 Before we introduce Patrick I didn't plan this but I had to take a little a little ironic pleasure with this tweet I got from zero hedge that someone shared with me about an hour ago barclays server crash Leaves customers unable to withdraw cash or use debit cards So thank you zero hedge for that little bit of news And what do we say about Patrick burn a retail and e-commerce giant obviously the founder of Overstock comm But also a PhD in philosophy and you don't often see those things two things combined Holds degrees from Stanford Dartmouth in Cambridge He's equally at home talking about business about management methods with employees About Wall Street and insider trading He's completely comfortable and knowledgeable talking about Austrian economics and some of the Hayekian problems of knowledge and What he's probably getting most famous for is his ideas and vision about the uses of the blockchain Going forward which are going to God willing Not only eliminate a lot of third-party risk from all of our lives But hopefully most importantly eliminate a lot of government intermediaries. So please welcome Patrick burn What an honor it is to speak with with you and and to address the Mises Institute I want to take this opportunity to say I think that in In Jeff the Mises Institute has gotten the next generation of leadership lined up And I think that we're going to see big things out of mr. Brown. So Great hire I Honored to speak it's to the Mises Institute crowd again My father always warned me that The the eyes are the second thing to go I don't have to the ears. I guess so just in case those in the back can't read this I don't want there to be any misconceptions This says on it make Bitcoin great again. I think we have to get those up on the site soon We have an hour and we have to 130 they have been very generous and gracious and Asking they're inviting me to speak for so long. I love Q&A but they've There's gonna be some philosophy first you know invite a philosopher to lunch what you get is some philosophies I don't tell you that and there's gonna but we'll have ample time for Q&A But as they as the great philosopher pink Floyd said You can't have your pudding until you've eaten your meat. How can you have your pudding until you've eaten your meat? So So we got to go through some meat first First who am I I've gotten I've started liking this article from a profile and wired a couple years ago saying meet Patrick Burn The Messiah of Bitcoin. I'm the Messiah of nothing. I hope you know that I Am the CEO of overstock in the scourge of Wall Street. I will Plead guilty as charged to that one And I'm a you may even deduce out of this Talk why that and it came to be It wasn't always that way about 12 years ago. I was the first in the country Let me tell you a quick story out We went public in 2002 and I'd grown up around Wall Street when you're a public company CEO as I was since 2002 you're out there in the mix quite a bit and you're out there with hedge funds and Regulators and prime brokers and bankers and venture capitalists and such and it didn't take me very long between o2 and o4 Just smells skunk and to realize there was a lot of mischief going on on Wall Street. So I just swam around in it and Learned everything I can I don't talk to My plan was to take it to the press and I try to stay as far away as possible from the guys with badges and guns for reasons we'll come up, but I Got it all I gathered a whole lot of Irrefutable evidence about what was going on Wall Street and in 05. I went public and I with this claim I said that the there's a whole bunch of mischief going on on Wall Street centered actually and I got him Stephen Cohen a guy a hedge Funding and seems to have about 15 satellite funds around them. They're engaged in widespread market manipulation and insider trading But most interestingly in the SEC who the American I wasn't going on the radio saying this by name Accusing them in criminal acts said no one's gonna sue me That's how confident I am that I'm right because they can't take discovery and at the most importantly that the SEC is asleep at The switch if not actually in bed, it's they've actually been captured by these these hedge funds and There's a whole bunch of systemic risk building up and the whole thing is going to come to an ugly end And the next day in the New York Post ran this photo of me They said it's crazy it's conspiracy theory to believe That what hedge fund that Wall Street and the SEC are too close and the SEC isn't protecting us wacky wacky wacky conspiracy theory boy, so That's who I am I'll let you at the end decide which of these but the thing in common between them is Whether I'm the messiah or lunatic is I'm a fanatic and as Churchill said a fanatic is someone who can't change his mind and won't change the subject And the thing that I'm fanatic about is a operating system called liberalism And I want to be clear Presumably well, no when you talk about political political liberalism. We're all talking about We're not talking about Bernie Sanders. We're talking about a long historical tradition So there's going to be some intellectual history here for a while and again I hope you forgive me, but I was asked to prepare something substantive and so I have I Would like to walk through this because I think we're up against some compare I think we're like a company that has lost its brand lost its business model has forgotten its business model and for the younger folks here, I think it's Probably I think that people should be Reminded what our operating system is about and what I mean by operating system is a great book that the it's kind of a cult science-fiction book who here's red snow crash Okay, they have to be kind of a real hardcore anarcho capitalist a red snow crash But it's a great book from over 20 years ago Where a sci-fi novel that envisioned the collapse of civilization at the snow a