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Nick, welcome to the Bitcoin Infinity Show. Nice to have you here.

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Wonderful to be here. Thank you, Knut.

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Yeah, you haven't been here before and I hardly know you.

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I got a tip from Efrat that I should interview you.

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So I will require a long TLDR on Nick Hudson, what you are and what you do.

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And yeah, what we're going to talk about today.

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Yeah, old Efrat was one of the first people amongst the COVID skeptic community that I met in real life. When the travel bans were all lifted, we started moving around the world and linking up with all the fellow dissidents that we'd met online for the first time.

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And so we had an enormous amount of fun in Bath, I think it was, in the United Kingdom.

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That was certainly for me my first sort of trip to meet all these new friends, you know.

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But the potter history of Nick Hudson is not too complicated until about 2020.

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So I was – and I still am a private equity investor.

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I run a couple of private equity funds in Cape Town, South Africa.

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And I've always been a sort of a student of finance and epistemology, the theory of knowledge.

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I like reading a lot and I'm a generalist.

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So I cover a lot of fields and have done so my entire life, which amounts to a fair number of books and so on.

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And I kept to myself, really, I didn't have any kind of significant online presence.

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Every now and then I'd be invited to speak at some or other conference, but normally on pretty dry financial topics, nothing that would have gotten anybody excited, except perhaps when I was saying something critical of stakeholder capitalism or some other Davos nonsense.

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And that all changed. I had my annual investor conference coming up in February of 2020. And I thought, oh, you know, one of the questions my investors might ask me is what's going on with this thing they're calling COVID, you know, is that going to impact the investments?

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So I thought I better look into this thing and check whether the media is talking nonsense or whether there is something real to it.

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And I started scratching around for the actual underlying information that was available at the time and very rapidly came to the conclusion that this was nothing more than a media hysteria with a possible niggle in my mind that there might be a grand state overlay to the whole story.

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In other words, that it was active state propaganda.

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And the reason I came to that conclusion was very simple.

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This was not a matter of detailed analysis.

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I noticed that there was propaganda that was being presented as emerging from China, but there was no counteracting or countervailing message from Western intelligence community assets.

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Nobody was trying to address this purported Chinese propaganda.

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The falling man videos and all these ridiculous things that we were exposed to in the early months of 2020.

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They were quite patently fabricated.

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That's not how people die of respiratory illnesses, walking down the street and then suddenly fall over dead.

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That doesn't happen and it never happened and nobody ever saw that.

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But those were clearly frauds at the time.

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And I surmised that the fact that there was apparent Chinese propaganda and no counteracting material meant one of two things.

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Either that both were in on it or that the Chinese definitely weren't involved and it was Western intelligence communities faking the Chinese propaganda in the first place.

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And that very rapidly confirmed, you know, to my own degree of satisfaction, that this was very much a Western phenomenon and not a Chinese story.

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Wuhan, etc., etc., was all showboating.

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And I took immediate exception to everything that was happening.

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And when talk of lockdown began, my private observations to investors and to my colleagues

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began to feel to me to be insufficient.

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I saw the scope for a humanitarian disaster of vast proportions.

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Lockdowns in Western countries were one thing where you have welfare systems and what do

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they call that?

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payment that they were making in the UK that kind of stipend. I've forgotten the name. It starts with

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an F. But in a country like South Africa, you have no such safety net. So locking down was

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basically condemning people to complete economic obliteration and possibly even

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death and morbidity from the economic consequences. I kept on seeing this kind of tagline in the media

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saying, you know, it's lives versus the economy. And anybody with half a brain knows that that's

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completely false, that the economy mediates life. And so I became increasingly uncomfortable with

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the sort of tension between having seen and understood what I'd seen and not speaking out.

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And when I found a couple of like-minded individuals in my own country who for one

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reason or another had developed similar perspectives, we grouped together and

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wrote a letter to the state president pointing these things out. And we put some PR agencies

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to work promoting that material. And this was before the whole machinery of censorship had

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been set up properly. And so we actually got our articles published in some quite

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significant newspapers. And I was interviewed on television and on radio in South Africa.

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That very rapidly became impossible as the censorship dragnet closed down.

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I would say August of that year, 2020, there'd been a significant tightening and I was the object of quite intense censorship and also smear campaigns at the hands of Western intelligence community assets.

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That little organization that was set up to write that letter was very swiftly put together and we quickly chose the name Pandemics Data and Analytics, which was shortened to Panda.

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Had I known the association with the creepy world of pedophilia, I would never have chosen the name, but we were in a hurry to get things done.

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So we launched it.

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And because it was very early to move, we were one of the first organized groups to mount a resistance to the whole COVID phenomenon, but specifically initially to lockdowns.

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We developed a following very quickly.

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Scientists all over the world who were skeptical reached out to make contact with us.

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And we actually put together a very serious scientific advisory board, including people like Scott Atlas and Srinathya Gupta, Martin Kuhldorf, Jay Bhattacharya, Senator Johnson.

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And yeah, they're not all coming to me right.

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Of course, yes.

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Mike Eden.

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I shouldn't forget him.

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and the organization then became quite prolific and began to be attacked in western media in

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particular the times of the uk started coming after us and accusing us of being all manner of

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things you know anti-vaxxers and the intelligence community assets started writing articles

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attempting to connect me to nigel farage and david ike who were people i didn't know at all

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and had no connection with.

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In fact, at that stage, I hadn't even heard of David Icke.

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So it all got quite creepy.

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There I was, I thought of myself as just this private equity investor

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with a slightly different way of approaching the private equity world

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and maybe a little bit of a contrarian financial approach,

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but certainly not a person who any intelligence asset

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would be interested in fabricating stories about.

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And all of a sudden, this was happening to me.

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I had my, by profession, I'm also an actuary.

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which in the United Kingdom and South Africa is a sort of designated professional body and you get a qualification, a fellowship.

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And so I was a fellow of the Institute and Faculty of Actories in the UK and a fellow of the Actuarial Society of South Africa in South Africa.

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And both of those professional bodies mounted completely fabricated disciplinary attacks against me where, you know, the complainants were people on the inner circle of the whole COVID fraud in South Africa.

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And in the UK, it was actually, you know, nobody's complaining about completely false things.

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And those cases continued for, you know, four or more years in both cases and cost me a lot of money to defend.

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And in the one case, I was not exonerated.

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They don't exonerate you.

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They just dropped the case eventually after four years.

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And in the other one, they're found guilty by a complete kangaroo court in the UK for offensive speech.

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Whereas the original complaints against me had been for, what was it, likening vaccination to rape, which I never did,

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and for murdering lots of people by encouraging them to think twice about the risk reward profile

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before taking a vaccine. And the third one was for bringing the actuarial profession into disrepute

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by questioning the COVID narrative. Those three charges never went anywhere because they were

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without basis, but they then proceeded to search through my trash cans and look through every

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aspect of my life to try and find something that they could pin on me. And eventually all they

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arrived at was five tweets in which I criticized a major South African political figure in quite

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harsh terms who happened to be a brown person. And for that day, they found me guilty of

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breaching the professional code of conduct by using offensive speech. That person had never

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been a complainant. No complaint had ever been made about those tweets, but they found me guilty

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and sentenced me to a monetary fine, which I duly had to pay.

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And I resigned from the organization,

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calling them the bunch of pathetic offense Olympic athletes that they were

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and pointing out that the whole trial had been a sham

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to try and get me to stop acting as a political dissident.

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So very serious stuff.

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Freedom of speech in the UK is completely under attack.

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And this is just one tiny example of legion ways

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in which the ability to voice dissent as a private citizen is being threatened.

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So that's my story.

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I mean, as the COVID phenomenon began to be displaced by other media narratives, also

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mostly false, I then found myself looking at the world with a new set of eyes, and I

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began to read more widely in the deep history of centralization.

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And that's an important part of the story. I think it's one that many people miss. There's 150 year trajectory of Anglo American establishment billionaire bankers promoting and funding institutions that are all about a massive degree of centralization, even at a global scale.

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And there's a continuum over that 150 period and a continuum of development and a vast institutional infrastructure that has been gradually accruing in the background, largely out of the public eye.

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And this is all a matter of completely verifiable historical fact.

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And so I've spent a lot of time getting my head around that trajectory, trying to work out who it is who's really behind it, to what extent such events are planned and to what extent they're emergent.

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Can we attribute them to groups that we can characterize in any particular way?

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Does it matter whether we can or can't attribute blame or root cause?

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And thinking a lot about what can be done about it.

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And I think that's where I intersect with the Bitcoin community. I've got a lot of friends in the Bitcoin community. I myself have no expertise because all my investment energy goes into private equity life. But a lot of my talking themes and investment themes are, I think, very compatible with the personal philosophies of a lot of Bitcoin investors. And I think that's how I end up speaking to you today.

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that's a fantastic introduction so a couple of couple of thoughts here that come to mind

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uh you you said if it's centrally planned or emergent i i find that that particular

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whatever you call it dichotomy like to be super interesting what we see play like the way i view

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the world now and what we're seeing playing out is like a crossover between brave new world 1984

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and the emperor's new clothes if you read those three books you can see through like pierce the

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veil of of all the bullshit that's going on but my favorite part of 1984 is the ending of it where

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where it turns out that there is no big brother it's just incentives and just people doing these

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bad things to one another so in in 1984 it's all emergent and i also like uh like to paraphrase uh

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what is it occam's razor like something like never attribute to 5d chess that which can be

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explained by retardation you know or something like well what the original one never attribute to malice That that which can be explained by incompetence So what I very curious about is like how much of this is just trickle down stupidity

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and how much of it is an actual cabal sitting on top in an evil, you know,

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Dr. Evil type lair and really controlling the world.

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And what are your thoughts there?

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What have you found?

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Okay. In the first place, I think the important thing to accept is that there will always be emergent features. And as long as humans are involved, there will always be planned features. And the emergent events affect the plans and the plans create emergent events. And some of the emergent events are intentional and some of them are accidental.

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I'm a great student of complexity theory. And when you exert significant pressures on complex systems, so when you perturb them in, let's call them catastrophic ways, the impact of those perturbations has a fundamentally unpredictable component.

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and that's part of emergence. It's something that isn't planned for. And so I think I would

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not take anybody seriously if they said it's all emergent and I would not take anybody seriously

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if they said it was all planned. The question is then, the next question I think that's of

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interest to you is, okay, well, to the extent that there is planning going on, what are the plans and

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and who are those plans by.

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And I've pointed to,

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I mentioned 150-year history

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of planning of centralization

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around the Anglo-American establishment,

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or some people call it

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the transatlantic financial complex.

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The TFC is another term.

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Why 150 years?

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It's roughly speaking

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where you begin to see

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firm documentary evidence

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of large-scale investment

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and mobilization around what was essentially to become institutional socialism.

