Doctor wolf in law. You're an academic somewhat, but you're an academic that teaches and has studied and learned and taught on real world things. So I think there's a disconnect. Right. There's the saying, which I'm sure academics don't like, or professors that those who can do those who can't teach. And what I see a lot of is people in academia in politics seem to have like no real world grounding.
They have a lot of theory, but like you've never balanced a checkbook, you've never ran a business, Like what do you know?
And you can tell by.
The policies that they do, right, I mean, have you seen that? Would you agree with with that for a lot of a lot of cases?
One hundred percent?
Ok?
Yeah, one hundred percent.
I And that's the reason why I'm not in academia anymore. At some point I made I was getting my PhD. And I was reading, writing, thinking and teaching, and I was asking myself the question like, hmm, do we want to do the same thing ten years from now? And the answer was no, because realistically, as somebody with my ideas cl'sicalliberal libertarian ideas, what would realistically happen to me. Even if I'm very good, like I would end up in the middle of nowhere, someone in Utah are teaching
like one hundred kids that don't give it. Yeah right, yeah, And so that that is not really something that was aspiring to do. And now I'm a CEO of a nonprofit where we have impact in over one hundred three countries, ninety staff members we're paying actually twenty of them are being paid in bitcoin regularly. And so I have all kinds of different business challenges in the organizing events all
across the world. And that's that's so much more interesting and I have so much more impact than compared to it if I were staying in academia.
Yeah, so you you're an entrepreneur, you're a business owner. I mean, it's a nonprofit, but it's a business, yes, And so now you have to deal with rural challenges as you're talking about when you made the jump from academia into business, was it sort of like all these things you had kind of studied and learned, and now of a sudden you're having to deal with it, and it it kind of gave you like a new revelation and you kind of realized.
It was different.
Like if if I watch UFC on TV all the time, I'm like, Oh, I'm gonna go be a fighter, and then I jump in the ring, like I'm not prepared to be in the ring just because I watched a bunch of UFC something like that.
I think there's definitely truth to that.
Academia teaches you a few things, but I think for most people it's not necessary to go into that. I've learned to grind as you're writing a PhD. So you have to write like every day and probably like over seventy percent of everything that you're writing is going to be thrown out. So dealing with frustrations, dealing with motivating yourself every single day, that sort of thing is being taught, but it comes at a high cost, not only financially,
but also the opportunity costs. So I would say most of the skills that I'm using right now in business is why I'm in the business that I'm in right now, because I'm a product of the organization. So Students for Liberty is empowering volunteers to spread the ideas of liberty all across the world while focusing on like giving them aunts of leadership skills. So when I got out of that program as a young twenty year old, I've raised fifty thousand years as a young person. I've started a
whole training program. I probably interviewed like one hundred to one hundred and fifty people, and those gave me like real world skills that I'm employing right now. But that's not the average experience that you have. Like university was more to vehicle for my volunteer experience than the vehicle for the ideas that made.
Me a more effective leader. Does that make sense?
Yeah, So now you've started this student for liberty. This is your works life or your life's work. This is like your passion. So I was asked this question yesterday on a panel I was speaking at it that I thank God for bitcoin. What is freedom? Then maybe I'll ask you what is liberty? And our freedom and liberty the same.
Yeah, that's an interesting debate right there. I would say, just to define libertine freedom and I often use them interchangeably, since it's like liberty in the name, I'm using that more. I would say it's I would you can define it like negatively or positively. There's like negative freedom and there's positive freedom, which I don't think is like liberty at all. Negative freedom means it's like you are just there's the absence of violence against you, you are protected, your property
is protected. So that's like negative lity.
So freedom from.
Exactly freedom from something instead of freedom for something. Because most of the progressive and even I would say, like conservatives would say like, oh no, no, no, you should have like you can only live like a free life if.
You have like health care and education and all of these things, and that only enables you to become like a fully.
So you can't be free.
So they would argue Bernie Sanders would probably argue that if you're broke, you can't be free because now you can't go do things that you want.
Correct, And like his ideology goes way deeper. That has really permeated the whole society because they're thinking socialist. That is generally that people are being exploited by the capitalist system because whoever the entrepreneur is on top of it. So like your workers right now that are helping us setting up this beautiful conversation, right, they're being exploited because you're on top and you are abusing them there's like surplus value that they're producing, but you're taking money out
of them. And that comes from the ideas back back then with factories and that you have like one person in charge, and so they think it's innately unfair. Therefore you have to redistribute. And there's so many other ideas like vocism that fits within that right now that you say like.
Okay, maybe we need markets.
However we need to really tame them with like the wide ideology, and we have to have like mix of people in there, and it cannot be just like yeah, whomever.
There's so much to unpack right there.
You know, I wrote this book last year, the Uncommunist Manifesto.
We kind of broke that down. So there's a lot to unpack there.
But going back to the freedom thing, So freedom from yep, so freedom from having my private property taken, freedom of speech, freedom from being censored of my speech right, so be freedom So almost like freedom is like is not a it's like an ad adjective or whatever, so it has to be freedom from or so, but what about freedom and liberty?
The distinction between freedom and liberty, it's an interesting just interesting question.
Or just what is liberty?
Then?
Yeah, I would just say, like a state where you have these constraints lifted from you, and it's always like gradual, right, we are not never perfectly free, and it's always like a gradual thing because there's always constraints on us, and some constraints are good and someone's very it makes sense, like I mean, some people would say, like it's again like the freedom towards something like you should have at least like a like a UBI, like a universal basic income,
because then it's the only way that you can flourish. No like you need to you need to make like a living, You need to produce value in the world for others, and that's what the free market system allows you to do through and it's just like a beautiful thing. You have voluntary exchange. You are like let's say we do a trade. I give you my coffee, you give me like three dollars. I value your three dollars more,
you value the coffee more. We're doing that exchange and we both say thank you at the end of the day, and if we don't, then no deal exactly exactly. So that's that that is really voluntary and it's mutually beneficial and most economists especially like leftist.
Really don't get that anymore. And that's that's sweety. It's quite something.
Yeah.
So we were talking about the Austrian school of economics, which I want to get into with you obviously, Well you're you're you're master's.
In it or yeah, I go to Mass's and it, so you know way more than I do.
I kind of think of ludlove on Misis as kind of the father I think maybe you might say Manger, yeah, Minger whatever.
Anyway, and then f. A.
Hyek Is is kind of a big figure for me in that. And and he wrote several good books. The Road to served him, I think as a must read for everybody. But he I believe it was. His last book was the Constitution of.
Liberty Constitution of Society, and he defined it as liberty being free of freedom, freedom free of coercion.
Mm hm, so coercion being I'm given the illusion of choice, take the job or lose your job. It's my choice, but either choice leads me to your ends versus I want freedom of coersion, that I can make a choice that leaves me to my own ends. That's kind of how I think about it.
That's a very good way of thinking about it, and there's a lot of richness, just like within the Austin tradition generally, and like many of the things that also like witcoiners believe come from that. For instance, like the power of spontaneous order. People always use it and are joking. You can see this that this conference is say're like, oh, that's like a line forming in front of the bufet and people are a spontaneous order. No, it's like much deeper.
It is spontaneously governing institutions that nobody willed by decree, but came about by human action, not by human.
Design, human action, not by human design.
And that is such a rich insight that Hayek helped proliferate. And that means, for instance, not only money, but also law and language. Nobody invented the English language, nobody invented common law. That just came about through hundreds and hundreds and sometimes thousands of years of people interacting with one another.
And once you understand that, which is like a deeply Austrian insight or classical liberal generally, once you understand that, that gives you some sort of humility as to what you can command in society and what politicians can accomplish. However, that sort of humility.
I find strangely absence from most ideologies.
That's one of.
Elect the lack of humility Hubris Ubis, I would say, yes, absolutely, I would say it's classical liberals.
And I like that term better than libertarians because that term has so many negative connotations to it, and classical liberalism has like a little bit more of the weight of the history, and like Locke and Adam Smith and even like the Salamanca School in Spain, and like many other thinkers that contributed to it, versus libertarianism, which is a very new word which only originated in the nineteen sixty s in the United States, and many great thinkers
behind it, like Rothbart And I'm a fan of thinkers like that, But like I'm using that term because it conveys like a little bit more of the depth and the sophistication of the ideas that gives you really an epistemic, like how do you look at the world aumidity, Like you don't know how we all should live here in this womb, and like what are the best choices for
a life? Often we don't know from one day to another, what's the best choice for our life and then to say like, hey, we have like somebody in charge right now who's like ancient, who can make decisions for like thirty million people exactly. That's mind boggling. I mean, there's many reasons for that, but it's really astonishing if you think about it.