snow crash a lot of interesting Memes come out of it the concept of cyberpunk Metaverse he envisions in this book in 1993 things that we would now call Facebook or the World Wide Web Memes itself the concept of memes got traction in this book And and or this is sort of the Bible of the anarcho-capitalist But what if this book does is invites us to Think of Civilizations and when as operating systems nobody kills each other. I think Linux is great. I think you know Macintosh is great. I think PC, you know, it's they're just operating systems that have different virtues and different flaws different design advantages and different design flaws and the the two main classes of operating systems And history is just as this book would invite you to see is just a sort of a Petri dish Well, we're looking at different operating systems and seeing what emerges as the most successful, which has the least flaws and is the most useful The two main classes of operating systems are Authoritarianism and liberalism Thoritarianism, I I'd love this, you know Kennedy said this and his inaugural address asked not what your country can do for you Ask what you can do for your country and Milton Friedman said well this bike Clear a few years later. He wrote this said that clearly as Kennedy's subsequent act shows he meant by country government and Milton Friedman said neither half of the statement expresses a relationship between the citizen and his government That's worthy of the ideals of free men in a free society And that's because Ultimately authoritarianism the core DNA is submission. It's submission and I think of George Orwell described the future this way If you want a vision of the future imagine a boot stepping on a human face forever Well, I think that that's too. I hope that that's pessimistic about the future But it certainly is a good description of history By and large, I'm remind I was once in oh for I was in Afghanistan searching for artisanal products for overstock and I was talking to a Young lady through an interpreter another a woman who was an Afghani woman who was interpreting pardon me. It's a lot and She was I was talking to this artist and third and in translation the woman saying I can't go I can't go and pick up the raw materials to make more products for you because I don't have a husband anymore If I walk on the road, I might be stolen and this and that and I corrected the translator I said the word isn't stolen. It's kidnapped and this woman this the translator said well Not really in our language We have a word for kidnapped and if it happens if a man is taken or something you're kidnapped But if a woman is taken We use the same word that you would use for a cow or sheep just like if you saw in America a cow walking down the road You wouldn't think of it. It's being you'd ask who owns it You know who owns the cow the cow doesn't own the cow somebody owns the cow And that's is how it is for women in Afghanistan And so we use the word that you would use if somebody steals a cow or sheep or a woman because she's there's no concept Of a free woman the woman's always owned by her dad or her husband or older brother something like that and I think that it's That's I think we all should remember that until the liberal revolution came along. That's largely how people had to conceive of themselves We were ends. We were means for other people's ends And it's easy to get confused on that when you read philosophy because people use words Like here I pulled a line out of Machiavelli. We're just just as an example of how this can be distorted Machiavelli speaks of whenever those states which have been acquired or live into their own laws and in freedom There are three courses for those who wish to hold them blah blah blah what he means by a free State isn't what we mean Machiavelli means a State that is not a vassal. It's not subject to another state But it's just taking for granted of course that the prince is the prince all who live within the state are the ends are the Means for the prince to achieve his ends. It's not free in that sense So people have used these this word freedom for a long time not to really mean anything like we conceive of it Where does our conception come from with a liberal conception? The core value for us is consent It's all about consent if you think of what what we are really trying to promote to promote at the DNA level is Consent consensual relations among humans among citizens and Consent of the governed as a political doctrine There are three precursors I like to mention I used to teach philosophy and love which I could teach a whole semester on this The three precursors the first time I can even think of this having been conceptualized is in the book of Daniel If you remember there is a line Daniels interprets for the king Nebuchadnezzar and one of his interpretations is you've been judged in the balance and found wanting Well that ability to conceive until then political and divine authority were Synonymous they were united the first evidence. I can think of where somebody conceived of it differently that there is some external Balance by which you can judge political authority is this line in the book of Daniel couple hundred years later really in Athens democracy emerges the first Voting and also it's interesting I used to study Athenian democracy and they had several different Constitutions and the Constitution that turned out to work the best and created the most stable Political system in Athens is when they went to choosing their representatives Through sortition which means randomly just as we choose jurors and Believe it or not. That's I was one. We don't think of anymore. Although we do choose jurors that way but when it was one that Athenian political system chose their electors at random that they that they actually fared the best and then third There was a Greek he was a Greek man that lived in the