Is Bitcoin a democracy? Or is it more like a natural order? What about democracy in general, does that protect human rights and enable human flourishing? Saifedean and Alex Gladstein debate the question of whether democracy promotes human flourishing. This was moderated by Stephan Livera, initially on Saifedean’s online seminar.
Saifedean‘s Links:
- Twitter: @saifedean
- Saifedean.com
Alex Gladstein‘s Links:
- Twitter: @gladstein
- Hrf.org
Sponsors:
- Swan Bitcoin
- Unchained Capital (code LIVERA)
- Knox Custody
Stephan Livera links:
- Show notes and website
- Follow me on twitter @stephanlivera
- Subscribe to the podcast
- Patreon @stephanlivera
Podcast Transcript:
Saifedean Ammous:
All right. Hello and welcome to the Bitcoin Standard Seminar podcast. In today’s episode, we have two special guests who are going to join us for a debate on the topic that we had in a few weeks ago on the seminar Stephan Livera, who hosts t
Stephan Livera:
Thank you very much Saifedean. And so yeah, I’m excited to moderate this one. I think I’m really looking forward to hearing some of the arguments that you, Saifedean 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 going to take the affirmative side there arguing that yes, Bitcoin is democratic and good, and as you can take the negative side. So we’ll keep this as a sort of loosely 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 hear it from you.
Alex Gladstein:
Thanks really appreciate you guys making the time for this should be, it should be fun. So I’ll start with the quick argument of why I believe Bitcoin is democratic. And then I’ll also include a little bit about why I think democracy is a positive force for humanity. So for Bitcoin, I want to 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 it’s sort of a, 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.
Alex Gladstein:
And we can unpack that, but that’s basically part one, part two 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 a fully democratic, competitive authoritarian and fully authoritarian. So you basically have the spectrum between democracy and dictatorship open and closed societies. And I’d argue that Bitcoin is very bad for authoritarianism and good for democracy. And in particular democratic movements with inside authoritarian States and recent examples include of democratic movements 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 oppression to try and stop those protests and people have been able to use Bitcoin to fight back.
Alex Gladstein:
Finally, technically as it, on the protocol level, 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 some power and the developers can make some proposed some laws, but ultimately the users get to decide what laws are going to stay and what blocks are going to 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 those are my three arguments about why Bitcoin is democratic.
Alex Gladstein:
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 in 2020, as opposed to perhaps in a more philosophical way in as much as, I mean, what are the other options from a, nation state level. I mean, again, you have different kinds of political regimes. And I would argue that most people would want to be in South Korea and not North Korea. I mean, most people would want to be in Costa Rica, not Cuba. Most people would want to 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 a much better one for democracies.
Alex Gladstein:
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 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 the United States could actually lobby for freedoms to be kept in these areas unlikely but possible. And that’s what a democracy affords in a dictatorship. There’s no chance. I mean, the Chinese citizens, the Saudi citizens, the Russian citizens, you know, they’re not going to get to like lobby for financial privacy or freedom. It’s not going to be an option for them. So this is why I think democracy is really important and helpful in today’s world.
Stephan Livera:
Excellent. Thank you very much, Alex, and Saifedean let’s hear from you.
Saifedean Ammous:
Yeah. So I think I would I’d begin by saying that Bitcoin is not a democratic system. Bitcoin is not democratic because Bitcoin is based on consensus. And so there’s the definition of the word. Democracy is a 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.
Saifedean Ammous:
Because democracy specifically refers to the rule of the majority, the idea that the majority get what they want and Bitcoin is 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. 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 there’s no, there’s no way around that. Like, if you want the Bitcoin consensus 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 does not get to decide the individuals decide for themselves. The and in terms of 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 with it, but really not accurate in the sense of the strict technical meaning of the word democracy, which is that which is the role of the majority.
Saifedean Ammous:
So if we’re talking about it being the rule of the majority you know, Bitcoin is not 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’s the concept of free association. That’s the concept of individual sovereignty, and that is contradictory to democracy because democracy you know, 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 rights that’s perfectly democratic and you know, advocates of democracy tend to just do the same kind of shuffle that socialists to do, which is, but that wasn’t real democracy that wasn’t real socialism.
