 Our primary guest tonight is Yaron Brooke. Yaron is the former, very recently former, executive director of the Einrand Institute, currently a board member, and also has his own podcast called The Yaron Brooke Show. The Yaron Brooke Show. And it's actually quite excellent if you've not had a chance to see it. I highly recommend it. It's lots of good, good content. And I'm really, really excited to be talking with Yaron. I have known of Yaron and followed Yaron for quite a while, but tonight's actually the first time I think we had a chance to meet in person. And I've been really looking forward to this. So Yaron, I think many people here, giving that crypto and Puerto Rico seem to attract kind of a maverick, independent sort of libertarian minded folk from time to time. I imagine many folks here are somewhat familiar with Einrand. But if you don't mind, just take a minute to describe and inform everybody about Einrand, her work, her philosophy, and why she is so still an important force in the world today. I am curious, though, maybe we can see a show of hands, though, with these lights I can't really see anything. How many of you have read an Einrand book, an Einrand book? OK, so quite a few have not. All right, so there's a good number who haven't. So Einrand, now I'll try to give a short biography, although I think her life story is quite interesting. It's kind of the epitome of the American dream. She was born in 1905 in St. Petersburg, Russia. As she was growing up, the Russian Revolution happened. So she got to experience communism firsthand. She witnessed the revolution, went to university under the regime of the communists, and discovered in her early 20s that if she stayed in Russia, they would kill her. She was not one that was particularly diplomatic in her ideas and what she said, and she was clearly antagonistic to communism, even at a very, very young age. So she got it very, very young that this was a bad system. So she managed to get out of the Soviet Union in the 20s and come to the United States with the excuse of going to do some research for a university project and stalling. There was a little window of opportunity and she got out. Her family knew she'd never come back. She came to the US and went pretty much straight to Hollywood. She wanted to be a writer. She went to Hollywood. First day in Hollywood she is, I don't know if you know the story, but she goes to Cecibee DeMille studios. Now you guys are too young to know who Cecibee DeMille was, but he was like the Steven Spielberg of the time, of silent movies. And she goes to the studios and she says, I want to be a writer with a thick, heavy accent, Russian accent, and they look at her like she's crazy. And she walks out and in the driveway, there is Cecibee DeMille sitting in his big convertible. And she stares at him and he says, why are you staring at me? And she tells him, I'm here from Russia. And I want to be in the movies. I want to write. I just came from the Soviet Union. And he said, well, if you want to be in the movies, I'll show you what you need to do. So she just gets in the car, takes her to the back lot where they're filming The King of Kings, the story of Jesus Christ, which is ironic if you know anything about Iron Man. And she becomes an extra on the movie. And she learns that's a beginning in the film industry. She has dozens of different jobs in Hollywood after that, ultimately write scripts. A number of them were produced into movies. Writes a play that is produced off Broadway and in LA. And writes a novel that is not very successful, but is the beginning called We the Living, which many of you probably haven't read. And I encourage you, it's the most biographical of all of her books. Then she writes a book called The Fountainhead, which you might know more about. And The Fountainhead is rejected by 12 publishers. The 13th takes it, doesn't pin a lot of copies because it doesn't believe much in the book. And through word of mouth, it becomes a New York Times best selling book. And indeed sells as many copies today as it did when it was a New York Times best seller. And this is a book that was published in 1945. That's unheard of in publishing. There's no other author that has sold more copies after they're dead than she has. 1957, she published Atlas Shrugged. By this point, everybody wanted to publish it. And it became an instant best seller. And to this day, sells in the six figures translated into almost every language. There are probably only two major languages that it's not translated in. You can ask me later what those are. But every other language it's translated in. And it sells all over the world. It was a best seller recently in Ukraine. It was a best selling book in Ukraine in 2015, I think. She then devoted her rest of her life to writing philosophy, writing commentary on the culture, commentary on the political world, commentary on ethics, and philosophical issues in general. So her philosophy, if she died in 1982 in New York City. So just her philosophy on kind of a one leg. Metaphysics is the field of philosophy that studies what is, the nature of reality. Iron man, what is, is. Reality is what it is. It's not shaped by your consciousness. And it's not shaped by an external consciousness. So A is A, as Aristotle famously said. This is the one thing I draw about, by the way. Yeah, no God, none of this other consciousness is out there. It's just, reality is what it is. No miracles. You have a tool to know reality. It's called reason. You don't know about reality because of your emotions. You don't know reality through revelation. You know, and you don't know reality by reading it in a book. You know about reality by use of your senses and your mind and your reasoning faculty. And only individuals can reason. Groups don't reason anymore than groups can eat for you. They can't think for you. You have to think for yourself. And indeed, ultimately, you is all you have. And the purpose of your life is to be alive. It's to survive. It's to thrive. It's to be happy. So the moral purpose of every individual is his own happiness. So she's again sacrificing your life to other people. And she's again sacrificing other people to your life. Every individual is an end in himself dedicated to his own happiness. But how? Using his mind by use of reason, the one tool we have to know reality. What kind of political system is appropriate for individuals who want to use their mind in order to pursue their own happiness? What is the political system that leaves them free to do so? A political system that doesn't tell them what to think and what to do? Well, that political system is actually called capitalism. It's a political system that protects individual rights and leaves individuals free to pursue their own happiness, free of coercion, free of force, free of authority. And so it's a free market where government is separate from economics. And so she's against statism of all kinds. She's not right. She's not left. She rejects Biden. She rejects Trump and everybody in between and to their extremes. She would not fit in today's political map. She didn't fit in her own lifetime into the political map. She believed in actual freedom. Freedom of individuals, she agreed with some things with the left, some things with the right. But she was an individualist believing in limited government where the role of government is to protect rights, and that's it. And that's the introduction. That's excellent. Got chills at a couple points. Just if you've not read any of her stuff, you really ought to. Yeah, you should read The Fontanet and Atlas Shrugged, those two novels. And if you're interested in more philosophical works, The Virtue