Roman Republic and you know the Rome spent 500 years pretending they were Greek they were sort of like East Coast Americans who look up to the French there Romans looked up to their Greek so much and every good Greek house every good Roman You know aristocratic household would have a Greek slave to teach the children and raise them and there was a Greek living there in about 120 BC Polybius who wrote and he was a tutor to one of the aristocratic households and he wrote the histories And he had this theory. He was the first to Articulate this theory of history and a cyclosis which says it's the natural order of things that out of the out of primitive society Kingdom emerges and then kingdoms degenerate to tyrannies and Then the tyranny gets sort of you the tyrant gets usurped by the nobility the Aristocracy around him and they take over and then that degenerates into oligarchy and then the people take over that's democracy and then that degenerates into mob rule and That's history had so there were benign and malign forms of each government kings to tyrants Aristocracies to oligarchy's democracy to forget the Greek word for mob rule, but I'm a mob rule and Does someone know it? No, it's not mob. I was here like a octocracy or something. I'm a Greek And that the way to stop that was polycentricity, which just means decisions Get decentralized you want to have decent if the more you centralize decision-making in one body The more it tends to accelerate this process but the more that you can distribute political authority across different bodies then You can we can perhaps stop this tradition of this this historical cycle and his great His he argues in one book of histories that that's the virtue of the Roman Republic that they had managed to balance these different interests and That this process had come to a stop So Continuing this It really but I say that's the precursor but liberalism really starts Just over 500 years ago in Spain And we normally don't think of it this way But it starts in Spain in two places one place in Spain called the lowlands or the Netherlands Which we got to remember Spain Europe was all Spain with this island of France in it but Europe was Spain and in the left in these swamps on the Northwest of Europe some Germanic folk who didn't want to be under anyone's authority Moved out into these swamps and realized if they could cooperate they could drain the swamps and build Let and create land and live together so it really was a a but then they had to come up with the rules by which they were going to live together and It actually is if you was a social contract We study if you're studying college philosophy political theory always hear of contract theory Hobbes Locke John Rawls is the big one that gets studied these days that the idea of justice is let's all agree if we were in some Original position before let's agree on what the rules would be and then whatever rules they would be That's what we that's what we should live under now Well, they actually did this in the Netherlands. This is what they were doing in the 1300s and they came up with a form of government That first recognizes You know that we we hire somebody if we're all working say to build a dam on the Amstel River Which is where it all started hence Amstel dam That we're gonna have to cooperate and how to and we're gonna have to have somebody who runs the show a mayor or something But as they think of them just the first among equals not some overarching presence in the sky government's just like a plumber or something that we've hired to get something done and It's just the first among equals and then enough of those principle enough of those Political bodies federated and that's that was the low ends So but from the ground up it's all consent and it's not based on sort of this overarching respect For government as a ruler of us. It's just somebody we hired because you do need somebody to coordinate, you know things a Merchant and bourgeoisie town emerged and the values of the merchant class are can our consent consensual exchange Erasmus a great Catholic theologian Came and wrote the first Philosophical defenses of tolerance religious tolerance and peace But a philosophical defense of religious tolerance Spinoza and the great one You know for 200 years if you just referred to the philosopher you meant Spinoza he was concerned he came up with what we would now call the modern view of the self Maybe even the basis of psychology are a way of conceiving of ourselves as Agents who have Psychologies and things that was Spinoza and he conceived of man for the first time as an entity Whose consent matters? It's not just about the princes and their dealings with each other that the consent of the government that we are beings worthy of consent And hence this whole sort of consensual society developed in this swampy area in the northwest of of Europe and it prospered and prospered immensely Something funny happened we give all this credit to the English as being the sort of the cradle of civilization And if you even teach this in American high school civics anymore, you you learn this stuff about the English and the and what really happened was Some English separatists they were Brownians they moved to They fled England and they moved to Rotterdam and they lived there for 20 years and they eventually Got fed up with the effect of the licentious and wicked ways of Amsterdam on their youth and they decided to move and they Sailed to the new world landed at Plymouth Rock. We know them as the pilgrims in our history book We give all this credit to the pilgrims that came over with pilgrims are not puritans common misconception pilgrims are not puritans they're more like we would think of as the Quaker tradition today and We they didn't come from England with it It's left what's not taught in the history books as they went and they learned it in this 20 year period