Saifedean Ammous:
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, but actually socialism can work. Now we’ll admit obviously democracy has a much better track record than socialism if at least other some would argue is just because, you know, democracy is the early stages of socialism. So obviously it’s going to not be as bad, but still the reality is you look around the world, you see this kind of system where we choose, where we just let the majority rule. It 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 democratic. They elect, well, I’m not so sure if they held elections in China, but I would presume so, but I guess most of the worst criminals of the 20th century were democratically elected.
Saifedean Ammous:
And you could argue about whether they had freedom of the press, freedom of speech, or you know, 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, we can’t perform this idea that it’s 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 not really rule of the majority, you know, it’s I don’t think that’s very consistent because you see you know, the majority will want bad things. And what ends up really working in the long run is not a 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.
Saifedean Ammous:
Government is there to help you. If we get rid of that horrible, dangerous lie. And we just, 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 help you win a popularity contest does not 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.
Saifedean Ammous:
And they’re all claimed to be democratic. And it’s the democratic people’s Republic of Korea. That’s the one that, you know, you can call it the authoritarian, but 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 there’s no legitimate way in which you can make the will of the majority become valid and become a proper that there’s no way in which that, you know, the majority wanted to violate the rights of the others becomes acceptable. And in terms of the alternative I think historically it’s an alternative, this co-existed 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 towards democracy, that’s when societies really fall apart. And don’t last very long. So you look at monarchies, you know, you see if you look around the world, the problem with,
Saifedean Ammous:
Most political scientists today is that when they look at democracy, they put a 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 do not 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 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 in my region of the world, you look at Syria, Iraq, and Egypt and you compare how they were under monarchy style. They became under republics. 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 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.
Stephan Livera:
Yeah. Yeah. Well, thanks very much Saifedean. So I think that’s all we can have is a first round of rebuttal from each side. So Alex, if you wanted to go back to Saifedean here and it may be 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.
Alex Gladstein:
Yeah, absolutely. So I think there’s a lot, I agree with what Saife just said, but I think that it all comes down to your interpretation of the word democracy, right? So you kind of have this view 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 would actually agree. Majoritarianism is very bad. I will absolutely agree on that. And Bitcoin protects against Majoritarianism. And I would also say that, and I agree that you’ll, you’ll be able to accuse me of kind of having it both ways or whatever, but like the socialists, but this is a very specific version of democracy that I’m speaking about.
Alex Gladstein:
In general, we start from the concept of rule by the people, not by the few. And again, the word vote is not in the word democracy. And for me 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 believe there’s like different layers of what I would call democracy and the most important layer it’s 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 the 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 person on the ballot, but it is an election Hitler was elected all these, Stalin, they all have these rigged elections.
Alex Gladstein:
So we would actually argue from our sort of human 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 is definitely you could accuse us of, you know, trying to have it both ways and trying to be very specific about the interpretation. But for me, democracy is that 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 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 going to defend today. And I, you know I will make that more clear, but again, just to touch on a couple of other things you said I agree that the history of democracy in the middle East has been a disaster, for example.
Alex Gladstein:
And we can, we can say, obviously in other parts of the world, that’s been better like, you know, far East Asia with South Korea and Japan, Taiwan, it’s been better Eastern 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 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 them 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.
Alex Gladstein:
I think there are one piece of it, but you can’t just have an election without all the other more important stuff underneath all the enlightenment 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 or Jews or things like that, I think you’ll find that like democratic societies over time protect the rights of minorities better than dictatorships do. 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. And 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.
Alex Gladstein:
And again, I think the scaling Wars really demonstrate that that Bitcoin is ruled by people, not even by the developers. I mean, the developers didn’t want to do 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, none of them wanted it. And it happened anyway. And I think that that is a very democratic thing. And just as a final thing, final rebuttal it is true that, that we on our side are, I guess, packaging the vote with these other enlightenment values. And I think this is where our main disagreement rests. And you say 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 I think there’s a very robust tradition of, and there’s a very 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. It’s a sort of democracy that protects the, the minorities. And yeah I’ll finish there.