of Selfishness, what a great title. The Virtue of Selfishness, partially to provoke you, hopefully into reading. And capitalism, the unknown ideal. So why capitalism is an ideal that we've never really experienced? We've never really had capitalism. You know, one of the more important things that she got right is the origins of value. You know, one of the great, most damaging ideas of the 20th century, and really predates the 20th century, but it became most manifest then, is that value and wealth is a fixed commodity. That it's something that exists out there independent of humans, and that, therefore, it can be seized and redistributed and divided up without destroying it, like you can divide up a pizza, like you can divide up a pie. And she really challenged that idea. She did it constantly in a number of different ways. But one of the most impactful for me was in a speech in Atlas Shrugged, given by one of her characters in that amazing book named Francisco Danconia. And in that speech, you know, what I really want to do now is just read a few quotes from this speech and invite Huron to really offer some feedback and commentary on it, because the words kind of speak for themselves, but if you don't have the context of the book, they may not be completely hit home unless Huron elaborates on them some. So in the book, Francisco is responding to a critic of money, a critic of wealth, a critic of prosperity, somebody who thinks the system is rigged and that we can't seize and redistribute wealth and that we do good when we do those things. And so he says, and I'm going to read a quote here from Francisco, he says, but you say that money is made by the strong at the expense of the weak, meaning that to get rich you have to take from others. What strength do you mean? It's not the strength of guns or muscles. Wealth is the product of man's capacity to think. So is money made by the man who invents a motor at the expense of the one who did not? Is money made by the intelligent at the expense of fools? By the able at the expense of the incompetent, by the ambitious at the expense of the lazy? Money is made before it can be looted or mooched, made by effort of every honest man each to the extent of his ability. And honest man is one who knows that he can't consume more than he has produced. You want to elaborate on that quote a little bit? Share some thoughts? Sure, I mean, there's a lot then, you know, we could be for him for a long time, but think of it this way. Really, if you think about 300 years ago, think about life 300 years ago. Most of us would be dead because the population of the earth was much, much smaller than it is today. And yet all of us would be working in the same field pretty much. We'd all be subsistence farming. We'd all be barely surviving. I would be dead because the life expectancy was 39. Your children, half of them would be dead because most kids didn't reach the age of 10. And in a sense, life was a zero sum game. There was only so much land that was cultivatable. People didn't have a life. You woke up in the morning, you want to work, you went back home, you ate something, and you went to sleep. That was it. Every single day. And if you didn't do that, you starved. Now, yes, some people lived in towns and some people had other professions, but they didn't choose those professions. Those professions were chosen for them by what their father happened to do. There was no freedom, and there was no wealth, and there was no time, and there was no luxury. Life was, according to Hobbes, life was short, brutish, and... Nasty, brutish. Nasty, brutish, and short. And life was nasty, brutish, and short. That wasn't just him being, you know, a pessimist. That's what life was for most people, probably not for Hobbes, but for pretty much everybody else. And then comes a period. And by the way, this is true throughout all of human history. If we go back 100,000 years, life is nasty, brutish, and short. And yes, things get a little bit better under Greece, and maybe they get a little bit better under Rome, and then they descend back into really, really bad. And throughout the period, throughout this period of 100,000 years, an inconceivable number of years to us who only live, maybe you guys live maybe 180, 100, over those 100,000 years, the income of the average person on the world was about the same throughout the entire period. People earned about two bucks a day. 95 plus percent of the human population earned $2 a day in today's dollars. So imagine what it would be like to live today under $2 a day. That's what they did for 100,000 years. And the world was very much zero sum. And some people were wealthy. Why were they wealthy? Because they got to steal from other people. They were called aristocrats, right? And then something happened. This amazing thing happened in the end of the 18th century. And suddenly, people started to become wealthier. Suddenly, we started to create wealth to add to the pie, although there isn't the pie for a variety of reasons, but to add to the stock of wealth. People started to live longer, live healthier, children stopped dying. People started to have stuff. The population of the earth exploded. Today, we have 8 billion people on planet Earth. In 1800, they were under half a billion. We've grown that much, and we're like a gazillion times richer. We're not a little bit richer. We're not even 300 times richer, which is what the economics book tells you. That's absurd. We're at least a million times richer. I'll just give you one little example of how much richer you are than somebody 300 years ago, which you cannot measure. You can't put a dollar amount to it. You guys all have running water. 300 years ago, nobody had running water. Flushing toilets. How much is that worth to you? In dollars. Some people here were here from Maria, so they get it. Yeah, I know. They lived without a flushing toilet for a few months. It wasn't fun. So we went from everybody poor, how many in the world, not in the U.S., how many in the world live on two dollars a day or less today? Anybody know? What's the percentage of the world population? 25%. 25% we have here. Anybody else? Two dollars a day or less. This is based on U.N. numbers, so you can look it up online afterwards. Anybody else? 25% going once? 24%. 15%. Anybody think it's more than 25%? We got a few more than 40%. 40%. All right. The number of people who live on two dollars a day or less today is under 8%. Eight. You can look it up. 30 years ago, 40 years ago, it was 30. Just over the last 40 years, about two billion people have come out of poverty, of extreme poverty. Now, nobody knows this. That's one of the great sins of the modern culture we live in. How did that happen? Because we redistributed wealth because we stole it from some aliens that might have it in some other planet. It's because once you free up the human mind, once you give freedom to people, you get a little bit of it, like they did in India, like they did in China, like they certainly did in South Korea and Taiwan and Hong Kong and Singapore, even in Thailand. Once you give people a little bit of their freedom and they create businesses and they build businesses, they start creating wealth. And what is wealth? Wealth is what you get when you produce values. Right? How do you become a billionaire? How do you become a billionaire? I mean, I don't know if there are any billionaires in the room. They might be. Bitcoin is 60,000. There might be a few billionaires here. How do you become a billionaire? Sell people what they're willing to pay for. Sell people something. Now, you have to sell a lot of people. You have to sell something to a lot of people for a price that