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This is not by any stretch of the imagination denying that there weren't evil bankers involved

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in the glorious revolution and that kind of thing.

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I know.

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I know.

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I've read that history, too.

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I know that those theories are there.

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I know that there are theories going around about the Illuminati and the Freemasons and

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various sects of Judaism and the Talmud and, you know, what else?

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The Black Nobility and the Prat-Orient gods and so on.

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Everybody has their...

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Yeah, sorry for interrupting because I think you said, yeah,

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this whole COVID skeptic community, of course,

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intersects with the Bitcoin community,

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which in itself intersects with the libertarian community.

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and I think we're all coming from the same thing.

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There's always a mistrust in institutions

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and that's what we all have in common, right?

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Because we're sort of seeing through all of this.

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And I think for most Bitcoiners

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and probably most libertarians too,

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it sort of starts with World War I

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and the pound going off the gold standard.

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That's sort of like a starting point.

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And then there's another tipping point in 1971,

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One, of course, where Nixon detaches the dollar from gold completely.

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And after that is basically all Soviet-style central planning because they have a money printer.

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So it is centrally planned.

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But still, so that's why I'm wondering about the wonder what happened 150 years ago, because in my in my mind, it's more like 120 years ago that this whole thing starts.

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In the 19th century, you have the roots being laid for what was eventually to become the movement called Fabian Socialism.

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The groupings prior to that, funnily enough, had a very important part of that story played out right here where I stand in Cape Town, South Africa.

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There was a fellow by the name of Lord Milner who was, to a degree, the handmaiden of a mining magnate called Cecil John Rhodes.

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Rhodes was a miner and politician who had financial backing from the Rothschilds family primarily.

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And he was a great architect of empire for the British.

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This was his nominal political role and a great monopolizer of the South African gold and diamond mining industries.

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Gold emerged slightly later than diamonds with the discovery of gold in one of the then Transvaal republics,

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which was separate countries that were occupied by people of Northwestern European origin and French Huguenot origin.

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they occupied interior provinces of South Africa that had been of no interest to the British.

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But they then discovered the largest field of gold that had ever been seen in the world.

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And the British became immediately interested in conquest. And so in addition to having kind of

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crept their way across the Kimberley diamond fields in the Northern Cape area of South Africa,

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They then fought a three-year war against the Boers, as they were called in the Anglo-Boer War from 1899 to 1902, to gain control of the gold fields of the then transvaal geopolitical entity that no longer exists since the new dispensation in South Africa.

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that's been called Gauteng,

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which is a bit hard for foreigners to say.

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It's a much smaller province

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than the original Transvaal,

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but the gold fields are, of course,

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still there, still producing gold.

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20, 130 years later,

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that grouping of the Rothschilds, Rhodes,

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and Milner had massive global political

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and economic ramifications.

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At about the same time as all of this,

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what happened was

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a political insight was obtained. Power is always seeking control, and control requires

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centralization. And what these powerful bankers worked out is that if they could persuade people

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that assets should not be owned by private individuals, but by the state, well, the state

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was very easily infiltrated by them. And so that effectively meant that the assets would be

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controlled by them and that they could become phenomenally wealthy if they could get their

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hands on those assets. And they packaged it all as if it was some kind of workers' movement,

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socialism, workers and communism, workers of the world unite, something that was going to mean that

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The assets, instead of being controlled by what they termed capitalists, which means private individuals, would be controlled by the state.

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And the state would somehow be in the hands of workers.

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But the mechanisms by which the workers would control the state were never articulated.

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This was never laid out.

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and the idea that workers' rights would be enshrined

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and that something other than greed or profit motive would be pursued

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was never demonstrated in the theory.

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All that was merely a promise, merely a marketing slogan.

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And, of course, the first efforts to roll out socialism really failed.

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There was absolute devastating economic consequences

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for reasons we can get to if you wish to.

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very solid intellectual reasons and empirical reasons as well. But the efforts to roll out

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socialism failed terribly. And they sort of went back to the drawing board and started again.

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And one of the conclusions they reached is that the sort of Marxist idea of revolutionary socialism

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that would then lead to the communist state was wrong and that they should abandon the

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revolutionary approach. And there's an important thing that most people don't understand.

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You know, people have this idea that communism has been tried somewhere.

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It really hasn't.

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Maybe for a couple of weeks, people might have declared something communist.

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But Marx's idea was that socialism was an intermediate state.

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So you'd go from a market capitalist economy or a free market economy to a situation where the state owned the assets.

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They would sometimes just quite falsely say this was going to be the proletariat who was owning the asset.

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But there was no mechanism by which that was the case. The state would own their assets. But that was an intermediate step towards the total dissolution of the state and the community or the communitarian organization or polity would be in charge of the allocation of labor, resources, wealth, and income.

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So socialism represented the gradual destruction or revolutionary destruction of the market.

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And then communism would represent the destruction of the state.

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And so although you have the Chinese Communist Party in power, there's nothing communist about China.

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It's socialist.

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And it's less socialist now than it was 30 years ago or 50 years ago by a massive degree.

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And in fact, one of the arguments I make in a presentation I gave recently was that the West is now significantly more socialist than anything in Russia or China, just by sheer weight of the quantity of assets commanded by the state.

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so that's the kind of story they spotted the gap they said we can we can pretend that there's this

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political phenomenon phenomenon called socialism and it's wonderful for the worker and we can get

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we can get the majority of the population to get behind the socialist objective if we market it

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properly and we'll do it by gradualist means we'll infiltrate education establishments we'll

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infiltrate large corporations we'll infiltrate charitable organizations and foundations we'll

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infiltrate governments, we'll infiltrate NGOs, and we'll gradually proselytize under this new

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religion of socialism. And when our work is done, it'll then be a simple matter. The population

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will have voluntarily voted for the ownership of the assets by the state, and we will never have

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lost control of the state apparatus. And that is exactly, in my mind, what has played out over

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the course of 150 years with remarkable success. And to your point about planning, there are plenty

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of signs of continued intergenerational involvement of the same families, of kind of

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divide and conquer strategies being played out, different family members represented in different

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countries, different family members looking after different parts of the agenda, different elements

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of the agenda. And that's been a sort of stable configuration and without much perturbation,

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as I say, for a century and a half. And that's why I had that early date. I know very well that

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bankers were involved when the Dutch basically took over the British crown in the 17th century,

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1688, I think it was. And I know that the whole idea of the financiers having been behind the

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kind of the Roman Empire's loss of its republic and the gradual reduction in the meaningfulness

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of the role of the Caesar.

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So there are ancient historical,

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let's call them trends or indicators

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about which you can wrap a million interpretations

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and stories.

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But in terms of solid documented history,

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I think that's where it's all located.

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Once you go above the level of these families,

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many people say, oh, there's a hierarchy,

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there's a cabal.

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but the evidence base becomes quite thin.

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You can talk about people wanting such a cabal to be in place

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and wanting to be in control of that cabal.

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You can read strange eschatological texts

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where they have their own set of millenarian fantasies

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and predictions, prophecies that entail a world

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very similar to what I've described.

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So those things are all there.

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I don't deny them.

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And I'm a very interested listener when it comes to people who have well-researched theories

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on these.

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But I kind of have stuck to the areas where there's very strong documentary evidence and

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where I can walk around in the business community and see evidence of that control structure

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in place, influence on government, influence on central banks, influence on large corporations,

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where I can see those, and very importantly, influence on media, where I can speak to the

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journalists who wrote smear articles about me, and they will tell me why their organization behaves

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the way it did Yeah I mean it fascinating and depressing at the same time how these things play out You said you were interested in epistemology I am too very interested in epistemology And that why I fell down the Austrian economics rabbit hole a couple of years back and wrote a book on praxeology

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Because with socialism and, you know, the whole notion of real socialism hasn't been tried.

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Well, you said real communism hasn't been tried, but real socialism has definitely been tried.

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Both Karl Menger and Ludwig von Mises laid out very solid a priori proofs of why it doesn't work.

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And contrary to what most people think, they think it's an incentive problem.

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But when you have a gun to your head, you will work.

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Like, it's not that people won't work.

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The bigger problem is economic calculation, which becomes impossible when you have a central planner.

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So the famous example is from the Soviet Union when the state orders 300 tons of screws and they make like three screws of 100,000 tons each or whatever.

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I'm exaggerating here, but, you know, there's no without the free market, there is no way to signal to producers what people want.

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And, you know, a common pen or pencil like Milton Friedman's example that can never materialize because you don't let it.

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So what I find more fascinating than whether socialism has been tried or not is that a real interventionist, free capitalist, free market with sound money.

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That's what has never been tried, like not even remotely.

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There's always degrees of interventionism.

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And interventionism is always done by an aggressor like the state or a criminal organization or a psychopath who wants to take other people's shit.

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And like if we didn't have that, we'll be pretty well off as a species because without aggression, we wouldn't have any of the bad stuff, right?

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So I'd like to pick your brain on epistemology to begin with here and see where we end up.

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Like, what are your insights and what are your views on Austrian economics and practicality in general?

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Yeah, well, I mean, I'll answer that very quickly.

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So in Austrian economics, I mean, I agree with you.

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For me, you know, von Mises, von Hayek and Rothbart are the three giants.

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Friedman, also an important one, as you mentioned.

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Happy birthday, Rothbard, by the way. He turned 100. He would have turned 100 yesterday.

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Okay. Now, these guys were, as you said, the analysts of, it's not just of markets,

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it was of complexity in general, I would say. These were broad enough thinkers that they didn't

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just confine themselves to thinking of along political theory and economic theory and market

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theory lines. They were very deep thinkers. And what they were engaging with was complexity.

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You know, the epistemological insight when it comes to dealing with complex systems

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is there is no potential for analytic solutions to complex problems. There is no way in which you

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can calculate your way out of complexity. And this has massive ramifications. So what can you do

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in the face of complexity? Well, the answer there is that instead of using inductive and deductive

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processes, you use trial and error, conjecture and criticism processes. So you can make a change,

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a small change on the margin as a certain type of experiment. The origin of that change is never

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a logical process. It's a creative process and a process of inspiration and intuition.

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So basically, we're using our complex minds in ways that defy logical analysis to propose

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potential solutions to complexity. And then in a process of trial and error, we identify

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those ones which we think or suspect are working, and we do more of them. And that's how what I'm

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describing there is the general framework of evolution. And I'm not referring to biological

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evolution. Biological evolution would be one subset of the general framework of evolution.

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And to my mind, it has been proven beyond any reasonable doubt that the only way forward in the face of complexity is by way of evolutionary mechanisms.

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And I think this is very compatible with the thinking not just of von Mises and von Hayek and Rothbart and Friedman, but a great many thinkers in the areas of geopolitics and economics.