Yeah, so you had this Austrian school of economics and this is a big question, but let's let's see if we can if we can go surface on that, just to kind of frame up this conversation. So for a lot of people probably have never heard of Austrian economics we were talking about before we're recording that. I have many people that I know that have gotten degrees some level of degrees in economics from American universities and have
never even heard of Austrian economics. So you kind of said it in a second ago, Austrian economics kind of worked on human action. So kind of frame up maybe as best as you can in a simple frame of what Austrian economics is good.
Let's put a contrast on like mainstream economics right now. Their methodology how they try to find truth is by creating models, often very very niche models, and then those models make predictions and if those predictions adhere to the data that they see in the world, then that is
a good theory. It's completely void of like a deeper like theoretical framework whereby the Austrians looked at human behavior and just deduced a network of like really straightforward assumptions about that human behavior and use that as a framework to analyze complex interactions within society. It doesn't have to be just economically, it doesn't have to be just in the marketplace, but just how human beings behave for one another, because you can have all kinds of different forms of
like non monetary trade. So what does that mean so human beings act? That's like one assumption at the beginning. What can you all pass out of that? Meaning action means has to come through time because action needs to be through time, Like if it's in the past, you cannot take action in future.
You can't. You can only do planning.
So you have time, and then like why would we take action because there's some sort of uneasiness, Like if we were perfectly happy right now, like completely in bliss, there would be nothing that we need to do.
However, like you have goals, you want to get more people to listen to this.
You want to make more money, more sponsorships, you want your wife to be happier, family, all of these goals are there, and we need to work towards that. If everything was perfect, we didn't need to act. Okay, that
means there's not like abundance, there's actually scarcity. Right, So you have the principles of time, you have scarcity, you have like human action, and you can go through that list and it's just a really beautiful edifice of ideas that you can then take and look at the world and then the really cool things like the Austin business cycle theory comes out of that, which is, for instance, the idea, and then we can make it practical. Okay, the wall of time. How do we adjudicate the value
of time? Because something like a coffee right now is worth more to you than a coffee to more right.
And my first coffee this morning was worth more to me than my second cup of coffee.
Very good, diminishing marginal returns right there, right, But like in terms of time, that means, okay, if you want to have a coffee right now, you are willing to pay like a quote unquote premium compared to tomorrow. Meaning if you lend somebody also money means that you won't get more money in return, which then the interest rates is allocating that. Right, So if you're the price of really just time, time, present and future demand of that.
And so if you have more people that are affluent that have produced more value, which means more goods and services, more shairs, generable things, that means they can lend out more money. That stands for all of these goods and services, and other people can use these goods and services to
invest in the economy. And so if you have like a society imagine like one hundred people and all of them are just like gamblers and drinkers and like I don't know, just like don't care about anything, they would not save a lot, meaning you would not have a lot of resources to invest, So the interest rate would be high. The cost of that of those resources would be high. Now, if you have like a prudent society
of people at saving, then the interestrate would be low. However, now we're living in a society where the interest rates is determined by people sitting at a central bank, just thousands of economists that think that they can set the right price of what the cost of for future savings should be right, And that's mind boggling really, and that has led to all kinds of differ manipulations.
And that's the last thing I would say here.
If you think about it, if you ask any kind of economists, would you know how to set the price of milk or the price of X to more? Or would you be would there be negative consequences if you set it too low or too high?
They would say yes.
But like the price that determines the value of money, that impacts every other price in society, they say, sure, we have to like say what that is.
Yeah, there's countless examples of history of price fixing, which is kind of one of the last steps that's done as an economy is dying, and it always fails. And so to your point, we know that empirically, I guess you could say, however, when you set the price of money, that's what you're doing, and they don't seem to get that connection. I want to dig more into that, but just for a minute, so you kind of have this.
It's driven off of human action, which seems so normal and so rational, and we understand that humans are irrational, and I like coffee black, but tomorrow I might want cream in my coffee. And I don't know why, I just do right, And so we change if we look at the other school thought. And so today I said, I have friends that have gone through university and got degrees in economics, and they have never heard about Austrian economics.
And typically it seems like most of the economic channels that are being out to the air off of Kinsey in economics, I don't know if they really call it that anymore. So what is the prevailing school of economic thought today?
Sum that up? And then I want to compare those two.
Yeah, so the most preventing schools of thoughts, and they're blending to some extent to one another, like neoclassical economics, which is for instance, like where Friedman comes from from that tradition, and I'm a huge fan of Freedman. I just don't agree with his methodology, but he comes to similar conclusions with different means. And then there's of course like Kne's in economics, and this is an interesting insight toout history. Like Kanes and hyek Hiak of course.
Being somebody that represented to the.
Austrian school, they were actually friend as times, and they were talking quite a lot, and Haya gave interviews about this and basically said, like, yeah, Kines has no knowledge about economics because he just came up with like a bunch of new theories. He was very creative, and he was just like looking at his one teacher, he never went through like history, and he didn't like know the economic thinking even like sort of.
Like they've never gone down to the first principles which allows you to then formulate your own ideas off of that, and so he kind of grasped on maybe at a higher level and started kind of being creatible without really understanding the base layer of it absolutely.
And that was also what really upset Hyek because high before the general Theory that Kines wrote, which was like the book that made him like really popular and he spoke everywhere and so forth, before that book, he wrote like a different book. And Haiak went out and attacked that book and took it apart, and then like a few weeks later, Kane said, like, I'm changing, I'm changing my minds.
That's not what I believe in anymore.
And so one of the highest biggest regrets was that he didn't attack that book later on the next one.
Yeah, the general theory.
Which then had like this huge impact, and he really regretted that for the rest of his life that he didn't do that because he thought like, oh, this guy would just change his mind again. That shows you that there was not like a really solid foundation there.
Of course, a lot.
Of people have derived theories from that, which is a very we talked about the humility aspect.
It's the opposite of it.
It's a very engineering view of society, just like as a system of cox and levers that you can just like pull and twist.
So that's what I wanted to ask you about that, that specific piece the cogs. Yes, so it almost I've been kind of working on this theory. I did a podcast with the Breed Love a couple of days ago and we titled it or. I was talking about the crisis and confidence and basically how we have these authority figures, doctors, economists, politicians, but we're starting to see that there's massive gaps in
their knowledge and so we're losing confidence in them. And I was kind of framing up how and correct me if I'm wrong, But here's what I'm thinking. And so technology is what changes the world because it changes the way that we communicate, organize, work, etc. So, if we look at, you know, the invention of the stirrup or the invention of the gunpowder revolution, the invention of the
industrial revolution, and the industrial revolution started centralizing people. And then you go into the early late eighteen hundreds, early nineteen hundreds, we had the invention of the automobile and the assembly line. And so then we go into the assembly line and then you and I. You're way smarter than me, but we work on the assembly line together, and we're both just.
A cog and a wheel.
And because we were trying to manage the masses, we had to develop a management system to manage the mass as cogs in the wheel, so that I don't take into account you and your traits and your knowledge or whatever. You're just on the assembly line next to me, and we're doing the world cogs and wheel. And so we created this management system to manage the masses in a mass manufacturing process. And then we kind of created a government system to manage that industrial mass production cogs and
a wheel. And we're not in that anymore. We're in the information age today. And so like the form of government we have today is no longer compatible with the world that we live in. But my question back to you that that's kind of the quick version of my question back to you is do you think that maybe had something to do with impacting or influencing Kine's view or this kensane economics where they all think of us
as a cog in the wheel. Maybe that where we were in society at that time, in the Industrial Revolution, etc.
That's very fascinating, and you laid it beautifully. I would say, initially, yes, for sure one question maybe you can get put like a pin in there. But like you said, that technology drives society, and I think that's an interesting debate there.
Is it technology or.
Is the ideas that are around those technologically changes that maybe influence that.
But to answer your question errectly.