Stephan Livera:
Excellent. well yeah, I like the point you were making there, Alex around it’s an interesting one. I think the point can be made both ways around what’s called the no true Scotsman fallacy of people saying, Oh, I believe in 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 and say, Oh, see, look what the, and then the capitalist person is in that position of saying, Oh, but see that wasn’t real capitalism, blah, blah, blah. So Saifedean. And I’m wondering what your response is on those points.
Saifedean Ammous:
Yeah. I mean, I think 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 in terms of values, 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’re tuning in for a shouting Fest, unfortunately I think you’re going to be disappointed today. But I think what I would say is that the parts of the liberal democracy 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, respect the physical body of other people.
Saifedean Ammous:
You respect their sovereignty over their selves and their sovereignty over all of their legitimate property. And the concept of legitimate property is not something that is 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 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 of it by their consent, or if somebody gives it to you, those are the ways in which you acquire legitimate property. And so the concept of a legitimate property 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 your stuff, and you should get to do what you do with it.
Saifedean Ammous:
And 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 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 leads to growing productivity. That’s essential to civilization of progress. So for me, and I think for the economists in the liberal tradition, like amazes, what they focus on is the property rights. And I agree with you that yes, there was in the 19th century and in the early 20th century, there was a, there was a movement that made those two things go together. You know, you voted as a liberal Democrat and because you wanted a government that respected property rights and allowed people to work freely and didn’t impose restrictions on others.
Saifedean Ammous:
And so maybe for 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 main point here is what I what I took from handsome and Hoppe’s incredible book Democracy: The God that Failed, the entire first chapter is on time preference. And I think this is just 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 expected to pass on to their children.
Saifedean Ammous:
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 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 regular constitution so that you can put your son in charge or whatever you know, you see when these things happen, civil Wars break out and so on, but under monarchies, you basically mute all politics because, all of the Megalomaniacs have to find something else to do in their life because they’re not going to be King because they’re not the child of the King. And if they want to be King, you know, they have to go and kill the King, which is you know it’s for whatever happens.
Saifedean Ammous:
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 no constant struggle for who gets to rule over who. And I think this is why you know, the security of property rights ends up mattering much more than the voting, in my opinion, because the voting is not just that it’s inconsequential. It’s worse than that. 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 we move away.
Saifedean Ammous:
The more we have of this democratic mind virus, the more we move away from thinking of private property rights and thinking of public property and thinking of government as being an omniescent omnipotent force that can manage the lives of others. And so this is why I think you know, if you focus on the property rights and you as an anarchist, and the reason I sympathize with monarchy as an inaudible 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.
Saifedean Ammous:
Essentially we will have their, all of their political drive almost you know extracted from them because they just find other things to do. And 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 really why I think and if you look at what happened in the 20th century, you know, the 19th century brief marriage between democracy liberalism quickly gave way to democratic socialism and democratic nationalism and national socialism, all of these things, which came through the ballot you know, they came because of the strengthening of the democratic reforms, I think.
Stephan Livera:
Yeah. So it really interesting. And so Saifedean and I think this is one of the areas where I agree with you, but in the spirit of being a fair moderator, I’m going to try and ask you a couple of hard questions anyway. So I could say, let’s say you know, I’m putting on the pro democracy hat I could say to you, well, hang on, doesn’t it, maybe it also comes down to people’s attitudes. So whether you are in a monarchy and people need to scrutinize the King, if he’s doing a good job of the management of 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 could also just come down to people’s attitudes. And we could also say, even look during all of this recent COVID or hysteria-19, whatever you want to call it, a lot of people have simply not scrutinized, you know, the government. So it’s I guess, I guess the point I’m trying to get to there is doesn’t it come? It 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.
