Cory Doctorow: Reviving the Cypherpunk in All of Us #354

Transcript

this is epicenter episode 354 with guest corey doctorow [Music] hi i'm sebastian and you're listening to epicenter the podcast where we interview crypto founders builders and thought leaders on this show we dive deep to learn how things work at a technical level and we fly high to understand visionary concepts and long-term trends if you like epicenter the best way to support us is to leave a review on apple podcasts if you're on a mac or ios device the easiest way to do that is to go to

dot rocks slash apple today i'm thrilled to have corey doctorow as our guest there's a saying in french for people who have been sort of consistently around for a long time we say that they're part of the furniture well when i think of core doctorow he definitely feels like one of the central furnishings of the open web so if you don't know corey he's a blogger an author a podcaster but more than anything he's a cypherpunk and an activist and an overall defender of digital rights creative commons and an open internet for all he's written several science fiction books and a new one's coming out soon which he talks about during the interview he was a co-editor at boing boing for nearly 20 years

and these days he's a special advisor to the electronic fountier foundation and he blogs daily at pluralistic.net i've been following corey's work and writing since basically since i was a teenager and a few months ago you know we were very fortunate to have him at the reset everything conference and here he gave a talk about the covet crisis and how it was not only a risk to our health but also our personal privacy and sovereignty the link to that talk is in the show notes well i was blown away by this talk and i absolutely wanted to have him on the podcast i wanted to speak with him about his early days on the web and understand what led him to take up such an interest in activism well we got to talk about all that and also got to understand how he became

passionate about writing and science fiction writing as a teen of course we also spoke about digital rights and the tremendous change that the web has gone through since its inception about 30 years ago we also got his thoughts on crypto and the role that it plays in his broader vision for the decentralized web and of course we couldn't help but talk about the pandemic and how it would shape our world in the years to come cory is obviously super passionate about these topics and the clarity and sharpness with which he speaks about these very important issues is really impressive i mean he can riff for hours without any notes it's it's really fascinating to watch this was a great interview and i'm sure it'll go down as one of my favorites

as you know i have a lot of nostalgia for the early days of the web and so i like talking with people like corey who were around back then and contributing to the culture you know in the 90s when i first came online so with that i bring you corey doctorow cory you grew up in toronto right yeah that's right so i grew up in new brunswick and uh i'm a little bit younger than you but you know growing up in toronto during the 70s and 80s what was it about being there during that era that has made you who you are today and specifically you know what kind of things were you encountering there as as a youth that got you into activism and hacktivism and you're interested in this intersection

between like arts and culture and technology and cypherpunks and this sort of thing well i don't know if you saw i did a thread about this yesterday that that went out in my newsletter today but a lot of it is down to a single person a woman named judith merrill who was an american political radical and author and editor and critic who had been married to frederick pohl and after the chicago police riots in 1968 at the democratic convention she went into voluntary exile and move with her kids to toronto judy set up all of these public institutions so she used to introduce doctor who every week on tv ontario the local public broadcaster and talk about the origins of those tropes and so i

would watch that with my dad as a little kid when i was like six and seven my mom was in teacher's college and we'd stay home and watch it of an evening and then when i was nine we went on a school trip to the library she founded because she took all of the science fiction books that she and fred paul had amassed and donated them to the toronto public library system and created a library called the spaced out library which is now called the merrell collection it's the largest public reference collection of science fiction in the world now the spaced out library yeah well now it's called the merrell collection she wouldn't let them change the name until she died she said you know i like my groovy spaced out name but you can name it after me once i'm dead so when she

finally died they renamed it but it's an incredible collection and i went down on a school trip when i was nine and uh judy was there she was the writer in residence and she told us kids if you write a story bring it down and i'll critique it for you so this woman who is this titan of the field and she would put writers who are promising into workshops with one another and so i ended up in a workshop with carl schroeder and david nicholl and peter watts is there now and so on called the cecil street of regulars she also founded a writer's workshop through a writers in the school program at the high school i went to a public alternative school that kids used to travel from all over toronto to attend and she also founded a uh movable feast

a six times a year uh get together for all the science fiction professionals in town that i started going to as a teenager so it was as close as you could come to having a an actual formal apprenticeship for science fiction writing you know i don't think there's ever been a time or a place where that was better and at the same time my folks were political radicals that my dad actually one of the reasons he wanted to watch doctor who when judy was introducing it is he knew her from the anti-nuclear proliferation movement and the labor movement which he was active in and and still is active in and so i was always involved in politics i got beaten up in middle school for being involved in the anti-nuclear proliferation movement because so many of the kids in the school were military cadets

and they would call me a communist and throw bottles at my head and beat the out of me so you know i was always involved in politics as well and my father is a computer scientist so he was one of the first people to get a degree in what was then called the applied mathematics program at the university of waterloo which later became their cs program and he became the head of the cs program at uh a big high school near us cedarbrae and in 1979 apple gave all the cs heads free apple ii pluses to evaluate for the summer so he'd been teaching his kids on pdps they would uh punch cards during class and then the cards would be

sent off to uh pdp off site and run and then they would get the output and that's how they would learn to program and so apple had this idea that people who were teaching programming in with batch mode might uh prefer to teach interactive programming even if they couldn't afford as many devices and that was a huge seller and we got a modem around then before then my dad had been bringing home teletype terminals connected to the university of toronto so i had an acoustic coupler and a terminal no uh screen just you know a thousand feet of paper my mom used was working as a kindergarten teacher by then and she would bring home rolls of paper from the bathroom and so you get a thousand feet of brown paper towel and you'd feed it into the line printer and you could compute for a thousand