What technology is a solution and a solution should come to a problem. Yes, so to your point, society has a problem and the technology supposed to solve that, but then it does change society correctly.
The reason why I'm pushing slightly back against that is because that is also like how I'm not accusing you of anything, but like that's also like how Marx actually look.
At the darker professor. Please, No, I'm not a professor. I'm just I'm a practitioner. I wish I could like spend more time on idea. So I enjoyed this chat very much.
But like they were thinking, like, Okay, the technological change is what determines history. It was a very deterministic view. So and that's exactly how you were saying that. And I'm not denying that technology has a huge impact on this and that it requires a lot of different changes, but I think it's mostly like, for instance, the ideas, because the industrial could have happened not only in the Netherlands and in the UK, it could have happened in
many other places. They had like similar conditions. The question is why. And I think that comes back to questions like what kind of values the people have, like for instance, like being pool and being saving, thinking about tomorrow, like building homes, building cathedrals and so forth, and thinking like further ahead, and then technology.
Natural human drive for ingenuity and efficiency, and like that's human creativity.
Correct.
So I think your point is one hundred percent correct. I just want to embed it in like in a slightly different context, but like going back to your question, which is a really fascinating one. I think you're right because we human beings are also not really equipped to handling complexity very well, right, Like our brain is involved, and like I think there's studies on that that shows that we can only keep like one hundred and fifty like close issue relationships at any given point in time.
Because that's like how typically the largest size of the types were you know, and now you think about, like, okay, how can you even imagine how like an iPod or like an iPhone is being produced with like the millions of different pieces in there, Like nobody knows how to produce that, and like everybody talks about like nobody knows how to produce like a simple pencil. If your audience
hasn't read the book, they should definitely read eyepencil. It's such a beautiful explanation that nobody really knows what goes into that. Do you have to think about the chainsaws, about the rubber and like the chemical composition the metal, you know, the lead, all that kind of stuff, and that's just mind blowing and thinking about all of these different steps is very hard for us. But theoretically we should all go into supermarket, right and just being like
blown away. Why we can take like a like a can of soup for like seventy cents or because of inflation, probably like two dollars right now, and.
Take that out and like we don't die.
That's a freaking miracle, right, But we cannot really fathom that complexity and how many millions of people have worked together to make this like working. And I think that is something that most people cannot handle. And therefore most economists also they're just humans and therefore or like, it's much easier to think, Okay, what's the problem unemployment, what's the solution. We just spend a bunch of money. Money in hand of people leads to people buying mo soup.
Therefore there will be more people that benefit from that, and then un employment goes high up and then be good. And every problem that you see as from that perspective, a status perspective, or as an engineering perspective or government perspective, you see all of these problems in society, and you have all of these just problematic nails, and you have like one hammer which is just like forcing people in that direction. But society is way too complex to do that, and that has a negative.
Consequence the complex system. And so in a complex system, you can't just treat one symptom. You have heartburn, the doctor gives you a heartburn medication, and then it creates all these side effects inside your body. Right, as opposed to think and so the same thing, right, unemployment, Okay,
what do we do, Well, let's print money. But yeah, I just I'm often thinking about, you know, these kinds in economic kind of viewpoints, where again like they look at society as just cogs in a wheel or number of zeros and ones on a spreadsheet, as to understand, these are humans and they're irrational, and they do things based off of lots of different incentives. And so I always wonder if it just to me, it just seems idiotic and it's interesting.
He knees also himself, and you can speculate about it. I don't know, it's just like an interesting tidbits for history. He seemed to have like a very high time preference.
Life time preference comes also from the Austrian school mostly which basically says like, hey, if you're looking forward in your life too, I don't know, safe in bitcoin and save for the future because you want to have a family at some point, and you're not spending as much like on a like a Ferrari now and you're saving for the future, or you don't go out for bers
right now because you want to save. That's like a low time preference, like you have a preference more for the future than for today, even though you need to eat today. High time preference is the opposite. Canes had a very high time preference life. He was like traveling a lot and partying, and there's all kinds of different other rumors about like high time preference behavior that he
might have had today living for today. Maybe that also played in that because at the end of the set, like set to Hiak, in the long run we all did right. He doesn't care about like maybe debt going higher up, or maybe inflation is going to pick up, because right now the pain of the people is that they're unemployed because there was a prosession or whatever, and government needs to fix it now.
I think it's easy to understand why governments today want to latch onto kins in economics and want to get rid of any Austrian viewpoint one side bit and you can correct me if I'm wrong, But it seems that we've gone way further than Keens that ever wanted things to go. He did it. You know, we should have some easing and you know, smooth out on the cycles. But I don't think he ever intended for things to get where they are.
He said, you just safe if you have like more income and like inflation is low, you should actually be saving what government doesn't.
Do that, and so he wanted to kind of.
Bring government easying up and down with the time, save in the good times, you know, ease and the bad times, et cetera.
And so yeah, we've gone way past that.
But I think it's easy to understand why the governments want to adopt that mentality or that ideology because they want to print and they want to continue to give more free stuff so they can continue to stay in power, and so they don't want to hear, oh we have to live on a budget austerity. We don't want to live off of our savings. So that seems to be probably the main viewpoint as to why they've adopted this, pushed it and kind of hidden Austrians, would you agree with that?
I think that's part of that absolutely. Why else would Another reason was physics envy, so Austin economics. Of course it does statistic analysis, it looks at historical examples. However it doesn't say that we can predict the future. Austrians are again as SPECIs we said before, they're humble about what they can do in society, yeah, right, and what can be accomplished. So they don't say like, hey, we can come up with like this great theory and we will fix everything in the world.
They never would say that.
Now, during the nineteen twenties thirties, like Austin economics was mainstream. However, then more and more math and physics envy came part of the social sciences where they tried to really predict
more human behavior. And that was like one of the main reasons why like neoclassical economics, even though they had like ludicrous assumptions often about like what people are and how they act, so for instance, have like full information now exactly what the prices are, like all of these things that go into like the basic models of neoclassical theories, even though.
It's not really true.
They could use that to build math around it and then predictive models around it, and often they don't break down. But it led also to the what they call the balcanization of social sciences, where everybody is in their like very little nook.
So for instance, if.
You talk to like a healthcare economist, right and then try to talk with them about like labor theory, they wouldn't be able to understand one another. And that just shows you that while there might be some merit on the margin on some of those things, it has gone way past that.
And that's the problem because now they're all specials in the little area, but without understanding the full complex system. I just read a report just as I think it was this week, and it was it was a report and a study that was done in the medical system and talking about how all these specialist doctors and how far apart they are from understanding the other pieces in there.
So like you're a liver doctor and you're the best liver doctor in the world, but you don't really understand how the liver corresponds with the kidneys and whatever the other organs, and so same in the medical establishment, we're kind of seeing the same thing. If the if the Austrian school doesn't try to predict based off of their models, then they're more just observing and what's the point of that.
They're doing something that's called pedun predictions. So they're just saying like, hey, if this generally happens, this is the effect. So, for instance, if you have like one market and it's like let's call it the German like, let's call it the potato market, right, and then suddenly there, yeah, there's a shock to the system for whatever, like there's like potato bugs and whatever, and then like thirty percent of
the supply is gone. They will say like, hey, this typically will lead to an increase in prices of potatoes because they're scarcity. And they can show that logically by like a link of like all of these things from the very assumptions of human beings act in order to resolve uneasiness. They can everything logically deduct to that statement,
and that is one hundred percent two. However, you can imagine in a world that suddenly there is like a potato innovation happening, or like another country comes in and supplies like they have like very overproduction for whatever reason and put it on the.
Market and the price maybe stays the same.
Yeah, would you say that the theory is wrong that typically if supply collapses, the price would go up.
Hell no, you wouldn't.
You know.
That's also like another difficulty if you're having your whole epistemic theory only focused on prediction, that that will get you into problems because, as we've said, complex situations would change. There's new things coming in into the system that you cannot really foresee.
But that's all like lagging information as well. Whereas Kinsians or whatever, we're classic neo economists or whatever, they're trying to predict, and not just predict but create the future. M hm. So Austrians don't have that hubris of trying to create. They're just observing, saying, hey, you had this issue with the potato bugs, and so here's what's gonna happen with potatoes.
What's the point of that?
