WBD352 Audio Transcription
The Sovereign Individual Pt 2 - The Logic of Violence with Robert Breedlove
Interview date: Monday 24th May
Note: the following is a transcription of my interview with Robert Breedlove. 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 Bitcoin writer Robert Breedlove. We discuss the mega-political variables that shape society, the role of technology, and the logic of violence.
“If you’re operating in a purely free market, the presupposition is that you should only be rewarded commensurate to how well you satisfy the wants of others basically; the better you serve mankind the richer you become.”
— Robert Breedlove
Interview Transcription
Peter McCormack: Breedlove, how are you, man?
Robert Breedlove: I'm great, Peter, how are you?
Peter McCormack: I'm good, man. Sorry, it's been a bit of a delay doing this, the back and forths, and scheduling, we're both busy, man. Your podcast is snapping on my heels, had to do some work to try and keep you away from me. You're doing well, man.
Robert Breedlove: Thank you, yeah, things are good. I'm just trying to, I guess, get my head around all of this sovereignism stuff and get through the whole series and like I was just telling you off air, it's a lot of really hard material, so it's been quite the effort.
Peter McCormack: So, I think a good second part of our interviews to cover this, and it's the area I'm most interested in right now, specifically is if we are in this information age, as we discussed in the last episode, there are implications for this. I'm most interested myself in understanding humans, like how did we come to where we are, the different stages of societal development, where we're going, what this might mean, because you often talk about the logic of violence and it's a very interesting subject to get into. I'm really interested in how the logic of violence changes in the future, and I've talked to you before whether there are net benefits or net negatives in certain scenarios.
So, I just kind of wanted to do the background with you starting at the Agricultural Revolution, what that meant and just kind of work through those different revolutionary kind of stages from agricultural to industrial, feudal, all the different stages and just understand how the logic of violence changed with technology. So, are you ready for this one?
Robert Breedlove: Yeah, I think I am.
Peter McCormack: It's a big topic.
Robert Breedlove: Yeah.
Peter McCormack: Right, so I think an interesting start point is with the Agricultural Revolution, which happened post hunter-gatherers. Interestingly covered there, I think I also read some stuff like this in Species, was it Species? I can't remember, but actually going before that, you might not know the answer to this, do we know, prior to the Agricultural Revolution, do we know much about the relationship between different groups and the issue of violence prior to the Agricultural Revolution?
Robert Breedlove: As, you know, my reading of the text and I'm definitely not an expert about -- that would be pretty much I think you're getting into pre-written history at that point, because Agricultural Revolution was the emergence of writing eventually, which is something we can get into. But my understanding in general there is that we were hunter- gatherers, so we were these roving bands of mostly symmetrical groups, typically less than a Dunbar number, much less typically, which is 150 people.
I think the bands tended to be much smaller and we just moved from place to place, we ate a wide variety of food, whatever we could get our hands on, tried to constantly move into good weather and didn't have much property or didn't have much wealth, because we weren't really creating an economic surplus, we were just living pretty much hand to mouth.
Peter McCormack: Right, so the big change that you've talked about in your writing and also within The Sovereign Individual was the Agricultural Revolution, that changed the logic of violence. Do you want to talk about the starting points of the Agricultural Revolution, what happened and why that changed the logic of violence?
Robert Breedlove: Yeah, I think we may have touched on this a bit in the last episode, but I'll go through a little bit to review. So, it was with the advent of the agricultural age where we decided to stop moving about all the time, as hunter-gatherers, and settle down in one place to plant crops and produce food.
That was the beginning of savings, or set another way, an economic surplus. So for the first time in history, we were actually starting to produce much more than we consumed. As a hunter-gatherer, pretty much all your savings were whatever you could carry around; your dagger, your pouch, you're limited amount of food that wouldn't spoil in a certain amount of time. But in terms of actually accumulating savings at scale or creating a large economic surplus, this began in the agricultural age.
A consequence of this, a really important consequence was that we for the first time had created something that was desired by humans, everyone wants food; and the other things related to food, which was the equipment, the buildings, the agricultural improvements, the livestock, all the things that went into farming and agriculture. These were things that people wanted, so therefore they were worth plundering, so if you could go and steal these things from others to eat or get a tool that would help you eat, that's an activity people were willing to engage in; which also meant that those owners of assets had to engage in protecting them from plundering.
