 Hey everybody. Well welcome again to FICON. How was last night? Do you guys have fun? Do you go to the AFF-CKI thing at Sidebar? There were like so many twists and turns there when you go downstairs. It's like another bar. It's really cool. Well, I'm happy to see you here this morning. We've got a great program set up for you. Before anything else though I want to mention a few more of our sponsors because again we couldn't do this without them. The Acton Institute for the Study of Religion and Liberty, the Basiat Society, Think Freely Media, the Charles Koch Institute, and Turning Point USA. Let's thank them for their sponsorship. It is my great honor to introduce to you Patrick Byrne. Patrick is an entrepreneur, an e-commerce pioneer and CEO of overstock.com. He is advocated for cryptocurrencies such as Bitcoin and that's really going to be the subject of his talk today. Let's welcome to the stage Patrick Byrne. I hope the cameras can do a close-up and so this doesn't get confused with other red hats that are floating around these days. Make Bitcoin great again. What an honor it is to speak to you and thank you Richard for the lovely introduction. I'm starting to recognize more and more friends in these groups when I come to them. I saw Caitlin Long out here earlier. Caitlin is one of the great friends of Liberty in the United States. You'll be hearing a lot more about Caitlin than years ahead. My subject, I have three subjects. Liberalism, its discontents, and the blockchain. How the blockchain cures it. What I really am and the next speaker, Magat Wave, just correcting me on my pronunciation. I view myself more and more these days as a glio. Liberalism is a glio. What a glio is in West Africa is the old man in the tribe who remembers the traditions and tells the stories. Tells the stories to the tribe, to the youngsters, where they came from. It's important that the young really know the history of their tribe and where they came from. This is a tribe and the reason I took this invitation was because I heard how many students were going to be here. I generally don't fly across the country to speak anymore, but I do when I'm going to be speaking to students. Because it's important that students understand where liberalism is, where we come from as a tribe. So I'm going to run through that, through things quickly, and just tell a story of stories. Many of you, this will be old hat. I am, as Richard said, who Wired Magazine calls me the Bitcoin Messiah. Not true, overstatement. I'm the CEO of Overstock. Scourge of Wall Street. Guilty as charged. But what I really am is the glio of liberalism, I think. So I'm going to tell you these six stories about six insights that were had historically that really gave birth to liberalism. Starting with the book of Daniel, something from the Greeks, the Romans, the English, the Spanish, and the original swamp people. The real swamp people. From the book of Daniel, there's this wonderful scene where Daniel is brought into the chambers of the king. I have a hand that has appeared and written, a message that no one can decipher. And Bouchers are asked Daniel to interpret it. And Daniel says to him, one of the parts, it means you have been judged in the balance and found wanting. I used to teach philosophy, and I used to teach, this is the first moment that I understand. I perceive a distinctly Western tradition emerging. The concept of authority until then, divine and political authority, were not distinguished. The sun kings and such. The king had some element of divine divinity about him. This is the first time it was conceived of, that there is some balance within which political authority can be judged. That it is not absolute, that it's not divine. Next we get to the Greeks who of course gave us voting. They gave something else that we still use. It's called sortition. And sortition is what we use to pick a jury. It's random selection. The Greek democracy of Athens had basically over 250 year history. But its only really stable period was when they embraced sortition as a way of choosing their legislators. It's a concept I'm going to have reason to get back to, so stick a pin in that. The Romans. Now our founding fathers were very familiar with the history written by Polybius. And Polybius was actually, he was a Greek who lived in the Roman Republic, about 110 or so AD, or BC, I'm sorry. He wrote a book where he described the cycles of history. And in his view there was a cycle that repeated itself over and over. And oh by the way the clock isn't running and I'm going to lose track unless somebody gives me a watch. Or Mike in the back, thank you. I'm going to leave time for Q&A by the way because we're all in here with that more. So cycles of history is the view that authority starts, we start with some sort of primitive barbaric state, some king emerges. So every type of government has a benevolent and a malevolent form. The king emerges, but over time the kingship turns into tyranny. So when it turns into tyranny the people around the king and the nobles take over and you get an aristocracy. That degenerates to an oligarchy. And then the people take over. That's democracy and then that degenerates into mob rule, collapse and you start all over again. The Romans he felt had arrested this cycle and the reason they had arrested it was because