Why? Like, I can understand, I don't agree with it, but I can understand the Kinsey and viewpoint where like, hey, let's let's make sure that we can organize the economy so at best it suits everybody and the underprivileged, and let's manage this. So I can understand why they want to do that. But then why do people want to I mean, what's the point of Austrian economics?
You hit it on the on the head, on the nail on the head, because you set yourself. You know, why does the elite.
Or the politicians not want to use this Because Australian economists would be useless. Like they could say like, oh, this is like probably where it goes in that direction, but they could not help to solve like that specific issue.
They could warn them about all kinds of debatings. They're good at warning.
Yeah, good at warning and saying like, hey, maybe you should not do anything because like we know, price system, property rights, individual trade, all that kind of stuff that will lead to better outcomes because you rely on the power of individuals decisions.
Yea.
However, like the people powers say like hey, I need like a three way that justifies that I can spend more money there, and saying like you shouldn't spend more money, you should actually like get rid of the Department of Education. It's not something that any kind of politician wants to hear.
Yeah, making a couple of notes, I can come back to some stuff here, so I can come back to these questions.
So let's let's go back to the technology changing things. And to your point, everything starts as an idea of course, right, And so typically we have a problem, humans have a problem that we want to solve. I want it easier to kill an animal, so I come up with a way to make a spear or whatever. Right, So it starts an idea, there's a want, and then it's an idea, and then we're creative beings. So then we create a
solution to that. But then a lot of times those new technologies that we created then go change the world. So back to like the gunpowder revolution, Right, you had a stirrup and how a guy and a horse could now control hundreds of peasants. But then a gun pow of revolution. Now one guy with a gun could take out one hundred nights. Yes, and so like that changes the world. Or we had the farm and cottage industry, but then the industrial eolution brought people into cities and factories.
A chicken or the egg argument or whatever, but it does change things. And so now we have another what I think is another technological revolution, decentralization.
We'd call it that.
Bitcoin is this decentralized network. Now we could sit here and I'm sure you have and I have as well, talked about all the ways we can see bitcoin changing things because it will change the way that we organize, communicate, It'll change incentive structures and all those things. But it came as a problem as there was a problem, and so Sotoshi put chance on a brink of another bailout. So it was kind of created as this way to have ability to have money that's not inflated, and so
there's lots of things that can do. Going kind of back to where we had originally started talking about liberty, it said and a tweet, bitcoin is the single best shot at achieving liberty in our lifetime. So now we've kind of framed up economics, we've framed up liberty. We're here at a bitcoin conference. We're recording this at the Bitcoin conference in Miami right now, twenty twenty three. So what does that mean? How is bitcoin the single best shot at achieving liberty in our lifetime?
It goes back to like what were you were challenging at the beginning, like the value for instance of like academics, because academics think they understand the world, they know everything, and they can like change the world, and that everybody wants that, right, But I think like bitcoin is fundamentally humbling in that sense right, because it is, in my opinion, it's the only true way of achieving liberty in our lifetime.
And why do I think that even though we have.
All of these the it's the awesome economists, we have Freemen, we have Bastiad, we have Thomas Soul, all kinds of great thinkers, but there's still the majority of people out there like either don't care or they think like, okay, government is necessary for like a whole slew of different things. However, bitcoin is circumventing all of that because this is something that cannot be stubbed. People can voluntarily opt in. Nobody
can really disallow it. And if more and more people opt into that system, they will realize and understand what the problem with fiat money is. And I believe to be Fiat money money, which is like by force, the creed upon us that we have to use, is the reason why government can grow infinitely if they wanted to.
I mean not infinitely. I mean there are some barriers.
Course of all their power as long as it works exactly.
So if you take that away, and if you give people actually an alternative that's like.
A it's a safety boat.
It gives you like a new opportunity to opt out of a system that otherwise would wipe you out. And we notice right now because I think there's like between forty three to forty nine hyper inflations that have happened. I mean, for God's sake, like it happened in the binary public as well, and still to this day it is in the psyche of people that Germans like save more because have realized that and then put it like
into heart occurrencies. If you think about like the prospect of everything that you've worked for in your life within just a few years being wiped out, as it just happened with the argentinaan So it's happened right now with the people in Turkey and in Venezuela of course.
Like that's yeah.
So when you say biitcoin is the single best shot at achieving liberty in our lifetime, so then that would then say that based off of your explanation of that, then government may be the single greatest threat to our liberty.
I would say so, yes, So.
If government is the single greatest threat to our liberty, and then bitcoin can somehow insulate us or isolate us from the threat of liberty from the government.
Because government cannot grow as much as it can right now because of all of the money supply, and most people don't even realize. And I think you're doing fantastic job on your show explaining like all of these different mechanisms how that works, because like how do they print money because they're buying government debt, right, And how do
they buy government debt? They just press like a button and then there's money out of thin air, and then they're by government dead and so it also and then who's dealing with that.
That's the banks, and.
That's what they have on their balance sheet as like the most secure asset, which if you think about it, if it's backed up and nothing, it cannot be secure by definition. However, it is unfortunately the world that we're living in. And if you take that away, then maybe you still have government. However, they would have to handle business in the same way as.
You and I.
They would have to save, they would have to allocate like where they spent, and they couldn't just like if they had to issue that they need to have somebody actually paying that debt. And if nobody is giving them money, then they would not be able to spend anymore. And they would go bankrupt and then you would have like
another government potentially coming up and being better run. Right now, there is no and we can talk about the banking system as well, there's no checks and balances on the system anymore.
Of course you have the constitution, there's no consequence.
Yeah, there's really little consequence, especially in banking right now.
People say like, oh, yeah, that's like that's.
The epitome of like neoliberalism and all that kind of stuff.
But think about it.
What where as the competition, the only thing that was like a checks on banks was basically that everyone that had deposits over two and fifty k would probably not be bailed out. So banks needed to be like prudent in there, and there many.
Users retail people had to be prudent as well. Exactly, I don't want to go over that limit as well.
Correct, Now everybody got bailed out. Yeah, and so now it's too big to fail. Was in two thousand and eight. Now everything is bigger, Everything is failing more, and like all of the smaller banks were actually helping to be the system, to have the system a little bit more bust are getting consolidated in bigger banks.
So we're just seeing the banks.
Didn't learn their lesson, nor did the depositors learn lesson.
I think banks are learning the lesson that they can do whatever they want, make a killing out of it, and they just get bailed out.
Well, the banks did go out of business, some of them, so SVB. The shareholders they did lose out and so the bank owners themselves lost, the shareholders lost, the depositors were saved.
Correct.
Yeah, is there something in I would imagine in studying human human action Astrian economics, there must be something about that feedback mechanism of consequence. I mean, we have to have consequence. Otherwise, how do we learn right? If I don't if I don't burn my hand when I touch the stove, how do I learn how to touch a stove again?
Right? And so we need to have that.
There's something we talked about in the Communists in in my book the Uncommonist Manifesto, and how we need to reintroduce consequence. So we have a system that allows people to move up, but it also has to allow people to.
Fall back down.
And so the FIAT system prevents that from happening, prevents governments and so they continually make going back to these models governments models are wrong every single time, and yet they continue to make more wrong assumptions because there's no consequence there, there's no feedback mechanism there.
Right, very true, and this is something that my wife Sophie says, and when we talk about like these giky ideas which we which we do from time to time, she says like, yeah, right now, government is really centralized irresponsibility, and what we need to go to is like decentralized responsibility, which goes like so well hand in hand and with bitcoin again, because it's just like it's your money, it's your life's energy that you pull into that, but you re sponsor for it.
If you screw up, you will have to bear other consequences.
And right now, it's understandable like people want safety, right and they just look for the government for those solutions that don't see that they can actually produce more agency, more opportunity when they empower themselves and their children. And that's a scary thought, but that's by basically where we are right now.
Yeah, So you're you have this education platform nonprofit and you're and you're helping educate people in these types of ideas which sometimes could be kind of a frustrating job, you know. I know we talk about in kind of this echo chamber of the bitcoin community orange pilling people.
How do we orange pill people?