feet and then when you were done you turn it over and compute on the back and then you couldn't compute anymore until you got more paper so you know i was in the right place at the right time for all of those things for science fiction for activism for uh technology i was able to drop out of university and walk into a job programming cd-roms and from there to become a gopher programmer and from there to become a web programmer and then a cio and then found a tech company during the dot-com bubble and then from there into eff so it's not like a linear progression but it was definitely very much of its time when did you leave toronto i sort of oozed out so in the mid 90s i started working for a silicon graphics integrator in

silicon valley doing pre-press stuff so i was a unix administrator and integrator and so i started spending more and more time down there and then i started doing more contract work down in silicon valley and then the company i founded opened an office in san francisco and i moved down to run that greater and greater stretches of time away from toronto starting in the mid 90s and by about 99 or 2000 i was full-time certainly by 99 i was full-time in san francisco talked a little bit about your childhood in this early kind of contact with you know science fiction technology i was listening to your talk again you know that you did for the reset everything and you know you talked there quite a bit about this idea of like you know

technological optimism and like you know you were critiquing it this idea that like you know technology is gonna like make things better what do you view as the role of technology sort of in the development of human civilization and like how has it changed from when you were like a child and having this early contact with technology and its impact on our species well i think it's a very science fictional approach i take because at its best science fiction is concerned more with what technology or who technology acts on behalf of and who technology acts upon and what technology does is only a small piece of that story i feel like i've got a pretty good

handle on what technology can and can't do but the social and economic relations that it's embedded in are the things that determine what it does do and so over the years i think i've become much more alarmed about what would happen if it went wrong i think that in the early days there was a real sense of alarm that it could go terribly terribly wrong i mean neither neuromancer nor snow crash or manuals for statecraft and people who found organizations like the electronic frontier foundation don't do so because they think it's all going to be awesome and so they just want to have a front row seat it's because you're afraid of what happens if goes wrong right you know you may be excited about the

potential but you're frightened about the potential for evil as well or that potential thwarted over the years as the social context has changed i've become more worried and and one of the specific things that's made me more worried is market concentration we had something like an equilibrium in the early days of the tech revolution because we still had pretty vigorous pro-competition enforcement and what that meant was that the collective action problem you had to solve in order to conspire to screw over everybody who used technology was really big there was always someone who is willing to defect from the consensus you know think about how printer ink works right that there's only a few

printer companies and they can all get together and decide either implicitly and tacitly or explicitly with real conspiracies that your ink should cost more than vintage vuvclico and if the sector is small enough that's a thing that can happen that convergence on that bad policy outcome one of the other things that you get a kind of epiphenomenon of that concentration is that you both get monopoly rents right the firms now have all that excess revenue from the overcharging on inc and you have a much easier collective action problem to solve when it comes to deploying those monopoly rents to attain policy outcomes that favor your monopoly so you can then go and lobby to make it

illegal to make third party inc and so you get this vicious cycle where as industries become concentrated it's easier for them to gang up and screw the rest of us and it's easier for them to suborn the regulators who are supposed to stop them from doing it and lather rinse repeat and you end up with a web that consists of you know five giant websites filled with screenshots of the other four and that i think was not something i saw coming i i feel like i had a pretty good handle on a lot of things that were going on at the start of the tech bubble and what we should be worried about but i confess that i did not pay enough attention to the direction of travel in antitrust enforcement and pro-competition enforcement and i think a lot of us took our eyes

off the ball on that one and 40 years later every single industry from professional wrestling to eyeglasses has become incredibly concentrated down to a small handful of firms that do routinely abuse both their supply chains and their customers crush new market entrants and suborn their regulators sometimes with really terrible consequences right like the reason that the sacklers were able to suborn medical authorities to allow them to sell dangerous opioids without adequate protection was because of this market concentration phenomenon which both allowed them to gang up on the regulators with their colleagues in notionally competing firms also

allowed them to have uh the excess rents the the additional profits from murdering people that they could spend on that project are you familiar with ben thompson and his aggregation theory i know about ben and i know strategy but i have not read anything about his aggregation theory is it a kind of um first mover advantage his aggregation theory is basically kind of you know sums up the points you're making i wonder if you think that this kind of aggregation is inevitable in capitalist system capitalist systems have rules right there is no such thing as a market without market rules and so you kind of have to ask which capitalist system i think that one thing that we've

learned over the last 40 years is that if you allow firms to do the things that antitrust law used to prohibit then the things that antitrust law was supposed to prevent will happen so 40 years ago companies weren't allowed to merge with major competitors they weren't allowed to gobble up nascent competitors to neutralize them before they could grow to be threats and they weren't allowed to create vertical monopolies they were subject to structural separations so if you ran a rail company you couldn't also have a freight company that shipped uh freight on your rails that competed with your other customers but you know you can have an app store and you can also make apps that compete with the apps in your app store so you know 40 years later after ceasing to enforce antitrust law

you got the thing that antitrust law was supposed to prohibit and there are a lot of exotic theories about why that is you know first mover advantage network effects information asymmetries and so on that are highly specific to tech and i would find them a lot more compelling if it didn't also happen to professional wrestling if the reason tech is concentrated is first mover advantage why is wwe the only wrestling league left in the world right is that did they have a network effect or a first mover advantage or do they just do what they used to be prohibited from doing which is buying you know merging with their major competitors and buying their nascent competitors and creating vertical monopolies i just find that kind of tech exceptionalism

to be exceptionalist i am skeptical of tech exceptionalism in people who use it to wave away the sins of tech and i am skeptical of tech exceptionalism when people use it to locate the source of the sins of tech so when people say oh well you know the reason that you know tech is so concentrated is that ad tech set out to create a mind control rate to make selling fidget spinners more efficient and now it subverts the capitalist mechanic by which whereby um intelligence about prices and demands are aggregated through market transactions because the firms can just use their fidget spinner mind control rate and make you buy stuff