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Just a quick comment on that. A couple of things.

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First of all, I wouldn't categorize Friedman as the same as the others, because the Chicago school is slightly different because he's not this hardcore, everything has to be a priori in economics.

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And I'd say the trial and error process and the evolutionary process of economics, I'd call that economic assessment done by individuals to assess the market.

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But I wouldn't call that economics because to me, like my definition and the Austrian definition of economics, it's just a study of what we can and cannot.

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It's very close to epistemology in that sense.

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It's all based on all else being equal scenarios and deductive reasoning, and empiricism has nothing to do with it.

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There's a great section on epistemology in Hans Hermann Hoppe's Economic Science and the Austrian Method, where he points out that the empiricists claim that we cannot know anything to 100% certainty.

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All we can do is approximate and get closer to the truth, that that statement in itself is an absolutist statement.

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so it cannot be true because you're saying that you know with 100 certainty that we cannot know

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anything to 100 certainty so how can you be certain of that so it's sort of a gotcha there

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and and this is why the rationalists view um or um whatever you may call it objectivist uh

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why a priori knowledge and deductive reasoning uh is more of an appropriate tool for to

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to come to conclusions about economy and the free market that have to be true,

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that cannot be argued against without running into a logical contradiction.

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I mean, that's the basis of the whole a priori Austrian method way of thinking,

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that these things can be proven without evidence.

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It only requires a set of irrefutable statements or first principles, and then you can draw your conclusions from that.

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For instance, saying that a minimum wage, with all else being equal, a minimum wage law can never increase people's well-being,

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because all that will happen is that fewer people will get jobs.

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In order for those people to get other money, you will have to take it from somewhere else.

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So it can only do nothing or do worse.

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it can never do any good.

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And you can prove that without any need for evidence.

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Evidence would not deny nor confirm the thesis, more or less,

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because it's reasoned and not observed.

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Yes, but what you've done there is reduce a complex system to a simple one

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with the little phrase you used, Ceteris Paribus,

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and then logic becomes very compelling.

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and useful for didactic purposes, which is what Austrian economics is about. It's a fantastic

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story. And yes, I devour it. And yes, I deploy deduction to a great degree when trying to

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understand it or indeed trying to advance it. So I agree with you there. As far as the sort of

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assertion of the point about evolution is concerned, the way I prefer to put it is not

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in that kind of absolute way, but that as a conjecture that I'm prepared to live by.

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And so the conjecture is that any explanation for reality is bound to be replaced by a better one.

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I mean, that's very interesting because it's sort of in line with the empiricist's claim that

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Yes.

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We can only.

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So, so do you, you don't believe in absolute truths then that there are certain things that we couldn't?

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No, I believe, I believe in a unitary grounded reality.

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So there's one reality, but our descriptions being imperfect and only ever getting closer to accurately describing that reality and its full richness and complexity.

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Yeah, I would say that, sorry, but for a praxeological axiom, for instance, like human action is purposeful behavior, you could say that you could refine that by improving the language and having better definitions of the words used in the sentence.

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But the sentence itself is sort of self-explanatory and kind of very hard to argue against because you need to act with purpose to argue against it.

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Yes, but then it also invites questions which must be part of your theory like what are the purposes?

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And that's where I think we can't know what the purposes are because everybody has their own purposes.

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And that's one of the reasons why we can't centrally plan and why we can't allocate resources, why we shouldn't centralize our economies is those purposes are as varied and infinitely malleable.

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They're changing all the time in ways that we can neither measure.

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Even the person possessing the purposes doesn't know exactly what they are from time to time.

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No, but there's no Austrian economics claim.

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Austrian economics do not claim to know that.

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It admits that we cannot know.

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One plus one is two is absolutely true.

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but it's not a it's it's not a description of of reality in in the sense so and i'll give you

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another one i'm happy to accept for example that i'm sitting in a chair that this is a chair

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underneath me so all of those specific um uh instantiations i accept they're definitional

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you know that wet stuff is called water all of those definitional things are right that water

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boils at at a regular temperature and that it can be defined to be 100 degrees centigrade and

385
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so on. No problem. I'm not like some kind of relativist. And I don't like labels so much.

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The claim that a philosopher would like to make is really one to humility, to being continually

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on the lookout for better ways to think about aspects of reality. And it's a hopeful, it's an

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optimistic framework where I fully expect that my very best theories about the world will be

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improved upon by somebody else. And in fact, every now and then you realize if you read a lot,

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00:39:36,895 --> 00:39:41,755
oh, they already have been. I was looking in the wrong place.

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And I love optimism and hope. I think hope is a rational choice because without it,

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we are bound to become institutionalized and we are bound to build our own prisons and not escape

393
00:39:53,615 --> 00:40:00,495
them. You need hope. We're bound to be extinct without that. Yeah, yeah, exactly. The will to

394
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415
00:40:58,835 --> 00:41:00,255
you also need a hardware wallet.

416
00:41:00,715 --> 00:41:02,335
We recommend the Bitbox.

417
00:41:02,615 --> 00:41:04,415
Bitbox is a great hardware wallet

418
00:41:04,415 --> 00:41:05,975
that has been around since forever.

419
00:41:06,355 --> 00:41:07,875
It's super easy to use,

420
00:41:07,915 --> 00:41:09,655
but also has advanced features

421
00:41:09,655 --> 00:41:11,075
and it's privacy focused.

422
00:41:11,215 --> 00:41:12,995
So go to bitbox.swiss

423
00:41:12,995 --> 00:41:14,975
and use Code Infinity for a discount.

424
00:41:15,315 --> 00:41:16,635
If you need further advice

425
00:41:16,635 --> 00:41:18,395
on how to do any of all of this,

426
00:41:18,395 --> 00:41:21,075
you should go to thebitcoinadvisor.com.

427
00:41:21,415 --> 00:41:24,015
There are friends from Australia and they're great.

428
00:41:24,235 --> 00:41:27,395
They have a multi-sig setup, a collaborative multi-sig,

429
00:41:27,595 --> 00:41:30,255
so that you can make sure that your descendants

430
00:41:30,255 --> 00:41:49,242
and your heirs inherit your Bitcoin when your time is due So go to thebitcoinadvisor and use code INFINITY for a discount So to recap get rid of the fiat and remember bullbitcoin bitvolt bitbox and thebitcoinadvisor

431
00:41:49,242 --> 00:41:53,802
Use code INFINITY everywhere. And don't forget to brush your teeth. Over and out.

432
00:41:55,042 --> 00:42:00,682
So one of the perspectives I have that gives me great hope and why I don't, when I, you know,

433
00:42:00,682 --> 00:42:05,402
at the end of that section when I described the history of the Anglo-American establishment and

434
00:42:05,402 --> 00:42:11,902
its role in the foundation and propagation of socialism, you said that was depressing. I can

435
00:42:11,902 --> 00:42:18,322
see why it is because it presents a problem and the problem seems daunting. But one of my

436
00:42:18,322 --> 00:42:23,842
philosophical sort of, let's also call it an explanation that I'm prepared to live by,

437
00:42:23,842 --> 00:42:30,662
is that overly centralized systems have failure as an inevitability.

438
00:42:30,662 --> 00:42:39,522
It's not, you know, no amount of information or data processing capacity or algorithmic complexity

439
00:42:39,522 --> 00:42:44,602
can get them away from that problem that centralization is doomed to fail.

440
00:42:45,622 --> 00:42:47,182
No, I love this.

441
00:42:47,942 --> 00:42:48,102
Yeah.

442
00:42:49,582 --> 00:42:52,922
And so I think that, sorry, you go.

443
00:42:52,922 --> 00:42:55,682
So I was just going to say, and for that reason, I'm hopeful.

444
00:42:56,362 --> 00:43:04,722
And people counter that by saying, yeah, but the amount of destruction that can be caused when they attempt to implement these centralized systems could be immense.

445
00:43:04,802 --> 00:43:11,142
I say, yes, it could cause a lot of people to die earlier than they otherwise would have.

446
00:43:11,902 --> 00:43:14,362
And I certainly don't applaud that.

447
00:43:14,362 --> 00:43:21,562
But that in itself, you know, problems are not things to be afraid of.

448
00:43:21,722 --> 00:43:23,162
Problems are things to be celebrated.

449
00:43:23,962 --> 00:43:28,102
Life would be, in my opinion, not worth living without problems.

450
00:43:28,582 --> 00:43:30,522
Problems are what make us tick.

451
00:43:32,182 --> 00:43:36,142
Our creativity would have nothing to do were it not for problems.

452
00:43:36,882 --> 00:43:43,062
When I say problems, I don't mean, you know, they're problems that cause you anxiety and they're problems that just provoke interest.

453
00:43:43,062 --> 00:43:47,942
So like a mathematics problem or the problem of how to make a more beautiful piece of music.

454
00:43:49,042 --> 00:43:52,002
You know, I talk about problems in that non-valent sense.

455
00:43:52,082 --> 00:43:55,202
I'm not giving it an ethical or moral overlay.

456
00:43:55,402 --> 00:44:02,862
It's just a thing out there that where the world would be improved if we had an explanation for it.

457
00:44:03,282 --> 00:44:07,942
You know, how to topple trillionaire bankers from positions of power is a problem.

458
00:44:08,402 --> 00:44:09,682
And that's worth thinking about.

459
00:44:09,682 --> 00:44:12,362
And all problems have solutions.

460
00:44:12,922 --> 00:44:14,962
They really do at a fundamental level.

461
00:44:16,042 --> 00:44:16,222
Yeah.

462
00:44:17,362 --> 00:44:19,962
So those are my beliefs that give me optimism.

463
00:44:21,182 --> 00:44:23,082
Yeah, and absolutely.

464
00:44:23,202 --> 00:44:24,142
I'm on the side of optimism.

465
00:44:24,282 --> 00:44:29,702
I just wish that we had fewer problems that are caused by humans shooting themselves in the foot.

466
00:44:29,882 --> 00:44:33,042
And like the washing machine has broken.

467
00:44:33,162 --> 00:44:33,922
We need to fix it.

468
00:44:33,982 --> 00:44:35,562
That's a problem I can live with.

469
00:44:35,562 --> 00:44:39,882
As I tell my wife often, you don't need to invent problems.

470
00:44:40,202 --> 00:44:42,602
They will come. Trust that they will come.

471
00:44:42,942 --> 00:44:45,322
There is an abundance of problems already.

472
00:44:45,942 --> 00:44:53,822
And I think a good example of this, like totalitarian systems not being stable, is of course the Soviet Union.

473
00:44:54,222 --> 00:45:01,482
But it's also an example of how long people will have to suffer before it crumbles, before it implodes.

474
00:45:01,482 --> 00:45:04,902
It took like 70 years for the whole East Bloc to...