And I always say, well, there's no one size fits on answer because everybody is in a different place of location. But also, like you know when you had just said earlier, kind of waking people up to the ideas or the problems of fiat currency, right, they can understand maybe why sound money can work. But like in order for if you look at like a diffusion of innovation chart of how new technologies diffuse out there, right, you have like
the innovator, the creator, the early adopters. There's a chasm, then the early majority, and then the late majority. And that chasm is where we cross over where the early majority doesn't have to know any of that stuff. So the people that use an iPhone today, my kids, they don't need to know how the face shows up on
the phone or even what the internet is. In nineteen ninety nine, I started an internet company and I had to set up my own server in my own office, you know what I mean, Like that was very difficult. They don't need to know any of that today, and that's like crossing the chasm, and so like the masses
don't care. Most the masses are ignorant, and the masses benefit from the work of the few, right, And so maybe the masses never really need to know about fiat currency, they never need to know about sound money, but they could benefit from the fu of us, the irate minority kind of pushing that.
Would you look at it? Maybe that way.
I do think that educational efforts and your fantastic show is one of that, are important, right, But it's mostly people who have already started to question things and want to take like ownership and want to like improve their lives. I would even say, and we talked a lot about the academic ideas and yes I have a PhD. And all that kind of stuff, I would say, I have very much a bias to action.
I would say, like, and that's what students liberty is about.
Like we had last year a little bit over one thousand, nine and fifty events with about two hundred fifty thousand people attending those events worldwide in one hundred and three countries, including Venezuela and the Democratic Republic of Congo, and like even California, you know.
Even California, that's below Africa.
Have you left yet? You have left?
No? No, no, I'm still what they call Carmi Fournier, people who call it.
Yeah, maybe soon. It's a great state, for sure.
I mean I bought a little ranch.
I got a little ranch in Texas and we got some cows and some goats on it, and we're off grid with solar and we got a well and all that.
So I got my bugouts. Buttom building a.
Place in Mexico right now, beautiful. I'm kind of I'm preparing for some exits, but currently California is still pretty nice, man.
I like that.
And so while this is great that we had like two or fifteen thousand people talk about the ideas like you and I talk about, or like philosophy or how free markets can help the environment, or whatever the students want to talk about, because it's very much bought them up. While that is exciting, I care about this number only as a proxy for the efficacy, the pain, the failure, the success, and the learning of what young people are
accomplishing behind those numbers, because it's all student driven. So for instance, you have like a nineteen year old students like inviting a speaker.
Maybe theyn write like a Mark Moss and it's like a big deal.
They have to write that email and get like nervous about it, or like raise money for that event, And those are the skills that will show them like, hey, I'm not just like a cog in the wheel. I'm like somebody that can contribute to society and I can produce value. And I'm a product of the organization myself.
When I was in my young twenties, I raised fifty thousand years, started a training program and got to interview like all the people that we got as part of the program then, and those skills are still with me today. It's not my academic pedigrees. I would discount all of that. I would say, like, if you go out there and just like take action and try things, and yes you will fail and learn, but then you will get more agency.
And that's what I'm excited about. That's what we need.
We don't have to have everyone understand like, hey, you have to like get rid of the federal Reserve. I'd rather have everyone understand like you can't take charge of your own action. You don't have to look for the government or to your parent or whatever. That they solve all of your problems and that will lead to millions of different solutions that we cannot even envision right now.
Yeah, we could go on and on and on about changing the incentive structure. I mean, there's a million rabbit holes we could go down into how bitcoin can change things. But seeing as I'm sitting down with a an Austrian economists here, an expert subject matter expert in this, I have some of the questions I want to ask you.
And it's something that I've gone round and around around with some other people on and if we go to something like bitcoin that changes incentive structures and time preference and the ability to save and transact and all these
things that we can go into. But if we imagine ourselves, so if we fast forward and we're in that, So bitcoin has a fixed supply cap of twenty one million, So there's a fixed supply cap, which means it's not deflationary, but it's fixed right as opposed to an inflationary monetary supply. So as our monetary supply inflates, I think the proper terminology I guess maybe would be that as you inflate the monetary supply that each unit is worth less, which
is why prices rise. Our currency buys us less goods and services. So in a fixed monetary supply and a deflationary environment, the good prices of goods and services would be getting less and less and less. But what some people have hard time with is two things. One maybe I put on a tree whilego. Two of the greatest tricks the FED ever pulled on us was one making us believe that the money supply has to always expand,
and two the asset prices are going up. So one is people think that the money supply always has to expand, and if it doesn't, then credit drives up and then or slows wig is constrained, which I think is the point. But then maybe we don't get the advancements in medicine or technologies that we have seen today. So that's that's step number one, So let's talk about that. And then the second one we'll frame up is you can't stop fractional reserve from happening, and so people are always going
to create additional mantrainer. So even though bitcoin has a twenty one million supply cap, there will actually be more because people will create more currency units. So let's talk about those two things. So one, if we don't have the ability to continue to create this credit system, we're on a credit based, debt based system, then how slow do does progress grind to a halt time?
Excellent questions, and most people would believe in those things. How you've put them right, But we both see the flaws and that sort of thinking, because the flaw is that why would you need something to always go up in prices? Like why do you have to have a stable price system? Even the concept of a stable price system doesn't make sense. There's no stable price system.
Like we talked about earlier, I might pay more for a coffee in the morning than I would pay for a coffee in the afternoon exactly.
Or there might be like an innovation within the coffee industry and suddenly like the prices are being cut in half, right, or the government is printing more money, or like there might be millions of different reasons and prices.
Like the power of prices is.
Because it is information wrapped up in an incentive. That's what the price is, information wrapped up in an incentive.
So if the.
Price goes up, that's an indication. Okay, it has become relatively scarce, the price goes down, there's more available, So there's price is changing all the time for millions of different reasons. So why would you want to keep that stable?
Because the very instability of that system, if you want to call it, that are the information that people need to receive so that they connect on it. Like you and I, we probably don't care about like the price of copper all that much, right, but there is millions of people that look at the copper markets because it affects really their goods and services that maybe potentially very down the line affect us.
So the very concept of keeping it stable makes no sense.
Point two, I would say the United States had a diminishing general price level for I think like a close of one hundred of years because it was relatively stable because as you've said, the price, like the amount of money in society stayed relatively the same and the productivity went up. So there's more stuff in society with the same amount of money. So the well, the cost of the price of the things that I are within society has to go down. And why is that a bad thing?
And why can that not work? We have seen this in technology, worst law, like people were questioning it recently, but it's stale holds two those far and technology.
The prices are going.
Down all the time in some of the sectors of all of them. Of course, however, it's super efficient, it's super productive, and it made America like still be like
one of the witchest nations in the world. So we have this practical example, and we have the theoretical argument of like, there is no stable price system, so what's the problem here, And even if we have twenty one million bitcoin, and yes it goes as symptotically like there will be few and fewer bitcoin with the harpening every four years, it doesn't mean that you cannot like live on in a bitcoin system with like a few thousand sartosis instead of like like ten bitcoin, Like why.
Would that be.
It's just like, if it's a gradual exchange and productivity rises gradually and the price level goes gradually, that gives people the ability to predict and therefore to make entrepreneurial decisions about their future costs and the present prices, which is completely more predictable than a fear system where you have all of these strucks and crises because you just flood the whole market with cheap money.
But I think you're you're highlighting, and this is a key piece, is that there's no such thing as certainties in life, and we have probabilities, but we also everything has like a cost benefit analysis, and so there's pros and cons to everything, and so you've highlighted a lot
of pros. And I would typically kind of flip that back as a question to people, and I'd say, well, would you rather your money buy you more goods and service in the future or less good point and everybody'd rather have more.
And so those are the benefits, Like our life.
Should be getting easier, we should be working less hours to maintain same quality of life. Most peopleould want that. However,
that would be a pro. But a con and this is what I was asking you about, is the con would be that I can't get the money I need to go design this new drug, and I can't get the money I need to go develop the next iPhone or the next whatever, because they're not create now without this debt based montec system where they're creating this debt it contract, you know, restricts the monetary supply, and then
we don't have the progress. So now how does that drug get made, How does that new piece of technology get built, how does that new data center or whatever? Interesting argument for sure, and people will always say, and I'm not gonna of course people always say when people always lend, it will always be there, but it could really slow progress down.
I would, then, as you do, like turn back the question and say, like, hey, would you weather like invest and be an entrepreneur in a system where you, yes, you have access to cheap money and therefore you can invest more. However, that money is not based on fundamentals. There's not like real goods and services behind it because it's just paper and like all the individuals printed, there's.