and in in the Netherlands and Then also we learn in our civics classes that our founding fathers all read this great English philosopher John Locke the second treat is on government where he works out a social contract and And and this was very influential book on our founding fathers in truth John Locke didn't learn it in England He sat at the glorious revolution Sitting over in Amsterdam for three years and then he went back to England and wrote this book This is really built again on his perceptions out of out of Holland So in in my view, we don't give nearly the credit to the Netherlands that we should intellectually It's really where liberalism was conceived that it maybe was cradled in England and Britain and then came to the US but And then there's another part of Spain and there's a wonderful economist Who I don't know if he has spoken at Mises, but Jesus Huarto de Soto is he known in the And he has developed while it was really Murray Rothbard I understand who first made this argument and that Hayek approved it and it was an argument that what we That oh just over 400 years ago the University of Salamanca in Spain something very special happened bunch of Jesuits Dominicans created this scholastic school. It really sort of took the philosophy of St. Thomas Aquinas and natural rights philosophy and developed it and they they noticed both from their own philosophizing and also from the Spain was at the time it was the Golden Age of Spain and there and there had big influx of gold and silver from the New World And so they were thinking economically and they came up with the first Objectivist theory of value the idea that the value of something is not some function of how much labor has been put in it or I mean people used to have these philosophical Discussions like how do we determine what the value of something is and it was them who said the value is The appraisal of the person who will buy There's no sort of way to find some intrinsic value in something The impossibility of socialist calculation The idea that prices can't be set by any authority because it's just you'd have to know all the preferences of too many people And how they really value things and even God himself and his infinite wisdom could not perform the calculations To describe what the price of everything must be They saw the big inflation as this gold came back from the New World There was big bout of inflation in Spain the quantity theory of money They even discovered what we now would call the equivalence of demand deposits and certificates of deposits that if a banking system a banking system can create inflation by over By over issuing Either so it isn't just That the book basically through fractional reserve banking you can create inflation as well all of this and also the the value and they sort of fundamental Importance of entrepreneurship property contract how this is what really moves society forward These are oh peace there was just as there was in Spain There was a Actual peace movement probably the world's first peace movement you had scholastics writing against the crown About the virtues you know what we would now call a peace movement about how wrong it was to be going and doing these things in the New World These thoughts move to the eastern edge of the Spanish Empire, which was then well the eastern edge Was the Öster Eich the eastern rain the Öster Eich which is Austria and there they hibernated for 250 years they hibernated in universities there until they came out and come down to us Starting about 150 years ago as the Austrian school of economics That's actually what we know is the Austrian school of economics Hazel Swarto de Soto and and to him I understand Murray Rothbard have confirmed that actually started back 400 years ago in Salamanca and I view if you mix all these memes up of consent Consent Federation among consensual states consensual exchange tolerance religious tolerance pluralism And on the right these these economic concepts I think you get pretty much the US Constitution. In fact, this isn't Jefferson read there was a book by one of this class is called the history of Spain, Marianas and Jefferson got copies and sent it to all the founding fathers They all read this book because he thought in the history of Spain, which is one Which is the material from which the the the Salamanca school work that one could find proof of these of the of the benefit of these concepts and that in In an obvious way our US Constitution embodies this tradition It's under attack so that's the that's the quick short course on I think we're liberalism where our operating system comes from what's important to know is It is under attack in four ways philosophically From a point of view of institutional design and a civilizational attack Philosophically, I I'm only gonna hit one of these really at any length Rousseau Rousseau is the great enemy of mankind Rousseau see when they the tyrants when the Thoratairans couldn't fight it anymore they They subverted it in different ways and for Rousseau who writes this book the social contract Where he says or he says yes the the consent of people the will of other people is important But it's not this silly will you don't find out what the will of a people is just by voting. That's not that's a Silly, you know, we're French where that's superficial It's that the will Each of us puts his person and all his power in common under the supreme direction of the general will La valente general there's a general will that we have we don't discover it by voting amongst ourselves But there there's a general will that would that is our purpose the sovereign power need no guarantee to give no guarantee to its subjects Thus the dominant will of the prince is or should be nothing but the general will or the law and Whoever refuses to obey the general will shall be compelled to do so by the whole body This means nothing less than