exceeds what it costs you to produce. And you have to do it over and over and over again. Now, why are they willing to pay you to produce? Why are they willing to pay you that much? Because it's worth more to them than what they're paying. So the only way, the only way to become wealthy is to enhance other people's lives. It's to provide value to others. And it's that value that the wealth captures. So somebody who's a billionaire is somebody who has created massive quantity of value in the world. Real value. Value to human beings. And we know that because actual human beings have gone out spent real money in order to buy the thing that this entrepreneur was selling. Why? Because they thought it would make their life better. And for the most part, nobody knows better how to make your life better than you. So wealth creation is a creation of values in the world out there. And the wealth is just a reflection. The money is just a reflection of that values. So wealth is a virtue because it's a reflection of the fact that you've created a value. So, sort of one of the very first ideas introduced in this speech is that wealth is created. It's created. It's manufactured by human ingenuity by the human mind. The second key idea that's introduced really early in the speech is that its creation doesn't deprive any other person of their wealth. In fact, as you just elaborated, you're on, it may enhance it because the reason they're willing to pay you is because it's worth more to them than they're paying for it. It doesn't enhance it. I mean, there's no question in it. I mean, there might be occasions where it doesn't enhance it. But for the most part, overwhelmingly, it enhances it. And that's how people get out of poverty. They gain out of poverty not because of foreign aid, not because of subsidies, not because of welfare. They came out of poverty because they got jobs. And who created those jobs? Entrepreneurs who were building things like this iPhone. Now, this iPhone is comprised of lots of little bits that are worthless unless they're combined in a particular way to create the iPhone. That's what gives them value, the particular combination of all these components that are in here, all these wall materials that are in here. How do we know how to make an iPhone? It's not a product of physical labor. It's not a product of muscle. The product that makes it possible to combine all these things to create the value that is an iPhone is the product of the human mind. Some mind had to figure out how to put all this together to get the result that is the iPhone. And created something that didn't exist before and in that sense created wealth because I'm willing to pay $1,000 for this. And I'll tell you how much it's worth to me if you promise not to sell Apple. But this is worth tens of thousands of dollars to me. I mean, if I think about what this does think about what you'd have to buy 20 years ago to do even a fraction of what this does. The camera, the film, the magnifying glass, calculator flashlight not to mention computer not to mention an internet what's that? Music games, you'd have to buy what do they call it Walkman? You remember the Walkman? They don't know what Walkman is, but a Walkman there's no way to hard-weight monitor, yes, exercise, tracker, there wasn't such a thing. But all this is in this thing. It's much more than $1,000 to me. It's enhanced my life, but you can't measure that. The closest thing we have to measure how much this is enhanced human life is the value, the market value of Apple. That's the closest thing and the fact is that the value that this is created in terms of human life is many multiples many multiples of the market value of Apple because this is worth to me many multiples of the market value of Apple is paid for it. No doubt. Another idea that's introduced through the quote I'm about to read to you remember when Francisco is giving this speech he's giving it in response to I believe it was a lady who was critical of money, basically it said money is the root of all evil and his speech is a defense of money. You can find this speech where it is a standalone I think on the Einvand Institute website and download just it. Mind blowing speech. He says quote money allows no power to prescribe the value of your effort except the voluntary choice of the man who is willing to trade you his effort in return. Money permits you to obtain your goods to obtain for your goods and your labor that which they are worth to the men who buy them but know more. This is a radical idea. It shouldn't be but it really is because we're in an age where people think that experts know better what the price of things should be where we're told that sellers should be able to demand. We should be able to demand for our art whatever we think it's worth rather than what the value thinks it's worth and if we can't get what we think our art is worth and somehow the system is rigged against us and the government needs to step in. And the government needs to step in and fix it. Right exactly. It's actually an ancient idea in this sense. One could argue that all of history at least in the west has been a battle between two philosophers Aristotle and Plato and this idea really goes back to Plato. Plato in his republic basically argues that most people don't know what's good for them. Most people don't know what values they should pursue. And then what we need in life are philosopher kings who will tell us what a value should cost in a sense what values we should pursue ultimately who we should marry what job we should have every aspect of our lives should be ruled by philosopher kings and from much of history this is being true. To start a business you needed permission from a king to go on a voyage you needed permission from a king to get married you needed permission of somebody of the local lord to switch professions you needed permission from somebody. For most of human history we as individuals have not been free to make our own decisions. We've relied on the philosopher king and Plato has a whole theory about why this is. The idea is that our kings see true reality the real essence of things the real truth. We see the stuff that is called reality it's nothing it's not real reality. Our starter comes around and says no no no no we actually see reality reality is what it is and you have the tool to know reality your reason. So we don't need philosopher kings each one of you can make your own decisions for yourself you can live your own life you can lead to make your own life better. But that's and that's the battle between those two forces and of course we're living over the last 250 years with the victory of Aristotle but Plato is strong and he keeps coming back and these people you're quoting and the people that I think today run our intellectual and cultural lives are very much descendants of Plato very much advocates of a platonic view of the world. They want to be our philosopher kings they want to tell us how we should live what we should do how we should behave they don't want you to be free they don't want you as an individual to pursue your values your happiness your success they want to run things for you. So there's a couple points in that quote but one of them is again that ultimately value is in the mind of the buyers it's in a free system what people are willingly wanting to give in exchange for something and we can fix prices sellers can dictate the price regulators can come in and dictate the price and we all too often confound price and value but there are two entirely different things and the one thing that free market capitalism has going for it is that it tends to draw value and price into harmony