Saifedean Ammous:
I think so. Yes, but I think, you know, the problem here is that democracy doesn’t just allow you to scrutinize. It sells you, it sells you the temptation of you being the one in power. And I think this is a really dangerous thing. What Hoppe calls the I forget the exact terminology, but it just makes it legitimate for everybody to 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 role of the majority. And so, you know, stay home, save lives, and don’t be a granny killer.
Saifedean Ammous:
Admittedly, you know, this worked all over the world this time, but I think you know, the concept of democracy strengthens in people the idea that they get to decide for others, what they should do. And I think like 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 don’t think it’s I it’s, I don’t think it’s well, this is where I would, to be fair. I was going to say, it’s not a real democracy. But that would 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 locust. And so you have a lot of sovereignty in the hands of small governments, which I think is much better.
Saifedean Ammous:
And I think, yeah on a small scale, on a community in 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, it, I can 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 proportion to how much property they have. And then with that, you know, you could maybe have some kind of collective decision-making, I’m not entirely sure that this is necessary even because you can just have private property rights and people mutually agreeing to things. But the point is that, you know, there’s localism in Switzerland. Japan is a 2000 plus year monarchy, and, you know, it’s only been a democracy recently, but you know, it’s spent thousands of years as a monarchy under the same family, as long as sort of family in the world.
Saifedean Ammous:
So a lot of the credit that democracy likes to take for a lot of things is probably not entirely the outcome. And then of course, the kind of general the overarching theme, which is the democracy basically is taking credit for the benefits for the products of the industrial revolution, which let’s face. It came out of England, which was not democratic in the 17th and 18th century. That’s when the engine came out, that’s when really our lives were transformed by being able to utilize so much more energy into our lives. And that gave us all these amazing technologies. It happened, the democracy came maybe as an outcome of the increased prosperity. I think that’s a more likely explanation. But then it took credit for it anyway.
Stephan Livera:
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?
Alex Gladstein:
Yeah, yeah. There’s a lot there that I also wanted to unpack. So I’m just gonna write that down. I just want to hit a couple things over there. Again I, again, I agree, I agree with Saifedean that civilization is sort of based on property rights. And I think that that’s a 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, 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 want to build a dam here.
Alex Gladstein:
And you’re all screwed. Like, there’s literally no way for you to fight back. So I would say actually in liberal democracies, we’ve established mechanisms like courts and the ability to write op-eds in your newspaper, the ability to protest that allow people to actually protect their property. However, I will concede that no government is 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 they’re protecting property rights less and less and less. And again, that’s why I think Bitcoin is so important. On the time preference thing, this is really interesting. It’s an interesting point. With regard to democracies versus monarchies, I’d argue that democracies are actually kind of like more anti-fragile they’re kind of harder to change than dictatorships where everything is arbitrary.
Alex Gladstein:
It can change in literally a moment. In democracies, things are just kind of slower and harder to change it. True democracies, well again, the Scotsman fallacy, liberal democracies, like in United States. I mean, despite all the stuff you read in the media, I mean, we’re not going to have a civil war. There’s going to be a peaceful transfer of power in a couple of weeks. I mean, I think so at least and if you want to kill our democracy, it’s going to take a lot of time and a lot of money. And the 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 20 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.
Alex Gladstein:
And it’s been a disaster for those people. But so it can certainly happen. But in general, democracies are harder to kill and harder to change and I think monarchies and dictatorships are the ones that are more fickle and changeable and less stable. And therefore, like, I don’t think they plan so 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 neighbour’s stuff. I think 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 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 then offer some money and probably get my stuff.
Alex Gladstein:
So again, like 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 like lockdowns, you’ll certainly, I certainly rather be in California than China. I mean, 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 countries still have monarchs, but the monarchs have been you know, look at the crown, watch the crown. I mean, you know, the monarchs have been stripped of their political power over time.
Alex Gladstein:
Look at Norway is a great example. I mean, it’s still a kingdom. The King still has 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 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. But again, they’re good. I think because the Monarch has had their 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 I, again, I think I agree with Saifedean that here, the protections have to be from the liberal value site, not from the voting site.
