WBD277 Audio Transcription

Resistance is NOT Futile with Aleks Svetski

Interview date: Tuesday 10th November

Note: the following is a transcription of my interview with Aleks Svetski. I have reviewed the transcription but if you find any mistakes, please feel free to email me. You can listen to the original recording here.

In this interview, I talk to Aleks Svetski, a Libertarian who has written several articles outlining how he thinks an anarchist society would work. We discuss libertarianism, democratic v anarchist societies and the erosion of individual freedoms.

“I want to see a world that is optimised for freedom, not for safety.”

— Aleks Svetski

Interview Transcription

Peter McCormack: What's up, brother, how are you?

Aleks Svetski: I'm doing good, man.  How are you doing?

Peter McCormack: Yeah, man, good to talk to you.  So, we've been planning this show for a few weeks.  We're also, both of us, have got a habit of swearing quite a bit.  Did I send you it after that last interview I did; somebody wrote to me and complained about yours and my swearing?!

Aleks Svetski: A bunch of people wrote to me as well saying, "Loved the interview, but I couldn't listen to all the swearing".  So, I vow to do better!  It's not for those people.  I think, for me, I've also been trying to manage my swearing a little bit, just for my own purposes because, when I was younger, I had a really foul mouth and then I went through a period of -- I completely cleaned up my swearing.  So, believe it or not, a Svetski existed that didn't swear for a whole year?

Peter McCormack: Wow, a whole year?

Aleks Svetski: Yeah, a whole year.  I literally cleaned it up completely; and then it came back.  It's like corona, mate; keeps coming, keeps coming!

Peter McCormack: Well, listen, we'll do our best, both of us, not to swear.  If the odd one slips in, we're sorry; and if that annoys you, well, go fuck yourself!

Look, you've got something on your mind, come on.  You've been pushing me, you've been saying you want to make a show, we're going to talk about state stuff.  I'm going to outline my position first, and then we're going to dive into it.  And, this is one whereby I'm not here with notes.  I normally have notes and questions.  I'm here just to shoot it with you.

But, look, my position, my very, very confused position, is I am a believer and support of democracy because, like the old Churchill statement, which actually came from somebody else, but you know, "It's terrible, but everything else is much worse".  I didn't, though, vote in the last election, which makes me kind of a hypocrite, but just because I felt like neither was worth voting for, and I think choosing not to vote is a choice within democracy, and you have your reason.

But at the same time, obviously, being in the Bitcoin world, I get exposed to a lot of kind of libertarian and anarchist ideas which, on paper, I absolutely, fundamentally, 100% agree with; but, I've always said I struggle to see how it actually plays out.  That said, at the moment, I just did this interview with Raoul Pal and halfway through it, my brain started to work and I was thinking, well, perhaps we're evolving to the point to get rid of the state and it's going to be like a natural conclusion, rather than some kind of political goal.

But, look, it's a very confused position I have; I sit in between it all.  And I think, in some ways, also because it supports the show, right, helps me to do the interviews, but that is my position from the start and that's where I will be during this interview.

Aleks Svetski: Cool.  And on my side, I mean, anyone who has followed me knows my position on the state and a lot of people think I started off libertarian, and if you look at some of my early talks back in the day, I was a strong believer that the state needs to exist; I even believed that taxation needed to exist.  But, more and more I've gone down the rabbit hole, starting from a particular set of values and what I will describe as "a priori truths", and that's some of the things I want to go through today: you can logically deduce things that make sense and bring you to a point of, hey, this is actually how things should work or, this is actually how things should function. 

And my argument's going to be that, this idea of "democracy" which, in my mind, is largely a farce, is part of the evolutionary process to something else, in the same way as the empires came from these large-scale slaved kind of tyrannies and then, empires then yielded the church; the church yielded the nation state; now, the nation state is likely to yield some sort of technocracy, technocratic kind of Big Brother kind of state. 

But, each thing yields something else and along the way, there are these almost bastions of objective truth, which is sort of where the libertarian ideals sit, that allow some sort of semblance of freedom and progress that basically carries the rest of the junk along the way.  And, what I think we've done is we've confused the reason for our progress with democracy, as opposed to scientific and technological evolution, particularly over the last couple of hundred years.

And, what I'm going to kind of argue is that if we extend the timeframe a little bit, we'll see that libertarianism is more aligned with how natural law functions and it's where gravity's going to pull us anyway.  And, you know, progression happens despite, or in spite of, things like the state and centralised control, etc; but, those things have sort of come along for the ride because true, raw, economic power is far more powerful.

So anyway, I'd love to get us to set a frame to begin with and find a common ground, because if we've got some truths, some values, some principles that we can both come back to during the conversation, we can actually have a fair and honest scrutinisation of our opinions, you know.  So, we can agree or disagree whether or not a plane should exist, right, but we can't argue about gravity.  With poverty, how we might fight poverty might differ, but we can both probably agree that it's a bad thing.

So, I think if we can find some common grounds, I think we'll actually learn something out of this, instead of just you talking Chinese and me talking Arabic and us not understanding each other.

Peter McCormack: I think we'll find a lot of common ground.  We talk offline; we've had a couple of phone calls and talk over Telegram and I think we have a lot of common ground actually.  I think there's a lot we agree on.  I think you've done a lot more research looking into how we progress with this, like the evolutionary process; whereas, I'm a bit more in the now, a bit of a doubter saying, "Yeah, but, that's not going to work because humans are selfish", or whatever reason.  But, I agree, so if you kick us off where you find us the common ground and we'll go from there.

Aleks Svetski: All right.  Well, have you heard of the notion of an "a priori truth" or an "a priori fact"; have you come across that?

Peter McCormack: Nope.

Aleks Svetski: Okay.  A priori basically means it's a fact that's not subject to verification or falsification on the grounds of observations or observed facts, and there's no contradiction that can exist.  So it's like, we can discover that water boils at 100 degrees, but we had to discover that through testing and we look back on empirical evidence and every single time we test it, we find that water boils at 100 degrees.  So, you know, we've found a fact; but, that's not a priori.

Whereas, something like maths, for example, maths was always two plus two, so that's a fact that is always true, it's indisputable and we didn't have to observe it in order to discover that it existed before observation.  So, a couple of other examples, just so we can sort of get our heads around this is like, humans act; that is a priori truth because, even in denying that humans act, you just performed an act.  Or, all bachelors are unmarried; or no two objects can occupy the same place; or no two straight lines can enclose a space; production must precede consumption.  These are all truths that don't require empirical evidence to prove; they're fundamentally true.

And, this is like the basis of -- there was a philosopher called, Immanuel Kant, who sort of really pushed this concept forward.  And, a lot of Austrian libertarian thought kind of spawns from here.  But, I never hear a lot of people talk about this.  They talk about their opinion more so than starting from this foundation of truth.  And I think, if we start here, we can always, when we branch out to our opinions, we can kind of use some logical deduction and come back to, "Is that consistent with this truth; or is it a load of crap?" 

And I think, a couple that I'd like us to establish common ground with is an idea of -- I've got this little list here of ten deductive truths that we can explore, but where I want to get to is us agreeing, for example, that the freedom to think is something that we both agree on; or, the freedom to speak is something that we both agree on; or, that all individuals are unique and different and that we all subjectively value things differently.

If you and I can agree on those small elements, I think we can really make some progress on this?

Peter McCormack: No, but that's fair.  That's a fair starting point.  I did want to go back, though, just on one point you said, "Production must happen before consumption", which is, I guess, what you're trying to allude to there is the avoidance of socialism, and specific aspects.  For example, you would dunk on universal basic income, because there is no production -- well, there is production before consumption, but somebody else is producing for you to have that consumption?

Aleks Svetski: Well, I think my dunking on UBI is probably going to go back to another one, which is more around who has the right to distribute wealth, and is it the right of the individual who produced the wealth, or is it the right of some other person?  And, we're going to see whether that idea is consistent with if we take the truth that, you are your own property and your work is an extension of your own property.  Do you own that; and do we believe in this idea of private property; or, are we going to be inconsistent in our beliefs and assume that somebody else has the right to distribute what you've produced to someone else?

So, that would be more my dunking on UBI as opposed to this, but I think production preceding consumption, I just fundamentally believe you can't consume that which doesn't exist yet, right, so something has to be produced before you can consume it.  So, as a result, if we look at just basic causality, cause and effect, production always has to precede consumption; something has to be created before it's consumed.  And I think that will sort of touch on some other things, but are we on the same page there?

Peter McCormack: Yeah, no, I agree, I fundamentally agree.

Aleks Svetski: Cool.  So, I'll take you through this little point thing that I have here and just pull me up if at any point, you're like, "No, I don't agree with that", or it doesn't make sense.

So, I drew a lot of this out of Austrian Economics, but we look at starting with the first a priori truth, which is, man, like humans, act.  Even if we don't act, that's an act, right?  So, there's no escaping action.  So, if we start there, then we can make the logical deduction and maintain consistency of truth which is, actions have a purpose or an end, because there is always somewhere that the action is taking us.

Then we can make the deduction that evolutionarily speaking, the intent of that end is to improve one's circumstances.  Now, one could say that, "Oh yeah, well people always perform stupid actions that are irrational and that don't improve their circumstances".  The intent, though, is for some sort of pleasure/pain.  So, we are wired biologically to pursue pleasure and avoid pain; and even though sometimes on the surface it might look like we're masochistic or something, we draw pleasure from these actions.

So, at the end of the day, the end is always in the pursuit of the improvement of one's circumstances, or in the pursuit of pleasure in some way, shape or form; it just may not eventuate that way.  So, that's sort of our third one.  Then we can on to, in order to act, in order to pursue an end, one must have a means.  Then, we can move on to, means are scarce because we live in a physical world; we don't have unlimited resources. 

We can then say, every effect has a cause, and this kind of ties back to production preceding consumption because, hey, welcome to reality.  Then we can move on to, all action takes place under uncertainty.  We do not and cannot know what the future holds, because that contradicts the causal nature of reality.  You would not take action, or you couldn't take action, if the truth was already predetermined.  So, we're moving in a plane of uncertainty.

We can also say, action takes place in the dimension of time.  Time is also scarce and it moves directionally forward.  We haven't yet figured out how to move back in time, and I don't think that's functionally possible.  So, we can then combine all these to then say, this means that all action takes place within the constraint of scarcity and uncertainty; like, that's where all action takes place with the intent of moving in some sort of direction that is for pleasure and improvement.

And then, this is sort of where I'll tie it off here, so we don't get too bogged down in the weeds, but this is where the idea of time preference that a lot of people throw around these days, but this is where time preference emerges.  It's because we're moving forward within the constraints of scarcity and uncertainty, what it means is that we value having something today, or now, more than we value having something later, because the uncertainty of having something scarce later lowers its value later.  So, we always have a positive time preference.

But, what we've found throughout society is that the lower that time preference, the better we allocate resources today versus spending all of our resources today.  And, therein lies the foundation upon which effectively economics emerges and civilisation actually emerges from there.  So that's, I think, a really important ground.

As we're discussing different points, you know, whether we're going to talk UBI or socialism or democracy, all this sort of stuff, I just want to come back and say, all right, does this concept or this idea or this way of thinking or this way of living, does it contradict these fucking truths because, if it contradicts that, then we know that that's probably not what we should be doing and we should be sort of trying to come back to what is natural and true.

So, was there anything from all of that that you would fundamentally disagree with, or that you think is madness?

Peter McCormack: No, no.  I think we have to see how it plays out in terms of the explanation and then, if you deduce things, then perhaps I will challenge it, but no, that's seems a very fair starting point.

Aleks Svetski: Okay, cool.  So, I guess I'll throw maybe one thing in there, just so people can understand --

Peter McCormack: Actually, let me do a couple of questions first.  Firstly, I've asked this before on the podcast and I know I should know the answer, but what is the difference between libertarianism and anarchism?

Aleks Svetski: There's very little difference, man.  I mean, anarchy is kind of like the natural state of things, basically.  So, if you look at all nature, there's no ruler that is telling all the animals and all the plants and everything what to do.  So, anarchy is like, all right, nature does its thing; it looks chaotic, but it's beautiful and that's where all the diversity comes from.  So, I mean, some people might argue that there's a God and there's a grand organiser of things but, at the end of the day, you can sort of align the notion of God with the notion of nature, which is this beautiful complexity, which is anarchic in nature.

Now, libertarianism tries to take anarchy and apply it to how human beings can behave as close to natural order or natural law as possible; and, that's why they're so similar.  Whereas, people's view of anarchy is just chaos and a bunch of people stabbing and shooting each other because, apparently, that's what humans should do when they're left to their own devices, which is a preposterous point, right? 

Usually people lose their minds and push back and punch, stab and kill people if they in some way feel threatened, or have no choices, or something like that.  Or, if we've completely avoided …  I mean, even "savages", you know, we go back to the early times, didn't randomly go around just killing everybody.  We sort of grew out of the savannah and got to here somehow, and that somehow was really anarchic in nature; and we didn't kill each other, otherwise we wouldn't be here.  So, anarchy's sort of the natural state of things, I would argue.

Peter McCormack: Okay, cool.  Okay.  And so the next thing is, goal-wise, I think any listeners understanding, what is it we're going to be, or let's say from your point of view, what is the case you're going to be arguing for?

Aleks Svetski: Okay.  I want to set some foundations for where good values and morality sit.  So, for me, I want to define what is negative and what is positive, as basic objective morals and values.  And then, I want to apply those to systems of current organisation, whether that is democratic, whether that is anarchic, you know, all that sort of stuff; and hopefully come to the end of the conversation to say, all right, A does not sound like a good thing and B sounds better, or C is, whatever, and see if we can get to a point where people redefine in their minds what anarchy is, what libertarianism is.

And again, I'm not preaching some utopian bullshit; what I'm preaching is the defence of what is likely messier, but more free, as opposed to what is sanitised, sterilised and supposedly for your safety, which is this idea of democracy or the state.  So, that's kind of where I want to land.

Peter McCormack: Okay.  But ultimately, what do you want to see; what's your end game here?

Aleks Svetski: I want to see the ability for -- I want to see a world that's optimised for freedom and not for safety.

Peter McCormack: Okay.

Aleks Svetski: So, for the individual, not for the group.  And, I think when we build strong individuals, where we identify the positive as the freedom of an individual to pursue their ends with their own means, you know, the voluntary participation in the pursuit of those means; the freedom to think and speak one's mind; the freedom and right to protect yourself. 