of polycentricity. Polycentricity is in political theory, it describes that there are many different centers of gravity of decision making. Decision making doesn't come from one place, but decisions get broken up and put into different parts of government. The English of course give us 800 odd years ago, 802 years ago now, the Magna Carta, which while imperfect, gives us the idea that it really just secured rights for noblemen in England. But at least it's a step towards limited government. And in particular section 39 describes something that in the next century William of Occam developed. Now those of you who study philosophy have probably heard of Occam's razor, which is the view that if you have two different explanations for the same phenomenon, the simplest explanation is better. Occam was also a great legal theorist and philosopher and he developed a rule that had been put in the Magna Carta that the king can only take things, practice what we call eminent domain when he provides just compensation. It actually goes back to the Magna Carta in the next century. Then the Spanish and there's a school if you're going to be pro-freedom and I've note that there are in our society people who call themselves progressives, they have hijacked the word progress, but basically begging the question is what they want in fact progress. They're just declaring it progress. I'm in favor of progress. Well, if they can hijack the word progress, I get hijacked the word freedom. And so if you're going to be pro-freedom, you want to know about a particular Spanish school called the Scholastics and the main figure is Juan de Mariana. And he wrote a book called The History of Spain that Jefferson read and gave it all the founding fathers. The Scholastics were Jesuit and Dominican priests who arguably were the first economists since ancient Greece. They saw this great influx of gold and silver from the New World and it led to inflation in Spain and they were the ones who put those two phenomenon together and so they advocated sound money. They also, the subjective theory of value is something if in college you study economics, they teach you that the Cambridge economist named Marshall figured this out in like the 1880s, 1890s. Until then, but it's not true, the Spanish actually did 400 years ago. For centuries philosophers wondered well what gives an object its value and there were all these lengthy medieval debates about it and of course the labor theory of value dominated that it's somehow the value is an expression of or a function of the labor that went into it. And it was the Scholastics who first said that's rubbish. The value is everybody has different subjective interpretations of value and there is no philosophical way to ascertain what the true value of something is outside of the value to individuals and it's a subjective theory of value which gives rise to pricing and so far. Under this view value of price is just a piece of information about value and scarcity to people. So they get short change because really after this golden age of Spain when Spain declined and Britain rose, kind of everybody forgot about the economics that had really been unearthed here. If you don't, if you understand the subjective theory of value and the value of items of things has to be some function of the value to individuals and you'd have to know how every individual values something to calculate what, if you were going to try to calculate value, you'd have to know all these facts about what, how individual people think. They said that even in the infinite mind of God that would be too complex an equation to ever solve. Well, that question came back in the 20th century with central planning and there was a Hungarian economist Janus Kornai who actually saw a speak once at Stanford in his old age, won a Nobel Prize. Well anyway, the question of the possibility or impossibility of socialist calculation was a question that occupied economists in the 20th century and there were those of them who believed it was possible, like Ken Arrow who was another friend of mine, and DeBrow, they thought that they did general equilibrium theory. When you hear about general equilibrium theory, it was really building the toolkit so governments could plan an economy. Well, the Spanish understood that was always going to be impossible and even in the infinite mind of God it'd be too complex a calculation and instead we need to rely on property and markets. Property and markets are, property rights and markets are like a calculating machine. They let us collectively calculate what the prices of things should be. Therefore, entrepreneurs are not, they're not parasites on society. People who make money aren't being parasitic, they're not taking it from people, what they are to this class. They're people who are seeing misprices and they are apprehending. They're perceiving this misprice and reaching in and taking advantage of it and by doing so they're doing God's work. They're moving us towards more accurate and correct pricing. They're moving society forward. They understood entrepreneurship then as not a parasitic activity but as a productive activity. They also were pro-peace. They had a legitimate what we now call a peace movement. They opposed the Spanish. They saw everything that you would see wrong today with what the Spanish