475
00:45:04,902 --> 00:45:09,782
They fucked around for 70 years and then they finally found out that this doesn't work.

476
00:45:09,962 --> 00:45:11,842
So that's what I'm afraid of.

477
00:45:11,842 --> 00:45:21,302
It's not like I view it when a system is based on an ideology of envy and aggression, then nothing good can come out of it.

478
00:45:21,542 --> 00:45:24,342
Like aggression is what we want to get away from.

479
00:45:24,542 --> 00:45:34,422
And if it's OK to take people's stuff, regardless of it's via the tax bill or by printing money, it is inherently immoral and not desirable.

480
00:45:34,422 --> 00:45:49,842
So like we have to defend ourselves from that. And like, that's, of course, why I fell deep down the Bitcoin rabbit hole, because all of a sudden there was a way for a peaceful revolution to exist where you didn't need guns to defend yourselves against aggression.

481
00:45:49,842 --> 00:45:57,882
You could use clever mathematics to bypass all of these a-holes and their ways of expropriating your stuff.

482
00:45:58,122 --> 00:46:00,802
Like that's the idea I fell in love with.

483
00:46:01,022 --> 00:46:07,762
And this number that couldn't be copied, allowing for absolute finite thing to exist.

484
00:46:08,382 --> 00:46:18,022
And even though, like, I truly believe they exist in our heads, mostly it's a way of communicating that allows us to be sovereign.

485
00:46:18,022 --> 00:46:21,202
and not have to worry about what anyone else thinks

486
00:46:21,202 --> 00:46:24,102
what we should do with the fruits of our labor.

487
00:46:24,342 --> 00:46:26,242
But that's a bit of a...

488
00:46:26,242 --> 00:46:27,502
I got sidetracked here.

489
00:46:27,762 --> 00:46:28,542
Where were we?

490
00:46:30,222 --> 00:46:32,022
Look, I mean, the one thing I should mention

491
00:46:32,022 --> 00:46:36,942
is that in understanding the work of von Hayek, von Mises and Rothbart

492
00:46:36,942 --> 00:46:40,702
at the level of economies and economic systems,

493
00:46:40,902 --> 00:46:43,802
my personal commercial insight was

494
00:46:43,802 --> 00:46:47,822
there was no reason why you couldn't apply that thinking to the corporation.

495
00:46:48,022 --> 00:46:50,942
It's a deep field, but I built my career on it.

496
00:46:50,942 --> 00:47:03,842
I run a private equity fund where our emphasis is on how to exploit the utility of decentralization within the institution of the corporation.

497
00:47:04,722 --> 00:47:07,562
And it's been a very stably successful approach.

498
00:47:07,742 --> 00:47:10,942
So we do a lot of things differently from typical corporations.

499
00:47:11,862 --> 00:47:16,622
And when I say typical, I mean like the 99.99% typical corporation.

500
00:47:16,622 --> 00:47:19,142
We rarely diverge in important ways.

501
00:47:19,642 --> 00:47:28,222
So there are things that are regarded out there in the commercial world as best practice that we regard as complete anathema.

502
00:47:30,302 --> 00:47:46,222
And there are ways of doing business which cause other practitioners of the private equity trade to clasp their heads and shriek when they hear what we do and how we run things.

503
00:47:46,622 --> 00:47:56,342
And when I say it's been stably successful, my last fund had no assets that performed at less than a 27% internal rate of return.

504
00:47:57,702 --> 00:48:00,522
And some that performed way above 100%.

505
00:48:01,702 --> 00:48:07,962
And they're not sexy businesses in growth industries or anything like that.

506
00:48:07,962 --> 00:48:18,002
I haven't got any investments in any of the flavors of the day of the last 10 years, no cannabis investments, no AI investments, no fintech investments.

507
00:48:18,702 --> 00:48:26,762
I invest in some companies that haven't grown for 10 or 20 years, businesses that have been around since the 1960s, that kind of thing.

508
00:48:26,762 --> 00:48:35,182
And our experience is that by altering the governance approach, you change the culture.

509
00:48:35,902 --> 00:48:38,142
And when you change the culture, you change the people.

510
00:48:38,642 --> 00:48:40,722
And when you change the people, you get more creativity.

511
00:48:40,962 --> 00:48:43,262
And when you get more creativity, you get more innovation.

512
00:48:43,482 --> 00:48:45,942
And that innovation is without limit.

513
00:48:46,242 --> 00:48:47,502
It can carry on forever.

514
00:48:48,122 --> 00:48:53,142
And that is an enormous way of a very powerful way of creating wealth.

515
00:48:53,142 --> 00:49:02,142
so would you say that there's an inherent flaw in hierarchical systems per se or

516
00:49:02,142 --> 00:49:09,322
or do you have an example of what you're doing differently here i'm so glad you asked me that

517
00:49:09,322 --> 00:49:14,302
question because you know a lot of people who are in our camp the people who like to be labeled as

518
00:49:14,302 --> 00:49:20,582
libertarians or bitcoin maximalists or whatever like to think very dichotomously they don't like

519
00:49:20,582 --> 00:49:29,662
to think about optima on a spectrum. And there is indeed utility to hierarchy. And there are some

520
00:49:29,662 --> 00:49:36,682
people in the, let's call it in the broader church of the Austrian view of the world, who have

521
00:49:36,682 --> 00:49:43,182
specialized in explaining how hierarchy can be of great utility. And they're very interesting people

522
00:49:43,182 --> 00:49:52,582
to read. The one that comes to mind right now is the economist Ronald Coase, who had the dubious

523
00:49:52,582 --> 00:49:59,542
distinction of having to wait the longest from the time he did his work until the day he eventually

524
00:49:59,542 --> 00:50:05,482
won his Nobel Prize. It was some stupendously long period, like 50 years or something, ridiculously

525
00:50:05,482 --> 00:50:12,882
long period of time. So in his 20s or 30s or something, he comes up with his book on the firm

526
00:50:13,182 --> 00:50:31,862
The firm, the market, and the law. And in his dotage, in his late years, he eventually wins the Nobel Prize. But I can mention a couple of interesting aspects of his work. I can't go through it exhaustively. That would take many podcasts, but just enough to give people a flavor.

527
00:50:32,802 --> 00:50:47,082
So he locates the appropriate use of what we can call hierarchy or corporate institutional structure in things such as the frictional costs of contracting.

528
00:50:48,362 --> 00:50:59,342
So because the world is complex and at the beginning of the year as a business owner, I don't know what I'm going to have to do in order to build value in my firm over the course of the next year.

529
00:50:59,342 --> 00:51:07,702
what I do is instead of contracting with Knut to say look Knut I want you to do that and that and

530
00:51:07,702 --> 00:51:14,902
that or I'm going to measure you on the following dimensions the business owner doesn't know exactly

531
00:51:14,902 --> 00:51:21,162
what to measure Knut on or what Knut should do as a result of what we've been talking about earlier

532
00:51:21,162 --> 00:51:26,942
we can't navigate complexity in this analytical fashion so what he does is he says Knut I can't

533
00:51:26,942 --> 00:51:32,962
contract with you. But what I'm prepared to do is to offer you a salary and you come and work for me.

534
00:51:33,022 --> 00:51:36,642
And this is more or less what we're trying to do. We're trying to, in this marketplace,

535
00:51:37,682 --> 00:51:44,562
in some definition of our sphere of influence, which can be geographically and product market

536
00:51:44,562 --> 00:51:51,702
and demographically defined, will you come along and help us do this? And I want you to look after

537
00:51:51,702 --> 00:51:58,162
this part of the business, you know. And so there's an implicit contract that is in place,

538
00:51:58,442 --> 00:52:04,442
and it displaces the alternative, which is to contract individually along certain dimensions.

539
00:52:05,222 --> 00:52:14,482
And at a low level of fidelity or at a high level of granularity, the frictional costs of that kind

540
00:52:14,482 --> 00:52:21,042
of contracting become overwhelming, and it becomes easier to deal in the domain of intuition.

541
00:52:21,702 --> 00:52:30,742
and implicit contracts. Implicit contracts and intuitions are very tightly bound to the idea of

542
00:52:30,742 --> 00:52:41,602
hierarchy, where no reason can be given, where no explanation can be created. Then we are dealing

543
00:52:41,602 --> 00:52:48,262
in this domain where, whether it's bottom-up kind of hierarchy, where we choose a leader and we have

544
00:52:48,262 --> 00:52:54,122
a person who we follow electively, the leader amongst our friends or the business leader who

545
00:52:54,122 --> 00:52:58,962
we most respect and most listen to, whose talks we all go to or whose lunch invitation we all never

546
00:52:58,962 --> 00:53:06,402
decline. Whether it's that kind of bottom-up emergent leadership or the top-down leadership,

547
00:53:06,402 --> 00:53:15,882
it all results in hierarchy. As soon as you accept that, you are in the domain of realizing

548
00:53:15,882 --> 00:53:23,362
that there is an optimum degree of centralization, that infinite decentralization is as much a

549
00:53:23,362 --> 00:53:29,722
fantasy as infinite or extreme. I should say extreme, not infinite. Extreme decentralization

550
00:53:29,722 --> 00:53:38,562
is as much a fantasy as extreme centralization. So that's one type. I'm just giving you a flavor

551
00:53:38,562 --> 00:53:46,122
by using the employment contract as an example. There's another one. In the domain of human

552
00:53:46,122 --> 00:53:53,562
interaction, most of our decisions proceed by unobservable mechanisms in our own heads. So,

553
00:53:53,562 --> 00:54:08,962
So a very small proportion of our decisions and the basis for our decisions is even reducible to words.

554
00:54:10,082 --> 00:54:12,662
Most stuff is what we call ineffable.

555
00:54:12,662 --> 00:54:21,142
We may not even be aware of ourselves making the decisions or selecting the content that we're using to make those decisions.

556
00:54:21,142 --> 00:54:34,502
When a good salesperson is sitting in a room in a negotiating setting, his eyes and sense organs and his mind is being bombarded with signals.

557
00:54:34,502 --> 00:54:41,522
and he's selecting from those signals and acting by what he says and how he behaves

558
00:54:41,522 --> 00:54:47,182
in response to those signals in ways that he will, the moment he walks out the door,

559
00:54:47,802 --> 00:54:51,482
be unable to describe to his boss or to his colleagues.

560
00:54:52,542 --> 00:54:58,822
He makes innumerable minute decisions, decisions about his posture and his bearing and the

561
00:54:58,822 --> 00:55:03,462
expression on his face, whether he's going to be manipulative or transparent, what it

562
00:55:03,462 --> 00:55:05,022
that the other person really wants.

563
00:55:05,122 --> 00:55:08,462
All sorts of processes are going through his mind

564
00:55:08,462 --> 00:55:10,742
and he could never write them down on a piece of paper.