I think, if we can establish a world that looks more like that, which is much more local in nature, which is voluntary in nature, where personal agency and more importantly, personal responsibility is what decisions are hinged on, not somebody else's decree, or what I call "fiat authority", as the way things should be run; because, I think humans get weaker and dumber and what happens is, the individual dissolves into this homogenous sludge of a collective, which I think is unfortunately the trajectory we've been moving in for quite a while now.  So, that's kind of my end goal here.

Peter McCormack: And, you have a good lens for this being from Australia, with the kind of dystopian nightmare that's happened there.  Although, I do want to talk about, I will talk about, we'll get onto coronavirus at some point; but, I wasn't too aware up until about a year ago what was really happening in Australia. 

I can't remember the exact story I read, but I read something to do with the freedom of the press, and didn't all the papers put out like a black front cover at some point, or a blank front cover, to protest against the free speech rights that have been impeded there?  You've also got quite a police state growing there as well.

Australia, I always had a picture in my mind growing up of this really kind of happy, beach, fun, healthy, laidback kind of place; but, it's going through its own kind of dystopian nightmare and I think, on some measures, it's even worse than the UK?

Aleks Svetski: Well, it is, and this is one of the problems with having no memory of -- a lot of people always talk about -- this is one of those utopian dreams that a lot of the statists and bureaucrats always talk about, "Peace on earth and we want to remove all conflict", and all that sort of stuff.  The beauty of conflict intention and all that sort of stuff, or even the existence of hardship or the existence of differences, let's relate it to a gym.

You go to a gym, you torture your muscles, you put yourself through some pain so that you can grow.  And, in removing pain and creating all these cushions and safety nets, which is effectively what Australia's been; Australia's been one big nanny state that's been out of the way of all conflict basically since it started.  We sit there and say, "Oh, yeah, we were involved in World War I and II"; we sent a couple of soldiers over to Turkey, they got killed, and no one gave a fuck.  So, we've sort of been out of the way of danger and conflict and all that.

So, what's happened is no one's got any sense of how slippery the slope can get, when society optimises for safety and not for freedom.  And I would argue that Australia's just been traditionally the lucky country, because it's been a beneficiary of all this capital and growth that's happened in China and America, and all around the world, and a lot of money's come into Australia; and, we've just been so lucky there because there's all this money coming in and we've had resources that we've been able to dig up. 

And because Australia was built on at least some functional western values that emerged out of enlightenment and England and all of that, it had some good systems and processes that allowed it to enrich itself.  And then, like I said, it got a bunch of steroids from the rise of China and all of that.  So, it's been really sheltered and lucky.

The problem is, in this bid to optimise for some utopian society where safety and all this bullshit is fed to people, it's inadvertently turning itself into a Big Brother state, because no one thinks deep and they haven't gone through the problems of what utopianism actually looks like.  If you want to know what a utopia looks like, it's North Korea because over there, there is no crime; but guess what, it's North Korea!  So, that's the problem that these people …

I was reading an article about the MIT Lab.  They recently created some software which they were trying to use over the phone to basically measure some sort of AI voice-recognition software to measure if people have Alzheimer's.  And now, they're applying it to measure the frequency of coughing and the sound of the cough so they can detect, apparently, whether you have corona.  And, these idiots are stupid enough to think that through their tech, they're helping people; but, they're literally building their own prison.

There's a saying I love from Tony Robbins, "The wall that protects you becomes the wall that imprisons you", and this is the problem with these utopian ideals.  When you don't tie them back to some of those a priori truths that we discussed earlier, you end up building your own dystopia in the pursuit of a utopia, and that's effectively what Australia is.  And, that's why it's in danger of becoming a complete police state, and we don't even have to apply the conspiracy theory lens to it.  It's just pure stupidity; it's because nobody is questioning what these "utopian ideals" can actually potentially lead to.  Now, if you sprinkle in a little bit of conspiracy, it's not hard to see how it's heading down that path.

Peter McCormack: All right, cool.  So, where do we start with this?

Aleks Svetski: Can we agree on a couple of these?  Hypocrisy is bad.  When some people say one thing but do another, whether it's by accident, or whether it's the result of their actions is contrary to what they said; can we agree that hypocrisy's a bad thing; we want to avoid hypocrisy?

Peter McCormack: Not directly.  So, what I would say with hypocrisy is look, I think everyone is hypocritical sometimes.  I think if you recognise it …  So, for example, I'm a hypocrite with my children, right?  I tell them not to do things that I do, and I don't regret doing them, yet I don't want my children to do them.  So, that happens and I recognise that; that's part of raising children. 

But also sometimes, you find yourself being hypocritical without realising it, and sometimes that puts you in check.  So, I don't think hypocrisy itself is bad, because sometimes it can lead to a good outcome; it can lead to a change of opinion to something which has a better outcome. 

I think deceitful hypocrisy is a bad thing; do you understand what I mean by that?

Aleks Svetski: 100%.  So, that's intentional hypocrisy, yeah?

Peter McCormack: Yeah.

Aleks Svetski: Yeah, okay.  But I think, and correct me if I'm wrong here, but what I think you're describing is not that hypocrisy is a good thing, it's that hypocrisy is always going to happen; but, what it is is that the path is to consistency, not to hypocrisy.  In other words, when we're moving towards enlightenment or towards realisation or towards thinking, we're actually moving away from hypocrisy.

If we look at it as a spectrum from consistency on one side and hypocrisy on the other, the path to realisation or the path to learning or the path to truth and honesty is actually away from hypocrisy towards consistency.  Now, if you deliberately or intentionally stay on the side of the spectrum of hypocrisy, knowing that you're pushing contradictions, then that's bad; that's "evil".  Innocent hypocrisy's always going to exist, but we should strive for is consistency; can we agree there?

Peter McCormack: Yeah, we can.

Aleks Svetski: Okay.  Power and control over another is bad.  We can define that as slavery, or it's the antithesis of self-ownership.

Peter McCormack: Well, let me push some things back on you there.  So, what about parenting?

Aleks Svetski: Okay, describe your parenting in the context of power and control over another?

Peter McCormack: Well, I have the power of control over my children to tell them what to do, what time to go to bed, what they can and can't watch on TV; there's certain things they can do.  I control probably, whether it's passively or not, but I probably control some of their opinions.

One of the discussions I was having with my brother this morning with regard to political division and where people's political persuasion comes from, I think there is a natural leaning for you to have a similar political leaning as the household you wake up in, because of the values you're taught.

Aleks Svetski: Can we try and make a distinction between control and influence; do you think there's a difference between those two?

Peter McCormack: Well, what are you saying in terms of -- you define control for me.

Aleks Svetski: Control is, I guess, effectively using force, or the threat of violence, to make somebody do something against their own volition.

Peter McCormack: I mean, people do that as parents, you know like, "Get your homework done or you're grounded; you've got to stay in your room".  I mean, it happens, right?  There are certain amounts of power and control that happen with parenting.

Aleks Svetski: Agreed.  So then, let's look at control in the parenting sense, because I think this one's really important.  If you disappeared tomorrow, would that be a positive or a negative for your children?

Peter McCormack: Negative.

Aleks Svetski: Why?

Peter McCormack: Because they love their father and they want their father in their lives.

Aleks Svetski: What else?  Are you, as a father, a provider in some sense?

Peter McCormack: Provider, guidance, and various other things.

Aleks Svetski: Shelter; this and that?  So, I would argue that the parenting situation is a little bit different.  It's because, as a parent, you brought a life into the world and you take on the responsibility then to help nurture that person.  And, you've grown up, you've got experience behind you, which the child doesn't.  In return for the shelter, the teaching, the guidance, the food and all the stuff you provide, the child actually has an incentive to listen because you've earned some authority.

Let's look at parenting in two ways.  So, do you think it's better that you are parenting your child or, for example, that some state authority comes in and takes your child because they believe they know better, and they make your child do whatever they think is right for the child?

Peter McCormack: You see, that's a very interesting point, because there are certainly scenarios where, with the state, a child is removed from an abusive home, whether that's violent abuse, neglect, sexual abuse, and taken out of a dangerous and abusive environment; that exists.  Now, do I believe I want it for me and my children; no, because I'm a good father and I look after them.  But, do I believe that there are degenerate parents out there who treat their children badly; yes, I do.

Aleks Svetski: Exactly.  Now, I'd love to address that separately, because I would argue that the incentive to be a degenerate parent has actually increased thanks to the state because, what we've done traditionally, if you were a degenerate parent and you didn't have a safety net, you would have been much less likely to have a child.  But, when we decided to start creating a state social safety net effectively for bad parents, then the incentive to be a dick and be a shit parent and either end up, you know, just popping a baby out because …

As soon as we started disintegrating the nuclear family, we've actually increased the percentage of these households with retarded kids.  Now, you can't remove complete retardation.  So, I was having a chat with a girl last night and saying, idiots will always exist; it will never completely eliminate stupidity or dumbness.  But, if we optimise society to sort of be structured around the lowest common denominator, what you do is you create an incentive for everyone to move in the direction of being part of the lowest common denominator, as opposed to optimising society for being the best in us.

So, I agree with you, there are dick parents that shouldn't have kids in the first place and in some senses, maybe that kid will have a slightly better opportunity with the state, but I'm talking about in general.  As a parent, you have a baby and most parents, like 99% of parents, have their children's best interests at heart, right; their goal is not to be a dictator so that they can have slave labour or child labour, right?

Peter McCormack: Yes.  There is nuance to this but, yes; I believe that the majority do.  But, I also believe there are a certain percentage of degenerate parents where, whether people agree with this or not, I am thankful that there are authorities that go in and remove that child from that environment.  Now, yes, there'll be arguments and consequences of having that, because then you have the state and the state has the power of control; but at the same time, I'm glad it happens.

Aleks Svetski: Yeah, I mean, I can relate to that one pretty strongly.  My dad was quite a degenerate, pretty violent, beat the shit out of me, my brother, my sister, my mum and all this stuff; so, my salvation, in some senses, was actually my uncle, so he was more a father figure for me.  So, thank Christ we didn't have any state intervention; it was more my uncle who intervened and the whole family broke up and I ended up moving in with my uncle and my grandmother.

But, I actually think that function used to be, well not think, but in reality, that function used to be taken up by the community or the immediate family, as opposed to some faceless, nameless state.  So, again, there was always a solution for the retarded parent, and it was more a local solution, as opposed to this completely socialised solution.

And, when it became faceless, nameless and socialised, what it did was increase the incentive for more "potentially bad parents" to have babies, because the consequence of being a bad parent actually was lowered, as opposed to being potentially ostracised from the community and things like that.  So, I actually think the state has caused more bad parenting.

Peter McCormack: Yeah, you see I don't know if you can objectively prove that for a couple of reasons.  I always remember, listen, when I went out to Thailand a couple of years ago.  I took my kids to this elephant sanctuary, where they used to rescue elephants which had been used for labour, or as circus entertainment, like street entertainment; and even this small kind of child elephant, I don't want to say baby elephant, had its foot damaged by standing on a landmine, I think it was a landmine?  Or, maybe his foot was in a trap and was badly damaged.  And, it's a place where you can't ride elephants.  You can go along for the day, you pay, and with that, they used to look after them and raise them.

And, they showed us a family of elephants and they explained how the community of elephants raises the child.  So, whilst it has its mother and its father, actually it's the whole community of elephants that work together to raise the elephant; and I just thought, what a lovely thing that was.  And I can imagine, if you go back centuries and centuries, before we started creating state infrastructure, and back when humans were much simpler, I imagine we didn't have certain types of abuses that we have now.  I can't prove it, but I am assuming sexual abuse was a very different thing, and I assume you had these small communities that raised children, okay. 

Now we're in a much advanced society, because we have state, we have technology, everything that's happened to advance society, and we've grown into a different type of civilisation.  I can't objectively say whether or not the state incentivises people to be bad parents; people might just be bad parents.  For example, I'm fortunate to live in the UK and you grew up in Australia, but you know, we're pretty developed western nations.  I don't know if cases of neglect or abuse are worse in areas of poverty, which have got poorer states; I honestly don't know. 

Perhaps there's an argument that in a more civilised and developed society, there are less cases of abuse because there are more checks and balances in place.  I just don't know if that's true and I don't know if you can objectively prove that.  I think you can make the hypothesis, which I think you've done, but I don't know if your hypothesis has been proven?

Aleks Svetski: I'm actually just flicking through a book that I was reading recently.  I'm looking for the notes where some of the statistics of rape, divorce, murder and all this sort of stuff, measured on a per capita basis, not on a total basis, are up ridiculous amounts since the emergence of democratic republic.  I may or may not find it.  If I find it, I'll give you a link so that you can show everyone on the show notes.

But, what it basically comes down to is, all human action, remember, comes back to time preference and incentives, and when you change the time preference around the way human beings order and manage themselves, and this will tie into why democracy is such a bad thing, because having a caretaker who's got no skin in the game look after a jurisdiction, their time preference actually gets really, really, really high.  They value now and don't give a shit about tomorrow, so they'll burn through many resources, natural resources, and everything, just to make themselves look good today, and who gives a shit about who comes in tomorrow.

But, the incentive setup for parenthood, for example, is let's assume in a situation where you don't have the state and you don't have a safety net, like a social security safety net or something like that to fall back on; if, let's say, you marry someone and you decide to have a kid, and you know that if you marry an arsehole and he leaves, and this is one of the big problems in America at the moment, is single mothers and single parenthood, they get rid of the dad, there's no dad, there's no father figure, but it's much more prone to happen because, guess who supports the single mother; the welfare state. 

You create these really skewed, fucked up, cesspool areas of society where young people are growing up without any proper guidance, particularly from the male side, but with a complete dependence on the state; so, it's become okay to make that mistake.  Whereas, in a situation where a state doesn't exist, you create a much large disincentive for two people to get together and just willy-nilly have a kid, because they have nothing better to do, because if one of them leaves, there is no safety net; you don't get a fucking safety net.

Peter McCormack: Yeah, I understand that argument, but I've travelled to a lot of parts of the world, spent a lot of time in South America.  When I went out to Venezuela, some might argue that Venezuela does have a -- it's a socialist system, right, so they might argue that that is in social state, but it really doesn't have one. 

I went into one of the most dangerous and awful slums, right, and I went to specifically an NGO, a charity which helps support mothers with children and it provides two meals a day; one in the morning before the kids go to school, and one after school, because these people just have no money; they are dirt poor.  But, they still have children, and they still have a lot of single mothers who are having children.