that he will be forced to be free This is the great Well, we laugh, but I'm gonna show you momentarily where this shows up in our modern discourse You know it Yeah, this is the great philosophical jiu-jitsu move against liberalism That yes, okay you folks are right not authority it is the will that's important But the real will isn't what you silly people think your will is It's what some robespierre is gonna come and make clear to you what your will is and if you don't what your collective will is And if you don't go along with it He can just force you to be free and that's what real freedom is so the real jiu-jitsu move to always be alert for Is somebody telling you that freedom isn't this or liberty isn't this silly thing of you pursuing what you want But is subordination submission to some other process to some other mechanism That describes basically the next 200 years of oh, by the way Voltaire read this and wrote to Rousseau dear monsieur Rousseau I've received sir you knew your new book against the human race and Thank you for it one longs and reading your book to walk on all fours I love somebody once asked Bertrand Russell if he had a Bible is it yeah, yeah, I keep it over there under my Voltaire um This mistake has propagated through philosophy for 200 years, and I'm not going to walk through in great detail, but But basically this the common denominator of this mistake is somebody saying freedom isn't what you think With this American conception of freedom is it's a or what our conception of freedom is it's a it's Submission to something else and Kant was really although we think of him as the father of liberalism some people do he really Didn't get it didn't get the joke and he still at the end of the day thought freedom was submission to a historical process Hegel basically a my view just warmed over Kant marks same thing submission if you've ever had the I know Misfortune to argue with a With a hardcore lefty. I used to live in China in the early 80s I would have these long debates with my I was a foreign student I would have these debates with my I was my my Chai-Kam friends my roommates and stuff and they would say well what you are what you understand as freedom is just this bourgeois Western understanding and we have you know through the science of Marxism and such Marxist now Lenin Maoist thought we understand that real freedom is submission to this process and by furthering this process That's how a man. That's our person really achieves true freedom Nietzsche did the same different different process named but he actually referred to what did he say if John Stuart Mill Only an Englishman cares about happiness In other words this idea of life Life liberty in the pursuit of happiness that the English that's just like that's like this trivial superficial Conception of freedom. I'm gonna bring down from the mountains a much richer Conception is through subordination to that submission to that that real freedom exists Lenin kind of twist it. Well, it's not submission to this historical process. It's submission to You know the the vanguard the vanguard of the process the party itself and literally If you go back a hundred or less than a hundred years and look at how this stuff was debated there are There's absolutely people may made this argument that is through submission in this case to the party Now if you've ever that is through submission to the party that real freedom is found So it's the same twist over and over freedom isn't the sort of silly superficial thing of life liberty and pursuit of happiness It's submitting yourself to something else is where you really achieve freedom Hitler our bite box cry Over the gates of the concentration camps work makes you free submission to this to the state and such Mal polo it's again when I've been in these bar even Cambodia. I've been and a long time ago People all know the Russo people the Chinese students maybe couldn't study any Western philosopher other than Russo And marks and marks Marks Lenin. It's the authoritarian Instinct needs needs to make this flip. It's the same judo move over and over that the that freedom is submission to something else Voltaire said people who believe in absurdities will eventually commit atrocities and that mistake is a that is in it is an absurdity Recently had a politician say the more I looked at what our founders were talking about They understood happiness to mean true happiness Not pleasure and enjoyment as we see happiness today But doing what you ought to do doing what you're oriented to do doing what God oriented you to do in other words Doing the right thing what our founders were talking about was the liberty to be able to pursue what you ought to do And he's very ready to tell you what you ought to do This was Rick Sandorum So this isn't just idle this philosophical error error Has crept into the not crept in it is barged into the discourse and polluted it for 200 years And it still lives That's philosophically constitutionally It's always been under attack. It held its own And I think that it would have held its own it was a well-designed system that our Constitution would have held its own until somebody had to cheat and The great scholar who has deconstructed this so beautifully is Richard Epstein He wrote a book on how progressive we were progressives rewrote the Constitution and he traces how in Jurisprudence American jurisprudence the principles of our Constitution got subverted Sort of to me. I was just hearing people talk about the regulatory state the administrative state None of that was really possible in the Constitution as it was written. The idea was to have 13 laboratories or 50 laboratories trying lots of different things polycentricity remember Lots of different Laboratories trying to solve problems and then the better solutions would get recognized and emulated and that's how policy Innovation would work. That was