565
00:55:10,902 --> 00:55:14,542
And this is the vast majority of human processing

566
00:55:14,542 --> 00:55:16,922
and decision-making and where I believe

567
00:55:16,922 --> 00:55:19,722
most of the quality actually lies.

568
00:55:21,422 --> 00:55:24,182
And I'll give you an example of that in my business

569
00:55:24,182 --> 00:55:25,502
of how we use that insight.

570
00:55:26,442 --> 00:55:28,362
We believe that it's a complete disaster

571
00:55:28,362 --> 00:55:30,622
to have a human resources department in a business.

572
00:55:31,962 --> 00:55:32,942
One of the things that human resources

573
00:55:32,989 --> 00:55:38,389
resource departments do is they try to centralize the recruitment process in order to make it fair

574
00:55:38,389 --> 00:55:45,789
and compliant with diversity requirements. They don't trust the guy, the line manager,

575
00:55:45,969 --> 00:55:51,569
the head of the team or whatever to make that decision without his implicit biases emerging.

576
00:55:52,309 --> 00:55:57,029
And so they all do the screening. They will look at words on a piece of paper,

577
00:55:57,029 --> 00:56:03,149
the person's resume and decide which people are going to be eligible for appointment to a

578
00:56:03,149 --> 00:56:08,369
designated role in a designated team. And that first layer of screening is a complete disaster

579
00:56:08,369 --> 00:56:15,389
because the first and most important story is the intuition of the team leader. He should be the one

580
00:56:15,389 --> 00:56:20,029
looking at the bits of paper and deciding which person he'd like to interview. And he should be

581
00:56:20,029 --> 00:56:26,069
the one assessing the fit. That his assessment will be made on the basis of things that can never

582
00:56:26,069 --> 00:56:32,709
be written down and is much likely to be to be sound much more likely to be sound than than the

583
00:56:32,709 --> 00:56:40,689
dolly bird in the hr department i i absolutely love that i used to believe it or not but i i was

584
00:56:40,689 --> 00:56:46,949
once an hr manager in a previous career at a shipping company and i i identify with that so

585
00:56:46,949 --> 00:56:50,849
much we would have been better if there was no one there at all like we would have been better

586
00:56:50,849 --> 00:57:00,169
off so because i i think one of the most misused in words in modern media lingo lingo is discrimination

587
00:57:00,169 --> 00:57:07,769
it's labeled as a bad thing but discrimination is the key to everything like that's what you do when

588
00:57:07,769 --> 00:57:13,589
you employ one person rather than another it's that you discriminate based on who you think is

589
00:57:13,589 --> 00:57:20,889
more fitting for the job and it's not a bad thing yeah the the other thing i wanted to explore here

590
00:57:20,889 --> 00:57:28,049
is the like uh decentralization i just wanted to offer you my take on on the whole uh notion of

591
00:57:28,049 --> 00:57:34,509
this so so uh i believe there's nothing wrong inherently wrong with hierarchies i believe

592
00:57:34,509 --> 00:57:40,009
they're very useful if they're based on merit the thing i am against is aggression like being

593
00:57:40,009 --> 00:57:42,009
of anarcho-capitalist roots.

594
00:57:42,729 --> 00:57:43,509
That is the thing.

595
00:57:43,629 --> 00:57:47,049
As soon as there's involuntary enforcement

596
00:57:47,049 --> 00:57:48,969
involved in the hierarchy,

597
00:57:49,229 --> 00:57:52,509
then it's not a hierarchy that I like.

598
00:57:52,989 --> 00:57:55,149
But of course, there's usefulness

599
00:57:55,149 --> 00:57:56,649
in centralizing certain things.

600
00:57:57,169 --> 00:57:59,849
In Bitcoin, in particular,

601
00:58:00,109 --> 00:58:03,629
I think decentralization is super misinterpreted

602
00:58:03,629 --> 00:58:07,069
because people think it has to do with everything else

603
00:58:07,069 --> 00:58:09,309
but the important aspect of it being decentralized.

604
00:58:09,309 --> 00:58:18,889
So in Bitcoin, I view decentralization as an unfortunate means to a greater end, and that greater end being absolute sound money.

605
00:58:19,089 --> 00:58:29,269
So 21 million supply cap that is enforced through decentralization because we cannot trust a human being with a money printer.

606
00:58:29,449 --> 00:58:31,209
That's why we need the decentralization.

607
00:58:31,209 --> 00:58:39,409
It makes the system much slower and much more inefficient than it would have been if we hadn't needed that kind of decentralization.

608
00:58:40,049 --> 00:58:43,769
But most people frame the decentralization as the end in itself.

609
00:58:44,149 --> 00:58:49,349
And I say, no, we need decentralization here, unfortunately, so we can have sound money.

610
00:58:49,789 --> 00:58:59,509
And when we have sound money and money that the state cannot take, and it's very hard for a burglar to take if they don't know that it's there, then we can achieve decentralization in everything else.

611
00:58:59,509 --> 00:59:02,389
Then we reach the sovereign individual thesis and then people.

612
00:59:02,649 --> 00:59:13,569
So decentralization in Bitcoin is unfortunate, but it can, through sound money, lead to the fortunate version of decentralization in the rest of society.

613
00:59:13,569 --> 00:59:31,749
And also when you have this world where you don't have any state interventionism or taxes, if you think of that as the utopian vision of everyone being in charge of their own money, then a company is not a legal entity or whatnot.

614
00:59:32,249 --> 00:59:33,529
And you don't need accounting.

615
00:59:33,869 --> 00:59:36,289
It's just a group of people doing things.

616
00:59:36,629 --> 00:59:37,469
That's what it is.

617
00:59:37,529 --> 00:59:38,669
And you can divide the plunder.

618
00:59:38,669 --> 00:59:42,469
You can even program it to be divided fairly amongst.

619
00:59:42,469 --> 00:59:45,329
But it doesn't have to be anything but a signal group.

620
00:59:46,329 --> 00:59:50,189
And there are businesses in Bitcoin operating that way already.

621
00:59:50,969 --> 00:59:59,869
Like you often have one foot in the legacy world and one foot in the new world where you don't need all the other stuff because it's permissionless.

622
00:59:59,949 --> 01:00:01,129
You can just do things.

623
01:00:01,649 --> 01:00:02,969
So that's the beauty of it.

624
01:00:03,229 --> 01:00:03,309
Yeah.

625
01:00:03,669 --> 01:00:04,029
Thoughts?

626
01:00:04,149 --> 01:00:05,649
Now, that's really interesting.

627
01:00:05,969 --> 01:00:09,829
And I'm going to, with your permission, put forward a surprising idea.

628
01:00:09,829 --> 01:00:11,989
I think it'll be surprising to you and to your listeners.

629
01:00:12,469 --> 01:00:16,689
and see whether you can spot the similarity

630
01:00:16,689 --> 01:00:19,729
between the logical framework you've just described

631
01:00:19,729 --> 01:00:21,969
and what I'm going to,

632
01:00:22,249 --> 01:00:24,329
the assertion or the conjecture I'm going to make.

633
01:00:25,989 --> 01:00:27,729
The conjecture is quite simple,

634
01:00:27,729 --> 01:00:31,189
that the world would be better off without stock markets.

635
01:00:33,709 --> 01:00:33,889
Okay.

636
01:00:34,529 --> 01:00:37,189
And let me explain why I think this is the case.

637
01:00:37,409 --> 01:00:40,949
Fragmentation of ownership is not neutral.

638
01:00:42,469 --> 01:00:52,549
Can you accept that point? The moment ownership of a complex asset becomes too disseminated,

639
01:00:52,829 --> 01:01:00,869
too fragmented, nobody cares about the asset. Nobody is a custodian. It's not worth your time

640
01:01:00,869 --> 01:01:08,949
to guide that organization properly. And you may say, well, that's easy. I spot the trick here

641
01:01:08,949 --> 01:01:14,209
because Nick is a private equity investor and he likes to control businesses. He likes to have at

642
01:01:14,209 --> 01:01:21,489
least negative control. You know, 25 up to even 80% of a business is good for me. But what I observe

643
01:01:21,489 --> 01:01:29,089
in the real world time and time again is that the businesses that have concentrated ownership

644
01:01:29,089 --> 01:01:37,309
are much better stewards of society's resources than the businesses that have diverse ownership.

645
01:01:37,309 --> 01:01:43,609
and that is yet another insight that I get to put into practice in wealth creating fashion every

646
01:01:43,609 --> 01:01:49,729
year. You know, our favorite type of transaction is to do what? To buy a division from a listed

647
01:01:49,729 --> 01:01:55,729
company because it is like shooting fish in a barrel. You initially, all you have to do is stop

648
01:01:55,729 --> 01:02:00,309
doing the stupid stuff and then you're already making lots of money and then you start doing

649
01:02:00,309 --> 01:02:06,129
the smart stuff and you make even more money. And that stuff is very beneficial to everybody

650
01:02:06,129 --> 01:02:12,889
in the ecosystem. So, for example, over a period where we have doubled profit per employee,

651
01:02:13,409 --> 01:02:20,049
which is the period starting 2016, over that time, we have doubled real profit per employee

652
01:02:20,049 --> 01:02:29,529
across our portfolio. We've also grown employment by 150%. So, they're two and a half times as many

653
01:02:29,529 --> 01:02:34,689
people working for the businesses we look after, even though we've increased the profit per employee

654
01:02:34,689 --> 01:02:36,369
by a factor of two.

655
01:02:36,809 --> 01:02:39,689
I promise you we haven't been cutting salaries.

656
01:02:40,269 --> 01:02:41,489
I've never done that analysis,

657
01:02:41,669 --> 01:02:43,049
but it's quite a tricky one to do

658
01:02:43,049 --> 01:02:44,229
and it's just not worth the effort

659
01:02:44,229 --> 01:02:45,749
because I know that the answer is,

660
01:02:46,249 --> 01:02:47,849
yeah, the salaries have been going up

661
01:02:47,849 --> 01:02:48,909
a little bit above inflation.

662
01:02:48,909 --> 01:02:51,429
Now, so what's going on there?

663
01:02:51,529 --> 01:02:52,549
Why is this the case?

664
01:02:52,729 --> 01:02:54,429
Why does fragmented ownership matter?

665
01:02:54,689 --> 01:02:55,849
Well, yeah.

666
01:02:56,029 --> 01:02:58,589
Can I attempt to dissect it?

667
01:02:59,049 --> 01:03:00,609
Because I find it endlessly fascinating.

668
01:03:01,509 --> 01:03:03,149
So, yes.

669
01:03:03,149 --> 01:03:10,289
First of all, the disclaimer here is like we have to talk about the stock market on an absolutely free market.