So, I don't know.  Yes, I can see the argument that in the UK, we have a welfare state.  There's an argument for some -- I think there's more of an argument for people not to work, but I don't know if the incentive is there to have children.  I just don't know if it exists as much, because I think that happens all over the place.  I think the incentive is to have sex, and people have children.

Aleks Svetski: Not really, no.  The more wealthy you are, and this is indisputable; the more wealthy you are, the less prone you are to have children, simple as that. 

So, what happens is, when you create a welfare state and you create a state of poverty, when you create a dependency on the state for you not to do nothing, but to live in a state of poverty, what ends up happening is the incentive to have children goes through the fucking roof because people a) have nothing better to do, but b) particularly in places like Africa, South America and everything, they have a hope that one of the kids might make it and pull the family out of poverty.  So, what they do is they pump babies like crazy.

So, if you want to slow down population, for example, you increase the wealth of the population and you actually slow down the kid-producing; that is actually what happens.

Peter McCormack: So, what's quite interesting, I've got a chart up actually, so there might be some evidence to this, because the US has the highest children living in single-parent homes; 23%.  It looks like Russia is second, which is 18%.  I'm not sure what the welfare system is there.  UK 14%; France 16%; whereas, India's 5%; Brazil's 10%.  So, it looks like, yeah, as a non-scientific, I'm just looking at this, it looks like the correlation is there to what you're saying, because I'm looking here. 

The most developed, I would say westernised countries, which have welfare states -- sorry, UK's 21%; US 23%; Denmark 17%; Germany 16%.  I mean, if you go to Brazil 10%; Nigeria 4%; India 5%, you know.  I wonder how much that is cultural as well?

Aleks Svetski: Well, culture is actually one of the things that drives the creation of the world.

Peter McCormack: Yeah, yeah.  It looks like you're making a fair point there.  Okay, so listen, let's say the evidence here points to that; okay, maybe you're right; maybe that incentive does exist.  I mean, there will be outliers, like Japan's 7%, but I can imagine that's a very cultural thing as well.  My friend is married in Japan and divorce is very rare compared to the UK.

Aleks Svetski: Okay, cool, all right.  So, if we come back to that original point then, so power and control over another is bad.  Parenting is an interesting discussion, but I would argue that parenting, fundamentally, is almost a trade between the parent and the child in some sense.  But, it is also a responsibility of the parent to nurture that child until they grow up to be an adult.

But after that, I would even that it's immoral for a parent, after their child has become an adult, for them to try and have power and control over them.  So, can we agree that?

Peter McCormack: Yeah.  I mean, I'd add a slight difference there; it depends if you're still paying for them, do you know what I mean?

Aleks Svetski: That's fair.

Peter McCormack: If my kids are still in my home, it's my bloody rules, I don't care.  But, look, I generally agree with you.  Okay, let me put another scenario to you; what about employment?

Aleks Svetski: That, again, that's a private property question, is that I have a business, so that's my private property; I decide to hire you, so I'm going to pay you something.  Now, I definitely have power and control, because you're an extension of my property in that sense.  Now, you're getting remunerated for your time and I'm not forcing you to have to work for me, because you can just go work somewhere else.

Peter McCormack: That's true, yeah, okay.  So, if I fundamentally agree with you, which I do, therefore any argument for having the state and the state having some kind of monopoly over violence and rules and controls and private property, etc, you would be able to go back to this and deduce that I am being a hypocrite, because I'm saying people shouldn't have power or control, and I shouldn't be a hypocrite; but, if I then give an argument in defence for the state, therefore I will be a hypocrite because I've said I don't agree with power and control?

Aleks Svetski: Well, we just need to define it.  So, I guess you've basically summed it up.  But, I think what we need to define is, is slavery bad; and how to do we define slavery?  Slavery is having the involuntary power and control over -- so, maybe let's just nuance it a little bit there then.  Okay, would we agree that slavery is bad?

Peter McCormack: Well, in terms of the commonly agreed understanding of what slavery is; yes, of course, because that is complete control over somebody and also, you consider them also as part of your private property.

Aleks Svetski: Exactly.  So, let's assume them, can we define slavery as the involuntary power and control over another; is that fair?

Peter McCormack: Yes.

Aleks Svetski: So, in other words, the slave has no voluntary choice; the slave has no choice whether somebody else has power and control over them?

Peter McCormack: Yes.

Aleks Svetski: Cool, because I think that then probably solves the parenting thing, is that the child in some way does have a choice.  Because, you know, if the child really, really, really wants to, they can escape, but they don't do that because they need mummy's and daddy's help in a sense, right?

Peter McCormack: Yeah.  So, we're kind of agreeing that aspects of your own child being your -- my own children aren't my -- well, actually, they are my slaves sometimes!  Like, on the weekend, "Go and fucking mow the lawn, otherwise you're not getting your pocket money", so yes.  There is a certain amount of child slavery that happens within the parenting circle, but I think we know the different between what is acceptable and what is abusive.

Aleks Svetski: Correct.

Peter McCormack: By your current terms, I'm currently agreeing that any form of control, absolutely control, with the threat of violence over somebody else, is bad; I agree.

Aleks Svetski: Yeah, and I think "involuntary" is probably a strong word there as well?

Peter McCormack: Yeah.

Aleks Svetski: Cool.  So then, the other two I want to do here is, stealing or taking by force someone else's shit; that's bad, right?

Peter McCormack: Yes, okay.  I know where you're going with all this.  I feel like I'm being railroaded into something, but that's fine.  Yes, I think stealing; again, it depends how you define stealing.  Let me just think about it?  Okay.  Sometimes -- let me think.  Okay, but in a scenario, if somebody was hungry and they stumbled into a farmer's orchard and they stole an apple, I'd be like, "Fair enough", but generally speaking, I agree; stealing is bad.

Aleks Svetski: Yeah, cool.  In that kind of a scenario, then it's up to that farmer to decide whether the loss of the apple was a fair trade for this person who's a poor bastard who's starving.  So, that's something that people can voluntarily decide on their own. 

But, I think this one's an interesting one because I had this kind of cosmic conversation with this chick yesterday, and we kind of talked about theft as almost like a thing that we biologically know is bad.  So, a lot of people talk about morals as things that have developed culturally, but I would argue that theft is one of those things that's not even cultural.  There is no culture anywhere that exists that theft is actually not frowned upon. 

Wherever you are, even if you're not the victim, if you just see two people and one person punches the other one and takes their shit and runs off, you don't have to be taught, you don't have to know law, you don't have to be taught shit to know that, wait a minute; that's wrong, right?  It's almost innate and it stems from the reality of how nature has evolved over millions and billions of years which is, territory, or private property in the extension for humans, is a fundamental reality; it's not just some cultural construct.  When we throw private property out the window for some sort of utopian ideal, what we do is we degenerate society because we move against what has naturally allowed us to evolve and build. 

And then, the last negative I'll throw in there is this: can we agree that it's always a negative for unprovoked violence towards another?

Peter McCormack: Yes, of course; that's an easy one.

Aleks Svetski: Cool.  So, again, that's actually tying it back to private property.  That's actually a transgression of private property when we properly define private property as starting at yourself.  Each person owns himself and that is where it starts.  If we can agree there, then that's another example of, I guess, the a priori truth of private property.

So, is there anything you want to dig into on those ones, or are those ones pretty acceptable?

Peter McCormack: No, but I think we need to play it out because obviously, it's very obvious where you're going with this.  You've established the framework of arguments against some of the things the state does but then, I think I'm going to have to go into the nuance where I'm going to have to make myself a hypocrite for some of my arguments.  But, I'm comfortable with that; that's fine.

Aleks Svetski: All right.  Well then, let's talk about maybe --

Peter McCormack: Let me, actually throw -- I'm unprepared for this; you've obviously prepared those.  But, let's say I throw a couple of things at you, and this is without preparations.  But, I spent some time before looking at Maslow's Hierarchy of Needs and things like that, etc, but do you agree that humans naturally organise themselves?

Aleks Svetski: Yes.  We naturally organise ourselves along shared values; not along laws.  Laws emerge from shared values, but we naturally organise ourselves along shared values; that's a truth, yeah.

Peter McCormack: Are shared values always true, or it depends what those shared values are.  Could it be shared objectives; could we have, not shared values, but shared outcomes?

Aleks Svetski: Absolutely.  So, that's where economics comes in, is that we might not share values, but we can still organise ourselves by trading the product with our labour, and that's where economic trade comes in.  And that ends up being a positive for us both, so long as it's voluntary.  And, if we transgress one of the truths of private property, so if someone comes and "takes" from somebody else forcefully without their voluntary consent, then we go into the realm of immorality as opposed to morality.  So, yes, we either organise around shared values, or we organise around voluntary economic exchange.

Peter McCormack: Do you think, and I'm not sure on this one; again, I haven't prepped.  If I'd realised we were going to go down this, I may have come up with some more.  Do you think humans are naturally violent?

Aleks Svetski: Yes, so we cannot remove violence; that's a natural thing, yes, 100%.  All species are violent.

Peter McCormack: All right, let's go on from this.  Let's start building into this; I'm looking forward to this now.

Aleks Svetski: Sure, do you want to dig into that?

Peter McCormack: No, I want you to go, I want you to take me through, because I know where this is going, but I want you to take me there and then I'm going to kind of become the hypocrite.

Aleks Svetski: Okay, cool.  So, this was another insight that I got from that anthropology book that I mentioned earlier, is that all species are fundamentally violent because, I mean, if we know that, for example, if we agree that all resources are scarce and that we all subjectively value everything different and that, again, the future is uncertain, all interpersonal conflict is always going to exist insofar as things are scarce and life is uncertain; it's always going to exist.  You cannot remove that unless you remove uncertainty and scarcity.

The only way you remove uncertainty is you move towards being in North Korea; and, the only way you remove scarcity is you give people the illusion that nothing is scarce, which is bullshit.  So basically, violence and interpersonal conflict will also exist; it's not something we can remove.  That is just a function of the natural world being uncertain and scarce, so we cannot remove it.

So, the question then is, how do we best manage it?  And, this is the discussion of, do we have a top-down authority tell us how we should live, or do we have a bottom-up way of organising ourselves as individuals first, and then as groups of people with either aligned values, or between groups of people who may not have aligned values, but have an economic incentive to do so.  And, that's really where the thing diverges, is are we going to go top-down and approach the organisation of humanity through tyranny; or, are we going to go bottom-up and organise it through territory.

And, I should probably touch on that as a point as well, in Robbins' book, is that if you look throughout all the species on the planet, particularly mammalian -- insects are a little bit different -- but, mammalian species, or all sorts of animals, they literally organise themselves through tyranny or through territory; there is no other option in the natural world.  And we, as human beings, keep switching between the two.

And my contention is that, whilst territory or private property, if we emerge from that point, it might look a little bit more messy, it's much more fragmented, it's much more localised; but, I would argue that it's freer and fairer and it leads to a better society.  It's not a utopia; it doesn't mean that violence won't exist.  We take as a given that violence will always exist because, again, we come back to scarcity and uncertainty; and, that's why the requirement to protect yourself and the right to protect yourself is so important.  But, I think that is a million times better than the tyrannical option, which is a top-down authority, and makes dictates and decrees for you, based on what their definition of morality and ethics is.

That's where I think we need to make the choice, because I don't believe we end up -- it's kind of like each side has a slope and you can't have both, because the more you go down one side of the slope, the more you move away from the other.

Peter McCormack: Okay.  So, the bottom-up approach that you think is the best approach based around territory, are there any examples of where this has happened; are there any examples of where this is happening right now?

Aleks Svetski: Right now, I would argue that Bitcoin could be considered one example.  I mean, the early American settlers were also another example.  That's sort of where libertarian thought really first emerged, is this idea that man has inalienable rights, the freedom to speak; the freedom to organise; the freedom to protect yourself; and all of those sorts of basic elements of the Constitution.

You can look at America and, from a results' perspective, it went from a barren land with settlers in the 1600s and 1700s.  Within 100 years, it became the largest economic power on the planet, from zero to number 1, on the basis of that.  It wasn't 100% clean.  You had all sorts of different people.  Yes, there was some slavery, but the abolitionists, the original libertarians, they were the ones who first were able to transcend what was the status quo back then, which was, slavery is normal. 

Mind you, slavery was happening all around the world; it wasn't unique to America.  There are all these idiots that say that, "The only reason America's prosperous today was because of slaves".  Well, if we use that logic, Brazil, who imported three times the amount of slaves that America did, should have been three times more prosperous than America, so that's not true, objectively speaking.  So, we had that in the early days of America, that America really started to go down when they removed the ability to secede from the union, which happened with that idiot, Abraham Lincoln, when he turned America into the United States of America. 

And, this is where I guess we're on this weird period of history for the last 150 years-odd, where the Industrial Revolution and mass scale skewed the incentives for basically organisation around, I guess, numbers more than anything else, which gave the state an advantage and ability to build a monopoly, particularly around violence first, and then everything else.  And, we kind of deviated away from societies that were freer.

There's all this talk about, "Oh, the Wild Wild West was a dangerous place".  You look at what happened in the Wild Wild West was two people had a problem with each other, went out and shot each other.  But, they didn't go out and rob and break people and rape and all that sort of stuff.  So, the statistics around all of those things that people know as bad, like rape and robbery and all of that sort of stuff, were completely different in the early days of America than they are now, when we sort of degenerated and changed time preference.

So, yes there are examples, but we also need to remember that this is an evolutionary process; it's something that is emerging.  I'll give you one more example before I shut up on this point.  You look at early England when, in the days prior to Adam Smith, you had these farmers who were originally serfs and they had been living on this land and they started producing food and all this sort of thing, and they created their own prosperity without the monarch or the state or anything like that telling them what they should or should not do; they did that themselves.

And then, what you ended up having was, when the monarch realised that they could produce wool at a better rate than countries overseas could produce something else, like silk or whatever, and they wanted to trade, what they did was they threw those farmers off the land, so there was a transgression of private property.  They had nowhere to go.  They became these paupers who went into London, who were poor, who became beggars, who no longer had routes to their own territory.  They were basically dislocated people.

They degenerated the land and what they did was, the monarch started building its own complete monopoly in that sense.  And, that's what spawned people wanting to get the fuck out of England and take the essence of man's free will and man's right to his own property, starting with himself, to a new land and start it afresh.

So, all these times, I mean even down to starting a business and starting a company, you start something, you build it, but that's an extension of you as a private property owner.  You turn your idea into something functional.  You then have a voluntary consensual relationship with somebody to come on as your employee to add their time and energy to the extension of that.  So, that's the natural way things work, and they work despite the stupid state getting in the way of things through meaningless regulation, fucking bureaucratic red tape, so that they can justify their existence.