a beautiful aspect of the Constitution Not sufficiently appreciated it seems to me Judging from the discourse. Well that got ruined by the administrative state. The particular case was wicked versus filburn you know Roosevelt came in and he passed all these laws and the Supreme Court struck down said these are unconstitutional we basically tried to Mussolini our country and Which is an interesting story to go into On the side, but people forget Mussolini was very widely respected in regard in the United States until 1935 when he invaded Libya, but Mussolini anyway. Oh Tom Is Tom there you are did you write about this the effect of the connection between Mussolini and Roosevelt is that Okay You have everything else. Why not this? Anyway, they and it really comes down to as absurd a case is this a farmer. I think it was in Iowa Well, eventually Roosevelt got sick of this and in 1936 told the Supreme Court. I told the country I'm gonna pack the Supreme Court. Nothing says I can't take it from nine judges to 15 There's nothing in the Constitution that specifies the number of judges originally was five and I'm gonna put six of my own guys on and At that point the spring term in 1937 the Supreme Court buckled and it was called the switch in time that saved nine and they buckled and they started rubber stamping as constitutional the flagrantly unconstitutional unconstitutional things FDR was doing and in 1942 or 43 a case came to the Supreme Court where Roosevelt had had a program that was setting price prices for agricultural goods nationally and a farmer had grown wheat in his own Backyard and made something with it got in trouble with the feds goes all the way the Supreme Court and on the grounds of the Commerce Clause That the federal government could reach in because the federal government had an interest in maintaining Price stability and farm products and it's not enough a farmer grows his own wheat and eats it then that's wheat He didn't buy the national market, so he's having an effect However, infinitesimal on the national market. Hence. This is a fit subject for federal intervention Well, that's so philosophically tenuous. That's what I mean by saying the system really ultimately did take a crime to be broken it took the threat to pack the court and it took decisions like that to for The Constitution to stop working and what that decision was the opening of the administrative state once they did that then it becomes a fit Subject for federal administrators and regulators to regulate just about anything another great Example of that actually marijuana marijuana in California when it was first legalized Here there was a woman like a leukemia patient who was dying and grew a plan in her backyard and That was the test case. They brought was Gonzalez of E Reich and Went to the Supreme Court where we discussed where there's only one person on the Supreme Court in my mind who actually understands the Constitution it's Clarence Thomas and because lots of conservative judges are way too deferential to Congress and way due deferential to government authority if you want to read a real libertarian Treasure read Clarence Thomas's dissent in the Gonzalez v. Reich where he said of the federal government can regulate that a woman growing a pot Planned on her backyard. They can regulate spelling bees and anything else in the country The third of the four ways it's under attack is institutional design and Here is Here's the real insertion point in our operating system for the virus that we are up against is The insertion point for the virus of authoritarianism is centralized institutions Because centralized institutions, I won't read all of this but Federalist 10. I just heard Federalist 47 refer to Federalist 10 says It was it was Madison wrote it Basically, we studied all the ways that other Constituent that all their attempts at democracy had failed at how they failed and we designed this Constitution to be better than that but The thing that we haven't I'm bridging and the thing that we haven't solved he's basically saying is this problem of faction None deserves when we're actually developed and its tendency to break the balance of faction the friend of popular Governments never finds themselves so much alarm for their character is money and fates is when he contemplates their propensity this dangerous vice This is what factions is what? Are the mortal diseases under which popular governments have everywhere perished and By factions he meant what we would call special interests special interests the ability for people to organize and get special treatment And he says this very interesting thing the valuable improvements made by the American constitutions Meaning this Constitution and the popular models both ancient and modern cannot certainly be too much admired But it would be an unwarrantable Partiality to contend that they have it as effectively Obviated the danger on the side as was wished and imagined in other words We have designed this Constitution to prevent all these flaws that we've seen take down previous attempts at democracy But there's one thing that we wish we had solved better Was this problem of special interest and that's the one that brings down? democracies in the long run So this is the weakness in our operating system It comes with wanting a rule a nation of laws and not men. You have to rely on centralized institutions and centralized institutions have this tendency to become Corrupted they have this tendency to get captured Regulatory capture we call it when it happens to regulators There are actually Marxists who argue it happens much deeper than just with the regulators It happens through the whole state through academia And I actually have a website called deep capture which is about this process. We're already on our financial markets so the real problem with if liberalism is An operating system of Institution or laws