and destroy the currency, then yes, you've already crossed the-- you, you've already gotten rid of all the liberal parts of liberal democracy and you've crossed over into the territory of, you know, illiberal democracy and authoritarianism, and you've become a Chavez or a Mugabe or, but I think, you know, it's, it's, it, it, it's, I think it's slightly disingenuous for, democracy advocates not to take ownership of this. Like it was democratic elections that led to this, and if it wasn't, you know, if it wasn't for the initial ideas that- Come, you know, in, in, in the fifties and sixties and seventies, in the seventies, Venezuelans started voting for nationalizing the oil company and started voting for, you know, public spending, more public spending on-- It always begins with the, the, you know, the, the nice sounding things, like nobody wants to have children not educated and nobody wants to have poor people not being able to afford to go to the hospital. Alright, so then let's just nationalize the oil company and then we get to keep all the profits. But, you know, This leap of, alright, there are hungry children, and if we nationalize the oil company, there won't be hungry children. You know, that becomes very easy because you have that we. You know, once you start believing that there is a we out there and that we can decide how to allocate and take things, and that the fat cats at the oil, industry are making too much money, whereas the hungry children are, going hungry, and we can fix that. You know, just take a little bit more of money from the fat cat Cats and the oil company and handed out. It sounds innocuous initially, but once you've established that habit, the more important thing that you establish is, an, an organ of the government That is in the business of taking from others and giving to others and deciding who gets to take and who gets to give and who gets to get. And so basically, once you've created that, then it's really a matter of time until that degenerates more and more, and then that gets co-opted into the democratic politic-- political process, wherein you buy people's votes by promising them to give them other people's stuff. So You know, this is how it started in Venezuela. Venezuela in the 1950s was the fourth richest country in the world. It was one of the richest places in the world. It was, you know, I remember up until the 1980s and early 90s, you, you, people, people spoke of Venezuela as being different from Latin America. You know, Latin American countries were basket cases with inflation, and, you know, Argentina and Brazil were having their prime ministers and presidents taken off in helicopters and stuff, and all these places were going to hell, and It was, you know, the, the, the, sophisticated advanced place that had been very rich for a very long time, but with democratic politics, this eventually continued to exacerbate, and then it just becomes about who can play that, m- That card of, manipulating people for votes and giving them other people's stuff more effectively, and then, you know, that's a game where the, you know, it's, it's a negative sum game for society overall. If you and I are competing on who can rob others in order to hand money over to others, then, you know, everybody loses. At the end of the day, we end up with a society in which people, in Venezuela today, are eating out of the trash, and it's not, you know, it's not because Chavez just decided to go dictator at some Of this game of what, what top likens to, e-everybody in society has their hands in everybody else's pockets, and everybody is trying to manage everybody else's money and just trying to decide what happens to them. That's, I, I think we can't separate that, you know, the emergence of the Chavez and, and, and, and these things, we can't separate them from, from, from the origin of that, of that. And I think, I would say like the, generally the anti-democratic position is, presented, I think, l- Far less coherently when, presented by, conservative politicians, who are playing the political game. But I think, the, the, not a lot of people like to talk about monarchy, and it's not popular to speak up about monarchy. But I think the, the only coherent, position against this is a situation in which we have a king, and everybody, you know, all of the people that need to be manipulated, under democracy are just manipulated with loyalty to the king, and they just believe the king is sent by My God, and that's why you don't put your hand in anybody else's pocket and you focus on your own self, on your own life. I think that just works out much better as, as, as a protection for society in the long run.

Excellent, thank you, Saf. So now, so look, we're coming to time, so perhaps it's, it's a good time to just have final comments from each side. So perhaps Alex, if you would like to lead off with