So, I would argue that it exists alongside the leeches.  And, the reason we haven't noticed the leeches that much is because the productivity of something like capitalism and a free individual is so powerful, and the momentum of technology is so powerful, that it's just carried the state alongside it for this long. 

But, here we are at a point where technology's plateaued for a little while.  We've had a lot of -- if you look at Peter Thiel's work, he always talks about how we've had heaps of innovation and development in bits and bytes, but nothing in atoms, and we've reached the zenith of the value that bits and bytes give us.  So, now you've got complete encroachment of the state in terms of how much they're taking from people and all this sort of stuff.

So, we're at a really ugly period of history now where these monopolies are shaky and, in fact, they've probably spawned the next version of monopoly, which is these technocratic fucking behemoths, like your Facebooks and Googles and Netflixes that are a new problem that we're going to have to deal with.

Peter McCormack: I don't disagree the state has gone too far, it is ugly.  I've got to try and get through The Fourth Turning this weekend for an interview next week; but, a couple of things.  Okay, I mean, I can't ever get away from a couple of key points. 

Firstly, is this natural?  Because we have different versions of states that have built up all around the world and, as you said, it's actually generally the democracies of some kind.  And, I know people in America say, "We're not a democracy; we're federalists", but just at the same time, let's class them democratic processes where you have the ability to vote or you have authoritarian leaders.  Is this a natural occurrence, therefore are we trying to fight for something that can't possibly happen so therefore, is there a better fight trying to make better of what you have, because that's something I always come back for?

There's nothing you will say on paper, with regards to libertarian ideals, that I disagree with.  Maybe minor things, but of course it sounds so much better.  But, not everyone is a libertarian.  We have a lot of arseholes; people are violent; people are selfish; people do like to have power and control over people.  So, if it's not the state, perhaps it would be warlords and such. 

And, I know there's like -- Stephan Livera passed me a paper to read; I think it was a Rothbard one, or a Mises one, which was like, "No, warlords won't appear", which was a written argument for why they won't, but they do appear.  There are warlords in certain states which don't have a functional, structural government.  I mean, Afghanistan comes to mind, but also you get them in Africa as well. 

So, I still come back to the point where, if you offer me tyranny or democracy, I take democracy, okay.  But, I agree it's got shit, so should we not be fighting for a better democracy, rather than spending time on an idea that -- and look, I understand other people will be, "No, we should, because it's the right thing to do", and I'm just like, hmm...

And the other thing is, what about the people who want to live in a state structure; what about people who say, "Actually, do you know what, I hear your idea …".  For example, one important part of your idea about territory is the ability to defend yourself, therefore the ability to have guns to protect yourself; I'm assuming that is an important part?

Aleks Svetski: Yeah, I mean, guns are arbitrary.  If we didn't have guns, then you should have the right to have a knife.

Peter McCormack: Yeah, or other stuff.  But, there is a very big difference perhaps between having this conversation, say, with an American and, say, with a person in the UK.  And, I defend the Second Amendment to my English friends, having spent a lot of time there, because I understand it.  At the same time, just very, very few people would want something similar here.

And, look, people can make the argument from a libertarian principle, or from a US Second Amendment position and say, "Well, what are you going to do about if someone comes into your house with a gun and you haven't got a gun?"  Well, do you know what, it's such a rare occurrence that I'm willing to live with that life.  I'm glad there are no guns in my house.  If I lived in the US, I might have a gun, but I'm glad there aren't.  And, I'm glad guns aren't as prevalent in our society. 

And, yes, innocent people do get killed; they do get shot and killed.  They get in a crossfire of gangs, or they just get murdered.  It happens, right, and it happens with knives as well.  But, there isn't a big desire in our country for that to happen.  If I went down the pub with all of my friends and asked them, you'd get zero people saying they want that.  And also, if you start explaining these structures, a lot of people would be, "No, I actually like living in a society that has a government".

Especially, I've got one friend, Tom, who would say, "Yes, there are a lot of problems with the state, without fucking doubt.  But also, we have progressed as a civilised society by having the state, in certain ways; we have certain things as part of that".  So, even if I agree with you, lots of people will be, "No, I disagree with you.  I want the state, I want a government, I want democracy, because I don't want the alternative".

Aleks Svetski: So, there are a couple of points I want to get to.

Peter McCormack: This is where you're going to tell me I'm a hypocrite?!

Aleks Svetski: No, no; let's just get a couple of points.  So, let's think about problems and solutions.  So, when problems emerge in society, whether it's warlords or whether it's state, or whether it's the ridiculous mandates of the Church, we look at, problems happen and then, what do human beings do when a problem emerges; what do we naturally do?

Peter McCormack: We solve them, we solve problems.

Aleks Svetski: Correct.  We figure out ways to solve the fucking things.  So that's, you know, in a pure economic order, the incentive to solve a problem is more monetary and economic in nature and what you end up having is, in an open society or in a free society with free markets and stuff like that, what ends up happening is it's very hard for a monopoly to develop, because competition emerges and allows us, as human beings, to solve a problem in a competitive way.  And what we do, that's the forcing function to solve a problem better, smarter, faster, quicker and all that sort of stuff, with the use of less resources.

Now, if we tie that back to why the state emerged in the first place; we haven't had the state for longer than a couple of hundred years.  And really, the state was the reaction to the problem prior to that, which was the Church and how corrupt the Church became as an institution over time.  And, the Church itself was an answer to how corrupt the Empire, which was Europe or some of the other kingdoms and shit like that, were before. 

So, if we look at some of the problems that the early state was trying to solve, actually the emergence of this idea of a sovereign individual and the idea that private property was a real thing, people came together and they thought, all right, the best way for us to protect these ideas, these natural laws of private property, and there were all sorts of other things, like the right to speak, and all this sort of stuff, was let's vote in some representatives that can act as the people who protect those things.

Now, that's all good and well, that's noble, we came up with these things to solve a problem.  The thing is, the solutions, over time, decay, they derange, and they dement themselves to the point where they actually become the problem and where the nation state today does not protect property anymore.  In fact, it acts as the ultimate thief, the self-legalised thief.

So, the argument here really boils down to, did we move forward over the last couple of hundred years, since the fall of the dominance of the Church, for example, thanks to the state; or in spite of the state; or is it a mixture of it both?  And, I would said, it's probably 95/5, in that in the early days, some of these systems and processes, and particularly in the early days, there were hierarchies of competence. 

So, people who were voted into some sort of representative position of power, particularly you look at the early days of the American Revolution, those people were fucking super intelligent, man.  They were philosophers, they were deep-thinkers, they were economists, and they didn't want to rule.  They helped spread these ideas and as a result, through competence, were able to achieve what I call natural authority, as opposed to authority by fear. 

And, they set these rules in place which said, all right, we all have these natural, inalienable rights, and they created a constitution, which was a set of rules that said, all right, this is going to apply to all of us who are all free men and we're going to use this as a set of blanket rules for all of us, because they align with how natural law functions.  They're always true; they're true all the time; and, they apply to everyone.

Now, that initial framework or that basis, I would argue that that is not really statism; that was sort of the original emergency of the libertarian ideals.  And over time, through the concentration of power and through the fact that it's very, very hard, generationally speaking, for the essence or the integrity of the original way people intended things because that diminishes over generational movement, you end up in a situation where the state gets worse and worse whilst the momentum from private property and all these things that we libertarians say are good, kept everything moving forward.

So, it's not absolute one or the other; it's that the state was a necessary evil at the time -- sorry, it was the solution at the time and it has devolved into an unnecessary evil.  Along that path, it started off as a necessary solution and it's become a necessary evil and along that path, it became a necessary evil; but, I think we've moved into the realm now where it's become an unnecessary evil and it needs to get out of the way.

I just want to touch on one last point there really quickly.  You mentioned Africa and all this sort of stuff where there's greater chaos and things like that.  There's a great guy called Clare Graves, who was a psychologist and some sort of sociologist, but he was around the time of Abraham Maslow and they were good friends.  Clare Graves developed this idea of a way to look at the world through levels of, I guess, consciousness; and, each level of consciousness has its own set of values.  He called it Spiral Dynamics and a guy called Don Beck expanded on it and I encourage everyone who's listening to this to go grab a copy of Spiral Dynamics.

It kind of puts the world, from an evolutionary perspective, into a lens of how we grow through levels of values.  It starts of at beige.  Beige is where we all start.  It's representative of the baby, or the self-centred arsehole, whatever.  It's me, by myself, and egocentric, nothing else in the world exists but me.  Then, we evolve to the next layer of values, which is purple, which is the colour in the Spiral.  So, purple is tribal thinking and the values around that are, there are a few of us and we're all together, but there's a big scary world out there and, for example, rain doesn't come from the evaporation of the lakes or anything, because none of that exists.  It comes from some scary gods that we don't know who they are.  So, it's kind of real victim.  You see that in the emergence of tribes.

And then, the next level of consciousness is the red colour, which is like the power god or the tyrant, and that's someone who realises that they can transcend that fear-based, tribal-based mentality, and they come up with this notion of, I'm more powerful than you, so I will subjugate you.  And kind of between purple and red is where a lot of non-western cultures are still stuck.  If you look at a lot of South America and South-East Asia and Africa and all that sort of stuff, they're stuck there.  Each level has its set of values and if you try and solve problems in that level through the lens of another level, which I'll keep going up to the top eight levels, you get this disconnection in society.

So, if we move up from red, you get into the blue level, and this is where you see the emergence of, whether it's religion or the state, the blue level is all about rules and process and structure and system.  It's back to "we" and it puts the lid on the red and it allows that to sort of function a bit better; and it's another level up.  Then we move from blue, we sort of emerge out of blue, and America was probably the first place to emerge out of blue, to this orange level.  Orange is like scientific, scrutinised, significance-driven, individual-driven again.  It's entrepreneurial in nature, it asks questions, it's inquisitive, it's less about structure and it's more about innovation.

From there, we emerge into the green level, and the green level is this idea of back to oneness and we're all hippies and we're all together, and it's all about connectedness and love and peace and harmony and all that sort of stuff.  A lot of young socialists and stuff like that, they come into green and they're born into a world that is quite orange, because it's built wealth and capital and all this sort of stuff.  But, what they do is they disregard the systems and the structures in blue, and they disregard the innovation and the entrepreneurialism in orange, and they just believe that the values in their side of things are all right.

Then, when we transcend from green, we go into yellow.  Yellow is this idea of, there's no right level at any particular point in time.  It's about having the maturity to be able to move through and apply the right solutions to the right problems within each level, I guess, of development of the society.  And, it's such a powerful lens through which to view a lot of these things.  And, whilst I'm an anti-statist, I recognise that we had to go through that phase to get to a better phase. 

And, libertarianism and bitcoinism is actually much more like the yellow phase which is, there is a time and a place for structure; there is a time and a place for entrepreneurially thinking; there is a time and a place for community.  But, they're all very contextually based and we need to root them in, like what I was discussing earlier, these a priori truths and we need to make sure they're consistent with things that we recognise as bad, like theft, like slavery, like aggression; and, we need to align them with what's good, which is voluntary trade, freedom to think, and all that sort of stuff.

So, it's quite a broad answer, but I think to kind of sum up my thoughts here, yes, people are going to think that they require the state because that's part of the indoctrination that they've received; but, in order for us to change the world, we need to think differently and if we continue on trying to solve the problems, and again I'll just use that Einstein quote, "Trying to solve the problems of today with the thinking that created the problems", we're not going to transcend. 

This is why I think libertarianism, as a notion, it's not a matter of "if", it's a matter of "when", because it's coming back to natural law, as opposed to democracy, which I believe moves away from natural law.

Peter McCormack: Okay, so that's a good point though, where you've said, "I understand why we've had democracy, and we had to have it.  It's this kind of natural evolutionary process, but we've got to the point where, what is the next step?" and I know we're going to talk about Bitcoin with that.

My view is, how do you move away from the state; and, what are the negative consequences, because I don't believe the state is 100% bad; I don't believe everyone who works for the state is 100% evil; I don't believe all politicians are bad.  I think there are a lot of terrible politicians and dumb people in power, but I also believe there are a lot of people who want to good things.  And, there are certain things I have discussed with libertarians before that I think are good things.

For example, and I know you'll argue against this, but I like the support for disabled rights we have here, that if you are to build any kind of commercial building, you have to consider access for people with disabilities.  Now, yes, I fully understand every argument against this, I've already had this before; I still think it's good, I still think it's great that somebody who is going, say, to the cinema, who is in a wheelchair, knows they can get to their seat and watch the film.  I think that's brilliant.  And, there are other things that I think are good that the state does. 

So, I totally understand the argument against the police, especially right now and the things they are doing wrong.  But, I don't believe that necessarily, private police forces will be better.  And, I did get intrigued before by, and I've not fully gone through the process of rationalising it; I think it might have been Eric Weinstien who said, or maybe it was Sam Harris, said that the state should have a monopoly on violence.  I know you're going to 100% disagree with that.

But, there are certain things I've been trying to go through to understand things.  Like, I understand that you'll say that any kind of welfare system is utter shit because firstly, it's theft and the government redistributes money in a very poor way; but, there are parts of the world and countries which have raised up and are able to support people who are in need.

So, I guess two key questions I would have for you: what do you do about people who want the state?  Like, I've questioned, is it possible to have a society where there's an opt-in and an opt-out, and I don't know if that's naïve.  But, the second thing is, if we're going to move on from the state, how does it happen and what are the processes we go through; and do we A/B test what the state should have and shouldn't have?

So, for example, I think a lot of libertarians struggle with the idea of open borders.  I know, within the libertarian ideals that you're meant to be against, is border control, but I think some of them realise there's a definite risk from negative externalities that can come from open borders.  What do you do about defence; what do you do about regulation of nuclear power; what do you do about companies like DuPont who've poisoned the waters?  These are some of the key issues.  Let's deal with that last one.

So, in a society that has no state, what do you do about a company like DuPont, who just poisoned a whole town, I can't remember if it went further; massive increases in cancer cases; the animals were dying on the farms.  There's a really great film about it actually called Dark Waters.  Nathaniel Rich, the journalist from Vanity Fair, wrote the big investigation into it.  And, the process it took to actually prosecute them was ridiculous; it took years.  But, the point being is regulations over those chemicals exist for a reason, and they were able to be prosecuted and forced to compensate people they poisoned.  If you don't have a state, what happens in that situation?