and so therefore tech is a rogue capitalism you know run by super geniuses who invented mind control raise and by the way they're willing to sell those mind control raised to cambridge analytica to turn us all into racists and i think that like that's a pretty exotic explanation especially when there's a more occam's razor compatible one which is tech is a monopoly it became a monopoly by failing to adhere to anti-monopoly principles and monopolists get to distort markets and monopolies and communications get to distort our discourse and they don't need mind control arrays to do it they just need like sorting algorithms right if you never find a certain thing when you search for something related to it if a fact never

surfaces when you search for it then that fact will become less well-known and if an incorrect fact is routinely surfaced when you search for it then that fact will be more widely believed but it's not because someone walked up to you and said you know although you don't know it you can really fly and then you walked around telling people that you could fly and convinced that you could fly like you'd just gone and seen a stage mentalist in vegas it's just because they lied to you and you didn't have any way to check the lie and like the answer is have competition so that when companies lie someone else can tell you the truth in this podcast we mostly talk about you know blockchain and decentralized technologies and cryptocurrencies i would say the kind of prevalent view

is more around that regulation has been kind of used to serve maybe the incumbents and the large companies and you know maybe protect the banks and that actually by kind of stepping into some realm that's like outside of the control of governments and regulation you can have a system with like more competition and more freedom and more choice do you agree with that view or like what are your thoughts on that i'm skeptical of the conclusion that says some regulation is bad therefore regulation is bad i mean it's like saying putting leeches on you doesn't work therefore medicine is a bankrupt enterprise i mean the fact that some regulation is

bad doesn't mean that that regulation can't be good i think for example that the reason that i'm not dead 100 times over of listeria is because of regulation so if we can make regulation about intense technical subjects and i hasten to point out food safety is an intense technical subject that no one in congress or in most parliaments has any expertise in it's not like we elect food safety specialists to high office routinely instead what happens is we have a regulatory apparatus that finds neutral experts to adjudicate competing claims from partisan experts to produce fact-based outcomes that are turned into recommendations and those recommendations are why you don't have lead in your water

they're why planes don't fall out of the sky and like when you look at planes that do fall out of the sky like the 737 it's because they were allowed to sidestep regulators so i think that we need a much more nuanced account than once we get rid of the regulation things will go well we need an account that talks about how regulation gets suborned how regulation can be improved and what you do to make regulation fail safe because the other piece of a good regulatory apparatus is it has a means for evaluating new evidence as it comes to light and revisiting the factual conclusions that are reached from the regulatory truth-seeking exercises as to whether you could just get rid of the regulators and replace them with cryptography

this is another thing that i'm very skeptical of you may be familiar with the idea of rubber hose crypt analysis which is that like irrespective of your key length or how hard your passphrase passphrases to guess if you live in a place where there is no rule of law and someone can come and tie you to a chair and hit you with a rubber hose and you tell them your passphrase then your passphrase will become known and so we clearly need an apparatus that produces rules and that enforces them and again they can be good rules or bad rules and the bad rules are rules we should avoid and the good rules are rules we should seek out but the idea that no rules produces a good outcome is clearly not the case right now one of

the major ways in which rules are suborned rulemakers can be wrong they can be foolish they can be venal or they can just be unlucky in how they seek out the truth and all of those things can cause them to make bad rules but one of the major ways in which rules are made bad is when industries become super concentrated everyone who is qualified to make rules about them is drawn from the upper ranks of the industry itself and everyone who is in charge of any of the firms in the industry is probably a veteran of most of the other firms so if you look at telecoms for example

everyone who runs a telecoms company everyone in the c-suite of the three or four telecoms giants that run all of the telecoms in the us used to work at at least two of the other ones and they're generally married to or godfather of or executor of the will of executives and the remaining ones and everyone in the upper echelons of their regulatory apparatus the ones i agree with and the ones i disagree with are all veterans of the same firms rather you know there's that photo that infamous photo of donald trump sitting in trump tower around a boardroom table with all the tech leaders after the election and a lot of people looked at that and they were like well how can tim cook espouse a uh a great uh belief in human rights and still sit

down with donald trump and you know that is what it is but i think a far more alarming thing about that photo is that everyone who runs tech fits around a single leatherette boardroom table at the top of trump tower that itself is like a very scary thing the rule that we have that makes all the other rules work is a rule that stops firms from becoming monopolists and by lowering the power of monopolies we increase the power of the deimos we force firms to reckon with pluralistic power exerted through elected democratic authority as opposed to the non-pluralistic democratic power that we have now where between citizens united and

industry concentration everyone who is in a position to make those rules generally speaking owes a very large debt to a very small number of people and either tacitly or explicitly operates on their behalf and this accelerates the process lather rinse repeat so the rules get worse and worse but abandoning the rules isn't going to make it better right abandoning the rules will just allow the people who currently have all the authority it's like having a game where the referee let the cheaters cheat until they had a complete advantage and had crippled all the players from the other team without ever getting a foul and then to solve this you get rid of the role of the referee altogether after all of your players have been

crippled and you hope that the victorious cheaters will just go easy on you and let you recover i don't think that's going to happen i think they will press their advantage i think rules are needed very much so in the current context i wonder though to what extent you think in the way governments currently organize and the elected officials that often sit in governments if these people are competent enough to regulate tech i'm sure you've watched the congressional hearings that happened in the u.s last week looking at that one can't help but think that the people asking the questions were not necessarily the most well-informed when it comes to you know this particular topic which is antitrust

and tech sure well but let's get back to listeria right the reason you're not dead of listeria is not because congress is full of epidemiologists or uh you know microbiologists the reason you're not dead of listeria is because congress has an honest process to adjudicate complicated factual claims one of the things that congress did last week and has done through the course of this antitrust investigation is move a bunch of facts from secret silos operated by the firms and into the public domain there's a million pages of documentation that was subpoenaed a lot of that is going to come to light and so that gives things like the ftc the power to act now