did in South America. They understood to be wrong and they publicly declared that. This set of beliefs of sound money, subjective theory of value, the value of having property and markets and entrepreneurship moving society forward. These views migrated to the eastern edge of the Spanish empire and of the Spanish rule. If you remember your European history, Spain was, most of Europe was Spain, with the exception of France. The eastern edge of Spain, the eastern realm, was called the Øster Eich. The eastern realm and that Øster Eich is Austria. These ideas moved to the eastern edge of Spain and they sort of went dormant there. They went into hibernation there for 250 years. They lived in Vienna in the university system. They came out about 150 years ago as the Austrian school of economics. And if any of you have heard or studied or considered yourselves Austrian economics, there's a very good argument that actually all traces back to this school in Salamanca 400 years ago. And lastly, the swamp people, the lowlanders, who really get short shrift in our teaching and our school system. We get taught that England was the cradle of liberty. Well, maybe, but it's not really where it was conceived. Social contract theory, you study in college that justice can be, Hobbes saw, let's all imagine what the world was like before government. Life was solitary, nasty, brutish and short, and that we would agree to form a government that was a tyrant, a Leviathan that had all power within it. John Locke, we know who influenced our founding fathers, said no, we would adopt a much more limited view of government. What they don't tell you, what I never got taught in college, was there actually was a social contract situation in history, only one that I can really think of. Bunch of Germans who didn't want to live under anyone else's rule, moved to these swamps on the northwest of Europe. And they figured out that if they collaborated, they could drain the swamps and create a nice place to live, and that's the Netherlands. And what rose there, and so they actually had to go through a social contract reasoning process, much like what Rawls and Hobbes and Locke described, but they actually did it. And what they came up with was a minimal state. Erasmus, a Catholic theologian, wrote about peace and religious toleration. First time that I can think of that there was real, well in Islam, early Islam there was a tradition of religious toleration, but political pluralism and religious toleration. Spinoza, a Jewish philosopher who was actually excommunicated for his views, but for 150 years if you refer to the West, in the educated West, to the philosopher you meant Baruch Spinoza. And Baruch Spinoza wrote the ethics and other works where he identifies, you might say the birth of modern psychology, where he identifies us, not as just beings under the rule of the prince, but beings with individual consciousness, and individual, well, individuality, that we are beings whose consent matters, in other words. And so this view of consent of the governed is what justifies government, is what rose first in Holland. And with that then government people are not, they're not people we battle down to, they're a stothold or the leader, it's just a steward, it's just a first among equals, as the Dutch say. So they really the first proper understanding of the relation of the citizen to the state that I can think of in modern era anyway, was in the Netherlands. Oddly, and this is why they don't really get the credit they should, some Brownians, a type of Protestant in England, left fled religious persecution in England, and then when they lived in Holland for 20 years, after 20 years they decided to leave because of the licentious and wicked effects that Amsterdam was having on their children, which is why we all love going to Amsterdam. And they moved, they sailed to the New World, landed on Plymouth Rock, we know them as the Pilgrims. They gave the most great credit to these English Protestants who came and the Pilgrims were not Puritans, they were much more like what we think of as Quakers. And they, and tolerant, we think it came from England it didn't, they learned it all by living 20 years in Holland. As well as John Locke himself, who we give all this great credit to for the second treaties on government, John Locke sat out the glorious revolution because there was a warrant and he was going to be hung. He lived in Amsterdam for three years. And he learned this Dutch attitude and approach to government and political theory. And then he went back to England when the war was over and he wrote the second treaties on government, which is what are influenced the US so heavily. And that leads to, in my view, the US Declaration of Independence and Constitution are the great flowering of liberalism. By the way, I'm using liberalism correctly. I can't stand the way it's used in America. In the 1930s, socialists couldn't sell socialism as socialism anymore, they started calling it liberalism. Liberalism does not mean what Hillary Clinton believes. It means it's a complete corruption of the word. And you will find that these ideas, these inspirations all show up. Just the framework of the Declaration of the Constitution as the individual is the principal and government is the agent. We are the principals, like the principals of