Always goods and services behind it instead of a different denomination.
Yeah, and it's like much fewer Like would you be like an entrepreneur where it's uncertain, like when that system potentially crumbles, versus a system where it is based on something real? And I think most people say, like, yeah, I want to be based on something real because then I can do like more planning, because the thing is like, if you don't do that, then you go back to the Austin business like a theory that we've talked about.
Which always ends in the same boom and bust exactly.
And so maybe in like the tortoise and hair analogy, the boom bust the Kinsian cycle grows way faster, but boombus boom bab boom busts, and maybe a slower growth ends up in the same location at some point.
And I would say it's it's hard to tell.
Like and also as a petun prediction, I would say, like, it's very interesting to think about, like our people more capable to be productive in an environment that it's like more inherently predictable instead of like cheap money versus like having cheap money. And then like the boom bust cycle, it's a very interesting question. I would say, it's more sustainable for sure if it's like more predictable and therefore like based on something real compared to something imaginary.
So the trade off is, would you rather have a system that gives you the money to go create this new drug or this new technology to have this progress and growth knowing that the trade off is a destruction of society MM.
One point, or like let's try to make it even, like so you.
Have the good of progress and growth, but you have the bad destruction of society and break down a family and it's and all the other stuff that happens there.
And some people might say like, oh, that's going to be tomorrow. I'll take that. It's going to be alive.
Yeah, eh, But like then let's maybe make it a little bit more tangible because like often these concepts and like concepts like government, they're so aggregated, right, and it's trying to bring it down a little bit. That's what Austrians are also pedagogically speaking. If you want to understand economics, it's like so much better because you understand what's going on and then you can tackle more complicated stuff.
But let's say like.
Ask the same question, like do you want something that's like a little bit more predictable or do you want
like access to like cheaper money right now? If you ask that to somebody that for instance, creates automobiles and say like, hey, do you want to like live in a in a world where you don't know if the supply of steel is actually the supply of steel that you're working with right now or it might be like thirty percent different tomorrow, Because that's what you're actually saying, because the money stands for all of these goods and services, and they would say, like, hell no, only.
Because it's like so much negative that's the cost.
That's the cost.
Yeah, but does the cost out weigh the benefit?
Right?
But in that example they would see like that the that the costs are like much higher than what they had thought they were quick exactly, but yeah, it's.
So we don't know. This is where theory just comes in and we're all just making assumptions in the future. And I would I'm a bitcoin obviously, and so I would agree that I think I would rather have a slower, more predictable growth world. I wouldn't want to trade off all the damages done to society for potential of more growth.
But it's certainly something to think about.
If I may jump in there, and going back to the military point, like maybe I'm completely wrong, And Austrians would say, like, maybe I'm completely wrong, but like why then we don't have like a competitive system. Maybe your system then like let's just assume like ye, it will be cheap money in a volbal fast and then you have like my system where it's like more where people decide themselves amongst themselves what the interest rates need to be because of you know, the human action.
And then's see how it works.
But the peculiar thing is always with these ideas of big government or socialists and so forth.
They don't like the competition.
Yeah, the FIAT money is a problem because not inherently, but because there's they don't alone any kind of other competition.
You can't you can't allow Caitlin Long.
If they think it's better, they should.
Yeah, if you start Kaitlin Long, she tried to launch that Custodia Bank and the FED shut it down. It could it's gonna be a full reserve bank. And there was another one. I forget now what it was. There's another bank that tried to picture a full reserve bank and they also got denied. And you know, some of the thought process the FED hadn't said this obviously, but some of the thought processes. They don't want to allow a full reserve bank because it will destroy the banking system.
Everybody will want to go to that maybe maybe not you know, maybe, but but that they're afraid of the competition because we don't want that.
Okay, but that's an interesting point.
Because of the faction reserve banking, I would just say, like, let the market de side, like many Austrians one hundred percents, but some of them are not, Like I'm like more in the not category because like I always like to give an example, we know that, for instance, airlines are
selling more seats than they have on a plane. Right, that's fection reserve if they have like big data, right, and they know that typically like whatever, it is, like three percent of the people that have a ticket don't show up. Is this a bad business practice to do?
Is this fraud?
Because like most people who don't get on an airplane, they get like thousands, thousand of dollars and typically they like incentives, they're able to move people around, but it's generally better for them to fill out the planes that way. Is that like a fraud the system? I wouldn't say it is, but some people say it is. But like
why don't let that compete? And some people that probably like me a little bit more risktaking, I say, like I'm okay with putting some of my money in a faction reserve bank, not like zero percent fractional reserve or two percent, but maybe it's like ten.
Percent, but you can decide.
So, hey, exactly, I'm at a fifty percent and I pay you fifteen percent. He's at a thirty percent and pays you twelve percent, And now you can choose which one you want, how much risk you're willing to take if there was some transparency and you can quantify that risk correct And yeah, so I would certainly be for
a competition. That's how we find out what works exactly. Okay, So then the answer is for that is maybe we'd have less progress and growth you think the trade would be worth it for the stability of the prices and so forth.
I'm not even sure we would have less.
I mean maybe in a short one, but like in the medium to long run, I think like a purely free market based system where you have solid pricess systems and people are interacting with it, I think that will always.
Because right now, like if my landscaping businesses is growing really really fast, my neighborhood is booming and we need more landscaping services, I can go down and buy five new trucks on credit, and then I can hire five crews to go work around those, and I take on a few thousand dollars of debt, but it brings me fifty thousand dollars of revenues. That works really good for me, and then all the downstream effects of those five trucks. So back to the pencil, right, so the manufacturers and
the vendors and blah blah blah. Right, So how much growth came because I was able to get a loan for five trucks. Now, if I had to save, it would take me my lifetime to get those five trucks.
Very interesting points.
I like that, and I a preshiate you pushing back because, like often many everybody agrees with everyone. I think there's an empirical answer that question. I don't have the data in front of me, but like one could look at how do society's economies compare that have like relatively stable and and like lower or like higher interest rates versus economies that have like very lower interest rates and lending. Yeah, and over like a period of time. Right, you can compare them.
Well, you would look at lots of other countries that don't have accessible credit and look where they're at on the progress scale. So I told you I'm building a place in Mexico.
That's a cash thing.
Yeah, and look at Mexico compared to the United States, Right, and so those countries that don't have easy credit markets look a lot.
Different, correct, And it's also like whier economies that have, for instance, are dollar wised because they have been through like a period of hyper inflation or like completely when bankrupt. Right, why do they tend to be better than countries who
are not dollar wise in the same system. I mean, they're giving up a lot of power and it's really bad for them, right because they're just like eating up the inflation of like the bigger the United States, but in the grand scheme of things on dollar and like how much dollars I want it doesn't matter really, But like why are they more stable than like where economies
where they have actually control all the money supply. But you could argue like, hey, they're not as sophisticated and they're like further down like in the ABYSS compared to like maybe the United States right now some other countries where you can play that game a little bit longer. So just about like it's just a tough question to ask, like how much you know, emphetamine do.
You pump into your system?
Yeah?
Yeah, until it's like becomes really a problem. Yeah yeah, I said, like yeah, maybe you don't want to do it in the first place.
Yeah, okay, So then the next part of that question, which is on a fixed money supply twenty one million, and then talking about the fractional reserve system that we have. You know, some would argue that there's no way to keep a twenty one million cap because people will create more bitcoin artificially. Like with the gold market, we have hundred paper ounces for every one physical ounce, or people don't even know how many. There is about one hundred
to one trade on a daily basis. So how would you prevent that I And what does that do to the system. People are now creating fraction reserve on top of bitcoin or creating paper bitcoin.
So they will never be able to increase the total supply of bitcoin just from the from the code, just from Bitcoin core.
That's not possible.
I mean they always tried to do that, right because like everyone in the system who already owns bitcoin and who's running a note can enforce the code. And if the code says like, oh suddenly there's like twenty three million or like let's say the double amount, you know, you don't want to have a fifty percent haircut on your value. So therefore everybody would go against it. So just from the game theoretical setup of bitcoin, that is
not going to happen. However, you're making a different argument saying like, okay, like what about fraction reserve.