Aleks Svetski: I mean, that's really pretty easy to answer.  So, I'll use an analogy then we'll hit this.  So, this idea; let's say we've got a forest and the community or the market needs wood from the forest.  There are three different ways that we can cut the trees down for the wood that's required for people to build houses, or whatever the wood's needed for. 

So, we have the completely public method, so that's socialist, communist; they decide how much wood everyone should have.  We know how that turns out because the socialists or communists have no idea how to measure what the actual need in the market is because they don't believe that people have a subjective need; they believe that they should allocate accordingly.  What they inevitably do is people who need more get not enough and people who don't need it get some, and they end up fucking destroying the resource and burning it up and Bob's your uncle.  So, we know that's a fuck-up.

The second way is the public/private mixture, which is the government owns "that public property", so the forest, and it then sells a licence to some private entity because it says, "Private enterprise knows how to price it properly, they know how to get efficiencies out of it, and they'll sell it at a better rate so we don't have to do all that sort of stuff; we'll just sell them a licence".  So now, what you get is a weird situation where that private provider, that enterprise, they don't view that forest as their own capital; they view it as this kind of, picture your rental car versus your own car.  You treat your own car nicely and you jump in a rental car and you don't give a shit how you treat it.

So, they will say, "All right, my incentive is to make as much as I can from this capital so that I can generate enough income now while I am renting the right to use this; because it's not mine, I'm going to rape and pillage this fucking forest and I'll chop down every single tree so to maximise my income now while I still have it".  So, there's a complete moral hazard there when you remove the element of private property from the entity that is actually performing the action of deforestation.

And then you have what I believe is the proper way to do it.  Instead of some public entity like the government owning the resource, you have a private entity, so someone who owns the forest.  Now, the natural incentive/disincentive comes into play here when you have to balance your income with the capital that you have.  So, your capital is your trees in that forest and if you chop all the fucking trees down this year, you're broke next year and you're going to starve, because you've completely deforested your own thing.  You have a natural disincentive to go and destroy the environment, or to rape and pillage your own resource, because it's yours.  This is the difference between having your own skin in the game, versus having zero skin in the game and renting it off some faceless, wordless entity that is the government or the public.

So, with that analogy in mind, the biggest problem we have, I think, with these large-scale companies is first of all, these companies only get so large because, when you look at the people who work within these companies who help write up their laws and get them around things, they're ex-regulators and ex-government people who help them navigate the "regulations", so that they can get some sort of monopolistic advantage in some sense, so that they can do some shit that other competitive enterprises can't do.  So, you end up in a situation where a) the emergence of DuPont is a function of the existence of government, b) --

Peter McCormack: Hold on, hold on.  Size is irrelevant; let's forget size at the moment.  You will still have chemical companies.

Aleks Svetski: You will have chemical companies, yes.

Peter McCormack: Okay.  And, they still might have one place that is leaking chemicals into the water, which is killing animals and giving people cancer, with no basis for regulations or what the regulations should be.  We know every instance when companies self-regulate; they do so in their own favour. 

Aleks Svetski: They do.

Peter McCormack: Without an independent regulator to regulate, I can't remember the details of the DuPont thing exactly, but without an independent regulator, where are the standards set?  If there are no standards, companies like this could easily just poison the well for others.

Aleks Svetski: Well, not exactly, because what that is, if I'm poisoned, I've had a transgression on my private property.  So, I have then the ability to sue whoever poisoned me.  So, that is an aggression; that is a violence against me.  Libertarianism doesn't remove the notion of private property, remember.

Peter McCormack: Yeah, but where does the regulation about what is decided as poison and what isn't poison come from?

Aleks Svetski: From the evidence of -- okay, that's what a journalist would do; that's what an investigator would do; that's what someone who is hired to --

Peter McCormack: But, that's too arbitrary.  When you're dealing with something as complex as chemicals and chemical compounds and the risks of causing cancers, or other kinds of illnesses, you can't have that solved by a journalist.  And by the way, it was a journalist who exposed the DuPont situation.

Aleks Svetski: It doesn't surprise me, because it usually is.

Peter McCormack: Well, no, actually it was lawyer.  Sorry, it was a journalist who told the story.  It was a lawyer who took the case on.

But, my point being, if you don't have a basis for what is legally allowed, then where do you start from?  Then it can become arbitrary; one place is considered poison, one isn't.  I think certain things, like nuclear power and nuclear power stations, I think you have to have some very strict regulations about that, because we also have psychopaths, you know; we have dangerous people and I think we have to have some certain situations where, if you can give someone the big, red button that can cause very significant …

So, for example, if we didn't have the regulations about nuclear power and everyone could be building a nuclear power station, you could end up having a situation where you have another power station meltdown?

Aleks Svetski: Yeah, but the power station meltdown was a function of the state.  So, if you zoom out a little bit --

Peter McCormack: No, no.  I agree with you in that scenario, because it was the Russian state -- sorry, I've just eaten a piece of chocolate! -- the Russian state, in terms of what happened in Ukraine, or the Soviet state then.  Someone's going to correct me on my history here!

Aleks Svetski: Yeah, same as Fukushima, same as all the 35-year old --

Peter McCormack: Yeah, but the point being that all the power stations now have regulations they must follow.

Aleks Svetski: Correct.  But, what you're assuming is that somebody who runs their own nuclear power business wants to have their own fucking capital, their own nuclear power plant, leak or fucking blow up; that's not the case.  The case is that they're going to want to continue to improve it and make it better so that risk is minimised.

Peter McCormack: Yeah, but greedy people cut corners or make mistakes.  I really struggle with that one.  I think there are certain things that require regulation from a central force.  I'll even given ground on the state.

Aleks Svetski: First of all, we need to look at this central power that apparently applies regulation.  How do they ensure -- because, what it's effectively trying to do is ensure that good actors are good and that bad actors are punished, right?  They use the premise of the economic threat of shutting their business down or closing them down or doing that sort of stuff as the forcing function to ensure that they are good actors; that they behave appropriately.

The problem though is when it's a state applying that pressure, instead of that remuneration going to a potential victim, the state just takes it for themselves; so, it kind of defeats the purposes.  Now, in some cases, a lawyer, a good lawyer like that DuPont thing that you're mentioning, will go and sue DuPont and will get damages for the individuals, but we've got a couple of things here that we need to sort of tap into to really make this whole thing make sense.

Number 1, without the state, these chemical companies won't get as big, but let's just assume that there are some bad actors out there who do dumb things.  So, what happens is, because libertarianism and anarchism isn't the absence of law; it's the adherence to natural law and when we extend from private property and someone aggressing against me, against my voluntary permission, ie poisoning my fucking water, or something like that, you end up in a situation when you can go after those and you can come together with a class action and go after those companies, and close them down, send them bankrupt, sue them for the transgression of property rights against a number of people.

So, you have the same forcing function but instead of a regulator managing that, what you have is you have a free market going after them.  You have lawyers going after them, which are the same people who are going to go after them whether it's the state regulator doing it, or individuals who are directly affected doing it; and, you kind of disincentivise the bad actors then.

The last thing I'll also touch on, so I studied engineering when I was younger and I was part of an association called Engineering Australia, which was part of Engineers Worldwide.  It was like a body that was a voluntary body; you became a member of it and being a part of that, it's almost like CPAs and all that sort of stuff, where it's a non-government entity that has a set of standards that if you're worth your salt, if you're a good engineer or whatever, you become part of that institute and you have that as a badge of honour basically. 

That's effective in a free market scenario in the absence of a centralised state regulator, who's very, very easy to corrupt.  What you have is free companies coming up that will do their best to try and market themselves, and they'll market themselves through the joining of different memberships like that, through different institutions, etc.  What will happen is, yes, there will be some mess along the way; yes, there will be some people who get poisoned; yes, there will be some lawsuits; some of these companies will get shut down. 

But, what will happen is competition will be a much better forcing function to clean up the bad actors and create openings for good actors, than will some centralised authority who's much more prone to being corrupted by one of these DuPont style monopolies who can get large as a result of knowing how to navigate the state, and having enough money to lobby the right people to keep doing whatever they're doing that's criminal.

So, both are solutions, but the argument of the libertarian is that the state solution is one that actually causes more problems and more moral hazard than the libertarian solution, which is one where you allow competition and adherence to private property and the ability to litigate directly and for the injured party to claim damages, as opposed to the state to fucking pocket the damages.  It's a much better and fairer model.

Peter McCormack: How do you enforce it?

Aleks Svetski: In the same way as we enforce the payment of fines and things like that today.

Peter McCormack: Yeah, but the payments of fines are enforced by the state?

Aleks Svetski: Yes, to an extent.  This is why I wanted to touch on the thing that you said earlier about people want states and what about the people who want a state.  What I was going to mention there is, you can't get away from a community organising itself around some rules that matter to them.  And the things is, people might confuse that for a state.  The problem that libertarians have with the current incarnation of the state is your inability to leave, or your inability to choose, if that makes sense?

Peter McCormack: Yeah.

Aleks Svetski: So, I think the future will be one that looks more like these private cities which are still jurisdictions where certain rules exist, where if that chemical company wants to operate there to provide a service, they have to adhere to a bunch of rules based on a contract that they agreed to coming in.  And, they may have, for example, a bond.  So, let's say they want to service this city with these chemicals and the requirement might be to put up a large bond in order to operate there.

Now, they transgress against the property rights of the individuals within that community or city, then that bond is forfeit, the members can go after them.  There are multiple legal avenues to go after somebody and do something like that.

Peter McCormack: But I'm saying again, this is a really important point.  If there's no bond, how do you enforce a fine?

Aleks Svetski: In the same way as a city would enforce a fine.

Peter McCormack: But, that's the state.  That's what I'm saying; you don't have a state to enforce it.  So, who gets to decide who gets to enforce it?

Aleks Svetski: This is where the market will probably determine over time by making mistakes like this.

Peter McCormack: Give me an example, just an example, because there are a few examples like this.  I think overall, your ideas are net correct, but I think there are some flaws in it, and I don't know how you enforce the fine?

Aleks Svetski: Well, let's do it this way.  Let's say we start off and we're in the early days of creating these private cities and we have these companies that come in and they want to provide a service, and one of them is a bad actor and they decide to poison the water.  In the beginning, we didn't have a bond; we didn't think about that; we thought, these people will be nice and that's what they're doing.  So, a bunch of people die; they send a suit against that company; we go to whatever the court is in our jurisdiction because again, it's not an absence of justice, the court is still there; and we win because you did the wrong thing. 

Now, this company turns around and says, all right, we are bankrupt, we are shutting down and we don't have the money to pay it up; so, they don't get to pay it up.  But, they get thrown out of the jurisdiction, so their business is gone.  Now, we may have had some things in the contract which is, your entire factory, which is in our jurisdiction, is not forfeit, because this is what this asset is worth, etc.  So, you can go after that stuff and take it, because they have transgressed against somebody else's private property; so, that stuff has been deemed, through private natural law, that you have transgressed on someone, so you now are liable for payment.  So, you'll go and take what you can.

Peter McCormack: How?

Aleks Svetski: Well, you go in and you send an auditor -- sorry, not an auditor; you send some person who provides that service, for example.  So let's say, at the moment, DuPont didn't want to pay, they had no money; what would the government do?  They would send an auctioneer in, or someone to go in and take the asset.  Usually, they'll send private companies to go in, take the shit, and then auction it off in the market to recoup the money.

Peter McCormack: What if I don't let you in my property?

Aleks Svetski: Well, the job of some of these, what do you call it, let's say collections people, will be to go in and take that.  Now, they have a legal document stating that you lost in this court, in this jurisdiction; so, they'll have the right to use force to come and take it, because they have won the case.  Are you with me?

Peter McCormack: Yeah.

Aleks Svetski: So, it's not the removal of force; it's the appropriate use of force against an initial transgressor.  So, that right is perfectly well within --

Peter McCormack: What if I disagree with the court?

Aleks Svetski: Well, you'll have to disagree on some basis that makes sense based on the law. 

Peter McCormack: But, what if I say I don't agree with the law?  Who sets to decide the law?

Aleks Svetski: That's in the contract when you first come in there.

Peter McCormack: But, what if it's something where there was no original contract?

Aleks Svetski: Then that's the fuck-up of the people who allow them in then.

Peter McCormack: So, I'm just saying, someone poisons the land or does something to me and they get punished and they're ordered to issue a fine, but we don't originally have a contract.  What if I just say I disagree with that?

Aleks Svetski: So, if it was really that bad where there was no contract, there were no rules, then the onus is on the person who allowed that person to come and transgress on them.  So, it's the same way as you left yourself defenceless.  So, again, what you're confusing there a little bit is the idea that in the absence of some sort of central authority, that there will be absolutely no rules, and that's not how human beings operate.

Before I go ahead and give you the right to come into my house and do something, we have some sort of contractual relationship.  Now, at scale, like if I'm allowing a plumber to come into my house, I'm not going to say, "All right, sign this paperwork before you walk in, just in case you break something", but we have an implicit contract that states, don't touch or break my shit. 

So, what happens is there might be, in the early days, people who are dumb enough to allow entities or companies or service providers who could do something sensitive or injure someone or harm someone, they could be dumb enough to allow them in without creating any fucking precedent for a contract or anything.  And guess what; the consequence of making a dumb decision like that is that you have no recourse.

Now, the improvement function in a free society is the next time, you aren't going to fucking do that, assuming you've survived.

Peter McCormack: Yeah, but sorry, we've still not solved the problem.  What if I just refused to pay the fine?

Aleks Svetski: Well then, we come and take your shit with guns.

Peter McCormack: Well, what if you come with your guns and I've got my gun and I shoot you first?

Aleks Svetski: Well then, we're going to fucking war; that's the thing.

Peter McCormack: Yeah, and this is the point.  This is where I see it as a degrading of civilised society; I see it going into more kind of Mad Max, but not like actual Mad Max, the film, but kind of all-out war, because there's no basic set of rules that we all fundamentally agree on.  The thing about democracy is it creates the rule of law, right, and the rule of law, whilst it might be shit at times, it's a base set of rules that we can all agree on.  There is no base set of rules here?

Aleks Svetski: There is.  There are natural rules, there are natural laws.  So, common law, for example, is based on natural laws, so it's based on things like private property theft is bad, you can't --

Peter McCormack: Yeah, but they're very basic, they're very, very basic ones that you can agree; theft is bad; private property.  But, laws are complicated sometimes for a reason, so --

Aleks Svetski: No, they're not, they just become overly complicated over time, because we have idiots that think that they can apply one law to one person and not to another person.