will they act wisely it remains to be seen but the ftc is certainly capable of hiring really good experts right the inaugural cto of the ftc was ed felton from princeton right the guy who broke sdmi he's an eminent cryptographer and computer scientist he's a you know tech and policy specialist and you know could that hearing have gone better sure i mean one of the reasons that hearing went really badly is that newt gingrich 20 years ago killed the office of technology assessment which was the non-partisan arms length congressional body that advised congress on technical questions and he kind of said well we don't need that we can just ask lobbyists for industry to tell us how tech works that is clearly not worked

out really well and again it's one of those things where we took away an element of the rule-making apparatus and the rulemaking apparatus started to fall apart our answer shouldn't be to take away more of it and see if it gets better you know if we took a part out of the machine and the machine broke down to a first approximation the next thing we do is put the part back in and see if the machine starts working again let's go to the topic of like cryptocurrencies and kind of blockchain technology like how do you look at them and what role do you think they should play in our future i confess i'm not a big cryptocurrency person you know i think the math is relatively solid i am a believer in in peer review in information security and

i think that if you subject uh mathematical proposition cryptographic proposition to widespread scrutiny that it will uh reveal the flaws and they can be remediated and it will improve it so when people say a cryptographic algorithm performs as as advertised i'm inclined to believe them if it's been subject to widespread peer review i'm also willing to believe that implementations especially free and open source software ones that can be freely audited by third parties and where there's no legal jeopardy for pointing out defects that might arise as a result of something like the computer fraud and abuse act or the digital millennium copyright act where those where you're free of those concerns that both of those make for robust implementation i'm

willing to believe that cryptocurrency does what it says on the tin you know notwithstanding the odd um problem with coinbase or whoever you know one of the wallet companies having leaks i don't know if coinbase was one of them i know that there's been a string of them was coinbase one of the ones that had leaks did i just malign them unfairly you're sort of inclined to believe that the you know the public protocols work but then you think that like some of the exchanges that actually are like they've had problems we could maybe even make an exchange that worked i have uh some technical some economic and some political disagreements with cryptocurrency so i'm skeptical of financial secrecy i understand that there is a role for it

i have a colleague who tells a very inspiring story about how in west virginia teachers could get fired for being gay and there was a campaign to overturn that law that was ultimately successful and all the money they got in envelopes with no return addresses in the form of cash because the teachers who were gay didn't want to join the campaign openly right so i understand that that financial secrecy has a role i think that if we look around the world the major role for financial secrecy is looters hiding their money from authorities and so if we're worried about corruption right if your claim is like we're we can't trust the rules because the rulemakers are bad at their jobs then gutting the states that employ the rulemakers

and evading them is not going to make the rules better and in particular if you want to make sure that you have the democratic and human rights fundamentals that stop someone from tying you to a chair and hitting you with a rubber hose until you tell them your passphrase i think that you also need to acknowledge that financial secrecy is one of the major corrupting influences that undermines the kind of democratic fundamentals and respect for human rights that stop people from tying you to a chair and hitting you with a rubber hose until you tell them their passphrase so that's kind of my political challenge to it just to clarify on that point you mean because it would be much easier if i tie somebody to the chair and hit him with a rubber hose and they have you know bitcoin and they can send me the

bitcoin or like even better maybe some some anonymous oh no no no not at all no no no no no not the ransomware thing no no not at all no i mean that if you help warlords steal from their governments and take them to their knees and then smuggle their money out of the country and buy luxury flats in london that are empty safe deposit boxes in the sky then the ability of that state to respond to the corruption represented by that is undermined and that means that you get more of the kind of leader who has both the authority and the willingness to tie you to a chair and hit you with a rubber hose then you would if states were able to

enforce laws against people who were doing criminal things right of course it can go the other way too right where maybe if you have like a suppressive regime like you know let's say take china as an example and where the knowledge of financial transactions you know could be extremely powerful tool to suppress people yeah but but i think that you know when you look at there were long periods when renminbi were the the major fiat going in the in the on-ramps into bitcoin and and i don't think anyone argues that the people evading chinese currency controls was doing so because they were uh pro-democracy advocates hiding from the pull-up bureau they were corrupt

local officials stealing money and then buying flats in vancouver right that that was the actual like path of that of that renminbi to bitcoin trade okay yeah that's my political problem with it right that if we want responsive democratic pluralistic states that financial secrecy although it has a role in in pro-democracy movements and pro-freedom and and uh anti-corruption movements financial secrecy on balance is is more of a tool of those who uh seek to undermine democratic fundamentals than those who seek to uphold them although i you know again stipulate absolutely that people who advocate for human rights also benefit from financial secrecy

and i would welcome a discussion a robust discussion in the cryptocurrency world about how to you know down regulate the use of cryptocurrency to corrupt states in ways that will lead to people who have cryptocurrency wallets being tied to chairs and hit with rubber hoses right like not even out of respect for human rights more generally just like how do you stop illegitimate authorities from showing up and and taking your cryptocurrency if that's what you want right so that's my kind of political question but i as i say i also have a technical and an economic question about about cryptocurrency and the technical question is the one that i think comes up most often which is the climate question right that that the proof of work is intensely energy

inefficient and the more people there are doing proof of work the more energy you have to consume in order to stop someone from gaining control of 51 of the network and and so over time you see this activity of maintaining a ledger that is trusted because of math and not because of legitimacy right like we have a lot of ledgers that we trust because of legitimacy right we just trust that the referee isn't cheating so you know you have to weigh this against the complexity and cost of other anti-cheating measures like you know pluralism and democracy and good government and you have this ever increasing portion of the planet's