670
01:03:10,429 --> 01:03:18,029
We cannot talk about the current stock market where there's interventionism everywhere and artificial interest rates and so on and so forth.

671
01:03:18,309 --> 01:03:24,709
So let's rewind the clock to the East India Company in Europe before central banks.

672
01:03:24,769 --> 01:03:26,029
Everything is on a gold standard.

673
01:03:26,029 --> 01:03:29,289
And this is sort of where the stock market starts, right?

674
01:03:29,289 --> 01:03:37,029
because all the ship owners realize that they're taking a huge risk if one of their ships sinks,

675
01:03:37,029 --> 01:03:51,921
they out of business So instead they form a cabal and they share that risk among one another so that if one ship sinks it hurts everyone equal So why would that be a bad thing

676
01:03:52,221 --> 01:04:05,841
Well, the answer to that would be that you are no longer incentivized to care about your specific ship as much as you were had you not collectivized the losses.

677
01:04:05,841 --> 01:04:12,081
So this is sort of like the start of centralizing profits and collectivizing losses, right?

678
01:04:12,381 --> 01:04:17,941
It's basically an insurance scam because you can even, you have the opposite incentive, actually.

679
01:04:18,201 --> 01:04:31,401
You have an incentive to make your ship as cheap and to get away with your ship being not as secure or safe as the other ship owners' ships,

680
01:04:31,401 --> 01:04:34,761
because then they have to spend more money and you spend less.

681
01:04:34,761 --> 01:04:41,461
so therefore because you know that you you won't be that hurt by one ship sinking even if it's your

682
01:04:41,461 --> 01:04:48,601
ship in fact there's so yes i i do buy that thesis i i do buy that it's it's a bit of like

683
01:04:48,601 --> 01:04:54,441
there's some collectivist trap there in in one way shape or form and it also reminds me of this

684
01:04:54,441 --> 01:05:00,261
friedman ish uh how many fucks you give about your money if you're spending your money on yourself

685
01:05:00,261 --> 01:05:05,821
you're you're worried about both quality and price spend your money on someone else you're

686
01:05:05,821 --> 01:05:10,421
more worried about price and quality spend other people other people's money on yourself you

687
01:05:10,421 --> 01:05:15,801
prioritize quality over and if you're the say to you spending other people's money on other people

688
01:05:15,801 --> 01:05:20,081
and then you don't give a shit about anything so like there's there's an aspect of that too

689
01:05:20,081 --> 01:05:25,701
so i think the more absolute the ownership which is also by the way why i don't buy this whole nft

690
01:05:25,701 --> 01:05:33,161
crap that you can own art and then send a portion of when you sell it goes to the artist and all of

691
01:05:33,161 --> 01:05:38,161
that that's all bullshit to me because if i buy something i don't want anyone else not even the

692
01:05:38,161 --> 01:05:43,721
artist to have a portion of it i want absolute ownership because that's where i take full

693
01:05:43,721 --> 01:05:50,441
responsibility for it and that's when it's actually mine and yeah i think this this ties in very well

694
01:05:50,441 --> 01:05:55,101
to the whole bitcoin narrative here if you view bitcoin as the only thing that you can actually

695
01:05:55,101 --> 01:06:03,101
100% own, which is not true for, you know, a villa that you have to pay property tax on,

696
01:06:03,181 --> 01:06:08,041
for instance, that you don't actually own that. You own it by permission from the state and you

697
01:06:08,041 --> 01:06:15,061
have to pay your captors every. So, yeah, I do understand that I'd buy that the world would be

698
01:06:15,061 --> 01:06:20,241
better without the stock market. There would have to be. But then again, the stock market wouldn't.

699
01:06:20,241 --> 01:06:30,461
Yeah, yeah. Anyway, because I agree with your point about the benefits of sharing certain outcomes, which is really a point about diversification is good.

700
01:06:30,461 --> 01:06:34,541
But the benefits of diversification in most settings run out very quickly.

701
01:06:34,841 --> 01:06:40,521
So in my business, eight portfolio companies is more than enough diversification.

702
01:06:41,181 --> 01:06:44,861
And there are eight companies in a single geographic area.

703
01:06:45,981 --> 01:06:49,441
How much of my personal wealth do I place outside of that?

704
01:06:49,441 --> 01:06:58,441
Not much, really, because I look around the world and I say, no way am I investing in shares at those prices or government bonds at those prices.

705
01:06:59,001 --> 01:07:00,141
I'd like real property.

706
01:07:00,301 --> 01:07:02,021
I'd like to own some trees somewhere.

707
01:07:03,681 --> 01:07:08,381
And, you know, that kind of real asset is stuff I'll buy.

708
01:07:08,381 --> 01:07:18,341
I don't like to have my money for the long term in things that don't produce income, you know, commodities and things like that.

709
01:07:18,341 --> 01:07:23,901
from time to time. They're just safe havens compared to the overpriceness of everything else.

710
01:07:24,521 --> 01:07:28,041
But the benefits of diversification in most settings run out very quickly.

711
01:07:29,141 --> 01:07:34,521
And so, yes, I can see how for a very large corporation, it might be beneficial to have

712
01:07:34,521 --> 01:07:43,941
10 or 20 owners, but not 10,000, not 100,000. That doesn't help at all. And I think I would

713
01:07:43,941 --> 01:07:50,861
say also you want the person who's the biggest owner to be overexposed in his personal capacity

714
01:07:50,861 --> 01:07:56,361
to that company because then you get the alignment of interest and the minority shareholders all

715
01:07:56,361 --> 01:08:03,221
benefit. So to me, it's not just the fragmentation of ownership that's harmful from a custodial point

716
01:08:03,221 --> 01:08:10,141
of view. You see how I use that word? I see myself as a custodian of assets. I'm not there to strip

717
01:08:10,141 --> 01:08:14,241
them or to squeeze them for cash or to make them more efficient.

718
01:08:14,381 --> 01:08:15,581
I never use this term efficient.

719
01:08:15,701 --> 01:08:18,641
Efficiency is a bloody stupid idea most of the time.

720
01:08:18,881 --> 01:08:23,041
But there's that aspect of the fragmentation of ownership.

721
01:08:23,041 --> 01:08:29,701
But there's also an aspect of things changing hands too fast.

722
01:08:31,221 --> 01:08:36,681
You know, that is just the only people who that suits are criminals, people who have

723
01:08:36,681 --> 01:08:39,821
found a way to pull off little shavings.

724
01:08:40,141 --> 01:08:47,421
of your value each time the thing changes hands but this is what's wrong with john maynard keen's

725
01:08:47,421 --> 01:08:53,361
idea of velocity of money that this is the big scam that they think that every the theory is

726
01:08:53,361 --> 01:08:58,381
that every time a hundred dollar bill changes hands you produce a hundred dollars worth of value

727
01:08:58,381 --> 01:09:02,941
but that's only true if there's no inflation because otherwise that's not a hundred dollars

728
01:09:02,941 --> 01:09:09,661
it's 98 and then 96 and then like it it shrinks so and it's also the the wrong type of shit is

729
01:09:09,661 --> 01:09:15,941
being produced it's over consumist like throw away quantity over quality products and if you

730
01:09:15,941 --> 01:09:21,141
have sound money there's quality yeah before you know it you've got somebody being paid to dig holes

731
01:09:21,141 --> 01:09:27,041
and fill them back up again no yeah exactly it's it's like a junkie being like getting the next hit

732
01:09:27,041 --> 01:09:33,921
which might feel good in short term but but you have to pay the price later on so it's a monetary

733
01:09:33,921 --> 01:09:41,581
junky behavior, I'd say. Yeah. So, to the extent that I believe there,

734
01:09:41,581 --> 01:09:47,961
you know, because I am talking again in the world of a spectrum and an optimum on the spectrum,

735
01:09:48,121 --> 01:09:52,681
I'm not an extremist kind of guy. I just sound like a lunatic when I say things like we should

736
01:09:52,681 --> 01:09:57,401
shut down the stock market. To the extent that I believe we do need government at a local level,

737
01:09:57,601 --> 01:10:03,021
how would I like to experiment with levying taxation? I would like to do it by way of a

738
01:10:03,021 --> 01:10:11,341
transaction tax. So only VAT and nothing else? My dad liked that idea.

739
01:10:13,001 --> 01:10:20,521
Not even just on sales. So like what I'm saying is you have a very small tax that's based on

740
01:10:20,521 --> 01:10:26,421
transacting. And so if you sold a share, that tax would apply. And it wouldn't have to be a big one,

741
01:10:26,421 --> 01:10:32,961
just a tiny little one. Slow all the transactions down. I've absolutely failed

742
01:10:32,961 --> 01:10:35,881
to see how that would result in economic contraction.

743
01:10:36,701 --> 01:10:39,501
You're so close to just describing Bitcoin.

744
01:10:40,041 --> 01:10:40,941
You know that, right?

745
01:10:41,041 --> 01:10:44,321
Because Bitcoin has a transaction fee

746
01:10:44,321 --> 01:10:46,241
and it's super small

747
01:10:46,241 --> 01:10:49,741
and it gives money to the people securing the network,

748
01:10:49,941 --> 01:10:52,041
which is the miners.

749
01:10:52,421 --> 01:10:54,961
The miners do not create the Bitcoins, by the way.

750
01:10:55,041 --> 01:10:56,881
They get employed by the users

751
01:10:56,881 --> 01:11:01,481
and they get paid in Bitcoins for the work they do, right?

752
01:11:01,481 --> 01:11:04,641
So the dynamic is different than what people think it is.

753
01:11:05,261 --> 01:11:08,361
No, yeah, it makes sense if you frame it like that.

754
01:11:09,161 --> 01:11:15,601
And I'd say there are so many parallels to what I already see in Bitcoin with all of these things that you're saying.

755
01:11:15,881 --> 01:11:24,821
For instance, the ownership, as soon as you divide ownership, it gets diluted what every single owner thinks about the thing he owns.

756
01:11:25,021 --> 01:11:28,541
Like the responsibility is reduced accordingly.

757
01:11:28,541 --> 01:11:32,681
So in Bitcoin, it's very hard to share custody.

758
01:11:32,901 --> 01:11:39,241
You can do it in multi-sig solutions and whatnot, pretty tricky technical solutions to it.

759
01:11:39,701 --> 01:11:44,201
But for the most part, if you know the private key, you own the assets.

760
01:11:44,361 --> 01:11:50,101
So there's no difference between knowing and owning or knowing and possessing.

761
01:11:50,721 --> 01:11:52,041
It's like a layer.