Peter McCormack: No, I agree.  But I'm saying, if I don't agree with the law, there is no base set of rules.  There is only your very basic base set of rules, but I don't think it would take me long to come up with more complicated transgressions on these rules that someone then has to arbitrate over.

Aleks Svetski: It makes it easier, sorry to cut you off, but it makes it easier to weasel your way out of shit the more complex law is.  So, if law is really basic and simple, and if you come into a jurisdiction as an entity that wants to provide a service and you are aware of what those things are without too much complexity …

Complexity is the enemy of cleanliness.  So, what we have in today's society, and this is again a result of the state, is the more regulations we create, the more of this complexity that happens, and the more we get mired in bullshit, legal fucking sophistry to identify something as simple as these dickheads poured chemicals into the water and it killed someone.  That's a fucking simple deductive process but, because --

Peter McCormack: Of course, but okay.  Let's make it complex; maybe it didn't kill somebody.  Maybe somebody got a little bit sick; what law does that break?

Aleks Svetski: Well, that person who got sick needs to then prove that this was thanks to this person who poured something into the water.  Again, these are all things that you never solve with a silver bullet solution in the beginning; but what will happen is, we'll go through a few mistakes, as all societies do, but we'll get better at creating some sort of contract that binds any service provider in our jurisdiction to be able to provide a service, particularly as the service gets more sensitive.

So, there might be a couple of mistakes in the beginning where you can't go and recoup the losses, or you can't go and force someone to pay something, because you've allowed the wolf into the fucking henhouse.  But, the enforcing function there again comes back to these cities, or these communities, being able to defend themselves.  And, this is again why that's such an important thing.

One of the most important things here is that, in a more open, competitive society, you have to take into account the fact that there'll be another competitor who would be doing it and might be doing it better, and the competitor might have been the one who discovered that this person was a bad actor and doing something.  So, if the whole community goes against the business that did something bad, that business will go bankrupt in that community; so, their reason for existence is going to disappear.  That is the disincentive for them to do the wrong thing.

Peter McCormack: Yeah, but that disincentive can happen now anyway as well. 

Aleks Svetski: Well, not exactly.

Peter McCormack: Humans are greedy, humans cut corners, humans are abusive and that will continue to happen; and people also, sometimes, there will be monopolies and people won't have a choice not to work for that company.

Aleks Svetski: You can't have monopolies in an anarchic or a libertarian sort of state, because there's too much competition.  So, a monopoly can only form --

Peter McCormack: I disagree; I absolutely, fundamentally disagree.  Technology would enable certain monopolies.

Aleks Svetski: Not at all, not at all.

Peter McCormack: You have to define monopoly.  Is it 100%?  Like, is Google a monopoly; you can say no because of DuckDuckGo, but it's essentially a monopoly, right?

Aleks Svetski: Yeah, but Google became a monopoly, not because of its innovation; Google became a monopoly because it's the beneficiary of fucking trillions of dollars of money printing.

Peter McCormack: No, I disagree.  I think it became a monopoly because it created the best product when there was no friction to move from one to the other.

Aleks Svetski: No, that's how it started.  It's maintained the monopoly.  So, let's talk about IBM and Apple, for example.

IBM has been a computer company since the beginning of the 1900s.  It was the most powerful computer company.  And, two dudes called fucking Steve soldering some keyboards in a garage took over and became the best.  So, what happens is innovation always, always, always beats a monopoly.

Peter McCormack: No, I'm not saying monopolies live forever, but I'm saying I don't think you can say you will not get a monopoly in a --

Aleks Svetski: Hold on, I promise you'll have a lightbulb moment here.  The reason these monopolies have occurred, particularly these technocratic monopolies right now, is because the financial markets are so fucking skewed.  So, what you have is a situation where new innovative companies and new ideas that could potentially topple a Goole or an Apple or a Facebook by being better, what ends up happening is there's so much capital on these guys' balance sheets that before the competitor gets strong enough to shift the direction, they buy them. 

Peter McCormack: That might still happen.

Aleks Svetski: It will not happen when you do not have all of this excess cash.

Peter McCormack: No, I would agree that it accelerates the problem, okay, but I don't believe you can say that it wouldn't happen in an anarchist society, I just don't believe you can, because you still might have somebody who creates the best product and it's more beneficial for everyone to use it.

For example, eBay; eBay has network effect, right.  There are other smaller buy and sell things, but eBay has a network effect.  You're more likely to sell you product on there because of the amount of users, and you're most likely to find what you want.

Aleks Svetski: EBay was able to use money from the public markets to go and acquire PayPal and create a monopoly around who can pay via PayPal.  So, trust me, it's a lot more complex than just assuming that --

Peter McCormack: We're going to have to agree to disagree on this point.  I think it can still happen.

Aleks Svetski: I'll give you another example.  So, let's say someone creates a really, really good product, so I'll use Amazon as an example.  They serve the customer better and they do things better than most companies and they continually innovate.

Now, you could argue that Amazon's a monopoly in the book space, or whatever; they're a monopoly in the online shopping space.  Now, Amazon doesn't sell every product online, because there are a million other smaller shops; but, what's important here is that in a free market where you can't get close to the monetarist bigot, so you can't get the benefit of cancel and effects because of all the money that's being printed that basically gets flooded into financial markets that gives you resources that your competitors don't have; so in the absence of that, the only way that you can stay on top is by continuing to provide a great service and be a good actor. 

As soon as you start becoming a bad actor or providing a bad service, what happens is a competitor comes in and starts to eat your fucking lunch, and that is the normal disincentive for --

Peter McCormack: It depends on the company type, okay. 

Aleks Svetski: Give me an example of someone that can create something that somebody else can't muscle in on?

Peter McCormack: Dude, I'm not saying nobody can muscle in on, but it depends what you define as a monopoly.  If you say it's 100%, then of course not.  But, if you can say it's 80% of the market, right, for example, Google is a bad actor; we know it's a bad actor.  We know that it allows censorship of content in.  China, we know it misuses our data.  We know all these things.  It is a bad actor; we all know that perfectly well.

I still use Google because it's better than DuckDuckGo and it's better than Yahoo and it's better than that stupid Microsoft search.  I use it because it's the best.  I know they're a bad actor and I know they misuse my data and I know that, but I stick with them because it's the best product.

Aleks Svetski: Cool.  So, what other agenda does Google have that has helped you stick with them?

Peter McCormack: Primarily, it's ubiquitous and it's easy to access; but primarily, the reason I've stuck with it is it's the best, it's just the best for search results.

Aleks Svetski: Cool.  So, they've got Gmail, they've also got --

Peter McCormack: No, I don't even care about all that.  Even as a search engine, just the best search engine.

Aleks Svetski: Okay, fine.  So, the issue that happens is that for somebody now to compete with Google, if they came up with a, I guess …  Google's an interesting one.  I would argue that Google would not have been able to get so large had they not had the benefit of being able to get all that extra capital.

Now, if we extend our timeline a little bit though, Google's business model still depends on advertising.  Now, let's say that gives them a lead of 40 years or 50 years or 60 years in the digital space.  That might feel like a long time, because it also felt like a long time that IBM had the lead of computers for 70 years or 80 years.  But then, Apple, as a competitor, came in and ate their lunch.

So, it could be that in a free society, Google might become the largest player for a short while but, in the future, where we move away from advertising for example, and we move towards search results and social networks that are based on streaming micropayments, so let's say onlining or something like that where you get just as accurate results, no censorship and no advertising and all that sort of stuff, slowly by slowly -- and, I'm pulling shit out of my arse.  I don't know what the future holds; if I did, I'd be a billionaire.

But, these things come and go; they're dynamic.  That's the most important thing.  The state creates a situation where you remove dynamic progression of monopolies.  So, what you end up with is, if you're large enough and you've made enough money through good innovation, so if you've created a monopoly through good innovation, because you came in and you created something that didn't exist before, and I'm perfectly fine with that; I think that's fucking fantastic, Google succeeded and, what's his name?  Peter Thiel really defines Google as a monopoly in the true sense of the term.  They created a new market and they dominated it.  You are fully entitled to having that. 

But, the problem exists when you get so close to the monopoly on money and the monopoly on morality and the monopoly on regulations, ie the government, that you can then turn into a parasite that no longer adds value, and you can exist by sucking value from society.  That's where the older the companies get, like you've got these old oil companies; actually, big pharma's probably the worst one.  I think they're, of all, the most leeching companies, because they emerged as these companies initially that may have solved some problems but now, just effectively exist to leech.

So, you create that incentive, so I would argue that it's a much worse world when you have the route that a company can take to get large and stay large and stop adding value, and remain in a position of, call it power, privilege, advantage, because they can close to the monetarist bigot.  And then, what they do is they help fund the creation of new regulation that limits another competitor come in and eat their lunch.

I experience this every day now in the Bitcoin space.  I want to come in and service European customers and UK customers.  The amount of fucking horseshit I have to deal with.

Peter McCormack: Oh, look, I don't disagree.  Look, dude, listen, I don't disagree, and I think perhaps we're going down an unnecessary rabbit hole, because I think that monopolies can exist, but very limited, very few, but I still think they might exist.  But, I don't think we need to focus too much on that.

Aleks Svetski: Yeah.  I think, maybe let's leave that with --

Peter McCormack: I disagree with you on the regulatory side of things.  What about borders; should we have borders?

Aleks Svetski: Okay, borders; yes.  The only reason borders are a problem in today's day and age, there's two parts to it, two pillars to discuss.  Border control is currently a welfare and wealth distribution problem.  So what happens is, if you assume that one of the state's functions is for welfare and wealth distribution, when you open borders, you end up getting a bunch of fucking new people coming in, that may or may not be adding value to society, that the fewer and fewer productive people in your current border that are left have to pay for.  So, that's like you having a house, letting a bunch of people come in, and then they start eating all the shit in your fridge, sleeping in your bed and all this sort of stuff. 

So, in the current concept of the state, that is a welfare state that distributes wealth from one group to another, and that literally subsists off the taxation of the productive people, absolutely you have to have border control.  You can't live without it; you'd just get overrun.  You're letting everyone into your house and you paid for everything; what the fuck; know what I mean?

Peter McCormack: No, I mean I agree with this.

Aleks Svetski: So, that's really difficult.  So, the other one is the risk of the values of your community being diminished by allowing a bunch of people that you don't know to come in, and that one's where I think a lot of the libertarians get hung up; is, what do we do?

Let's solve the first one first.  If you remove the welfare state, then allowing anyone to come in doesn't really matter, because they're not going to get any benefits by coming in, they don't get any refugee benefits, they get nothing.  So, the only thing they can do is actually work and add some value; and, they can either for someone, they can start a business; so, they can actually add value.  So, if you remove the welfare state, you actually eliminate a lot of the problem with immigration.

Then, the only problem you really have to deal with is this mass potential of people incoming that might bring their culture and try and fuck your culture.  So one of the examples of that is, let's say you've got a good set of rules and we operate on this set of rules in our community, in our city, in our region, and a bunch of people come and they say, "Yeah, we'll follow those rules; we agree with them", but they bring their own shit and they come and start stealing from you, robbing from you and all that sort of stuff.

So, that's a stickier problem and that's something that needs to be addressed on a case-by-case basis.  But, when you start to see people like that coming in, you may need to start thinking about who you allow to come in, on that note.  So, that's probably the stickier part, but I think the first one is, in the current status quo of how we live and the fact that the welfare state exists and the fact that the productive capacity of a small subset of the constituents in society is how all the bills get paid, you have to have fucking walls; you absolutely have to have border control.

Peter McCormack: Okay, but not all libertarians agree with that.

Aleks Svetski: Well, because maybe they haven't thought about it. 

Peter McCormack: Well, no, I've heard it.  I've listened to Tom Woods and I've heard two people really struggle with it.  And I know what they're doing, because they know it's bullshit; but, they also know, by creating borders, they're essentially limiting a certain aspect of freedom that comes with natural birth rights.  I think that is an element of hypocrisy, because we are naturally born into a world which was created without rules, and we are now creating a rule saying, "Those people born there can't come here" and I think that's a hypocritical position.

Aleks Svetski: Again, this only becomes a problem in the context of a welfare state, or a wealth distribution.

Peter McCormack: No, but even without a welfare state, in your version you're saying no welfare state, but you are also saying, "Absolutely, you have to have borders"?

Aleks Svetski: Well, no, I'm only saying you have to have …  So, you have to have borders around your property, right, and now your community --

Peter McCormack: What about country?  In your anarchist world, do you think there should be borders?

Aleks Svetski: In my anarchist world, a country doesn't exist; you can't have a country.

Peter McCormack: You know what I mean; like a region, or area.  Well, it does because in your version, it exists inside the borders of other countries.  Just say it was America.  The Canadian border and the Mexican border would exist?

Aleks Svetski: Yeah, well they're much, much smaller, first of all.  Number 2, you would allow someone to come in, but guess what; they don't get fucking anything for nothing.

Peter McCormack: No, of course, but you're open to that idea?

Aleks Svetski: Absolutely, yeah.  So, in that sense, in a libertarian society where there is no welfare state, the requirement for strict borders diminishes.  Someone can come in and they either starve or they work.  And if they work, that's good for all of us.

Peter McCormack: Okay, let me add something to this.  What about defence?  You know, America goes anarchist; those mean bastards over in Canada see all their success and the army thinks, "We're going to invade there and pillage everything they've done".  How do you provide defence?

Aleks Svetski: Defence was traditionally -- and again when you look at how the Americans first beat the United Kingdom, let's say you're a bunch of communities and cities and you say, all right, we have this free, libertarian, private sort of policing where everyone pays an insurance agency, or something like that, or they pay a subscription -- like, you will have policing at subscription.  Then each jurisdiction may or may not choose to have some sort of group of people that they hire for external defence.

Now, what happens is each little city or collective or group, or whatever, can choose to ally.  In the same way as America and France and England and everything allied against the Germans, just on a different scale, you would ally and try and push back the invader, because it's theoretically sound for you guys to ally to maintain your individual sovereignty because you know, if you start getting eaten up one by one, then you're next, basically.

So, it's actually been the same throughout all history.  Clans, and things like that, when they used to go to war against monarchs and stuff like that, they would all band together and they would protect themselves.  I don't know if you remember Braveheart in the beginning, the Scots protected themselves from the English by banding together; that's effectively how that would work.  But, the idea of having a standing army to go and attack somebody else is, I think, stupid, because that's an aggression.