So this was the emergence not only of assets as we understand it today, in terms of property, which property went through a number of phases as we'll kind of touch on here today, but it also came with it the emergence of government actually; government being the preeminent specialist in violence, or you could say the protection of a producing enterprise; it protected local assets from outside plunderers.
So, this is a really distinct fork in human history, in that all of a sudden, because we had begun to accumulate savings, this made investments in weaponry and defence more profitable. Whereas in the past there wasn't anything of scale to capture, you just needed weaponry to hunt and be mobile pretty much. So, this started to change the logic of violence in that the wielder of bigger weapons, or the possessor of better defence, would have a strategic advantage in terms of building an agricultural-focused society.
As governments basically arise in these little enclaves of economic activity, they can secure a perimeter around an area that can then produce an economic surplus; the government becomes richer as a result and something else we can go into maybe a little bit now actually. The thing about the government specialist in violence is that because they're a monopoly, they're able to charge a price; they don't care about the sensitivity of their customers to prices, they can charge them whatever they want because their customers need the protection no matter what. Protection's a pretty essential service for conducting agriculture or any kind of business.
These producers of protection, governments, were able to charge monopoly prices and they could really charge whatever price the productive economy would bear, up to the point of creating economic loss for the producers themselves, or to the point at which they invited outside competition. If there was some other territorial monopoly that saw the revenues they were producing, they would then encroach and territorial conflict would ensure.
I described this in my latest piece as a kind of bootstrapping process, but it's interesting that warfare and violence are just so closely related to our ability to become productive, and more technologically sophisticated over time that all of this has its foundations in that singular decision where we figured out that we could put seeds in the ground and sit in one place and we could therefore create -- we're more productive, we could create more units of food energy per unit of human effort, therefore we could increase population size. But with that came the trade-off of needing to protect ourselves in larger and more sophisticated ways.
Peter McCormack: I guess during that evolutionary process, the very early days would have been the seeding of simple crops, eventually creating barriered areas to hold animals and breed animals and eventually build property and property would have arisen around that time. When you define "government" or when you discuss government here, can you define what you mean by government, because the current modern understanding of government is the security of the nation, but a whole lot more?
Robert Breedlove: Yeah, it originally emerges that simply actually, it is the local protection-producing enterprise. So, you've got a farm, you've made some stuff, you've got a silo full of grain or livestock or buildings; things that need protecting. Whoever you pay to physically secure your premises, which is not just your lot, it would be a group of lots, so it would be an entire territory; that specialist in violence is the government. They are preserving your property rights from external threats; that's how government originally emerges.
Peter McCormack: Do we have any understanding of the structure of this kind of government and the arrangement of these groups of properties? Would they be bordered? Do we understand how this worked?
Robert Breedlove: Yeah, so one of the points that the book goes into is it describes mega-politics, this is one of the core theses of the book. We'd say mega-politics are the macro structural patterns that determine how society is shaped over time. So, they're kind of these forces that are really outside the control of any individual or particular group, but they exist above politics. I open my piece by saying, "A mis-perceptive student of history could be forgiven for thinking that political decrees determined the shape of human history", but in fact it's these mega-political variables that actually shaped things.
There are four key variables that they lay out: one is topography, and this will just be the terrain right, whether it's a mountainous terrain, whether it's a plain; it's typically more easy to exert power over a flatter land area. So, if it's a lakebed, a dried lakebed, it's pretty easy to patrol and manage human affairs in that area, because there's just not a lot of obstruction from the terrain itself. Whereas in mountainous regions it's much harder to govern people that live in the mountains, because you just physically can't project power uphill as easily. So, topography's a big deal.
Climate is another mega-political variable. This has a large influence on clearly where you can live, if it's too cold or too hot or too humid or infested with the wrong bugs or anything like that, if it's too swampy, it determines where humans can live and settle. Climate also has a big impact on crop yields, so you know clearly as people trying to settle down and engage in agricultural activity, the climate and the fluctuations in the climate determine the best places to do that. So, throughout history people have moved based on cold fronts, warm fronts, things like that.