and when you have a system that's based on other than free market capitalism namely a system based on coercion you end up in situations where price and value have a large spread and disaster is typically the result. Yes I mean these are basic principles of economics that in a free market supply matches demand. It doesn't mean that everybody gets what they want because once is not the standard everybody gets what they value at the market price if they're not willing to pay the market price they don't get it but then it wasn't worth it to them and that's where value comes from value is not a fantasy value is not a wish just wanting a Ferrari doesn't make it a value for you a Ferrari is a value if you're willing to work hard and save the money and bring it all together to the point where you're willing and you can spend the kind of money that the market demands that you spent for a Ferrari so value only individuals can determine the value for themselves price is a market determinant and then you get to decide whether you are willing to pay the price for your values or not and if you're not they're probably not their values they're probably not important values to you so if if wealth and value can be created by human ingenuity it can also be destroyed to some degree by humans as well and Francisco in the speech gets into this he says when a society establishes criminals by right and looters by law men who use force to seize the wealth of disarmed victims then money becomes its creators of venture such looters believe it is safe to rob defenseless men once they passed a law to disarm them but their loot becomes the magnet for other looters who get it from them as they got it then the race goes not to the ableist at production but to the most ruthless at brutality when force is the standard the murderer wins over the pickpocket and then that society vanishes in a spread of ruins and slaughter money is so noble a medium that it does not compete with guns and it does not make terms with brutality it will not permit a country to survive as half property half loot and this is kind of the premise behind Atlas rug that make things difficult enough on those who are producing and creating wealth and the wealth will either simply disappear or those people will simply disappear or both we're seeing that in the world in which we live right now let's say here in Puerto Rico in order to prevent the looting of our wealth in order to prevent you know prevent the destruction of what we work hard to create and you know luckily there is this haven for Americans that is Puerto Rico that allows us to shield at least a significant portion of that wealth from those looters and those destroyers but the world keeps going and what's interesting is I know I did not consider I don't consider the world in which we live today a capitalist world America is not capitalist it is a mixed economy there's elements of capitalism we have some freedoms you can do some stuff free of regulations of control but not much people think they're private property but just try not paying your property taxes one year and see how much the property belongs to you or whether you've actually been renting it from the government taxes are just rents that you pay for the government to use their property and we live in this mixed world of heavy heavy controls and force and regulations and some semblance of private property and some semblance of freedom and Rand claimed that that is not a stable equilibrium that either moves towards freedom or moves towards more and more and more controls and more and more looting particularly in the United States but I think in Europe and even now in China we're seeing the movement away from freedom towards more and more and more coercion more and more and more regulation it's not staying put it's not staying where it is it's getting worse and it's going to get worse unless we make it better and since there's almost no force in America today to make things better it's just getting worse and it's not just politics politics it's now the moral expectation you know I saw this I don't know if you saw these tweets that are going on between Amazon and Elizabeth Warren the last few days it's quite interesting Elizabeth Warren complained about Amazon paying taxes Amazon put out this tweet saying we follow the law if you guys politicians write loopholes we're going to take the loopholes we're going to deduct the stuff but we follow the law and we pay taxes so Elizabeth Warren wrote this tweet saying basically who are you to take such a snotty tone with a United States senator I am going to work to break Amazon up so that you can't talk like this to a US senator now that's one of the most disgusting things a politician has ever said although it sounds a little bit like Trump and what he said to Amazon when he didn't like what the Washington Post was printing which is also owned by by Bezos but that's the state in which we're in freedom of speech doesn't matter anymore if you offend a politician who is now God that's how the constitution was written this supposed to serve us now there are gods you can't offend them and if you offend them they'll go up or they'll increase your taxes or they'll force something down your throat because they are now lords and masters over all of us and that's the world that we're heading towards unless we reverse course that's the world from before this dramatic increase in wealth that we've experienced over the last 250 years that's the pre-freedom world and I think what Iron Grand is warning us against is that why is it right morally why is it right economically to take money away from Amazon of Jeff Bezos and give it to other people why is that right if Amazon got that money but Jeff doesn't need it he does he absolutely needs it because he needs to go to Mars and to go to Mars he's going to need every last billion that he has I mean and it's his and since when do we decide to stop basing the need you remember the communist slogan the communist slogan is from each according to his ability to each according to his need but we're not communists so it doesn't matter whether you need it or not that shouldn't be the criteria by which you get stuff it's a question of what you've earned some people earn a little who cares inequality doesn't matter as long as it's earned inequality it's not cursed inequality it's not stolen inequality it's not manipulated inequality as long as it's earned who cares so we are heading towards a society of need where somebody's need is a claim against you somebody's need you have to fulfill it it's your job you have more than that other person it's your right for them but that's the philosophy that this speech is arguing against that's the philosophy Einrend is against you want to help another human being cool nobody's against helping other people but that's a choice you get to decide based on your values based on what you want to do with your money right now Jeff Bezos wants to go to Mars I hope he succeeds because my children and grandchildren on the planet maybe in time but it's his choices what he does with his money money he created wealth he created not took for me Amazon doesn't take for me I use Amazon why because I gain value from it I wouldn't buy from them if I didn't gain value from it now I wish they'd ship more stuff to Puerto Rico I have to say that but you know it's a big definition maybe if we got rid of the Jones Act they would there's a there's something yeah that's something you should be fighting for Amen to that toward the end of the speech he makes the point or Einrend makes the point through Francisco D'Anconia that what we're what we're dealing with here really is two alternative