energy budget allocated to replacing referees with math and i question the whether that is the most efficient technical solution we have sure i mean just just sort of like two two thoughts on that i mean first of all this this was also for me like one of the big things that made me like uneasy about uh you know bitcoin and proof-of-work cryptocurrencies but i think over time that is kind of like lessened a lot and and here's the reason so there has there have been a bunch of uh you know studies where they've looked at like you know actually where does the energy come from in the

big in the bitcoin and proof of work networks and i think you have this weird property in cryptocurrency that you know the ideal thing you want is like really really cheap energy like that's the number one thing you care about and you can kind of go wherever the cheap energy is but that's different from the kind of way that energy normally works right because normally you need the energy like in a particular place and that sort of like what has happened a bit like if you look at where have people put a lot of crypto energy mining you know there's a lot in like iceland right where they have these like

thermal things they put a lot in china where they built some sort of hydro dam where they wanted to have a fa a city but nobody showed up and now they had this like power plant that basically was you know pointless but you know you could basically then get go and put or you know they had in um i know in the us there's some mining companies that have come up that basically would go where they produce natural gas and in that process i guess there's like this extra heat and stuff that produced and then they would have these mobile mining rigs so i think as a result like the most of it at least from the the studies that i've seen looked at it said that like you

know the vast majority comes from like renewable sources well i mean but i so i would question the underlying assumption that the energy is fungible and that there are no other users for these this you know i guess you could call it the dust of energy right the the leftovers of energy i mean for example aluminum smelters have done exactly what you just described because aluminum is only cost effective to smelt when you have excess energy like you've got spot markets where the prices are super low so you see you see aluminum smelters and extra dams all over the world and when they can't use up their energy they smelt aluminum we need a lot of aluminum smelted right sintering concrete right like low carbon concrete we're gonna have to like in the next 50 years we're gonna have to move every coastal city in the world 20

kilometers inland or uphill right like we're gonna need a hell of a lot of concrete and basically like by fermi approximation the total carbon budget of the planet is a rounding error on aluminum and concrete and both both of them are completely amenable right you could absolutely imagine a plant that just centers you know concrete or smelts aluminum when the sun is out or when you know when the there's excess gas or whatever and then those prefab slabs get turned into cities somewhere as we as we cope with the fact that our planet is swiftly being rendered uninhabitable so i just think that it is rivalrous right i think that that uh ultimately there is rival uh that those are rivals for other energy uses and that there are lots of

ways we can you know use energy uh opportunistically for purposes other than uh you know proof of work calculations right yeah i mean of course the other the other point to make here is that you know many of the up-and-coming and some of the largest crypto networks don't use proof of work no longer they use proof of stake which actually doesn't use up energy of course bitcoin still does right sure who knows if bitcoin will ever move to proof of stake but right but isn't proof of stake all based on like isn't i don't understand proof of stake i confess but isn't my under my very like vague understanding of proof of stake is that you have some proof of work asset that you then use as your proof of stake isn't that right

no no okay the way i would describe proof of stake is almost like so let's say if you take the the bitcoin network right and you look at the distribution of the hashing power in the bitcoin network and it's like oh you know this miner is doing like 10 of the mining some other miners doing two percent of the mining and like let's just say you virtualized like you said now you can only mine sort of in proportion to how much you have of a particular token but you don't have to do all the work right so you almost like virtualized is like block production rights and then you know if you have to basically hold

a certain amount of some asset to produce blocks but you don't have to do all of the ha all of the proof of work anymore and then how you how you create the asset i mean for the most part it's been sold i you know i just sold in you know these kind of token sales or you know often it might be some mix between you know like some of it is sold some of its development team some of it might be like ecosystem funds and bounties and community grants and like like lots and lots of different stuff right all right i mean that i would will certainly look up more about proof of stake it does sound fascinating as i say you know i only have a very cursory understanding of it i think i saw saturn on one talk of it about it at um devcon in

prague a couple of years ago but it's like one of a million technical things i'm trying to keep track of well we've got lots of episodes above the stage go back and listen well i'll go and check check them out but then the last pieces is economic and i am a modern monetary theory deficit hawk skeptic who thinks that that government programs are not paid for with taxation that the deficit budgets are not a problem that they or or aren't necessarily a problem that they're extremely poor proxies for whether or not you're creating that inflationary pressure um and that particularly now with so much of our economy imploding and and our economic activity imploding

uh you know i don't think that having uh arbitrary limits on the monetary supply is good for our civilization i actually think that it's like potentially terminal for our civilization you mean fixed supply crypto assets are yeah yeah okay yeah i mean i think i think that like the story of money is really that governments create money when they when they type zeros into spreadsheets and that then when they tax money they annihilate it and that the thing that creates uh pressure on prices is when governments try to procure things that the private sector is trying to procure and oftentimes there are things that that the private sector is not trying to

procure and the government can spend as much as they want on that like for example the labor of people who are unemployed is not an asset the private sector is seeking to procure and so you can type as many zeros as you need into a spreadsheet to procure that labor and put it to productive use and spare people the incredible indignity and harms of uh protracted unemployment which you know there's there's pretty good evidence that second it's second only to the death of a spouse in terms of the toll it takes on your mental and physical health and that that work can go into things like remediating uh the climate emergency which we're going to need a lot of and that you can only do that if you can control your monetary supply let me sort of share like my fault in

that which i i think is shared by many in the crypto space and which i think this term was made up by like nick sabo of like cantillon insider but basically i think this was some economist who argued that you know when you have newly created money that enters society that you know there's sort of like some place it goes first and if you kind of get it first or like if you have to sort of access this printing press that then you have this enormous advantage and that then the the effect we've had was that you know maybe there's like some banks and financial insights and stuff that are are able to like monetize their you know proximity to