Because it would still affect the supply demand fair enough?
Yes, it probably would, and then there might be like more paper bitcoin out there than real bitcoin.
However, we saw FTX had what one point four billion dollars of the bitcoin on their books, but they only had one actual bitcoin.
Wasn't that that drastic? Yeah, that's hilarious, I mean sad, but also hilarious. Yeah, set for all of the people that invested.
In that they had paper bitcoin claims.
Indeed, So I don't consider that potent to be like an issue necessarily because we have examples throughout history of a system called free banking and that has happened, and it just means that there's like as little regulation on the banking system as possible. It was never one hundred percent free, but like relatively free, and this was for instance, happened in China, happened in Canada, happened in Scotland, and Scotland happens to be like.
The best example and the US very free.
No, No, they did not have that.
They had like always like really atrocious banking regulations and you actually couldn't like open up. There was a huge problem for the United States to actually become like Witcher because at some point the banking system was so that if you had like a regional bank in that area, you would not be able to have like another bank somewhere else, which then doesn't allow you to diversify, and you become like less robust as a bank.
And because they each have their own currency. So now my currency is good in this region with this bank, but if I go to a different region, my currency is no good or at a massive discount.
Yeah, that didn't exist so much a little bit. But like that is actually a feature, another bug, I would say, And that's what free banking is because banks were actually allowed to print their own currency.
And no, but because they weren't allowed to have multiple branches. Oh yes, so now they print this currency in New York, but then I go to Texas and now it's worth seventy percent because that person has to go back to New York to redeem it. And so yeah, it's a feature. They could print their own currency. But because to your first point that they couldn't have multiple branches, that caused a problem.
And then as a side.
Note, interesting enough, it looks like one of the greatest downfalls of that was to your point, they couldn't scale. But also they were forced to buy government bonds. What's causing the banking collapse today. They bought government bonds.
To put a weighted beautiful debt.
It's the same problem anyway.
That's a side note, but keep going sidey.
Yeah, So no, that is all very good, good points. And so the system was one and we have to keep in mind that only because it is has transaction costs anything doesn't mean it's it's necessarily inefficient. Right, So if you have like different areas where have different currencies, that's still still okay, and you will have like exchange. Right now, we have like how many different currencies are out there, right, like sixty seventy maybe more, probably more?
Is that efficient or not?
I mean it's hard hard to tell, Like it would be super efficient if you're only like one money.
Do we want that?
Hell no, because it will be like super manipulated until the ends of time, you know, and it will be super bad. So in regard to Scotland though they were able through competition issuing money, and of course there were sometimes like businesses going going down and there was like this checks and balance in the system.
However, generally people were able to.
Produce more wealth invest into the future, and the system actually through naturally going to like a reserve ratio of two percent at some point because there was so much trust in the system because they have become so efficient. And I see that that is possible again. However, if then do we have a bank who is imprudent, then it will go bankrupt and then the stakeholders to suffer same as today. Right, why should it should be no
risk in the system, no skin in the game. The problem is that we don't have enough skin in.
The gright, which is the whole reason whying to create the FED exactly and prevent banks from going bust.
Pick the So it's it's not an easy sell, right it saying like, hey, you have to take more risks
or maybe your bank and your life savings go bankrupt. However, there's bankruptcy proceedings and all that kind of stuff, and many people are making these sorts of risks right now by going to Vegas, or by even much much more prudent is friving having like a lot of company stock and you like investing into a startup and you're like one of the first employees there, and like eighty percent of your wealth is in that stock and suddenly goes away.
Should we prevent that now, because that's the engine of wealth and prosperity. And it happens to also work with money. And I don't see any reason why you have to have a centralized production of money about the nationalization of money in one of his very short books, and I would recommend people to eat.
That, which goes all the way back to kind of what we started talking about, which is the skin in the game or the consequence bringing back consequence. So then I guess then you're saying that even though we would have no more than twenty one million, you think it would be most likely that we would have competing banks, The would be some sort of fractional reserve. It would create more currency units, more bitcoin units, not on the chain, on the code, but on paper. There would be more.
Yeah, so there's a limit to it.
And then and then would that affect the supply demand, the equilibrium or the what happens to the price of bitcoin. If they're creating more bitcoin units or claims on bioin, it.
Would affect the price.
Yeah, let's say they got they extend the money supply by four x, so like we have like eighty four bitcoin now, right, and of course ed would. But it can only come over time, right because like in the beginning, you only trust like banks that you can really verify, right, And we have to imagine like a completely different world right now, because right now everybody thinks like all of the banks are safe, and people think they're putting the
money in and the money is actually there. Right, try to get like fifty thousand they're like even twenty thousand dollars from a bank.
Right now, even five in a lot of banks.
Yeah, I mean we hear these hory stories not only from Canada but also from the United States.
Have to pre order cash, yeah yeah.
And most people don't know that they think it's safe in there. So bitcoin most likely will only come about in a grand feshion after like some big collapse at least that's my pattern prediction, that more people opt into
that and so people will not trust banks. There's like no business model coming up hopefully like there will be custodian banks that are like one hundred percent, and then they will shortly like increase the money supply a little bit and because they want to like test how much on the risk curve that can go out and it depends on, of course, like the risk appetite of the customers generally, and then only slowly there will be like more and at some point there will be like an equilibrium,
but it will be not like as rapid and as like expansionary and inflationary as the system that we have right now where things can come into thing like that.
Yeah, and then the one big difference of bitcoin is that it's it's an open you know, ledger, yes, and so we can see what the bank actually has versus what the bank has extended, and so then it allows us to gauge that risk with transparency as opposed to a traditional banking system where we really have no idea, and so then it allows that feedback mechanism to happen a lot faster. Also, it's a lot easier to just take your money out things like that, So I think
that would greatly change it. I was kind of thinking along the lines of what misis framed up as like the difference of circulating credit versus commodity credit. So commodity credit would be if I grew ten bushels of wheat and I sold eight, I could give one of them to you on credit, but that came from my savings versus circulation credit was creating that credit out of thin air. So would you put the fractional reserve banking as like circulation credit.
It's an interesting question, and in the first five minutes you presented yourself like as somebody that has not studied all of these things as deeply as I am. You are really diving into those topics and media understanding those.
I'm asking questions. Sometimes I get comments on my videos like oh that guy owned you, or I'm like, I'm just asking questions, Like my goal is to ask questions. So but yeah, of course I'll study this. I spent a lot of time discussing and thinking about these things.
And it goes into like the theory of money and credit, which is like one of Mes's books where a where he like, really dive what dives into that?
Yeah, I think, and I have my own thoughts to these questions. But I'm I want your viewpoint.
Look, and I really enjoy that because like in my day to day, like I'm running a business, like I'm hiring people, you know, all these sorts of things, so I don't get the chance to, you know, engage into like those sorts of intellectual discussions as deeply as we are doing right now. So I appreciate that framework that you've created. Yeah, I would say, like it's it's probably more I mean, it's it's still it's still credit and
it's still produced out of thin air. However, since bitcoin is not something that can be ever you know, reduceed to do like extended then more than twenty one million bitcoin on like on the chain, there is like a natural limit to that, and I think that gives me a lot of pause and and you know peace that that is not like the biggest issue. However, like I don't know, maybe you're d maybe I'm read, I really don't know. And that's the beautiful thing. So Moss Bank
will compare against von lab Bank. You will probably win because most bank's not so much better than my last time.
It's harder to beat. And you already have like.
A huge audience, like you have a reputation you know, and all of that will be and that's that's all what it is, like you investing in businesses or you go to restaurant because you can check it up on the help and people will just like say, like, okay, it's marked mores believable and can we trust him with our money? And if you can't, then you will go
out of business. And then it will go back from like maybe eighty million into like sixty million bitcoin on paper, but like still there will be only twenty one million because some people will hold them themselves, which is like this revolutionary thing that you can be your own bank, which mankind humankind never had access to it before.
So then we'll we'll round it off with this question.
So then we maybe don't get as much growth, and the cost benefit analysis is probably worth it in your opinion, meaning less tear down of society, more predictable future, which is what we always want, right, more predictable future, and maybe we sacrifice left growth. You might say that we might still have the same growth over a different timeframe.
We would probably have fractional reserve banking, but that would be okay because there would be competition and it would allow us to pick and choose, and we could test different theories out.
