Why Arjun Sees a Link Between Pope Leo and Bitcoin

Transcript

The Pope recently had some things to say that we want to get to. Um released the first encyclical of the Magnifica Humanitist titled on safeguarding the human person in the time of AI. Uh this was presented along with one of the anthropic co-founders Chris Ola. And Leo had a lot of things to say here, not just about AI. We'll get to something else he said as well, but he said artificial intelligence needs to be disarmed, deliberately chosen, uh because this moment needs words capable of attracting attention. He said AI is an instrument of domination, exclusion, and death if unrestrained and that the pursuit of greater profits

cannot justify choices that systematically sacrifice jobs because the human person is an end, not a means. There were a couple of other things in here, but I also want to get to some of his greater comments on the financial ecosystem at large as it impacts this debate, which was in recent years, finance has increased in importance and has undergone significant innovation driven partly by the introduction of cryptocurrencies. That's right, the Pope is talking about crypto. The reflections and observations contained in the teaching of my predecessors, particularly in their encyclicals, have highlighted how the financial intermediation sector, when operating without the necessary anthropological and moral foundations, has not only

produced manifest abuses and injustice, but also demonstrated a capacity to create systemic and worldwide economic risks. On the other hand, the Pope also said, "Savings transformed into credit for the real economy, thereby creating both jobs and self-employed work, remains central for the development and the investments that must accompany ongoing transactions. The social function of credit remains irreplaceable." So, there's a lot to unpack and I put those side by side because the Pope seems to be saying, "I'm not for or against either of these tools. It's a matter of how you use them, but Chris, I want to start with you. I know you had some views here.

What did you make Pope Leo's comments?" >> Well, when the when the big man talks and and I'll just say that Villanova is having a moment right now u between the Pope and and the Knicks. Um, but I think it's absolutely fascinating that the the Pope is talking about these technologies and even crypto and and the church has had a long storied relationship with technology going back to the Gutenberg press. Uh, in the beginning they thought it was awesome um because all of the uh it was had gave them the ability to spread their teachings but then you know the Protestants got a hold of it and they were like wait a second we need to control this stuff. And so it's just so fascinating to me that this is another iteration of the Catholic Church, uh, you know, having a relationship with

technology. Um, and by the way, I don't know if you guys have seen the stats, the uh, the Catholic church is doing very, very well amongst young people. Uh, I was down at Georgetown recently and I don't think it's um, an anomaly. Like I talked to the kids there and they're like, "Oh yeah, um, the church gives me meaning. I lost it in social media. Now I'm finding it again." Which is just fascinating. So these are part of big macro trends that are happening. Um I think at a very basic level the fact that the pope is mentioning crypto is a net very much positive for the space because talk about distribution the pope has massive distribution particularly from a mind share perspective and a mainstreaming perspective. If this was fringe technology I don't think the pope would

be talking about it. That goes for AI too. He's talking about AI and crypto together. Uh how many times have we talked on this show? These are technologies that you cannot separate. They go hand in hand. Excellent. I thought it was fascinating that he was critical of intermediaries. And my open question is maybe the guy likes DeFi. Maybe uh Villanova's finest likes DeFi. And and I think there's there's a reason for uh for the Pope to like DeFi, frankly, because it does democratize access to financial services and credit. Um things that he thinks I think done right are are are thoughtful.

But I mean in my mind this is absolutely fascinating. >> Yeah. Rob the Pope's comments. I thought they were very thoughtful. You know he was invoking Emanuel Compt when he said focus on people as ends not as means. He identified AI as a technology of tremendous genius. He said it's a powerful tool. But what he he also said is he doesn't want to disinish he doesn't want to disinish the role in of human dignity. So you sort of think about things like automated lethality and the rise of drones. You have decision-m that's done by an AI. There's a risk of dehumanization creating a distance between one human being and another. Um I think that may have been

what he's addressing. I thought all those comments u made made a lot of sense. He also highlighted an earlier speech a few months ago around the risks of creating concentrated wealth in and power in the hands of few people through AI which is a legitimate risk. You know if you control AGI you can spin up businesses divisions on the fly. You can marshall execute resources. Citadel is well positioned to benefit from AI. You know if tokens become money and tokens are claims and productive assets and they're going to trade which they will in the future. uh you know there are legitimate concerns around this. So I think he identified the right issues. Uh so I thought it was a you know I thought it was a very