the money creation process and that that is actually a massive driver of you know inequality and that then if you have uh you know like cryptocurrency systems that are like competing with each other you know that then you kind of maybe get rid of this source of inequality well i mean i think that that is true for the primary market for bond sales but that's not what i'm talking about i'm talking about automatic stabilizers right like we we like we try to do um offsets for public spending through bond sales as a way of effectively uh sequestering money so the government spends some money into existence and then it invites some people who have money in what amounts to a checking account

at the fed to move it into a savings account right to buy interest-bearing bonds and you know there's some good stuff about interest-bearing bonds right there they're like a good safe asset if you're trying to fund a pension plan i would just rather fund the pension plan the way that we fund the military right just by typing zeros into a spreadsheet in fact i'd rather stop funding the military and start funding pension plans but um other way that money gets spent into existence is through automatic stabilizers so you have some part of medicare not not all of medicare but some of medicare for example is fully funded it doesn't have a trust fund it doesn't have an allocation it just has there's a mandate to fund it which means that congress doesn't allocate for it you know 70 of congress's budget is non-discretionary this is a piece of it

so congress passed a law saying however much medicare costs this year the treasury will make that much money they don't sell bonds they just make the money right and so the person who's in close proximity to that money is a doctor treating a patient right uh and i'm not gonna sing the praises of the american health care system here but you know that is not what we think about when we think about the primary bond market and inequality if there were a jobs guarantee then you know that was federally funded and locally administered where instead of maintaining a buffer stock of unemployed people you maintained a buffer stock of um of shovel-ready jobs that the day you lost your job you could just walk into another job that your community needed and that it had voted on and that was

made through close democratic control and that was fully funded by congressional order yeah congress could sit down and make a new congressional order that changed it but there's no primary uh bond market that exists to offset that it just gets spent into existence and so the person who's closest to that money is unemployed people yeah i mean we did a podcast with you know this venture capitalist called albert wenger a while ago and he ha he has his proposal in like a book he wrote that the he thinks the money creation process should work by basically just giving people like sort of as basic income the money directly right so that all the money is kind of created through that mechanism

yeah i mean the the problem with basic income is that it in a highly unequal society it's an it's an inequality exacerbator so imagine two people one of whom has all of their basic needs now met and is in fact you know socking away a hundred thousand dollars a year in a 401k and you have another person who cannot meet their basic needs and whose basic needs are now met through a ubi and they both get you know the andrew yang thousand dollars a month right and assuming that that's enough for the person who can't meet their basic needs to meet their basic needs they now have all their basic needs met the person who doesn't need any extra money just puts twelve thousand dollars extra

a year in their 401k and with compounding interest at a pretty modest rate ten years later that person is a quarter million dollars richer like i'm not a big fan of means testing because means testing produces all kinds of grotesque outcomes but it suggests that the that the you and ubi is not going to make a uh you know address the inequality that we worry about and so if you're not going to address the inequality that way you know yeah i'd rather have an unequal society where the people at the bottom have their basic needs met but is there an alternative to means testing that we can use to produce positive outcomes and that is universal services rather than universal income so we know that for example that the

health problems that are both comorbid with poverty and exacerbate poverty don't appear in societies with universal health care so rather than universal income that you spend on health care you just give everyone universal health care free at the point of delivery with a single payer or state administered and then you just don't have those exacerbating effects a universal job guarantee as opposed to a universal income guarantee that would not displace disability payments or unemployment payments but would instead be a way for people who are actually looking for work and who the private sector doesn't want to employ can just walk in and get a job that is paid us at a socially inclusive wage with a full suite of benefits

and that is funded as a financial stabilizer would not need any kind of um you know explicit intervention beyond the set and forget part of of creating this program and the routine exercise of laying out community jobs that the program would fill and so what you get is the instant that the market collapses right the day after coronavirus sends out layoff notices across the country that very day everybody who's been laid off can have a new job and congress doesn't need to act or even assess it because it's an it finds an equilibrium when the private sector recovers you know there's this argument oh well

now the private sector has to bid against a socially inclusive wage i'm actually not opposed to the private sector having to pay a socially inclusive wage in order to have a business if your business only survives if your employees are on food stamps you don't have a business you have a government subsidy so you know we then the private sector as it recovers will have a stock of potential employees yes they will have to offer something over and above what uh what a jobs guarantee would pay but they would also have a stock of employees who hadn't been out of work so one of the things we know from the literature and that we saw very explicitly after the great financial crisis is that employers would rather pay a premium to employ someone who's already employed right to poach someone else's employee than to hire someone who's been

out of work for six months or more the premium is actually pretty goddamn high right once you've been out of work for more than six months you are damaged goods and you may permanently exit the workforce and so yes employers might have to beat the socially inclusive wage but they also have a much larger stock of employees to choose from without having to suffer their perceived problem of hiring people who are you know chronically unemployed and therefore damaged goods i'd like to bring this back to the to the governance issue um i mean we've been talking about sort of kind of going around that question but i'd like to bring it back to crypto and government specifically and i'd like to throw this idea at you and see you know how you respond to it i look at the web as a technology that

disrupted companies that previously were seeking rent on information and so you know we see this with like the publishing industry the newspaper industry the music industry the movie industry specifically and for me crypto is like the next step in disrupting big powerful organizations and these are the big powerful organizations that govern the world so you know governments uh central banks and the financial system and i wonder if you know with with all of these sort of criticisms that you have about you know how democracy functions and you know regulators being corrupt et cetera like influenced by lobbyists and all that if you think that crypto as a tool for governance

could bring good in the world by eliminating some of the you know the flaws of the discretionary aspects of our political financial monetary system that are so interwoven with one another i i don't see how i'm willing to be convinced but let me tell you why so we do have another form of money creation in our economy which is credit money that's created by banks right you know they they have fractional reserve requirements you know again in the same way that governments don't take in your taxes and use them to pay for services like that would be like apple collecting your itunes gift certificates and then circulating them out again because before they can sell anyone a new itune in the same way banks don't take our