competing somewhat irreconcilable ways of resolving value conflicts humans value different things and they value different things at different levels into a different degrees and what do you do when those values conflict what do you do when what I value isn't just different than what you value it's the opposite of what you value how does that get resolved and in the speech get to the quote here because it's a great quote and then I'll invite you're on to to talk about it Francisco says quote unless and until and unless you discover that money is the root of all good you ask for your own destruction when money ceases to be the tool by which men deal with one another then men become the tools of men blood, whips and guns or dollars take your choice there is no other and your time is running out there's basically only two ways to gain a value to trade for it or to steal it to trade for it or to steal it there's no other way to do it now you could hire somebody else to do the stealing for you call that somebody else the government and pretend that because we voted on it democratically for stealing but at the end of the day if you want my money you can either offer me something in return for that money labor or good or you can come and stick your hand in my pocket and take it from me at the point of a gun now as it turns out we've become really sophisticated at stealing each other's money we form little groups call them gangs and we go and use those gangs and take them to the voting booth and we lobby our politicians and we bribe them and we get them a lot of votes and we get them to go and stick their hands or they hire people to go stick some of these hands into our pockets and give it to the gang that won the election but our politics is today is gang warfare that's what lobbyists are that's what unions today are unfortunately that's what all the different actions within are that's what all these different groups who are at the going to the government and asking for this favor that favor, this benefit or that benefit they're all just gangs trying to manipulate the process so they can steal whatever wealth whatever values other people have for their own benefit and that's the only alternative it's the only alternative to freedom a system where force is banned not steal, you'd think this is obvious stealing is bad stealing is evil and where the only way to interact with one another is through trade it's through offering value for value and this is where I think the topic turns to something that would be particularly relevant to the group here today which is the money and the way that what we today call money really isn't money and how the powers that we are manipulating the money in ways that do great harm Francisco says quote when destroyers appear among men they start by destroying money for money is men's protection and base of moral existence destroyer sees gold and leave it to the owners a counterfeit pile of paper this kills all objective standards and delivers men to the arbitrary power of an arbitrary set of values gold was an objective value an equivalent of wealth produced paper by contrast is a mortgage on wealth that does not exist backed by a gun aimed at those who are expected to produce it paper is a check drawn by legal looters upon an account which is not theirs and that account being the virtue of the victims that are robbed we talked a little bit about gold as money what is the difference between money and currency and where we stand today I mean you have to think about all transactions all transactions in economy a fundamentally border border is where I provide goods and you provide goods and we exchange them and border is really really inefficient I mean it's obvious it's inefficient you know because I might want eggs and you might have a cow and I might have chickens and somebody else has a pig and to get all this organized in a way that everybody actually has what they want is really difficult it's partially difficult because it's hard to get half a cow half a cow is not worth half a cow it's worth a lot less I mean there's a lot of complications with border but for a long time human beings survived through a border system exchange good for goods but then somebody came up with the idea what if we had one medium of exchange one unit of value that we used to value everything else that served to make more efficient this border system because it's still true that at the end of the day what I want is not money what I want is the cow and the eggs and the chicken and the things that I can do stuff with money facilitates the border it makes border more efficient and effective right and people have tried lots of different things they tried shells they tried rocks of particular shapes they tried tobacco in early America tobacco was money for a while but it seems that almost every civilization no matter where you go around the world typically settled on two mediums of exchange things that would facilitate this exchange of value for value effectively and the two were silver and gold and ultimately in more developed economies silver was dropped and gold became money and the reason gold became money is one is that gold is as limited supply and that supply is not just accessible to some ruler to print stuff up and start distributing it to his favorite people gold requires mining it requires real effort it requires real activity to produce it so it's limited supply and all the gold that's ever existed is still in the hands of people it doesn't disappear, it doesn't go away it's a kind of ideal material to serve its money it's also easily divisible you can get millions out of it which was really important originally and it's it's easy to weigh there are a lot of good things about gold that make it an easy medium of exchange and easy money right? but in addition to that gold also has value beyond its value as a currency as a medium of exchange and you could argue about where the source of the value of gold is but I would say the source of the value of gold is that it's pretty you know what did people use gold for before money? they used it for jewelry people like it, it's shiny and amazingly again this is just an interesting psychological thing no matter what culture you go among human beings no matter where you go no matter what period of time people have always liked gold they've always valued it, crowns available so gold became money because it was valuable people liked it people wanted it in and of itself and then because it was a very efficient and effective means of exchange it was easy to denominate everything and with regard to paper money I'd say when paper money was backed by gold every piece of paper was exchangeable into a gold into a unit of gold so you know where the wood dollar comes from? but you know what the wood dollar means? it's a measure of weight it's a measure of weight so one dollar meant I can't remember an eighth of an ounce of gold so every dollar a what? one thirty fifth or something I can't remember what it was but it's some unit of gold because dollars meant nothing other than in the context of a piece of gold and indeed before the Federal Reserve was established in 1914 US banks would print dollar bills they would print the money it wasn't a treasury, it wasn't, it was no fed the money was printed by banks and was exchangeable at the bank for gold you could go into a bank with a bag of gold with a bunch of dollar bills and ask for gold in exchange and they would give it to you and that was real money the paper was called a money substitute because it represented a piece of gold what we have today what we've had since 1914 is money printed by government backed by nothing you