Alex Gladstein:
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 Chavez 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, those two leaders got there.They instituted mob rule through authoritarianism, not through democracy. They, how did they get to where they want it to go? They destroyed democracy Chavez over time, over the, you know, the two thousands. And until he died in 2013, he, you know, packed the courts with his cronies. He created his own legislature because he didn’t like the one that the democratic legislature that 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 bore criminals, basically, who took their countries back in time a hundred years, but I think they did it through authoritarian tactics, not democratic ones.
Saifedean Ammous:
First they have to use the democratic ones. They wouldn’t have gotten the authoritarian power had they not gotten through with democracy? I think that’s the elephant in the room of all of these mass murders that are democratic that are dictatorships that authoritarians, you know, all of these places at one point in time and everywhere 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 decide today what our country needs is for me to kill the King and be in charge and take over all of this stuff. And then we will become a civilized advanced country like the Europeans. So let me just start by giving the King and then, you know, all of these places go to shit after that.
Saifedean Ammous:
I think this is, this is kind of the, the real point that’s missing, which is you know, I appreciate that you pointed out institutional monarchies as being a good form of government, but I think you misidentified what the advantages you said because of constitution Monarch is clipped 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 Mugabe, or a Hitler, or inaudible or an FDR from that democratic system, because that’s what democracy naturally tends to. It’s just, it’s, 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 them elections, who gets to open a newspaper who gets to say what, who gets to run any factory, of course.
Saifedean Ammous:
And of course, you know 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 20th 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 client. And, you know, there’s just fire them and get a new one. And I think if you look at you know, for instance, look at the early 20th century, when all the world essentially, or the midterm in the 20’s and 30’s, when after world war one, and after the great depression, all these countries started to go toward these authoritarian regimes.
Saifedean Ammous:
The Monarch is where, the ones who didn’t, you know, you look at Germany, Italy, and US. They essentially went toward completely collectivist economic systems in Russia as well, because 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. I’m never, you know, the closest you could come up with was Churchill, but Churchill was no Hitler in terms of, 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 look at Jordan you know, it’s very hard for a prime minister to come up and take over power and develop a power structure 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.
Saifedean Ammous:
It can’t happen because as soon as a lot of disgruntlement happens about the prime minister, you know, the King just fires. And so you have this constitutional Monarch is a wonderful check on parliament. It’s wonderful check on democracy because it there’s always a King and you can’t be King. You can’t be the one who is the top dog in the country. And I think, you know, it, yeah, 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 you think about it, in terms of just the natural order of society, I think it makes much more sense than that. You know, I have my own life, everybody gets to have their own life. And then, you know, one guy has the job of thinking about our society in the long run.
Saifedean Ammous:
You know, ideally of course, I, 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 Monachy than be farmed by a democracy, because the Monarchist is you know they’ve been in power for hundreds of years and their plan is to have passed this over to their children, hundreds from years from now. And so they care about what happens to the country in 10 years. They don’t want to Rob the country today and then suffer the consequences in 10 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 the roads or whatever.
Saifedean Ammous:
And that just legitimizes what the function of government, as well as the King is thinking about the fiscal crisis that would meet their son in 20 years from now. They don’t want to give their son a hyperinflation in 20 years from now. So they’re much less likely to do that. And that’s why monarchies have much lower inflation rates overall. Now 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 this is, it’s kind of strange how democracy gives people this illusion that, well, you know, you don’t things are all right, 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 really what happened in the US this year in terms of just the economic devastation that happened to people and they and just the security situation in American cities is absolutely calamitous.
Saifedean Ammous:
And it’s not something that is you know, it’s not something that was normal 100 years ago. If you told somebody living in the US 100 years ago, that in a hundred years, you would, you know in 2020, there’ll be very difficult to walk in the streets of any city, any major city in the US and be safe, would it would sound astonishing, like who came and conquered this country and destroyed it in order for it to reach that stage? I think it’s, it’s not something you need to the US is 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, and you have 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 inaudible fallacy, you know, it’s only democracy when it leads to roses and rainbows, then yes, democracy protects against that.