You could probably buy inschouance against like banks like going bankrupt, like as you can mention by chewing for most other things, and.
Then that would offset some of the first problem of the growth, because now with fractional banking, you would have that the fractional banking that would happen would expand the paper supply of bitcoin. And you don't really view that as a bad thing.
Not in itself, No, not in itself, which the first probably I'm.
Pissing off a little bitcoin us by now, But like you know, I don't see like again, going back to the outline example, I don't see that as inheavenly problematic and like flawed, as long as it's managed well in competition and having more banks coming into the system will be the discipline that the market needs in order to and then but then.
But then by then creating that money and changing the supply, the paper supply, but making make sure we're clearing that, you know, four six, eight times or whatever, that doesn't change the future cost and price.
Of the money.
No, it does, it does, of course.
So now we're back to the first problem, which is you said we'd rather have a fixed monitors'pply because you'll know what the price of still will be in the future. But if we go to a fractional reserve system, now we're back in the same proble where we don't know what the price of still will be in the future. Yep, it's all about So we didn't actually fix anything, Yes.
We did, because it's it's about like the entrepreneurs always like uncertainty, you know, is a premennial effect of life, right, and we will never do away with it. Is a system better that is like gradually going into one direction where the supply of bitcoin is known, where there is a limitation on a system being set by the twenty one million, or like a system where you have like some people in charge they can just say from one day to another, we need like ten to ten percent
more like you know, cheap money into the system. Which system is like more predictive and more productive for the entrepreneur and for people to make decisions on because prices will always change, as you said, like there's no stable price level. It's always changing. And as you've said, like innovation also will change it a I will probably reduce the prices. It's a very deflationary force. But it's it's I mean, I don't know how you feel about that, but it's a good force generally if it makes us
more productive. Is that an issue or should we like not forbid like should we forbid any kind of other you know, innovation because it schools with prices.
And I think one.
Big differentiation right there that I was just thinking as you're talking, is that if it really came down to the free banks making loans, those banks don't want to go bust, we have to reintroduce the consequence so that means they're only most likely making the majority I say the majority of their loans would be product productivity.
Loans, correct, because if they don't lend it to like a business that performs, then you investing badly.
Right, And so what we one is we want to bring more goods and services into the market. And so if these banks are expanding the money supply, but they're expanding the goods and services faster, otherwise there's a lot of business and then we have a deflationary we get that money out. So if they're loaning money for productive use cases and we're expanding the goods and supplies, faster
than the money supply. We're a good situation. The problem we're in today is the government that's creating thirty one trillion dollars worth of money and destroying all the wealth and goods and service at the same time.
Very well said.
And even if they if they don't do that, it means like a lot of money goes to them. And that will be by definition, as we know from Means's others fantastic book, mess socialism by definition will be invested inefficiently and not two ends that are actually productive for society.
Of course, government can build bridges and can build the tanks. However they have.
No higher private contractors to do that exactly.
I mean, like I live close to d C.
Unfortunately, there's a lot of people getting filthy witch on all of that stuff. But like, is that what society needs? I would say no, because it's not based on like the demand and supply of real p it make the best decisions with the information that they have in an uncertain world compared with like some high end this pie, like we need to increase like twenty percent more off the money supply, you know.
Yeah, well I think we'll wrap it up with that we covered a lot of ground that was just I just I just wanted to ask those questions. Those are things I would normally be on your side of the conversation, and so I'm just trying to like, these these are challenges that people have brought to me, So I just wanted to kind of ask that to you. I'd like to take these opportunities to try to learn, right, I'm
trying to learn as well. There's actually something breed Love helped me out with where a lot of times I was doing interviews trying to kind of serve you up softballs and let you kind of get your pitch out to the audience or what I thought the audience would want, and like I try to, like, man, I'm getting to sit down with you, like I should try to, like see what I can learn. So I appreciate that students of liberty, students students for liberty, where can people go to find more about that?
Well, thank you so much, MOK. And I've also learned a lot and like some of the challenges I've not heard in a while. And as I've said, like I'm like thinking about business all day, I'm reading business books. Yeah, now you're bringing me back to like the world. That really made me excited about these ideas because they have changed my outlook in life and see like how society actually functions. Gave me like a different lens to look
at the world. And that's beautiful that you're helping other people to see, like a little bit more clearly what's what's going on.
And I appreciate you for that.
But yeah, Students for Liberty can be found out students liberty dot org. If you're a student yourself, go go check out the resources that we have. We have a YouTube channel called Learn Liberty with over two and eighty five thousand subscribers, a bunch of videos interesting topics like the one one here. We should have you at some point, by the way, Yeah and yeah, otherwise, just check out my Twitter which is at wolf von La.
What about one last thing, Maybe you have this on your website or part of your curriculum through this, through through through the program that you have. But I mean, I love these books and so I've read, you know, some of these books. Myself. Human Action is a book that everyone should probably read, but it's so friggin hard.
And most people don't get past the first time page. It was just about epistemology and like you need to be like very philosophical to get and like.
If we could just take that book and rewrite it in like a fifth grade level, because that's where most books are supposed to be and kind of like a fifth grade level, right, if we could just take that book and keep the concepts and the theory, but just because it was written one hundred years ago in a very academic way and they talked a lot more.
Proper back, very Germanic, with like sentences that do this.
Long, right, you know, if we can and I find myself having to reread a paragraph multiple times, it's the same. So if we can just like take that and rewrite it in like a fifth grade level. Are there books like that? I would would Could you point people to a few of those?
Absolutely? I would say there's a few books that people should beat. It's all eye pencil. It's not like even the book, it's a booklet. Like that's one thing that everybody should read. Then The Use of Knowledge and Society by Hyek also like a short article you can also read very fast. What is it called the Use of Knowledge in Society? That is an article that he's written once he received the nobod price and he talks about like the price system and how it works, and it's
it's pretty pretty remarkable. So those two articles go play very well together. Then I would say for an American audience specifically, but also international audience, What has Government Done to Our Money?
By Murray Rothbart, you.
Can if you want, you can skip the history a little bit and then just like focus on like what the system is that we have right now, and like why money is such an issue and like why you and I talk so much about it. I think those are all very good. I would also check out Frederick Bastiad The Law.
It is the best.
It's also very good to anime of the state, but we have to state money.
But yeah, I think those are probably some of the very good books.
And then when once you feel like a little bit more you know, adventurous, then go like into like more Messian books and they human action also, so it one not last thing. Law Legislation and Liberty by Frederick Hayek. Very good book that teaches you about the complex systems about law. What law, legislation and liberty. But people should only read the first two books. I mean, that's there they're split up into three books whatever because Chicago printed.
It doesn't matter, only the first two, not the third one.
When I read the Constitution of Liberty, which I think was his like seminal work, it was like his last book high and.
I don't think it was his last, but I'm blanking on the name of his last book right now.
It had nineteen hundred citations in nine languages. I'm like, no one will ever read in nine languages. I don't know, no one will ever be that smart again right now or distracted with TikTok or whatever, like, yeah, no one's going to be able to do nineteen hundred citations in nine languages. Amazing. Cool. Encourage some of your students to maybe take some of those Mesis books and we read them.
I think the World of.
Benefits, Oh yeah, so we should give a shout out. I don't know if you had him on the show, but Murphy, Bob Murphy wrote a few of these companions to missus Human Action much thinner, and you can read it by the side by side or just like that. And I think also, like, don't start with maybe Human Action, but start with Mary Rothbot's book Man Economy and State, yeah, which is an easy explanation of mesus human action. But like one book that we didn't mention, which is it's
tough to read. But I think that's the most mind blowing of them all, at least for me to understand truly, like why we need to move away from government's means of socialism. Yeah, it's the Tour the Force, And like you, I had to like every time I went like a page that I had like on my chest, I had to just like think for ten minutes to try to
understand whatever I was learning. But it tells you with such rigor and clarity about like why we cannot have a system that is just based on forced and it's like doesn't have price system, it doesn't have competition, which by definition is government.
High ex road deserved Him has a couple of chapters that are pretty good on that as well. True, and then mesas dot org they have tons.
Of good information on there. Certainlyybody know that.
Cool? Well that was signed off, Thanks so much, Mark, Thank you all right,