can't take your dollar bills to the Federal Reserve and get anything other than government bonds for it it means nothing but it serves as a medium exchange and it serves as a medium exchange because the government basically said it does you know, if debt is in dollars you have to be able to settle it in paper money in government dollars government will take dollars for taxes it's become like money but the funny thing about our currency today is you can print as much as much of it as you want so for example, we just had the government pass a 1.8 trillion dollar stimulus package now where are they going to get the 1.8 trillion dollars from? well basically they're going to print them now we don't print money anymore we create digitally and we put it on people's balance sheets and it's just an entry that says somebody has 1.8 trillion dollars but it's out of thin air it's out of nowhere and of course if there's more of something than there was before what happens to the value of what was there before? it goes down so even though we don't see it in the change in prices the fact is that the value of the dollars in your pocket is less than what it was before the 1.8 trillion dollars stimulus plan and that's 1.8 trillion on top of 3.0 trillion the trump pass we have 5-6 trillion dollars into the hole since covid started money made out of thin air no basis no production none of this what francisco talked about no value was ever given for that money nothing was given for that money except that you could take it and use it to buy stuff but the money has become meaningless and I think people's attitude towards money part of what francisco's were billing against is well money is just stuff that the government prints it doesn't reflect creation so if jepezos has a lot of it he must be in with the government he must have somehow siphoned off a bunch of that money from other people something he created because there's no conception anymore like it was with gold if I have a lot of the gold it means I sold you a lot of stuff you have the stuff I have the gold today none of that there's no conception of that because money is just made out of thin air by the government whenever they feel like it we're about to print another 3 trillion proposed 3 trillion infrastructure there's no end to this they could print and print and print and print and we know that at some point this creates price inflation monetary inflation where prices go up out of control we've seen that in country after country after country it hasn't happened yet in the united states I think the damage that the inflating the money supply has is manifested in other ways rather than in rising prices but damage is being done on a massive scale you know my preferred way of sort of conceptualizing money maybe I just find it personally gratifying but also find it in many ways true is real money is essentially a thank you note when you go and you get a haircut from the barber you're giving them if it's real money a token of your gratitude and if that token is sufficiently scarce and can't be counterfeited and if enough people in a given area all begin to accept the same sort of token as a representation of their gratitude that token ultimately becomes money and gold was an ideal token of gratitude in that regard because it was scarce it was divisible it was relatively easily transportable it had a number of other characteristics and it wasn't counterfeitable yeah you could go get more you could go find more but man you would have to work your ass off digging in a gold mine to counterfeit more thank you notes right a system that is obviously not the case we can manufacture these thank you notes out of thin air and they're fraudulent they are supposed tokens of gratitude for which no actual value was ever given by anybody and that is offensive I think at so many levels you know bitcoin has been often called gold 2.0 or digital gold and you know bitcoin is actually more scarce than gold more easily and cheaply transferable peer to peer than gold more easily auditable than gold it's literally impossible to counterfeit a bitcoin it's not impossible though it is difficult to counterfeit gold more easily divisible than gold and maybe most importantly more easily made seizure proof than gold and when you combine that type of token of gratitude that type of money with smart contracts running on blockchains that allow people to trade in that token in ways that can't not be easily censored easily suppressed easily reversed I think you perhaps have a very real opportunity to bring back real capitalism in the world if only at least initially in the virtual world though increasingly the world is being dominated and increasingly digitized more and more is moving into that platform and as the virtual world has real money and the physical world doesn't I think we'll see that trend toward virtualization toward digitalization moving everything on chain accelerate so I'm going to ask Iran to just offer some thoughts on his thoughts on bitcoin as money based on a comment that he made just a second ago I want to anticipate what might be one of his objections if it's not it's certainly a common objection and that is that gold for example as Iran emphasized had a use case other than money it had a use case as jewelry as something that was lovely and pretty and valuable and humans valued it for that reason perhaps before they ever began to use it as a token of gratitude I think there's a very big misconception and a very big divide between technologists who really get bitcoin and blockchain and folks who come from more of an economics and finance background and this question I think is probably one of the root of that division I think folks who primarily come from an economics from a finance don't appreciate the extent to which a cryptocurrency like bitcoin does actually have very real very important use value that's completely independent and completely separate from its usefulness as as money as currency many here in the room probably get that because many here are from a technical background but essentially the bitcoin network is the world's largest and most secure digital ledger at this point and it is a digital ledger that nobody can make an entry in unless they have a signing authority and there are many useful reasons to make entries in that digital ledger. Satoshi Nakamoto the very first transaction of the bitcoin network included a political statement it was a reference to a headline in the Times of London newspaper objecting to the money printing that Iran just described, objecting to the bailouts. That sort of freedom of speech has real human use value to be able to speak in a way that cannot be suppressed cannot be censored can be done anonymously or pseudo-anonymously and to do that on the world's most secure incorruptible blockchain you actually have to have signing authority and that's what the bitcoin tokens essentially are. They are signing authority that allows you to make an entry into that extremely secure digital ledger and so I do think that a lot of folks from an economics and finance background miss that subtle point that there is in fact a use for bitcoin that goes well beyond its use as money or merely as a digital token. Care to elaborate on any thoughts on that girl? Sure, I mean I'm not from a technology background so I have some skepticism but I don't know enough so you know anything I say about this topic is somewhat delimited by the fact that I'm not an expert on this field but here's some of the sources of my skepticism that while gold is pretty to everybody pretty much you have to have this specialized knowledge to know that bitcoin is valuable beyond its means of