762
01:11:52,181 --> 01:12:04,812
If you have ownership on top it a legal relationship between you and a thing Possession is physical you physically hold the thing but in Bitcoin it yet

763
01:12:04,812 --> 01:12:06,912
one level

764
01:12:06,912 --> 01:12:09,232
deeper still because the knowledge

765
01:12:09,232 --> 01:12:10,752
is the ownership

766
01:12:10,752 --> 01:12:13,072
so in that sense it's the only thing

767
01:12:13,072 --> 01:12:14,952
you can actually own to that

768
01:12:14,952 --> 01:12:16,592
extent and that's

769
01:12:16,592 --> 01:12:18,932
also another aspect of it

770
01:12:18,932 --> 01:12:20,972
I fell in love with and it's so funny when you

771
01:12:20,972 --> 01:12:23,092
talk about these things and your insights about

772
01:12:23,092 --> 01:12:29,752
how companies should be run and decentralization and hierarchies and so on because I see so many

773
01:12:29,752 --> 01:12:34,912
parallels. So you're basically describing the system where we're trying to materialize here.

774
01:12:35,212 --> 01:12:42,112
I really enjoy this discussion for that reason. Like you, I'm seeing all these parallels and it's

775
01:12:42,112 --> 01:12:48,132
quite weird. Like I'm coming from a very unconventional private equity world, but it's

776
01:12:48,132 --> 01:12:50,732
an old economy kind of idea

777
01:12:50,732 --> 01:12:52,812
and you're coming from the

778
01:12:52,812 --> 01:12:54,612
angle of the cryptocurrency or

779
01:12:54,612 --> 01:12:56,352
blockchain and

780
01:12:56,352 --> 01:12:58,432
their conclusions that we arrive at.

781
01:12:58,572 --> 01:12:59,252
I'd say specifically

782
01:12:59,252 --> 01:13:02,672
Bitcoin. That's also one of the insights.

783
01:13:03,132 --> 01:13:04,352
That's why I say that

784
01:13:04,352 --> 01:13:06,672
decentralization is an unfortunate means to a greater

785
01:13:06,672 --> 01:13:08,672
end and being this

786
01:13:08,672 --> 01:13:10,592
21 million, all the others are just

787
01:13:10,592 --> 01:13:12,712
cheap copycats of that and cannot

788
01:13:12,712 --> 01:13:13,492
work in the norm.

789
01:13:14,232 --> 01:13:15,492
I must tell you that

790
01:13:18,132 --> 01:13:27,072
When the Bitcoin phenomenon began to be a thing, I started thinking a lot harder about money and I started reading a lot more about money.

791
01:13:28,212 --> 01:13:33,452
And there was a time when I thought I understood money well enough to explain it to other people.

792
01:13:33,452 --> 01:13:53,392
But that time has long gone. The more I think about money, the more I realize that I'm an explanation or several explanations away from possessing what I would describe as an understanding adequate for the purposes of teaching somebody else.

793
01:13:53,392 --> 01:14:08,832
I find myself repeatedly stymied by some of the critical features of money as I see it, or let's not call them critical, let's call them key features of money.

794
01:14:08,832 --> 01:14:26,612
And so I retain a sense of great humility when it comes to discussions about Bitcoin, indeed other cryptocurrencies, about central bank digital currencies, about fiat currencies, about commodity-based currencies.

795
01:14:26,612 --> 01:14:36,532
I don't have a set of answers which I regard as a sort of framework I'd like to put forward.

796
01:14:37,052 --> 01:14:41,412
But at the same time, I have a sense that there is such a set.

797
01:14:42,832 --> 01:14:49,372
And Bitcoin, I would regard as a candidate explanation or sorry, not candidate.

798
01:14:49,372 --> 01:14:58,112
Bitcoin is an explanation and destined to be replaced by a better one for intrinsic reasons to the nature of explanations.

799
01:14:59,652 --> 01:15:02,192
That's not a criticism of Bitcoin, by the way.

800
01:15:02,192 --> 01:15:09,792
that i'm as i say intellectually i don't feel i have

801
01:15:09,792 --> 01:15:19,772
had those flashes of insight required to to get me to the point of being able to

802
01:15:19,772 --> 01:15:24,492
look you in the eye and tell you i understand and this is what we should do and here's a suggestion

803
01:15:24,492 --> 01:15:31,172
and that kind of thing i'm just not there it's so sad i find that very honorable of you to to

804
01:15:31,172 --> 01:15:37,732
admit that to take the humble approach. I see that all too seldomly in the world today that

805
01:15:37,732 --> 01:15:42,192
people just say that I'm not knowledgeable about this. I shouldn't have an opinion on it. It's very

806
01:15:42,192 --> 01:15:49,752
rare. For me, just to wrap this part of the discussion up a bit here, for me, it sort of

807
01:15:49,752 --> 01:15:57,312
clicked when I stopped seeing store of value and medium of change as two different things.

808
01:15:57,312 --> 01:16:03,252
nowadays i see it as medium of exchange over time and space so it's four-dimensional medium

809
01:16:03,252 --> 01:16:08,912
of exchange over time when you trade with your future self and over space when you trade with

810
01:16:08,912 --> 01:16:16,232
other people for me that was it's just a like to tell you what what what made it simpler for me to

811
01:16:16,232 --> 01:16:21,172
explain it to other people i'm going to remember that sound right because a person who's thought

812
01:16:21,172 --> 01:16:27,252
deeply about things and gives that sort of subtly different uh framing that's often the key to spur

813
01:16:27,252 --> 01:16:33,252
creative thought in somebody else because you get locked in the tiredness of ideas otherwise.

814
01:16:34,032 --> 01:16:37,772
You know, and I have read some Bitcoin books, Safidian Amos.

815
01:16:38,992 --> 01:16:40,032
Safidian Amos, yeah.

816
01:16:41,052 --> 01:16:46,252
But that was actually one of the books which caused me to realize, I was about to say to

817
01:16:46,252 --> 01:16:52,732
understand money less, but that's terribly unfair. It caused me to realize that that book didn't

818
01:16:52,732 --> 01:16:57,732
contain what I needed to know, but it did shine a light on me needing to know something else.

819
01:16:58,052 --> 01:17:03,852
Yeah, it was a great book for me too, because it sent me down the whole Rothbard Mises rabbit hole

820
01:17:03,852 --> 01:17:08,452
as well. There's so many references to that. I've forgotten that he even referenced them.

821
01:17:08,692 --> 01:17:11,832
You know, that's funny. Because they were so familiar to me already.

822
01:17:13,452 --> 01:17:21,332
Yeah. Yeah. It's a really interesting space. And I think, you know, people ask,

823
01:17:21,332 --> 01:17:22,532
what would you most like to know?

824
01:17:22,692 --> 01:17:23,412
You know, what did you like?

825
01:17:23,472 --> 01:17:25,232
Where would you like your knowledge to be filled in?

826
01:17:25,892 --> 01:17:27,532
And they would expect me to say,

827
01:17:27,612 --> 01:17:29,772
oh, I'd like to know who rules the world, you know?

828
01:17:30,632 --> 01:17:33,032
I think more than that, I would like to understand money.

829
01:17:34,472 --> 01:17:38,692
Yeah, and that is, it is a deep, deep topic

830
01:17:38,692 --> 01:17:42,612
because the word has changed meaning so many times.

831
01:17:43,132 --> 01:17:44,632
I mean, when we think of money today,

832
01:17:44,652 --> 01:17:47,692
we think of fiat currency, which is not money,

833
01:17:48,292 --> 01:17:50,232
but we refer to it as money.

834
01:17:50,232 --> 01:17:54,032
but it's very far from anything just or fair

835
01:17:54,032 --> 01:17:56,732
since they can print more of it

836
01:17:56,732 --> 01:17:58,892
and conjure it out of thin air.

837
01:17:59,432 --> 01:18:01,412
Okay, here's a little mind game

838
01:18:01,412 --> 01:18:04,592
that I play when I do try and think about money,

839
01:18:04,652 --> 01:18:05,312
which I do often.

840
01:18:05,432 --> 01:18:06,832
I often try to think about money.

841
01:18:07,352 --> 01:18:09,512
But a mind game that I play,

842
01:18:09,672 --> 01:18:11,852
it's interesting that we use the term fiat

843
01:18:11,852 --> 01:18:14,232
only when the fiat,

844
01:18:14,232 --> 01:18:17,312
you know, Latin word for doing or making,

845
01:18:17,312 --> 01:18:20,632
is only when the fiat is...

846
01:18:20,632 --> 01:18:20,952
Sorry?

847
01:18:21,912 --> 01:18:24,772
By decree, I believe, is the one translation.

848
01:18:24,772 --> 01:18:24,952
Yes, let it be.

849
01:18:25,952 --> 01:18:28,632
It's, I think, a subjunctive.

850
01:18:29,692 --> 01:18:31,332
Latin is now a little bit stale,

851
01:18:31,452 --> 01:18:33,132
but it's sort of let it be.

852
01:18:33,632 --> 01:18:35,892
It's only when the state is decreeing

853
01:18:35,892 --> 01:18:38,312
that we call it fiat money,

854
01:18:38,432 --> 01:18:40,012
but in all other instances,

855
01:18:40,212 --> 01:18:41,792
individuals are decreeing

856
01:18:41,792 --> 01:18:44,052
when they use money.

857
01:18:44,912 --> 01:18:47,232
So there's always a fiat aspect

858
01:18:47,232 --> 01:18:56,052
to money in the literal sense of the word, in the sense that one of the important components

859
01:18:56,052 --> 01:18:59,252
of any monetary system is that it be recognized.

860
01:19:00,032 --> 01:19:01,672
Yeah, absolutely.

861
01:19:01,772 --> 01:19:06,112
Whether it's recognized by government or recognized by individuals, somebody has to

862
01:19:06,112 --> 01:19:06,912
do the recognizing.

863
01:19:07,952 --> 01:19:11,712
So the question is, what is it that we recognize?

864
01:19:11,712 --> 01:19:20,032
yeah and and i think that uh the recognize uh that's that's the the the six properties of money

865
01:19:20,032 --> 01:19:28,592
are uh fungibility scarcity divisibility i'm a bit too long into the conversation yeah yeah

866
01:19:28,592 --> 01:19:38,892
all all sorts of there are these anyway yeah yeah and the sixth one is um acceptability

867
01:19:38,892 --> 01:19:42,872
and I think acceptability is really a product of all the others.

868
01:19:43,372 --> 01:19:46,912
So you have to have the others first before you can't just say that,

869
01:19:47,312 --> 01:19:50,612
well, you can point guns at people and say you have to pay your taxes

870
01:19:50,612 --> 01:19:55,612
in nation X's currency and that's one way of getting acceptability.