deposits and lend them right banks banks you know when you get it when you take on a mortgage the bank just adds some zeros to your balance it has a you know capital reserve requirement but it doesn't it doesn't give you it's not jimmy stewart and it's a wonderful life you know your money is in fred's house and tommy's bar right it's just like your money is in a spreadsheet and the thing is that there is a sectoral balance between the private and public sector all of the money in circulation today is money that the government spent and didn't tax back or its money that the banks created and the money that the government spent and didn't tax back didn't cost anyone anything right if you get some medicare benefits uh and then you spend them and then the person you spend them with uses them to

buy a candy bar nobody collected rent on that money but bank money create creates rents right loans create rents and so the austerity movement is as much a movement about having a source of income from other people's need for capital when when you look at governments that have attained so-called balanced budgets like that the clinton government what you see is that for every dollar they withdrew from the economy by by dialing down spending or dialing up taxation was a dollar that the economy didn't have left to spend right that that was no longer in circulation and where that created a shortfall of dollars

somebody made rent by by lending dollars right the government's fiscal agent the bank right banks are all chartered by governments were then able to take the fact that the government wasn't spending enough money into existence or was taxing too much money out of existence to charge rent on every business that needed capital for its operations and so they became a gatekeeper to a successful firm if because firms need access to credit and so when there when it wasn't available you know your credit need goes up when there's not as much money in the economy and so you then go and you get your money from the bank the bank charges you interest on it so i think that if we're worried about rent seeking from money

then the and then we have an answer right that that is to have public money instead of private money be the thing that provides enough money into our economy and we use automatic stabilizers to figure out when we need more money and when to take the money out well i know we we are kind of at the end of our time i think there's like so much more we'd love to talk with you about but i guess we'll have to wait for some other time maybe one thing to wrap up here i mean you've done like so much interesting work and you know there's probably a lot of things you know from your novels to maybe your kind of daily email or like some other things that you know people may want to check out

like what's the best place people can learn more about your work and like what are you spending most time on like thinking about and working on these days yeah well it's a real split so i i have a new novel about to come out which is the third little brother novel it's coming out in october it's called attack surface and it's about uh the young woman masha who's at the beginning and the end of the other two novels and the first novel ends up working for the dhs as a spy and in the second novel goes to work for a military contractor in the third novel we learn her story learn how she did that and how she is today working for a company much like palantir or the nso group developing cyber weapons that are deployed against pro-democracy

revolutionaries in the former soviet union and she comes back to san francisco where her best friend her childhood best friend is now a black lives matter organizer in oakland and who is being targeted with the same cyber weapons that this woman developed to use uh against democratic revolutions in the former soviet union and against jihadis in in iraq and she has to reckon with having worked for the wrong side for all these years and and what it means now that that stuff has come home to roost for her i think it's a good book i mean i i really do i i have this sense that it's a book that's really of the moment you know i finished a book that turned out to be about cyber weapons being used against black lives matter organizers

a year ago before the current round of things and it feels like i really put my finger on something the afterwards to the book are written by uh runa sandvik who's from the tour project and who previously was in charge of opsec for the new york times newsroom and john and ron diebert who run citizen lab who are the forensic specialists who unwind the attacks uh by cyber weapons against pro-democracy movements around the world including uh in egypt and in ethiopia and in the us and mexico and canada he's um he's a an amazing expert on this stuff and both of them sort of in there afterwards said this is this is very representative of my work my work is underappreciated

it's very important and this book feels like it surfaces it so at the risk of sounding a modest i'm very excited about this book and i'm working on a new novel that will come out after it called the lost cause that's a utopian post-green new deal novel set in in burbank california where i live now that's about truth and reconciliation with white nationalist militias and i think that's also an important question that we're going to have to reckon with is what do you do with people who are on the wrong side of history like even assuming that trump is defeated all the people who think trump is doing a good job are not going to dig a hole crawl in it and and pull the dirt in on top of themselves so what do we do with people who hold

odious beliefs that we disagree with after our beliefs are ascendant and um you know this is not a thing anyone's figured out it's an issue that's very salient in respect of me too and uh with with other revelations of historic abuse and it's not a question as a society we're good at at answering so i'm trying to answer this in fiction as well i write a daily uh newsletter and blog called pluralistic it's an open cross-platform no surveillance way of finding out what i think is important it you can read them as twitter threads that comes with surveillance although it's just from twitter not from me if you visit my my uh twitter page twitter.comdoctoro every day there's a pinned tweet that

has links to all the threads i posted that day and you can read them that way but you can also sign up as a newsletter there's no tracking no analytics you can go to pluralistic.net which is a wordpress site with no embedded tracking or analytics i don't even embed youtube videos uh i rotate my logs every 24 hours so there's no no surveillance there and it's also available on mastodon and on tumblr obviously tumblr has a terrible amount of surveillance as well so i would encourage you to use one of the low surveillance options but they're they're all identical and they're all posted together in real time so you can follow it that way great well thanks so much for joining us uh cory and uh we'll keep following your work i've certainly been following you for quite a few years and um i

i love this uh your your pluralist um newsletter i check it out once in a while thank you yeah and i'm so i'm sorry i'm not more bullish on bitcoin i mean it's not like i don't like the people who like bitcoin but i i hope i gave you a good account of what it is that i worry about in respect to bitcoin it's not reflexive it's it's thought through i may be wrong but i don't hate it just on general principles or something i i have specific articulatable objections and thanks for sharing them yeah absolutely it was great talking and uh i am going on vacation the week after next but i i purchased your little brother book so i think i'll be reading that one oh very good well i hope you enjoy them thank you