exchange. It could be that in 50 years everybody will get it because everybody will have that knowledge it could be that there will be a day in which everybody gets this value that I don't quite understand that you guys seem to. Maybe maybe that's possible I just don't know. I'll also say that you know one of the challenges with bitcoin is that yes you can't replicate bitcoin but you can create other crypto currencies, you can create other cryptos and you can create other blockchains other ledges and in that sense again as an economist that strikes me that you're creating inflation by doing that a potential for inflation that you've got now more money because all these different so it's not just bitcoin is capped there's only so much bitcoin that will ever be in the world but other you could create infinite number of blockchains you could create infinite number of bitcoin like instruments that's not capped so that to me seems inflationary so I wonder about that but I think my biggest source of skepticism is this idea that you can somehow bring about a private currency into the world and everybody's going to let you do it I think you underestimate the power of physical force the evil of governments the evil of authoritarianism he's already a hand well it worked out in a way I get it China banned it but of course it worked out China banning it hurts your cause because the fact is that retailers in China don't accept bitcoin if you want to buy stuff at the retail store they don't accept it which means that the rate of adoption in China is going to be a lot lower than it would have been if bitcoin was legal in China and if in the United States they banned the bitcoin and China banned bitcoin and India banned bitcoin yes all of you will still have your bitcoins but you won't be able to do anything with them because anybody who accepts bitcoin in exchange for a good will go to jail there is a transaction there that is not anonymous it's not hidden it's physical because at the end of the day you need an iPhone so if you're going to buy an iPhone I have to deliver an iPhone for you but if the government says you cannot deliver an iPhone in exchange for bitcoin then bitcoin becomes useless so I think you underestimate the power of government now I think it's an evil power I'm not defending their power to do this I think at the end of the day that there's no way to shortcut a way to freedom freedom is not going to be achieved through technology it's not going to be achieved through bitcoin it's not going to be achieved through crypto freedom needs to be achieved by changing people's ideas by changing a philosophy by fighting for liberty and freedom and once we have freedom once we have lezific capitalism in the world would bitcoin be the currency I don't know but I don't care because in a world like that there will be competition different entities will produce different private currency and we'll see who wins the best currency will win I have no vested interest one way or the other I happen to think it'll be some electronic reflection of gold transferable into gold because you won't have to hide it the anonymity won't be that important because you won't have an ominous government looking over your shoulder so I think having a physical manifestation of gold backing up the crypto would be of value the point is I care about liberty I care about freedom money is just a means let me push back on a couple of those the first one is with regard to inflation yes anybody can go fork bitcoin anybody can go create an entirely new digital token but there is this well known highly highly documented highly studied phenomenon called network effects which is the idea that users in a network the more exponentially valuable that network becomes which then attracts more users which makes it even more exponentially valuable we see this with phone networks we see this with Facebook any of us could go and create facebook 2.0 we could do it with a relatively modest amount of money it's all software and code it's not that hard but the odds that we're going to convince many of our family and friends to adopt are pretty slim and none because everybody is on facebook there are some other competing social networks and they have gotten some traction but has it really diminished facebook's overall value proposition or usefulness not much can I just address that one is anybody willing to take a bet that facebook is not the dominant social media platform in 20 years I'll take the bet that it's not I'll take that bet Microsoft used to be the largest corporation in the world had network effects all over the place apple succeeded not partially with the help of the US government by going after Microsoft's still the second or third most long time it wasn't it had to re-create itself it had to re-establish those networks network effects are real they're incredibly powerful and they can be overrun by another network and they have been we see that over and over again particularly in technology so yeah great I mean maybe bitcoin is the network and it's the final network and there is no other network I'm just not convinced I don't know enough about it but it strikes me as an economist that they're going to be competitors and I wouldn't bet at all just on one so I'm not sure of that plus let me add this if other networks are established they don't one network doesn't overrule other networks in the same way as with Facebook right Facebook there's only so much time in the day you can't be on five different social networks but you can accept five different currencies and indeed I think in the ideal world right in a lot of capitalism there will be multiple currencies and people they'll compete and there'll be multiple networks but the network isn't exclusive so you can have bitcoin I can have a store and I can accept bitcoin and five other crypto currencies but you see that creates a problem because then what is the value and this is the bottom line for me and this has nothing to do with you guys I just don't know how to value it I'm a finance guy so I need an anchor to put a value on it I'm just saying it's going to replace all dollars in the economy then I know how to value it 61 million units of bitcoin there's x trillions of dollars in the economy I divide one by the other that's the value of bitcoin if it replaces every dollar but is it going to and are there going to be other cryptos and is the dollar because it's backed by government and because government is nasty is it going to survive somehow I don't know what the prices is 60,000 is it a million is it five I have no clue that's my challenge yeah well there are ways of value in it there's there's Metcalfe's law in variation of Metcalfe's law and there is more recently the stock to flow model in the stock to flow cross asset model which has proven insanely accurate today we'll see if it continues to to prove out but my goal is now that I've met Euron in person to have him back here in a year in which case he's going to be a raiding bitcoin fanatic so we'll see how successful I am but the biggest thing I wanted to challenge was Euron's comment that that technology doesn't create freedom I could not disagree more in fact I would say that every single significant advance in human freedom was preceded by a massive advance in technology from the printing press to double entry bookkeeping the printing press led to the Protestant Reformation which led to ultimately where we are today technology I think is incredibly important in advancing the cause of human freedom in fact I think it isn't the very cause of human freedom so your thoughts on that? double entry bookkeeping was invented in the Muslim world the Muslim world then