871
01:19:56,352 --> 01:20:00,292
But natural acceptability, like what's the case with gold, for instance,

872
01:20:00,292 --> 01:20:04,512
the free market figured out that gold had very suitable properties

873
01:20:04,512 --> 01:20:18,344
for being money all by itself so yeah and so I wouldn say that gold is by decree since it an asset found in the earth crust and i wouldn categorize bitcoin as that either since i would

874
01:20:18,344 --> 01:20:25,144
categorize that there are ways of seeing bitcoin as like an informational element on the periodic

875
01:20:25,144 --> 01:20:30,904
table without protons or neutrons it's just basically electrons but it still acts as if it

876
01:20:30,904 --> 01:20:39,824
was an element so yeah maybe a bit far-fetched but anyway no no it's interesting um with seven

877
01:20:39,824 --> 01:20:44,664
minutes to go i mean just just the one observation i would make is that it's exactly in that listing

878
01:20:44,664 --> 01:20:49,364
of the elements of money that i find conversations get very interesting very fast because people have

879
01:20:49,364 --> 01:20:55,784
different lists many critics of bitcoin um would would say oh but you guys always drop out the

880
01:20:55,784 --> 01:21:01,544
the stability of monetary value, to which a Bitcoiner will say, well, how can you use the

881
01:21:01,544 --> 01:21:08,744
term monetary in that sentence? Because the Bitcoin is worth one Bitcoin. What are we talking about?

882
01:21:09,544 --> 01:21:16,944
But criticism is that yesterday I was able to pay for two children's school fees and today I can

883
01:21:16,944 --> 01:21:25,284
only pay for one. That's not a stable value. The criticism we would give there is that the whole

884
01:21:25,284 --> 01:21:31,664
notion of stability is a lie like that's how they fool us into paying more and more for everything

885
01:21:31,664 --> 01:21:37,564
every year while we it seems like we're paying the same but the productivity of the human race

886
01:21:37,564 --> 01:21:42,864
is going up and still prices aren't falling so like the the the nature of the free market is

887
01:21:42,864 --> 01:21:48,164
deflation like the that's the natural state and it's if you think about it from first principles

888
01:21:48,164 --> 01:21:53,844
it's super simple like if a human being practices doing something do they get better or worse at

889
01:21:53,844 --> 01:21:59,664
doing the thing they're practicing like of course we get better at stuff so the follow-up question

890
01:21:59,664 --> 01:22:05,244
to that should be so why aren't all prices falling forever and if you denominate in bitcoin and zoom

891
01:22:05,244 --> 01:22:12,024
out long enough you can see that they actually are falling like my house is worth way fewer bitcoin

892
01:22:12,024 --> 01:22:20,044
this year than 10 years ago but you have to have a very zoomed out lens for a while in my

893
01:22:20,044 --> 01:22:28,904
younger days, I'm talking in my sort of 20s to early 30s, I would be a guest lecturer in economics,

894
01:22:29,084 --> 01:22:36,544
in various segments of economics. And I used to start probably something close to all my lectures,

895
01:22:37,404 --> 01:22:42,364
reminding people that everything that is worth saying about an economy starts with a simple

896
01:22:42,364 --> 01:22:49,684
picture of a factory and a household. And that everything else that goes on in between is what

897
01:22:49,684 --> 01:22:59,244
we call intermediation. And what we're interested in is how the household and the factory are

898
01:22:59,244 --> 01:23:06,124
able to interact and what they are competent and able to do. So all the stock markets and all the

899
01:23:06,124 --> 01:23:11,444
bits of paper and all the contracts are configurations of the institutional structure

900
01:23:11,444 --> 01:23:16,184
relating the household to the factory. And I found that the reason I always used to do that is

901
01:23:16,184 --> 01:23:25,064
the discipline of starting there had always been so useful to me in order to determine what was

902
01:23:25,064 --> 01:23:30,224
bullshit and what was not, that I wanted to impress it. And years later, I still get people

903
01:23:30,224 --> 01:23:34,064
coming to me saying, you know, I remember that time you put on the whiteboard that simple drawing

904
01:23:34,064 --> 01:23:40,864
and then spoke about it for 45 minutes. People don't forget that. And I'm not talking about

905
01:23:40,864 --> 01:23:44,284
people who became professional economists. I'm talking about people who were like maybe

906
01:23:44,284 --> 01:23:48,784
10 years younger than me studying economics and going out into the South African business world,

907
01:23:48,844 --> 01:23:52,904
you know, and then you run into them and they remember who you are or whatever. Now they've

908
01:23:52,904 --> 01:23:56,264
seen you on a podcast or something. And I was taught by that guy, you know.

909
01:23:57,744 --> 01:24:06,504
But it's very, very often and I get that feedback. And so for me, what I've noted is in some

910
01:24:06,504 --> 01:24:20,104
Some Bitcoin enthusiasts, first of all, are propensity to say totally absurd economic things and a failure to link back to the real economy often enough in their thinking.

911
01:24:20,864 --> 01:24:22,244
I'm not accusing you of that.

912
01:24:22,724 --> 01:24:25,364
I found our conversation very orderly and interesting.

913
01:24:26,364 --> 01:24:27,984
But it is a problem and a phenomenon.

914
01:24:28,304 --> 01:24:33,984
I've kind of been invited to Bitcoin conferences and I say, there are too many of those crazy guys.

915
01:24:34,724 --> 01:24:36,284
I've gone to one or two of them.

916
01:24:36,284 --> 01:24:40,244
I know. It's very hard. You've got to weed through all these absolute hooligans who say

917
01:24:40,244 --> 01:24:44,004
like the most foolish things. Yeah, I just don't, my life's too short for that.

918
01:24:44,324 --> 01:24:50,144
So I don't go. I try to find individuals and have lunch with them and ask them a bunch of

919
01:24:50,144 --> 01:24:54,764
questions. Like, I want to come and have lunch with you in Spain. And then if you're asking

920
01:24:54,764 --> 01:25:01,524
the questions, I ask the questions because, you know, I have this yearning to have a more

921
01:25:01,524 --> 01:25:09,784
developed sense of money. Fantastic. I mean, yeah. And if you widen that to the broader crypto space,

922
01:25:09,784 --> 01:25:16,984
you get even more economic illiteracy, I say. But it's very prevalent within the Bitcoin community

923
01:25:16,984 --> 01:25:22,584
as well. I see bad takes every single day and horrible takes, to be honest.

924
01:25:23,104 --> 01:25:27,024
There's a fundamental one that you might enjoy that I realized the other day.

925
01:25:27,024 --> 01:25:35,104
You know, central bankers banned you about this term programmable, saying central bank digital currency.

926
01:25:36,024 --> 01:25:36,144
Yeah.

927
01:25:37,064 --> 01:25:41,904
Oh, straight away, that thing is not money.

928
01:25:42,784 --> 01:25:49,544
Because the moment you make a unit programmable, it becomes non-fungible.

929
01:25:51,364 --> 01:25:51,764
Exactly.

930
01:25:51,984 --> 01:25:53,704
And it's programmable people.

931
01:25:53,844 --> 01:25:54,504
That's what it is.

932
01:25:54,604 --> 01:25:55,404
That's the end goal.

933
01:25:55,404 --> 01:25:56,704
And that's what they're trying to do.

934
01:25:56,704 --> 01:25:58,024
They're trying to program us.

935
01:25:58,324 --> 01:26:02,084
Like, why else would you want money to be programmable?

936
01:26:02,544 --> 01:26:04,924
Like, I don't buy that at all.

937
01:26:05,684 --> 01:26:09,084
And like, that's what we're reacting against.

938
01:26:09,824 --> 01:26:13,084
Trying to program business as well, operating through the Basel framework.

939
01:26:13,224 --> 01:26:21,264
If I see signs of it emerging in the South African banking world right now, and I'm pointing it out to the bankers, I'm saying, you're only doing this because of Basel 3.5.

940
01:26:21,564 --> 01:26:22,984
Think about how crazy that is.

941
01:26:22,984 --> 01:26:30,064
we must resist that with everything we got because that's uh that's the social credit score

942
01:26:30,064 --> 01:26:36,544
score on on steroids it will it will nibble away at your freedoms until you have a constant

943
01:26:36,544 --> 01:26:43,104
booth constantly stomping on your head that's what that is 100 you know this whole story the

944
01:26:43,104 --> 01:26:48,704
whole focus on digital id and and individual social credit i believe is a big distraction advice

945
01:26:48,704 --> 01:26:51,064
the time bomb

946
01:26:51,064 --> 01:26:53,124
the major threat is

947
01:26:53,124 --> 01:26:56,784
the Bank for International Settlements

948
01:26:56,784 --> 01:26:58,304
and the Basel framework

949
01:26:58,304 --> 01:27:00,744
we are running out of time unfortunately

950
01:27:00,744 --> 01:27:03,584
well thank you very much for your time so far

951
01:27:03,584 --> 01:27:04,904
it's been great conversations

952
01:27:04,904 --> 01:27:08,184
likewise great to get to know you Nick

953
01:27:08,184 --> 01:27:10,384
and before we leave

954
01:27:10,384 --> 01:27:12,304
where can people find you

955
01:27:12,304 --> 01:27:14,404
is there anywhere on the internet you want to send them

956
01:27:14,404 --> 01:27:17,344
of course pandata.org

957
01:27:17,344 --> 01:27:22,944
but other than that where can they find you a good place to find me is on twitter nick or on

958
01:27:22,944 --> 01:27:28,904
substack the handle is the same it's at nick hudson as spelt on the screen at nick hudson ct

959
01:27:28,904 --> 01:27:34,924
for cape town and depending on uh what i'm talking about at any particular time i may or may not be

960
01:27:34,924 --> 01:27:39,644
search banned so you might have to be very precise in typing that out otherwise you will find those

961
01:27:39,644 --> 01:27:44,524
horrible replica accounts you know the what do you call them the counterfeit accounts that have

962
01:27:44,524 --> 01:27:51,044
my picture and my background and talk some shit about whatever the time the day is so you've got

963
01:27:51,044 --> 01:27:56,604
to be very careful there are no underscores there are no spaces it's at nick hudson ct and the same

964
01:27:56,604 --> 01:28:02,864
on substack where i write infrequently and and and repost occasionally so you don't get bombarded

965
01:28:02,864 --> 01:28:08,624
by nonsense um and i with anybody who i follow back there the gms are open and that's a good

966
01:28:08,624 --> 01:28:10,324
place to contact me as well.

967
01:28:12,584 --> 01:28:13,064
Fantastic.

968
01:28:13,484 --> 01:28:14,304
So with that,

969
01:28:14,544 --> 01:28:16,764
thank you very much for coming, Nick.

970
01:28:16,984 --> 01:28:19,544
And this has been the Bitcoin Infinity Show.

971
01:28:19,784 --> 01:28:20,544
Thanks for listening.

972
01:28:21,024 --> 01:28:21,624
Brush your teeth.

973
01:28:22,584 --> 01:28:22,964
Bye-bye.