Saifedean Ammous:
But if you think about it in terms of if you think of democratic politics and more broadly, you see that one that’s 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, in the last 100 years in Arab politics you, Jordan and Morocco have basically been almost entirely peaceful throughout this time. And you know, they have pieced out prosperity, their livers monarchies, you compare to their neighbors who had gone to republics, and just how much things continue to get worse. I think particularly over the last 10 years, as things have gotten absolutely horrible 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 there’s something about democratic politics, because that fundamentally leads to societal conflict, which you don’t get in monarchies.
Saifedean Ammous:
And I think you know to bring this back to Bitcoin, which we’ve forgotten about I think 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, 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 out, take the magic printer away from the hands of governments. It’s you know, it’s good because it reduces I think the democratic drive 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 magical printer.
Stephan Livera:
Alex let’s hear your thoughts there.
Alex Gladstein:
Yeah so I think that a lot of this has to do with our interpretation of what a monarchy is also, and 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 have actually happened in the UK, in the 1960s, where she stops a coup from happening by basically overruling what politicians and business interests were trying to do. And therefore that serves what Saifedean is showing is the 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 are not the queen of England.
Alex Gladstein:
Most monarchs are like horrible thugs 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 person over another bad things. I agree. But again, I would, 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 Weimer Republic, arguably no democracies have ever had hyperinflation only dictatorships Soviet hungry around Somali lands, Zimbabwe Venezuela. I mean, say what you want about the EU in the US and Japan in the last 30 years, but they’ve managed their economy way better than North Korea and Cuba. I think that, autocracies are much more likely to engage in inflation, especially because 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 Erdowan literally just gets to decide how much money to print.
Alex Gladstein:
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 all in autocracies. This is one of the reasons why Venezuela got so bad is because Maduro could just print whatever he wanted to. There was no one saying no. And at least in liberal 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 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, because they’ve allowed actually a little more freedoms for their, for their people. That’s a patronizing way to say it, I guess, but, and I think there’s a chance in the next 10 years that those two countries could actually shift into more of a constitutional democracy, but let’s not pretend it’s all roses in those two places.
Alex Gladstein:
I mean, there’s horrible secret police torture. I mean, you get disappeared if you disagree with the government in many cases. And, and there are good reasons to think that those two countries are not maybe having such a bright future 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 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 over-hyped 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 population United States was being lynched in hangs 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.
Alex Gladstein:
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, there’s, there’s a show about accountability, which is better than nothing at all. 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 needs 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’s why they is actually exciting for me, I guess, is the opposite of way in some ways it’s exciting for Saifedean.
Saifedean Ammous:
Yeah. I mean if I could just say, like, I think obviously yes, you, by the time that you’ve gotten a hyperinflation, by the time that you have somebody in charge, who’s able to just command there, the central bank and destroy the currency, then yes, you’ve already crossed the, you’ve already gotten rid of all the liberal parts of liberal democracy. And you’ve crossed over into that 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 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 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, you know 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.
Saifedean Ammous:
All right. So then let’s just nationalize the oil company, and then we get to keep all the profits. But you know, when you have a democratic mindset, this leap of all right, there are hungry children. And if we nationalize the oil company, that won’t be hungry, children, you know, that becomes very easy because you have that week, you know, once you start believing that there is a week out there, and that we can decide how to allocate and take things under 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 cats and the oil company and hand it out. It sounds innocuous initially, but once you’ve established that habit, the more important thing that you establish is 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.
Saifedean Ammous:
And so basically once you’ve created that, then it’s really a matter of time until that degenerate more and more. And then that gets co-opted into the democratic politics, 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 as well. In the 1950s was the fourth richest country in the world. It was one of the richest places in the world that it was you know, I remember up until the 1980s and early nineties people aren’t, people spoke of Venezuela as being different from Latin America and Latin American countries were basket cases with inflation. And, you know, Argentina and Brazil were having their prime ministers and presidents taken off and helicopters and stuff. And all of these places were going to hell and Venezuela was, you know the sophisticated, advanced place that had been very rich for a very long time.