became a lot less free than it had been when it invented double entry bookkeeping the printing press ultimately led to freedom but for a while led to Calvin's dictatorship in Switzerland not a very nice or good place and we today have a ton of technology I mean the invention of the microchip coincides with the growth of government the internet coincides with the growth of government so I think cause and effect are reversed here freedom leads to increases in technology and as freedom is diminished increases in technology are ultimately diminished and you know there was amazing technology in Rome I mean amazing technology in Rome technology that was lost for a thousand years we didn't know how to build a dome like the dome in the Colosseum we didn't know how to build multi-story buildings we didn't know how to have running water with faucets they did have that in Rome you can see them Pompeii so to me the cause of the relationship is the other way around the reason Godenburg actually ultimately can not only invent the press but can use the press is because Europe is starting to free up the printing press in a sense existed in China even before that but it was so oppressive it didn't have any impact freedom creates technology not the other way around and if we rely on technology and what really creates freedom are ideas philosophy that's where the focus should be and if we focus on the technology then I fear that we ignore what really matters the battle in the war that really matters and one day we won't have either freedom or technology fair enough I think we've gone long enough we got time for maybe one or two questions maybe one or two questions anybody got anything we need that microphone here hold it a little closer now? so back in Georgia I was 12 years old when Maria came I was in my 30s and I started living a lot of things and every time I went to any place everything was relied on electricity so we depend on computers we depend on all these things that as soon as electricity goes you're done 20 30 50 years ago everything was on pain on paper so we didn't have computers and it was slower but if you went to get help they had everything there physically on pain on paper but now everything we don't have system we don't have electricity you're done you have to wait you have to ask why we don't have electricity because that's a massive failure there's no reason why Maria should have caused as much damage as it did to Puerto Rico it is the fault of the Puerto Rican government it's the fault of the Puerto Rican people for electing these bastards into government but it doesn't matter the people you replace them with are the same quality so it's again a problem of ideas it's not a problem of technology and look here's one other aspect one little problem I have with bitcoin and it's not a big problem it's just why I have some gold coins and I think everybody should have a few gold coins even though you have some bitcoin that is when electricity goes out your bitcoins are worth exactly zero exactly zero and when the riots in the streets and people are struggling and they're trying to fight food and civilization is breaking down nobody will care what I order about all your bitcoin wealth but if you have a few shiny gold coins they'll trade food and weapons for them and that's a value I totally agree with that no doubt anything else now let's hope we don't get there we have to see you guys all get super rich off of bitcoin it's a pleasure thank you so much for coming out it's been awesome a question that I fully agree with so I'm going to ask a skeptic's question it's not necessarily what I believe but I think it's relevant especially because there's a lot of people in Puerto Rico that think this way the idea that socialism is a big part of how humans interact we are a social species you know if you look back in history the homo sapiens there's a lot of social tribal connected ways that we interact and when I look at my family I look at the communities I'm part of there's a lot of traditionally socialistic ways that we interact we don't say thank you wife that was great and we'll see how much do I owe you thank you for that meal and cooking dinner for my kids how much do I owe you we don't interact purely capitalistically in a lot of our day to day interactions against the criticisms that I'm random to often get is being this hard poor individualist who doesn't actually understand the human species being a collective species in some ways and that's why Sean recommended a great book You know, Puerto Zero Marginal Class Society talks about the shared collaborative comments is there a merger of something coming that's not purely capitalistic as you said that we've never actually seen because our species will reject it and isn't destructive socialism that we see often is there something in between that can interact as a social species but not kill the individual? No there's absolutely no such thing and I know people and I know people are looking for it, people love it because they'd love to have their lousy philosophy and their wealth at the same time but it's either or we are not a social being we're an individualistic being who likes other people and therefore we like to be social because we like it as individuals so you start as an individual you die as an individual and you collect people around you that you hopefully love and you enjoy and you benefit from and you create a society to benefit you because it's in your self interest so no, I don't say to my wife every time, thank you when she cooks me a meal but I better be grateful and I better express that gratefulness in some way and there better be a lot of trading going on you try having a relationship with somebody that's one way where you're only a giver or you're only a receiver how long will that relationship last? nothing, try doing it with a friend just for a few days every one directional every relationship capitalism deals with money it deals with material goods but life is the same principle just in spiritual goods so often you don't have to say thank you to your wife you give her a smile a little nod a little caress there are lots of ways in which we trade but these are trades again, if only you gave you would feel cheated and the person who constantly got would feel like they're not they're not participating, they're not worth anything so everything we do in life that's healthy is an actual value for value trade spiritually and materially so no, at the end of the day Iron Man doesn't reject the idea that we're social that we benefit from society the contrary she's not an individualist in the sense of going to Desert Island and living all by yourself right? that's not being egoistic in our concept because that's not maximizing the value you can get from life human beings are present company included, wonderful human beings are fantastic you want to have relationships with human beings for whom? for you so I think that we strawman of you and we have this confusion, individualism this is individualism, I do this because I love me more than I love you, I don't love you that much I mean I like you a little bit but I don't know you that well so I'm not going to love you that much but I know I love me but I love doing this and I'm hoping to change some of your minds so that you become more productive and you know I learned something about Bitcoin that I didn't know before I gained something, you gained something interaction, I love the attention these people the focus, the thinking, I love to see people thinking about ideas, it's great and we're all benefiting each as an individual in a social context alright, you're on, thank you very much thanks guys, thank you