a law firm. We're in charge. And we hire this agent to do something for us. And the great Milton Friedman had a wonderful twist on this. He described a way of getting people to see this. He described how, what was it? Kennedy's inaugural address had this famous expression, ask not what your country can do for you, ask what you can do for your country. Milton said, in any society that understood freedom, that would have been considered deplorable. Because your government is an agent, it's like your plumber. We've hired a plumber to come in and do something for us, stuff we can't do ourselves. And if your plumber came over and did a lousy job and stuck you with a bill three times what you thought it should be, and when you griped said, hey, don't ask what I can do for you, ask what you can do for me, we would all understand that the plumber had everything inverted in his head, our relationship to him. And so did Kennedy have everything inverted in his head. We're not here to ask what we can do for our government. And my country, he clearly meant government. The government's only existence is to do the things we ask it to do. What we have empowered it to do. And polycentricity, how did this enacting as we empower it, we have, or the contract we made with it includes polycentricity. The idea that political authority will be moved, will be broken up. So it can't become too consolidated and tyrannical. It's expressed both in the constitutional articles one, two and three on the Congress, President and Supreme Court, but also in the federal state structure, which is embodied in amendments nine and ten, that the listing of certain rights here should not be interpreted to, or construed to mean that the citizens don't have others and that the powers not explicitly granted to the federal government have stayed with the states or the people. So polycentricity. And by the way, there's a wonderful Oxford historian, a classicist named Cole, I'm blocking out his name, Nicholas Cole. And he's turned from being classicist to sort of recreating what the founding fathers knew of the Greeks and the classical influence of Greece and Rome on our founding fathers. And he's actually got it down to like what books people had read and such. Peace and sound money. Peace is expressed. The power to wage war, remember, resides in particular in the House and in Congress, not with the presidency. We see how well that's lasted. And political and religious pluralism. Again, First Amendment. The Congress shall make no law respecting an establishment of religion or freedom of the press and so forth. Defense against an expansive state comes, one big bulwark on it is the Fifth Amendment, the Takings Clause, that government shall not deprive people of property for public use without just compensation. It took until 1985 for some law and economics guys, in particular Richard Epstein, pointed out the tremendous economic wisdom of this because suppose you have a field worth $100 and the government wants to take it to make a ballpark. Well, if the ballpark is worth $150 to the people, then the government is able to afford to pay you your hundred, seize it, and they've still created $50 in value. But suppose they're only creating something with $20 in value. They're seizing something for $100, they're not going to seize it if they've got to pay you $100 to only create something for $20. And the reason is, although the principal was there for 800 years, they only figured out why this is so important in the mid-80s. And it's because if you don't follow this principle, there's always a Pareto dominant alternative to any deal. So if the government is seizing $100 worth of land to create a $20 park, then there'd be some other deal where they could take, say, $30 and give $30 and both sides are better off. It's strictly Pareto dominates. So unless you follow the rule that the government has to provide just compensation, then the government will embark on all kinds of projects that lower that destroy value. And then also, of course, the Second Amendment. You know, the right defense of the Second Amendment is not really about individual self-defense, but ultimately, Isaac Asimov said an armed society is a polite society. I would add to that. An armed society is a society where the government has to stay polite. The government can't get too big for its britches. And that was really the understanding behind the Second Amendment. The discontents, where this has failed, our founding fathers saw one big flaw in this, and they described it, Madison described it, in Federalist 10. And it's worth taking a moment to read two paragraphs. The friend of popular governments never finds himself so much concern, alarm for their character and fate as when he contemplates their propensity to this dangerous vice. The instability and justice and confusion introduced into the public councils have been mortal diseases under which popular governments have everywhere perished. So they understood factions or what we call special interests or regulatory capture or capture in general is what they saw is what brought down previous attempts at democracy. And while they had studied all these previous attempts and designed the Constitution to be able to defeat what made them fail, they weren't confident that they had defeated this problem. The valuable improvements