Saifedean Ammous:
But with democratic politics, this eventually continued to exacerbate. And then it just becomes about who can play that 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 a negative sum game for society overall, if you and I are competing on who can rob others in order to hide money over to others, then you know, everybody loses at the end of the day, we ended 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 point it’s because they’d had decades of this game of what Hoppe likens to everybody in society has their hands in everybody else’s pockets. And everybody is trying to manage everybody else’s money.
Saifedean Ammous:
And just trying to decide what happens to them. That’s I think we can’t separate that you know, the emergence of the Chavez and these things, we can’t separate them from the origin of that. And I think I would say the generally the antidemocratic position is presented, I think far less coherently when presented by conservative politicians who are playing the political game. But I think not a lot of people like to talk about monarchy and it’s not popular to speak up about monarchy, but I think 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 God. And that’s why you don’t put your hand in anybody else’s pockets and you focus on your own self on your own life. I think that just works out much better as a, as a protection for society in the long run.
Stephan Livera:
Excellent. Thank you, Saifedean now. So look, we’re coming to time, so, perhaps 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.
Alex Gladstein:
Yeah. I mean, again, I think a 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 autocracies and absolute monarchies just as a general rule. Obviously coin clipping itself 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.
Alex Gladstein:
It’s not perfect. Certainly there’s a lot of stuff I’m worried about with regard to surveillance technology and people giving up the rights and becoming ignorant cheap. 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 democracy have to be quite active or else you know, things go South. So I won’t pretend that it’s perfect, but generally speaking, I would like to conclude that that liberal democracy, there’s still the best thing we have, of course, 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 there 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.
Alex Gladstein:
That is, that is what is so powerful about Bitcoin as well is that there’s this ecosystem of miners and developers and users and commercial folks. And they all, again, kind of balance each other out in that that’s a super, super helpful political arrangement. And at the end of the day, I, I do think Bitcoin’s democratic for, for the reasons I argued. And especially because 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 really enjoyed this. And of course there’s a lot of areas where I agree with Saifedean. So this has been a lot of fun.
Stephan Livera:
Fantastic. Saifedean, I think you should finish it out and close this off.
Saifedean Ammous:
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 enforcing 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 monarchy is just, you know the concept of private property rights, which in know your Bitcoin node embodies.
Saifedean Ammous:
But I doubt that the concept of rule of the majority is it is a useful one in society or in Bitcoin. And I think, you know, to go back to the example, you mentioned that, yeah, Saudi Arabia, you may have a lot of problems with Saudi Arabia, but I think you know, we could always make, 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. I’ll tell you for the past 60 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 most of those places for the past 50 years, all the brightest are trying to secure a job in Saudi Arabia.
Saifedean Ammous:
And it’s a one way track. There are no Saudi’s trying to get jobs in Syria and Iraq and Egypt. So, you know, 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 things that mattered 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 stability that it has provided as a monarchy has exceeded what its neighbors have what its democratic neighbors have had. And I think that’s something worth considering something that you can’t just be dismissed by it, 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.
Saifedean Ammous:
And I think I really need to write something about this. It’s just like we can, we have 100 years of data on about 20 countries and the evidence is kind of overwhelming to support them the promoter key thesis, and the idea that the move toward democracy has not worked out. And I think that the Arab countries are not the same in, are not alone, alone in this. You can find similar stories all over. I want 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 the popularity contests are not the best people that you would want making decisions. And I would take the luck of the draw of 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 with elections. You can’t get a good guy, you know, that it doesn’t happen. If they were a good guy, they wouldn’t have needed out of their local primary, you know, they would have been cheated out of their first electoral job. Very, very, very few examples of that.
Stephan Livera:
Well, look, thank you very much Saifedean and Alex, I think that was a great discussion. Both of you mentioned excellent arguments and it was a pleasure to moderate.