Now again, in the last 100 years, because of the rise of the state and the advantages of scale that have emerged through industrialisation and each man with a gun kind of warfare, there was an advantage to raising a big army and going and stepping on someone else's territory.  But, that's all shifting.

Peter McCormack: Yeah, but fine.  But, what if we didn't build an ally and what if they just did come and attack us, where does the defence come from?  Or, let's think about border encroachment from other countries, which has happened.  Israel has stolen land from the Palestinians -- sorry if there are any Israeli people listening and they disagree with this; I'm not an anti-Semite, it just factually has fucking happened and everyone who disagrees with it is a fucking liar -- but, that has happened; Russia's annexed Crimea and is a threat all across their border; China in the, is it the South Pacific Seas, are battling over specific islands. 

Countries steal land when they can.  If you're an anarchist society, what stops a border and country just deciding to expand its own country into yours?

Aleks Svetski: Really good fucking defence weapons, man; it's the only solution.

Peter McCormack: Okay, but how do you have those, because this is a country with an army and the apparatus of an army and, if you're an anarchist, you don't have the apparatus of an army.  You might have certain weapons, but you don't have the actual structure and the apparatus of an army.  So, how is that defence provided?

Aleks Svetski: You can pay for it.

Peter McCormack: But how?  Structurally, how does it happen?

Aleks Svetski: Well, you pay a provider to come together.  There'll be a lot of money now in us protecting our way of life.  So, if we're a prosperous, capitalist, anarchist society, there are a lot of other elements that go into that. 

Peter McCormack: But, hold on.  If we're a prosperous, capitalist society, we also then have the money to invest in companies, create big balance sheets and create monopolies; sorry, man?

Aleks Svetski: No, that's not what capitalism is.  Capitalism is the efficient use of your resources; that's got nothing to do with monopolies. 

Peter McCormack: Yeah, but Google will argue that is a very efficient use of resources, because of the size of the company it's built?

Aleks Svetski: Yes, but again, Google is someone that's built a solution that is very useful for everyone, that is why everyone keeps using it.  But, the monopolistic element of Google, where nobody else can compete, is exacerbated by the fact that the state exists; that they print money; and, that these public companies get 80% of all the fucking liquid capital that flows into the markets.  That's where the unfair advantage is because now, as a competitor, I can't compete with that.

So, that's not what capitalism does.  That's not capitalism; that's the crony system that we have at the moment.  Google gets an unfair advantage over any competitor that might have created something better, smarter, or anything like that.  So, let's separate that from capitalists.

So, we've got an anarchic, capitalist community; we make much better use of our resources because we allow people to voluntarily trade; they do things better; they do things smarter; we're innovating; we're creating all this cool shit.  First of all, you are selling stuff, so you become valuable to these other countries that are less fucking intelligent and have these heavy-handed state fucking things, so they want to buy shit off you in the first place.  So, they have an incentive to ensure that you keep doing your thing.

Now, some draconian fuckwit might think that, all right, I'll just come and take it from them, because they might be dumb enough to believe that it's the machines that you built, as opposed to the method of organisation that you guys have built that allows to produce at a higher rate.  So they come in and then what you do is, you pay somebody else to come and protect you if you don't have the resources yourself to protect you; or, you band together with other ones that are in your vicinity that might be in a similar situation.  So, these kinds of things, they're very difficult to have a blanket solution for.  But, when your existence comes into question, you end up finding a way. 

One could obviously use the Hong Kong example as an antithesis.  We have China taking over Hong Kong and it's a fucking tragedy and all that sort of stuff; and it fundamentally is.  So, there's no clean answer which is why I don't think the transition to smaller jurisdictions, to smaller cities, to a more free-ish society is going to be clean.  We're going to have to go through the tyranny of the state trying to transgress upon, of transgress against, free people.  As the tables, or the tectonic plates, let's say, shift where … 

I mean, in the past, if you wanted to go and beat America, you had to raise a larger army than America.

Peter McCormack: Good fucking luck with that!

Aleks Svetski: These days, if you want to beat America, you can, I don't know, a group of ten people who can whether it's hack the elections or drop an EMP or something like that, you can take down entire nation states, because the larger it gets the more fragile it gets. 

So, this was actually the thesis of The Sovereign Individual, this idea that the gain that the state apparatus had over the last couple of hundred years of using scale and number of people to gain an edge in the use of violence is diminishing because now, you can cause much more damage with a lot less people.  So, what that does is it changes the incentive dynamics for how violence and defence actually work, how attack and defence actually works.

So, you come back to this notion of, the only way to really demarcate private property is by what you can defend.  And, what we need to be focussing on as individuals and as people who are freedom-loving, for example, is how do we lower the cost of defence and increase the potential cost of attack?  That's a kind of direction; it's not a panacea; it's not a silver bullet.  There are going to be -- we might create a citadel that gets fucking overrun by China and then we have to be, "Oh, fuck, that was a waste of time.  Now we have to go somewhere else and do it again".

So, it's not going to be clean, but it's the direction we need to strive for and there's no point in us replaying the same democratic fucking farce, because we're just going to end up where we are right now, which is having a couple of people decide what's right for everybody.

Peter McCormack: Listen, look, I get what you're saying, but I think you have to recognise some of the flaws.  I think the potential loss of [by the way, Bitcoin's just shot over $15k!] I think the potential encroachment of land from non-anarchist countries from the other side of the borders is a significant risk.  And, without a coordinated central defence of equal, then you are at risk of losing territory.  [Wow, look, it's going up like a rocket!]

We've seen that with other countries.  You know, Palestinians, they have rocks and a few mortars and they have not been able to defend themselves.

Aleks Svetski: No, the guerrillas always beat the big army, man.

Peter McCormack: That's just simply not true; it's just factually not true; what's happened in Israel and Palestine?  You only have to go and look at, I think it's the 1970 UN-agreed borders; go and look at the borders and then go and look at the encroachment of the borders.  It's happened and they've been abused and had their land taken, and they don't really have a way to defend themselves.

Now, listen, you can argue the guerrillas work in a war; look what happened in Vietnam, certainly.  The guerrilla warfare of the Vietnamese soldiers, who had literally rudimentary weapons and they had to reuse the bombs that didn't explode; I get all that.  And the Americans weren't able to defeat them, but the Americans weren't there to take their land.  They were there to prevent the expansion of communism.  [Are you watching this rocket ship go, by the way?]

Aleks Svetski: No.

Peter McCormack: But, I'm just saying, a bordering country is a different scenario.  Where they want to steal your land, they could just steal your land.  I think you're being naïve not to admit that's a possibility so therefore, do you accept it, or how do you defend against it?

Aleks Svetski: Well you either, unfortunately, in the face of evil, you either protect and defend and you do it to the death, or you retreat and then you go and rebuild somewhere else.  So, these are one of the unfortunately realities.  What, I guess, some people would argue is that the way to defeat the threat of that, or to protect from the threat of that, is by doing the same thing.

My argument is that I don't think that's wise.  I think the tectonic plates and the way the use of violence is changing, we will be able to protect in better ways than we have traditionally with guns where, you know, 1 million people defeat 10 people.  The advantage that came with numbers is not going to be the same advantage moving forward, because we're operating on a different plane, in a different field.  And, there's going to be a situation like …

In the transition, I'm sure there are going to be casualties.  In the transition to being a more fragmented, smaller, more locally-focussed world, there are going to be some larger states that try and take advantage of non-well-defended, call them citadels or private cities, and stuff like that, and there will be some tragedies along the way.  But, I think the days of the large-scale state are numbered, because they don't have the same advantage that they used to have, number 1 --

Peter McCormack: I'm going to call you out on this one, sorry.  The large state, I don't think is over.  I agree with the threat and what they present, but just saying that you can get rid of them, I think, hmm.  I think there are a lot of people living in a lot of countries, like I think the people in North Korea would love to overthrow the state.  They haven't managed to for, what is it?  How long is the Kim dynasty?  Is it like 60 years?  I don't actually know; maybe 100 years.  But, the overthrow of the Russian state; that's not happened. 

Aleks Svetski: That's a blip on the timescale.

Peter McCormack: No, no, but what about the overthrow of the Russian state; that's not going to happen.  When states get overthrown, they get replaced by another state and I'm not saying you're not right in your desires and goals, but I think you're underestimating how difficult it is going to be to overthrow the state and replace it with an anarchist society. 

I think you can overthrow a state and replace it with another state, but the days of the states being numbered, I just don't see it.  It's not that I don't want it, not that I don't agree with you; I just think it's a naïve position to take.  I apologise, that sounds a little bit aggressive, but you know what I mean.

Aleks Svetski: No, that's fine.  I stand by the fact that I think it's numbered in the sense that my timescale might just be a little bit longer than yours.  I'm thinking in terms of decades, because I think it's going to continue to disintegrate.  It's not getting stronger at this point. 

I think what's happening, particularly after this whole 2020 mess that we've had, is you've got less productive people now; you have less of a real economy; they have a smaller productivity base to tax.  So, they're getting more bloated, they're getting larger, but the parasite has less to feed off.  It is collapsing under its own weight and the problem is, because it's no longer agile because it cannot innovate, because it's no longer protecting private property, because it can't move with reality, it's going to fracture under its own weight.  This is the thing. 

When things become too centralised, they end up breaking anyway.  This is a natural law; you can't get around it.  It's going to break.  When you use up the capital base, you fall apart; you have nothing left to eat.  Now, the only question is, is that going to happen violently under the collapse of the system itself, or will we be able to move it back consciously in the direction of fragmentation and more localism; that's the only question that we've got here, because it's going to happen.

Peter McCormack: All right.  I hope it happens.  I just don't underestimate how complex of a challenge it really is going to be.

Aleks Svetski: Of course it's going to be complex, but tell me, if the state continues to get bigger and there's less and less wealth being produced, where does the wealth come from; how do we feed people; what do we do?

Peter McCormack: Well, this is where revolutions start.  It's like that Fourth Turning thing like I mentioned earlier I've got to go and read in preparation.  I've got to do with Brandon Quittem about that, so I need to go and read and understand that.  But usually, with your boom and bust cycles, you eventually get to the point where there's such a wealth disparity that you see revolutions.  I saw it when I was in Santiago in Chile earlier in the year, you know, people protesting on the street; we've seen it in France.

We live in the most prosperous times ever, but everyone's fucked off, you know, everyone's pissed off and for a variety of reasons.  But, there is so much wealth disparity.  It happened in the US, the UK.  We're at that point where we require a reset, yes.  The Bitcoin reset is interesting.  I don't think the people who want it fully thought it through yet, in certain examples, but I think most of these will be replaced with another form of state.

Aleks Svetski: Yes, but do you think that state is going to be larger, or do you think it's going to be smaller?

Peter McCormack: No, I think it starts smaller and the same happens again.

Aleks Svetski: And why do you think the same happens again?

Peter McCormack: I think it's the natural cycle of the state and how the state operates.

Aleks Svetski: Why?

Peter McCormack: I just think this is the way we are.  Firstly, we organise ourselves into structures.  We have leaders and followers and I think what happens is, structures just get bigger and bigger as the state ends up creating more and more rules; and then, it ends up having to tax us more to manage what it's created; then eventually, it has to print more money to cover the fact that the tax receipts don't cover its debts; and eventually you have a reset.  I just think it's this perpetual cycle until something new happens, and I'm not saying it won't happen; I just don't know what it is or when it will happen.

Aleks Svetski: Okay, so let's touch on a couple of things there.  So, it gets bigger because it can do a couple of things like, it promises to provide protection, again, better, so it then finds a way to give itself a monopoly on violence.  And you also mentioned the printing of money.  They're the two facets that allow a state to grow larger: maintaining a monopoly of violence and being able to print money.

Now, what I think is different this time, and this is I think we're sort of transitioning into something new, is that the most important form of wealth is Bitcoin; everyone's going to want some, even these new states; and they aren't going be able to fucking print it.  That is going to be the ultimate thing that stands in the way of their ability to grow large, because you cannot grow large without printing money out of thin air to fund the ability have a monopoly on violence.

Peter McCormack: So, what we're really talking about here is, can we create a Bitcoin-based system that the state doesn't destroy?  Or, can the state use violence to make us use their currency as well as Bitcoin?

Aleks Svetski: They will try.  So, my contention is more so that, we're doing that anyway, because we're sucking the economic mass out of the existing system, so what will happen is the existing system's just going to get more and more brittle.  Over time, more and more of the producers are going to store and transact their wealth on Bitcoin, so it will be immune from tax, it will be immune from the confiscation by the state.

So, what will happen is the state will have less and less to feed on.  At some point, it will either go through revolution or through natural collapse, or something; it's going to get really fucking messy.  Anything that emerges afterwards, all the while Bitcoin's getting stronger.  This is actually where the whole idea of "Bitcoin fixes this" actually comes from.  Because you can't print money, you can't give yourself, as a state, the ability to pay for something like large-scale armies, or a monopoly on violence.

So, first you remove the monopoly on money creation; then, that actually limits the ability to create a monopoly on violence.  Then, that actually makes room for people to create more competitive societies that are smaller and more fragmented.  So, this is why Bitcoin is such an important thing.  So, the question is less about when it happens, because we don't know, but it's more about how. 

Is it going to be a messing falling apart of the state; is it going to be people finally fucking having enough of governments and large corporates that have turned into monopolies thanks to their government pals having all the money, whilst all the middle class and poor have nothing?  Is that going to be the breaking point, or is it going to be just that these fucking states in the next decade, literally run out of money, because they have to tax people 60%, 70%, 80% because they just shut down every single economy and there's no more money left and there's no more people working?

We are the fool right now who's run off a cliff thinking that we can fly and we've jumped.  And, for the first five seconds, we're beating gravity because we feel like we're moving up.  But, on a long enough timescale, we're fucking crashing.  So, we've deviated so far from natural law, from things like what we discussed earlier, things that we agreed were immoral, from power and control over another; from stealing or taking by force someone else's shit; from unprovoked violence. 

All of the state stuff is built on these principles and it can only last so long until people fundamentally have had enough, or until the capital that has been built up over hundreds of years, or centuries and millennia of work, is depleted.  We're sort of depleting all of that shit now.  It's going to happen.

The talk that I gave in Vienna at the beginning of this year, actually, I think it was a couple of weeks before you and I did our first podcast, was that a libertarian society and Austrian Economics cannot exist without Bitcoin.  Until then, it's just theory, because we will, I agree with you, keep going through the same cycle of concentration and centralisation of power, until you cannot concentrate the tool to which we measure human resources, which is money. 