your final comment. Yeah. I mean, again, I think, liberal democracy to me holds up as the best form of government. I think absolute monarchy is obviously bad for humans. I mean, the best example is Saudi Arabia, which is a disaster on every possible level. you can make a case that constitutional monarchies are good, but I would argue that, that- Only the ones in which the monarch has had their power clipped away have functioned well, and I also think that liberal democracies have had much less shenanigans when it comes to, money printing than, than autocracies and absolute monarchies, just as a general rule. Obviously, coin clipping itself was, was, you know, done first by kings, right? and a lot of the technology we're excited about is, you know, in Bitcoin is, is, is a protection mechanism against coin clipping basically. So generally speaking, I think liberal democracy holds up today. It's not perfect, certainly. There's a lot of stuff I'm worried about with regard to surveillance technology and people giving up their rights and becoming ignorant sheep. But a lot of this was predicted by people like Tocqueville, I mean, a couple hundred years ago. You have to, you know, citizens of democracies have to be quite active, or else, you know, things go south. So I, I won't pretend that it's perfect, but generally speaking, I, I, I would like to conclude Have, of course, the, the Churchill quote, and that the things that make them good, the balance of power inside of them, the fact that no kind of one group has power over the others, that they're, maybe there's a, maybe there's a monarch, maybe there's a parliament, maybe there's a military, maybe there's a free press, and they kind of balance each other out, that is what is so powerful about Bitcoin as well, is that there's this ecosystem of, miners and developers and users and, and, commercial folks, and they all

Arrangement. And at the end of the day, I, I do think Bitcoin's democratic for, for the reasons I argued and, especially 'cause it's ruled by the people. I mean, it's not ruled by the miners, it's not ruled by the developers, it's ruled by the users. And, I think that's kind of, the way I'd like to end it. But I, I really enjoyed this, and of course, there's a lot of areas where, where I agree with Safedine. So it's, it's been a lot of fun

Yeah, I'll say, I agree with you, on Bitcoin, you know, there's no authority in charge, but I guess we could summarize our entire agreement is that in that you say Bitcoin is, controlled by the users, I would say Bitcoin is controlled by the user. So I think that one plural S is a summary of the differences in that for me, it's really the individual, and so it's my node, my rules, and I can only join the network by, agreeing to the rules and by not- And forcing it on anybody. So, for me, this is what I look forward to, this is what I like in liberal democracies and what I like in monarchies, just, you know, the, the, the concept of private property rights, which, you know, your Bitcoin node embodies. And I, I, I doubt that the concept of rule of the majority is, i-is a useful one in society or in Bitcoin. And I think, you know, to, to, to, to go back to the example you mentioned, yeah, Saudi Arabia, you may Saudi Arabia, but I think, we can always hypothetic, hypoth-- I would make hypothet-- find hypothetical reasons why people hate things and why things are bad, but, none of that compares to what people do when voting with their feet. And I'll tell you, for the past sixty years or so, the best thing that all the smartest and brightest people in Iraq, Syria and Egypt could achieve or could dream of is a job in Saudi Arabia. Like in, in most of those places for the past fifty years, all the brightest are Trying to secure a job in Saudi Arabia, and it's a one way traffic. There aren't Saudis trying to get jobs in Syria and Iraq and, Egypt. So, you know, it, it, it may not, fit according to the cultural sensibilities of, people who believe in democracy in the West, it may not be the ideal society, but I think in terms of the thing that matter to people and their families and the security that people look forward to in life, for all of its failings and all of its imperfections and all of its problems, the It as a, a, a, a, as a monarchy has exceeded what its neighbors have, what its democratic neighbors have, had. And I think, y-y-that's something worth considering and something that can't just be dismissed by, you know, well, it wasn't real democracy, democracy, because, you know, we've had a hundred years of post World War One political order in the Middle East, and I, and, and I, I, I think I really need to write something about this. It's just like we, we, we can-- 20 countries, and, the, the evidence is kind of overwhelming to support the, the, the pro-monarchy thesis and the idea that the move toward democracy has, ha-has not worked out. And I think the, the, the Arab countries aren't, the same in, in, are, are not, alone, alone in this. You can find, similar stories all over. I, and one, one more thing, one point that I, didn't bring up during my initial comments is just, democracy's problem is adverse selection. The people who can win popularity contests aren't the best people that you would want making decisions. And, I would take the luck of the draw or the luck of birth over a popularity contest, because a popularity contest selects for negative traits, whereas the luck of the draw is, you know, you could get a good guy, you could get a bad guy. But with elections, you can't get a good guy, you know, that, that, it, it doesn't happen. If they were a good guy, they wouldn't have made it out of their local primary, you know, they would have been cheated out of their first electoral, job. Very, very, very few, examples of

Thank you very much, Saf Dean, and Alex. I think that was a great, discussion. Both of you made some excellent arguments, and, it was a pleasure to moderate. I hope you enjoyed that discussion. Make sure you check out Saf Dean's work over at safdean dot com, and also follow Alex Gladstein at Gladstein on Twitter. You can find me at stephanelivera dot com. Thanks, and I'll see you in the citadels.