made by the American Constitution on the popular models, both ancient and modern, cannot certainly be too much admired, but it would be an unwarranted partiality to contend that they have as effectually obviated the danger on this side and as was wished and expected. So they knew the thing that they thought, the chink in the Constitution was its ability, that special interests. We had not found a way to deal with special interests. Philosophical mistakes in applying these principles come from the Supreme Court and I have to say, and it's not noted, the real philosophical mistakes we made in the 19th century really can all be traced to racism. We made these horrible, the Supreme Court made some horrible decisions that bent the Constitution out of shape and they were all based in racism. Dred Scott, of course, the case that started the Civil War, it was an activist court, I think it was Taney, and an activist court didn't read the law, they acted like super senators. They thought of themselves as senators and they decided Dred Scott the wrong way. A really important case, I'm going to describe in detail is the Slaughterhouse cases. So this whole point of the Civil War was to get what was codified in the 14th Amendment. Well, of course, freeing slave stuff, but the 14th Amendment says has two key clauses. One is that privileges or immunities clause that states cannot deprive citizens of any privileges or immunities that they would have under federal law. And that's really what completes and perfects the Constitution. Until then, the federal government was one thing and after that, it was... Until then, any rights you had as an individual and federal government couldn't take away, after that, any rights or powers that you had through the federal government, a state couldn't take away. That's the whole point of fighting the Civil War. And it was 1868 that reflected the Civil War, reflected the political compromise that came after. And it worked just fine. And New Orleans, so the Republicans, of course, dominated the South, occupied the South, reconstruction. New Orleans passed laws against black people being butchers. And they said, if you're black, you can't be a butcher. And this went all the way to the Supreme Court in 1872. And it absolutely was crystal clear by the 14th Amendment that, given that the right to earn a living is something that the federal law had always recognized, there was no way a state could deprive black people of that. And again, the activist court broke the political bargain that had been made and they said you could. And that's what gave rise to the Jim Crow South and he blessed it further in Plessy versus Ferguson 20 years later. Gangster, what really happened to this country is gangsterism. We got gangster. That's how you were started, started in Italy. And here's a story most libertarians don't know, I can promise. There was an Italian socialist, a very hardcore socialist, hard left. He was a syndicalist. The only syndicalist I know of today is Noam Chomsky. He's an anarcho-syndicalist. And he, this hardcore left, he was actually the editor of the socialist newspaper of Italy. Vladimir Ilyich Lenin met him at a convention, wrote favorably of him. He went to World War I and after, and his view of syndicalism is the view that we all should kind of belong to guilds and then guilds, the bosses, the heads of the guilds work out differences and set prices and such under some sort of government supervision. This was his view after he fought in World War I. He came out saying, well, with a little bit of an addition, just those of us who have been bloodied in war are really the ones who know what is good for the country. And his socialism got nationalistic. But his fundamental view of how he organized society remained on this unchanged socialist view. This was, of course, Benito Mussolini. Benito Mussolini had great fans in the United States. In the West, actually. It was only after he invaded Ethiopia in 1935 that he became an enemy. But he was very well regarded. You may remember an old Cole Porter song, you're the tops, you're my great Houdini, you're the tops, you're my Mussolini. Well, that was written in 1928 when Mussolini, he was viewed as the man who made the trains run on time. The Columbia University Economics Department was to Franklin Roosevelt what Breitbart is to Donald Trump. They were his intellectual, they were his think tank. And there was one economics professor who went and studied this stuff for 18 months and came back all excited about how Mussolini had made Italy work. And it became the basis of the New Deal. The first person in charge of the National Recovery Bureau was actually a man who described himself as a fascist. He was a retired general. And so they tried to implement, so fascism doesn't come out of the right. History got rewritten after World War II. If you go back before World War II, a Ron Paul position would be considered right-wing. The fascists and the communists and socialists were left-wing. It was only after World War II that we got told fascism was a phenomenon of the right. It wasn't. It's national socialism, Nazi-ism. National socialism. His deals, his New Deal got struck down by the Supreme Court. And he couldn't get it through for three years. In 1936 Roosevelt said to the Supreme Court, if you keep doing and striking