well-ritten speech. >> You know there's um I think the crypto philosophical lineage I think is kind of important to think about. You know there's a and and I spend I don't know why I do this but I've been spend spent a lot of time thinking about this. um you know like Judeo-Christian philosophies. I think there's a general thread connecting what um the Pope said and to the entire crypto philosophical project right all the way um all the way back to the Bitcoin white paper and I and I don't think it's a stretch actually. So if you look at like traditional Catholic social teachings, it has a it has a principle called like subsidiary um sorry subsidiary rarity.

Um and that idea is that the decision should be made at like the lowest competent level and it's not centralized upward. And so that principle tracks back to like Augustine City of God where the worldly power is always presumed to be corruptible which is what we're talking about right now. And the only stable institutional design is one that resists concentration. So when he's speaking about concentration, um this is the same thing if you read the Bitcoin wiper white paper is that the lens that Satoshi is essentially arguing for is monetary subsidiary subsidiarity. Sorry, I always mess that up. And so it pushes decisions down to the protocol layer rather than upward to a central authority. And this is what we always talk about, right? Like what what

is the point of why we started this in the first place? Why are we excited to get up? And so I think when the pope is framing things in terms of AI, I think it's the same terms which is how do you resist concentration? How do you protect in this specific case human agency regardless if you think it's right or wrong? And so he's kind of drawing on an intellectual tradition that I think um is also a crypto philosophical um and what is inherit. So I'm not, you know, I wouldn't say it's like a metaphor or anything, but it is the same philosophical comment expressed in different vocabulary and we're all thinking about the same thing. So the political implication I think is that a decentralized infrastructure argument now has more of a moral and theological

backing for I don't know the billion and a half people that like follow Catholic teachings or the global institution which should show up in EU regulatory debates. It should show up here in the United States. it should show up in the global south policy etc etc and hopefully at the next round of how people think about AI and finance legislation um or in some cases non-legislation we just continue the path and so I I my hope is that that that at least his um his essay or his post or his speeches um gives like a real shift in that type of political coalition and thinking um and I think maybe the markets may not price that today even if that is the direction that we go down >> I think there are some >> Austin Sorry, Austin, you have to quote

Aquinus now. We got an August. >> That was thoughtful answer, man. >> I am. And I'm going to go a different direction here. I'm actually going to like pull out another philosophical thread which I found it interesting to read this with Leo being the first American pope because part of the exact same framing that he's putting there also shows up in some of the political theory around the founding of the American system at large, right? which is this idea that concentrated power is inevitably corrupting in whatever form it is given and that one of the ways to fight that is of course decentralizing it. I will remind everybody the first American government actually had to be redone because it was too decentralized to function with the Articles of

Confederation. But two, if you read the Federalist paper, it's or papers, excuse me, it's the idea of having all of the different nodes fighting against each other and working at cross purposes. Because if we believe in inevitable corruption among these things and that they're fallible sort of creations of man, you pit the states against the federal government. You pit the federal government against itself with the executive and the legislative and the judicial separation. It's fascinating to me to see related principles expressed in theological terms because I'm wondering if what we're moving towards here, especially in the world of AI and like fears about AGI and jobs, is a greater appreciation of not what I will

call anonymous decentralization, but call it non anonymous decentralization, right? like actually allowing individual people to get their hands on the decision-making apparatus and be respected in that framework. So I'm wondering if the pope is perhaps going to create an alliance of strange bed like bedfellows here as we start seeing these disperate forms of philosophical thought run together because a lot of what I just said market economists would be all over as well from a competition perspective. >> Yeah. And you know I think the forgetting the actual quote um but like there there was a quote around the separation of powers federalism bill of rights etc. um you can make the argument