So, until that is standardised where nobody can have an advantage, we'll go through the same process of centralisation and largess and fatness of the institution that runs the joint, until it collapses and we emerge with a new, smaller, fragmented thing.  And then we go through the same fucking cycle again.  So, Bitcoin fundamentally breaks that.

Peter McCormack: Okay, I don't disagree with that.  I would love someone to do a proper investigation, like a proper write-up of a paper, like the honest pros and cons; because "Bitcoin fixes this" is a useful meme, but I don't think it's entirely correct in every instance.  There are lots of things to consider about what Bitcoin can and can't do.

Also, the transition to a Bitcoin-based society itself, we'd have to accept that there are some negative consequences.  It's likely a bloody transition, because you were talking about a reset of the economy and the financial system.  It could push a lot of people into desperate poverty as we reset the production, the means of production.

I would love someone to do, I don't know if someone's done it, an actual real research paper into how it happens and what it means.  But I think, just as a starting point, having Bitcoin as a reserve currency I think would be super helpful.

Aleks Svetski: But, this is why I say it's so much more than just a reserve currency.  It's actual a limit on the ability for a state actor to have a monopoly on money, because that's where it all starts.  So, if we create a limit there, and this is what the Constitution was originally trying to do, because it was actually trying to be a limit on the ability for one group to have disproportionate power over everybody else.

Now, the Constitution has failed thus far, because integrity was based upon the interpretation of human beings, whereas Bitcoin transcended that; and, that's why I think it's so powerful.  It is a Constitution in and of itself that, no matter how different you think you interpret it, Pete, and that I interpret it, I mean it's still ten-minute blocks; it's still 21 million; it's still the same fucking rules for all of us, no matter what you subjectively believe or what I subjectively believe.  And that's so, so powerful.

That is the crucial piece of the puzzle that has been missing, which is why the original libertarian ideal ended up failing under the corruption of the creation of the state.  So, I actually think it's not a matter of "if", it's a matter of "when", because we are heading there.

One of the other advantages that we have now with Bitcoin, that I think is really interesting, is that because Bitcoin embodies private property, it is almost like private property by definition is what you can defend, remember; if you can defend what's in your brain, you are the official owner of that piece of property.  And that's why Bitcoin is so superior as a form of wealth preservation.

But, what's interesting is over the next decade or two, contrary to how previous revolutions have emerged, the people who basically helped drive the revolutions for the positive result, or let's actually use the American Revolution as an example.  Those who left England and went to start a new land, they actually had to drop everything and start from scratch. 

The difference that we're going to have this time, and this is really powerful I think, is that you're going to have a bunch of freedom-orientated individuals, who are going to be quite fucking wealthy, holding a bunch of Bitcoin, who will have the resources to make some moves that would have, in days gone by, been very, very hard to do, unless you really find a fresh land, like what America was.  So, that's going to be interesting.

Now, that's not a panacea; it doesn't mean it's going to fucking solve everything; it doesn't mean it's going to be perfect or smooth or any of that sort of stuff.  It's going to be messy; it's going to be ugly; but, we'll actually have a resource that everybody else wants and we'll be able to pay for stuff to restart, or kick off, that path to productivity again.  So, I think that's the wildcard that I don't think we've had in the past and it's a really interesting one.

Peter McCormack: Yeah.  Well, I love the fact that Bitcoin has shot through $15k while we've done this, and we've done nearly three hours.  In the time, when did we start?  So, Bitcoin has gone up around $400 since the time we've done it; amazing!

Listen, let me give you my clued-in thoughts, because we could go on for hours, but I think this is a good thing that we can follow up on.  My concluding thoughts are I agree with the vast majority of what you say.  I tend to then try and work through the consequences of them, what the negative ones are, what the positive ones are as such.

What I think is that you're mainly right, okay; like, 95%.  But, I don't think you probably -- and I think you were actually working it through in your head when I sent through the DuPont thing; I think you were trying to figure it out.  I think if I'd given you that in advance, you would probably have a different response.  I don't know if you agree or disagree with that.  I don't think that one was fully answered.

I also don't understand how the rule of law is maintained and I know there are certain basic rules, but then who sets those, there could be more complicated ones.  I mean, we could have covered how prisons work, who finances them, etc, because that needs thinking about.  And, I also don't think defence was answered.

And in some ways, it takes me towards this idea that despite us not being friends at the moment, Frances Pouliot introduced me to the idea of the night-watchman state, like minarchism.  And, I know there's that libertarian joke, "Minarchists are six months away from being anarchists", or whatever.  But, I like the idea of minarchism because at least it covers those basic things. 

For example, I don't think the roads thing is ever really properly well answered; I think you could have basic regulations around certain things.  I think minarchism, with a strong constitution of what it can and can't cover, therefore it doesn't have scope creep, is an interesting area for me.  And I certainly think that defence, in terms of borders, I don't think you answered that one fully well; I still think that's a risk.  But, that's my conclusion, but everything else, theoretically I agree with you.

Aleks Svetski: I actually started off with minarchism as well when I started falling down the rabbit hole, and minarchism is what made sense.  In fact, it was Any Rand's book where she said, "The government should exist to perform three functions and three functions only: defence, internal protection through policing and judiciary services" and that's it; nothing fucking else.  And for me, that's where I also started.

But then, I guess where I've moved on, and this is that whole six-month meme, is that I realised that okay, instead of giving that right to one group, let's open it up to competition because different ones will do it better.  And basically, different providers of those services will enforce protection, rule of law and external defence better if they can compete against each other; and, what it does is create a market for the best provider of those services.  So for me, that's a hard argument to push against.

If a minarchist says it should be just one person doing it, my thing is, "Yeah, that's fine, but why don't we just open it up and let the best provider of that win?".  And, that's kind of where you fall into.  But either way, minarchism or anarchism are both much, much better than large-scale democracy or large-scale state control, without the option to secede.  And I think, if I had to boil down the biggest problem with democracy today, or the biggest problem with the state today, it's that you're not allowed to leave, man, you're not allowed to fucking leave.  You don't have an option.

Peter McCormack: Well, that's what I saying; is there that option to opt out?  Someone recommended a book for me and I got the audio book, I don't know if you've heard of it.  It would be funny actually if it was you who recommended it, because we had that chat before.  Let me just dig it out for you.

Aleks Svetski: Yeah, go for it.

Peter McCormack: Because I was like, what about the idea of an opting-in and an opting-out state.  I think, if you had that, you might actually -- so for example, if you opt out, you don't get health, you don't get police, you don't get fire, but you have the ability to choose to take out insurances as such.  I can imagine that leading to the end of a lot of what the state provides.  Someone recommended this book, Too Like The Lightning?

Aleks Svetski: No, that wasn't me, no.

Peter McCormack: Well, I got the audio.  Apparently, that's a similar thing.  I got the audio book, but I was just bored --

Aleks Svetski: Well, you're defining the libertarian thing right there; that's what it is.  So, libertarians aren't necessarily against organisation by people.  Organise in whatever way you want; that's your choice and your right to do so, but allow for an opt-out.  Allow for then, if you don't like it, go set up your own competitive version of it if you think you can do better.

Peter McCormack: Well, that's what the US system's meant to be in some ways, isn't it?

Aleks Svetski: Well, it was meant to be, but the founders are fucking in their grave right now looking at the cluster-fuck that it's become.  But I mean, if there was ever an argument for smaller state, you look at America today, completely fucking divided.  There is no reason why one person should be in charge of everyone, when you have people that completely think differently; it's fucking madness.

Peter McCormack: No, I agree.  People don't know, but we delayed this, because we were meant to record a couple of days ago.  Firstly, I stayed up all night watching the US election, so I didn't get any sleep; but then, I wanted to see the result. 

But I couldn't help but think, there are essentially two political groups within the US and let's just say, for the sake of the argument, it's like the country's split down the middle, half Democrat and half Republican, and they're all fighting to have one person choose who gets to, not on their own because obviously you have the Senate and the Congress and such, but you essentially have this one leading person who you look to as your kind of leader, yet his views only really represent 50% of the people.

And even then, it's a choice between Donald Trump, who is a fucking moron, and Joe Biden, who's got a really terrible track record as a politician, and it's just kind of bollocks, really.  So, I'm kind of with you on that.

Aleks Svetski: Yeah.  I mean, I want to finish on one last description of democracy which I like that I've got written here.

Peter McCormack: Do it, man.

Aleks Svetski: I say, democracy's another form of just the removal of personal agency where, the difference with democracy is that you feel like you feel like you have a say, but you're still mired in the common.  So, your opinions, your desires and your wants are secondary to what the supposed collective has.  So, the example I try and use with people sometimes is, let's compare food and diet in a commercial system or an economic system, versus food and diet in a politically democratic one.  So, we're replacing decision-making with what you're allowed to eat. 

So, your money in the democratic version is pooled and what you eat is what the collective agrees on.  So, you pool your money together; instead of individual decision-making, you decide as a group and its majority rules.  So you and a couple of the others might want broccoli, but the majority want meat.  So, it's decided that meat is the way.  You believe it's wrong, because you don't want to eat meat, you think broccoli's better; so, your only recourse, because remember all the money's pooled and it's split up and you all have to eat meat, is to decide to lobby.  So, you now have to waste time, energy, and build an unnecessary set of political skills to convince everyone that broccoli's better. 

So, after a couple of years of lobbying, you finally get to do a new vote, and now you have a 60/40 win that broccoli is what we should all eat, not meat.  And then we go back into the vicious cycle, because then your opponents are pissed off, who wanted to eat meat and are now being forced to eat broccoli, have to go and do the same.  So, you have all this fucking waste.

Whereas, in a free market, which is what libertarians promote, is fuck what everyone else wants, you just choose for yourself.  And, the direct mechanism for voting is an economic decision, which is where do I put the product of my labour, which is my money, and I decide to use what I want in my way; instead of someone else, or some collective deciding via some ridiculous indirect, intermediary method.

So, democracy just introduces all of this waste in the middle of direct decision-making.

Peter McCormack: I agree.

Aleks Svetski: And this is where you were talking the minarchist system.  If you want defence, if you want healthcare, fucking pay for it; buy insurance.  Human beings are solution-oriented creatures, so if there is a problem of defence, if there is a problem of private property protection, if there is a problem of sickness, if there's a problem of bad actors, we will find the solutions to these.  And, the best way to find solution is to let everybody have a go at trying to solve the problem.  That is the definition of a free market, and that is so much better than creating institutions that can accumulate power through regulation that then blocks off anybody else from coming and competing. 

So that, I think, is really where that element settles.  And, whilst I think we might not have all the answers for what a utopian, libertarian society looks like, because it doesn't exist; but, the messiness and couple of the things that you brought up which I might not have a direct answer to, I might not, but in an open market, some other person of the seven billion will come up with an answer to that problem and the opportunity for them will be to make money.  And that, again, is where the free market comes in.

So, I think, again, it's far superior than a couple of academic, intelligentsia fucking numpties who believe that they know better, and if only they had all the resources, they would know exactly how we should all live.  It's so arrogant.

Peter McCormack: All right, man.  Well, listen, I think there's lot to think about here.  We should do this again.  I think next time, I'm going to try and get Alex Gladstein on, because he'll have some arguments that I won't think through with regards to democracy, so I'll try and do that.  Also, we've got to stop because we've both started swearing; I don't know if you noticed!  We both started swearing, and we made that promise.

Aleks Svetski: We failed.

Peter McCormack: Look, this was long in the planning, it's been an awesome show, we've done three hours.  I think it's provocative, it's going to make people think and I appreciate you giving me three hours of your time to do this, Aleks, and it's been good getting to know you, man; I appreciate it.  You definitely make me think and check myself sometimes, so thank you, brother.

Aleks Svetski: Likewise, man.  Thank you for having me on and allowing these sorts of conversations.  I mean, I obviously side with a lot of the plebs and the hardcore guys and stuff like that, but I side with them because I'm morally on that side and I'm part of that intolerant minority.  But, I think those guys have sort of come to that realisation through much of the same path that I've sort of come and I stand with that and hope that these sorts of discussions bring people who are on that journey along the path to that.  So, yeah, appreciate you being open to it.

Peter McCormack: Well, these conversations are useful.  I mean, I could very easily just agree, but I think it's useful to have these conversations to actually challenge the ideas and the thinking and take contrary opinions, which I like to do. 

It's so funny, right, all the guys on Twitter think I'm left because I don't like Trump, or because I have some kind of progressive ideas; and, all my friends think I'm on the right.  I just like taking contrary opinions, because I think it's useful.  But anyway, look, we could go on forever.  I appreciate your time, man, I wish you all the best.  Hopefully, I say this to everyone, when the planes are flying, we'll actually get to catch up in person some time and do you know what; we didn't even talk about coronavirus?

Aleks Svetski: We didn't even talk about Trump and Biden; holy shit!

Peter McCormack: We didn't talk about Trump and Biden, we didn't talk about coronavirus; we could have done a four-hour monster here, but I'm wiped out, I'm sure you are.  But, we should definitely follow up.  This has been easily one of my favourite chats ever on the show, so I appreciate your time, man.

Aleks Svetski: Appreciate it, sure, man.  And, I'll throw one last thing in there; if anyone hasn't read some of my stuff, I wrote one recent article called Bitcoin & Lockdowns, which I think is really important.  But I think, probably one of my more favourite ones, I just published it today; it's called, Resistance is Not Futile, it's Necessary.  It's kind of a call to arms to everyone. 

I think the biggest danger we have in the world today is that we've fallen into just this apathetic acceptance of being told what to think, how to think, what to do and it's getting worse and worse.  And, it's kind of a call to people to think a little bit deeper, so check it out; it's on my Medium: svetski.medium.com, but I talk about some of the stuff that me and Pete discussed here, and particularly the difference between natural law and man-made law, and using some of those basic primitives to decide that, hey, it's really important. 

This is why I love the name of "Defiance" for you.  That ability to defy stems from the ability to think for yourself, which stems from some of these a priori truths, like I am a man with free will and I own myself and I own my ability to think and therefore, I can defy something that is a transgression on my personal, private property, which is my ability to think. 

So, it's such an important thing and I think a lot of society's lost that courage to defy and to disobey, and yeah, anyway, I urge anyone to go and read some of that.  But, yeah, thanks again, Pete, for having me on.

Peter McCormack: No worries, man.  I'll put that in the show notes; I'll make sure people share it, because I read it in preparation for this.  It's a very, very good article; it did make me think.  So, I'll put it in the show notes and, yeah, wish you all the best, brother, and hope to see you soon.

Aleks Svetski: For sure. Take care, man, ciao.