and not men or institutions and not people then when those institutions get captured That's that's our great weakness And if they if they have a tendency to be captured they create This creates what John Kenneth Galbraith called the bezel in financial circles John Kenna Yeah, Galbraith said that That any given time There's what the people are being told is in the financial system and what's there if you could just freeze time and add up What every single one of you is being told is there your ownership and can compare it what's there There's a huge discrepancy and that discrepancy is the amount that has been embezzled from society over time that's the bezel and I would argue that our centralized institutions that govern our financial arrangements display this To no end so we want to get rid of where possible centralized institutions because they are this liability They are this weak point in our operating system and where possible we don't want to be Overseen by centralized institutions because they do get captured The blockchain has come along and what the blockchain is so great at the economist calls it the trust machine We can now through blockchain engage in all kinds of consensual exchange and and all kinds of activities Without them being mediated by central institutions We will see shortly central banking is one of them I have been focusing my attention on an area of Wall Street called central counterparty clearing I won't go into the details, but what effectively what the blockchain does to Wall Street is as follows It drags it behind the barn and it kills it with an axe And why that's that's going to do that to Wall Street quickly but it also it can do it to all kinds of centralized institutions think of Property think of a land titling you can't trust you know The common denominator of so many central institutions is we can't trust each other. So we agree. I'll stop this from slashing the ball We can't well what the heck You know, I'm going to trade you a camel for your gold coin I don't know whether to trust you did you debase the coin or not So there's a business model that is someone prints, you know, they're a mint and they Somebody who has the monopoly on violence in an area creates a mint puts his face on everything gets minted anyone who debases that It gets killed. It's a way to monetize one's monopoly on violence. It's a business model We happen to call it government, but it's a business model There's lots of business models that both public and private that share this feature It's we can't trust each other. So we just agree There's some third-party institution. We trust land titling could be one notary publics is another I mean, there's there's all kinds of these things that now we can achieve that trust for the first time in 6000 years of human history we can have that trust come about not through some central institution that we all agree on But on but through blockchain Now how that happens is a is a big subject and I won't go any farther in it and lastly and I read in the In the material that you pride yourselves on not being PC. So I'm gonna bring up an uncomfortable subject at least much discourse and that is if our DNA at the if our genetic material is about consent What do we do if a authoritarian operating system emerges? disguised as a religion It's core value is submission But it's as a religion. We grant it, you know, the from the very beginning. We've been about religious tolerance So now of course I'm talking about Islam Now Islam has I've spent a lot of my life in the Middle East. So I'm not just speaking from Fox news Islam has variants and before say 1979 I think it was It did not have the tendency I'm describing but at the core for some Salafist and Extremist interpretations of Islam The the the basic world view is there's the world that has submitted to the will of Allah The world that has submitted the world the Dar al Islam and Islam means submission the Dar al Islam And we in the world of submitted who have submitted versus the world that we're still at war with So there's the world of submission in the world of war Dar al Islam and Dar al Harb and What do you do if then operating system comes along its fundamental value by some interpretations is submission and That shows up when we're In a society whose fundamental value is consent I'm not sure that a carbon-based life form can ever mate successfully with a silicon-based life form I'm not sure there's ever gonna be a way to Work this out now Fortunately, we're sure it's a small fraction of the of Muslims who believe this way and I'm happy to hear that I read a poll last year on upon among The immigrants to Europe 13% of them the 10% of them support ISIS Somewhat and 13% support ISIS strongly. So that's 23% will tell a pollster. They support ISIS I don't know what the real number is my guess is higher than 23% So there's some you know, so there is some non-negotiable fraction That don't have anything like the fuzzy bunny soft interpretation of Islam that we are told is the standard interpretation of Islam And like I've said, I've spent a lot of time in the Middle East with a lot of people who believe in another interpretation of Islam Which is the one I'm describing the fundamental value is submission and we may be kidding ourselves That you can ever that there's ever a way to integrate that into a liberal society Maybe not maybe we have to do a better job of integrating, but maybe it's something that Has to be fought in a different way My preferred route is I think the US should be all about Women in the Muslim world we should focus all focus all of our attention on situation of women in the Muslim world both because it is consistent with our values and Because it would be it is quite subversive for their societies and that's how we I believe we should be addressing that problem So anyway, that is liberalism. That is The four ways it's under attack