this down, I'm going to pack the court. He said, look, in the Article III, there's nothing that says how many judges should be on the Supreme Court. We started with five, now we've got nine. I'm going to add six, said Roosevelt. We said the other judges are getting old and can't keep up the work, so I'm going to add six to help them. But it was going to be six hard left guys. And they came back from the spring 1937 term the Supreme Court did, and they rolled, and they rolled over on everything. And that was the great gangster moment that punctured the Constitution. The case, one specific case to know, would be Wicked v. Filberg. It was the case that, you know, so Roosevelt had these policies, the agricultural board that was going to manage pricing, agricultural prices. And a farmer named Philburn was growing wheat. I think it was in Nebraska or Iowa was growing wheat that he fed to his cattle. He made his own food out of it. He got charged under these federal laws for doing so. It went all the way to the Supreme Court and the Supreme Court on the argument that, well, here the president is trying to have a national market in agricultural prices, and this farmer, by growing his own wheat and eating it, that's wheat that he would have had to buy in the market, so even infinitesimally he's affecting the national market, so what he did is illegal. Well, that's such a obviously tortured interpretation of the Commerce Clause, because the federal government has the right to manage commerce among the several states that was so causuistic, but that's where our Constitution got punctured, and that case really is what opened the door to the massive administrative state that has risen ever since. Lastly, I know this is a difficult and touchy thing to talk about, but Sharia, I've spent a lot of my life in the Middle East. I probably spent four or five years of my 54 years in the Middle East, collectively in different places. Can we reconcile a belief system emphasizing submission with a view that just government arrives from consent of the government? I don't know. I think it may be like a carbon-based life form and a silicon-based life form trying to meet and have an offspring. I don't know if we can ever, but what I would love to see is a rise out of our Muslim communities as some attempt to reconcile Sharia with the view of consent of the government. If you believe that just law comes from divine authorities interpreted by clerics and stuff, how can that be reconciled with consent of the government? And lastly, blockchain solves all this. Blockchain solves all this for a very simple reason. For 6,000 years, we have been involved in consensual exchange. We've had to rely on centralized institutions to enable it. If you want to buy a camel from me, I'll give you my camel, give me a gold coin. I don't know whether the gold coin is debased or not, so there's a business model. He who has the monopoly on violence in an area says, I'll make gold coins, put my face on them, anyone who debases this gets killed. That's a business model. It's a way of monetizing one's monopoly on violence. Land titling. If you could buy land from me, I can give you a piece of paper that says... In that case, I just described the mint, the central institution. We don't have to trust each other for our exchange. We just trust it. If you're buying land from me, I can give you a piece of paper that says you don't know whether to trust that, so we all agree there's this one office, the land titling office that we'll go to and what it says is the truth is the truth. And you can go through... Well, I've been in a Silicon Valley company where they had on the wall 160 examples of institutions, both government and private, whose real purpose is the same business model. Strangers can't trust each other, so we each just trust this central institution. Well, with a blockchain, we don't need those anymore. And that's good because those institutions, we have this thousands of years of history of seeing those institutions corrupted, taken over by predators, philosophically distorted, gangstered in the different ways I've described, but we don't need them anymore. Because due to the blockchain, the fundamental, you know, value is... Or the breakthrough is the blockchain lets us exchange value for the first time without needing any third party to trust. And that makes it what the internet did to publishing. I think the blockchain is going to do to those 160 other institutions across society. So I think this is the most politically revolutionary moment, maybe in history, the evolution of the blockchain, because it reverses 6,000 years of the way we have solved this problem of consensual exchange. So with that, I think I've got time for one question. Yes. Well, the technical questions on the length of the blockchain and stuff is I'm not qualified to address. But the... I think that at this point people... It's still a novelty thing. People are storing value. They're getting that value can go up and such. But what really needs to happen is adoption. Adoption in commerce. A happenable website where you can spend all the Bitcoin you want to spend, and shortly, shortly not to let the cat out of the bag too much, but it's not out of the question that someday in the near future you'd be able to spend any altcoin at Overstock. Okay, thank you.