that it's the same structural separation argument applied to like political power and it traces back again I mean this is you know cath catholic natural law philosophy and so you know when you think about all the folks that wrote this and then and and then eventually you had the American founders sure I mean you can say you can you might have this perspective that um the American pope is referring back to this I I think it's more important which is um what's the forward implication of when people speak about this and does anything happen? I don't know if anything will happen, but when I think about what we're doing in crypto and then you know it's we're we think about antitrust, we think about mandated interoperability, we think about neutral utility

regulation, we think about ring fencing and so my perspective and and I think actually Trump started this in the United States so credit should be given to who started it um you know after the Biden era is just to get the moral cover from more globally um acceptable and credible voices on ethics and decentralization. Um, and in the moment where we think about American antitrust, I think is is a maybe there's like a political um system that's being rebuilt around that and then AI being the second piece of that. And so then we think and then and we can use the same logic around financial infrastructure, payments network, exchanges, stable cocoin issuers, custody, etc., etc. And they all run on a winner take all dynamics in the past. Question ends up

being what does it look like in the future? Um, that's open and neutral. So you guys, are you saying that the Pope is into crops? >> I hope so. I hope so. >> Sorry, I couldn't help it. Austin, >> I'll throw in another >> Let me explain what crops is. Like that's that's the Ethereum Foundation's doubling down on it philosophy on censorship resistance, open source, and privacy. So >> I don't know. It just sounded like a crops thing. >> You just you should just say C Os. Well, I'll throw another biblical metaphor. There's this comment Sam Alman made referring to AI as magic intelligence in the sky. When I first heard that, I said, "Gee, this sounds an awful lot like the Tower of Babble." The Tower of Babel, of course, was the first

human centralized platform. It literally was about translation, which is a core use case of AI. It's built towards the heavens, and it was about ego over humility. Um, and so I think there's a good message for the pope. It's like, hey, you know, there's is not a substitute to raify synthetic intelligence above human judgment and intuition. >> Did you just make an argument for building a single giant AI data center into the sky? >> Basically, the color bubble is like a stack of GPU chips in this metaphor, if we're >> hold on a second. For those like checking the potential markets, >> infinite band is, you know, the connectivity. Go ahead. Rob Rob did his,

you know, every show bashing Sam Alman. So, he got it in, guys. >> Not a nothing burger. Got it in. >> So, all right. Let me let me push back slightly here and say I find it questionable that the Pope is arguing for complete decentralization, right? given the nature and structural design of the Catholic Church, just hypothetically speaking. But I think the greater point, and this is one that actually probably hits the pivot point of the crops argument, is how much decentralization do you need? Do you need everybody to be their own sort of source of truth or decentralized, you

know, version, aka the Quakers, or do you need a system, if we're going to go in the other direction, where it's okay for there to be some top- down direction so long as it is not absolute in a sense that denies human dignity, which is something that looks more like, call it, I don't know, a semi-permission chain. That I think is an open question. But the interesting thing about the comments to me is less about what specifically is it defining. I think it's very clear from Pope Leo's comments that he's not okay with a system where it's just one or two large companies telling everybody how to think. Aka >> Pope Leo is not a fan of Fed now.

>> But he's a fan of Canton. It sounds like you're saying canon guy. Sorry. >> Canton's not a blockchain. It doesn't belong in Russian. We'll just we'll just throw a stone there. No, but like all facitiousness aside, where I think if his comments are received and Arjun, you made a good point about what what is like the butterfly effect when somebody speaks like this and I think that was very insightful is if there's a downstream argument here that moves towards an acceptance of the value of decentralizing decision-making power and more traditional tech and finance, that's probably a net positive for people in the world over time.

given, you know, some of the abuses we've seen in the centralized system. So, I hope that's the outcome. And for the record, I have absolutely no dog in the fight for the Knicks thing. I'm a longtime Spurs fan, so we'll wait to see who's in the finals there. Chris, if you like this segment, please like, subscribe, and tune in every Monday at 4:30 p.m. Eastern time. I'm Austin Campbell, the host of Bips and Bips, along with my friends Rahm Alawalia and Chris Perkins and our slate of exceptional guests. Every week, we're going to discuss macro, crypto, and the collision of worlds, covering topics that move markets and shape the financial landscape.

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