yeah so as someone who maybe wasn't so familiar with with corey's work and who just kind of got introduced to him recently what did you think of this interview before we did this interview i you know you you did this reset everything event right a few months ago where corey doctor spoke and at the event i saw like the last 15 or 10 minutes of this thing but like i watched this actually we should put that in the show notes yeah definitely uh the link to that video because he did a like just an outstanding job there and like he's so uh like so sharp so fast with his mind so i was really impressed and the guy certainly can riff yeah yeah

and so i'm actually really excited to sort of you know discovered him and to be exploring his work a little bit and you know i look forward to reading some of his novels and yeah so i think my tendency would be uh i'm probably more a bit more you know libertarian leaning than he is and maybe less bullish on regulation and policy but but yeah i think i'm i'm looking forward to like learning more about you know his perspective and his work yeah i mean dr corey certainly does have um some some some marxist leanings uh you know in some respects i think that kind of shines through a lot of a lot of his opinions and his works and

um you know he is the son of of of some some uh russian and ukrainian uh you know uh immigrants so maybe that has something to do with it but um no i mean i i mean i've been following him for for for years kind of like you know not you know religiously but you know following his like because he was formerly like a writer at boing boing and um quite active on twitter and i i also really kind of started you know getting a sense of his you know political views during recent everything so that was kind of like the first time that i got to talk to him and interact with him in a meaningful way but um what i like about him is like you know he he he kind of embodies the intersection we kind of talked about

this at the beginning of the interview he kind of embodies this intersection of like art and technology and cypherpunk culture that for me is like very reminiscent of like the 90s internet and it just like it it conjures up all these like memories of like being on the internet as a child in like the mid 90s and um and you know at the time like he you know was much older and like you know it was kind of like in his early 20s or something but you know it's like cory for me kind of represents like the early blogger you know like the the people who were like the emblematic bloggers of like the early 2000s things like that so yeah it's like um he's kind of like part of internet

history for me of course i think he would probably disagree right with the marxist thing right because he says you know i mean that's the interesting thing right he very much says oh it's about more competition and like more regulations about more competition and stuff like that now i like i kind of like understand that argument sort of in theory but i'm a bit skeptical of its like validity you know i mean if you've seen now in the last year you know you've actually had facebook and like these big tech companies in google and you know they say like oh we want more regulation like they literally said that and of course

if you look at gdpr as an example i actually went gdpr when i learned a little bit about gdpr so gdpr for those who don't recall is the sort of european data privacy law and when i originally kind of like read about that and the way it's done i was like actually this is pretty good right it's pretty like sensible in many ways and it tries to give like sort of control over to people over their data but then if you look at the reality i think it's just creates like a big administrative burden people like click their rights away in some way and you know the it's not it doesn't really actually

impact businesses like facebook at all and so i i think in reality what i'm afraid of much more is that you know you create more regulations and rules and it just makes it actually it sort of solidifies the position of the incumbents makes it harder to compete and in the end it doesn't actually it does maybe the opposite of increasing competition i i guess he would say that's because the you know the particular policy is wrong and you make good policies and has the opposite effect but you know i'm a bit skeptical there i mean i think in the case of gdpr like gdpr i agree with you you know it

does little to protect people's rights because it actually just lets people sign their rights right also gdpr has like you know if you if you go at a higher level it's it's it's in it's uninteroperable right so like your gdpr rights don't so like you're as a as a user you don't have any clear visibility about like who actually has access to your service once you click your once you've consented your data away unless you're keeping a ledger of who has access to your data it's very hard to kind of follow the to follow it and there's a whole bunch of other problems with it in with regards to the you know the sort of current antitrust you know debate that's happening uh certainly like around uh the

congressional hearings and things like that i think that the problems that exist in tech these days has more to do with with um you know like cory was saying uh during the interview is like this absence of of of respect of like anti uh antitrust laws right like companies like apple and facebook are able to have antitrust behavior and it goes mostly unchecked the evidence of this is that during the congressional hearings most you know a lot of the questions that were aimed at tim cook had nothing to do with antitrust uh while i think apple probably within all the companies that are there is the one that has that is the most

uh flagrant you know like doing anti-trust uh having anti-trust or behavior like for example inside store etc so i think that's the bigger issue that needs to be resolved in order to create more competition it's a tricky question i think there's definitely like a part of you that i think said okay but you know if if some company like apple appeases its market power like too much it actually you know would create a competition i mean there's definitely sort of like you know a question in me whether you know if a company like apple abuses this power like too much then it creates the competition like it creates

the incentive and the opening for someone else to come in and disrupt that and so that like maybe socially you know it's not such a bad thing but of course it gets complex and you know i in the reset everything example right he was talking about the instance of like broadband and like where maybe you have these clear monopoly situations and like their kind of the abuse gets you know it gets obvious and of course there's like an interesting question of like you know is in what way is that similar to something like a smartphone i think it is very similar to something like a smartphone where

you know there are you know for all intents and purposes two platforms which exist um those platforms have monopoly essentially on anyone who wants to create a sustainable digital business you know through their app stores and whether or not you're able to be on those app stores is very much at the discretion of those businesses of apple and google but yeah there's an entire there's an entire conversation to be had around this i think that goes beyond the scope of this interview but it's definitely something that i think is really interesting and you know i would encourage people to to check out and we mentioned during the interview ben thompson you know he he does a lot

of work on this and like i think it's like one of the really sort of sound and reasonable voices uh around like these anti-trust issues um it's got a great newsletter strategy that you should subscribe to if you don't already should we wrap this up let's do it all right cool thank you for joining us on this week's episode we release new episodes every week you can find and subscribe to the show on itunes spotify youtube soundcloud or wherever you listen to podcasts and if you have a google home or alexa device you can tell it to listen to the latest episode of the epicenter podcast go to epicenter.tv subscribe for a full list of places where you can watch and listen and while you're there be sure to sign up for the newsletter so you get new

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