Another really important mega-political variable is microbiology. This is also one that's influenced by climate, so if it gets too warm in an area, then maybe mosquitos become -- warm and humid means mosquitos become more of a problem. Maybe those mosquitos carry Malaria, and this can just wipe out a population or prevent a population from settling in a certain place. You can think about when European settlers arrived in North America, right. They brought with them a host of diseases, I think the main one was smallpox, that just basically cleared the path in front of them. They just landed in North America and the Native Americans caught this foreign microbiological invader and it just started killing them in droves, so it really eased the path for Europeans to conquer the new world just by luck petty much. This mega-political variable that no one controlled, they got lucky; cleared the way for their conquests in the New World.
So, it can be offensive, microbiology can be offensive, but it can also be defensive. Where there are areas in Africa that for centuries, despite major technological and militaristic advantages, Europeans could not penetrate because they were susceptible to Malaria; whereas Africans had developed a resistance. It was actually, it relates to the shape of their blood cells so sickle cell syndrome is actually a defensive adaptation to Malaria. So, that too has a trade-off, right; that's a disease that has its own issues, but it also protected Africans from Malaria historically.
So, you've got topography, climate, microbiology and then the fourth mega-political variable is technology, and the big argument in this book is that the more sophisticated a society becomes, the more important technology is as relative to the other mega-political variables. So, technology lets us live in climates that we otherwise couldn't, like in the Southern United States there were huge portions of say Mississippi that were not even habitable before the invention of air-conditioning.
Clearly technology lets us reshape topography; we build roadways, we blow up mountains, we build islands, we do all kinds of crazy stuff now. Then obviously, technology has a big influence on how we deal with microbiology in terms of vaccines or medical equipment, procedures, etc. So, the thesis there is that, yeah, basically as we've become more sophisticated, technology matters a lot more and the first three matter less over time. I think I got away from the original question, which was?!
Peter McCormack: I was interested a little bit more about the structure of governance and who provided it? Was it essentially -- because you say "government", but it feels more like a kind of private enterprise anarcho-capitalists think about with regards to providing security in that it would be a competitive product in that it wouldn't be -- well was it forced on people; was it more like some form of mafia racketeering; or was more like a private enterprise? Whilst you use the term, government, it doesn't feel like the government which we have now which is a monopoly which you can't extradite yourself from.
Robert Breedlove: Yeah, it's hard to disentangle the two actually, because again this is before the conception of property even existed, but really at the beginnings of government, it does have kind of a free-market origination and that you needed to protect yourself, so there was a valid need for this service. But the thing about protection enterprises is that they are inherently centralising, and they tend to form natural monopolies within the bounds of these mega-political variables actually. So, you could say within a certain island, with a certain climate that had a certain level of technological sophistication, there's very likely to be one government.
The reason for this is very simple, because over time as these different economic enclaves, local specialists in violence rise up, they eventually collide with one another, right, so you'd probably get two rival, you want to call them thugs or gangsters or specialists in violence, whatever your term is, they're going to have a turf war effectively; who gets to service the protection for this little area?
The thing about protection and violence is that it's inherently centralising, because whoever wins that contest, every customer and prospective customer prefers the winner. You never want to have the second-best specialist in violence protecting your stuff, because he's always subject to the whims of the best, right. So, whoever wins this turf war is kind of at the top of the hierarchy or the top of the game and they're just naturally preferred by everyone else.
In terms of is it public or is it private, again it's very hard to disentangle, because they establish themselves as a monopolist. Early on, they're usually like a God king or they're a potentate or a local lord. They have a course of influence over the population that's pretty much working on their behalf. So, we could say that the concept of private property rights doesn't even apply to most of their citizens or serfs, depending on what stage of economic development they're in
The private property rights, as we understand them today, really just accrued to the individual that's sifting on top, or their chosen few, the politically favoured friends or lords or whatever it may be. So, I think the question's maybe just a bit difficult, because we say government and we think of government in a certain way. We tend to think democratically-controlled government where we go and vote and someone represents our interests ostensibly, but this is much more of, you're born into something and there's not a lot of social mobility. You're either a serf, you don't really have private property rights, you can't accumulate independent wealth and pull yourself up by your bootstraps, you just work to survive, but it changed over time too.
So, as agricultural productivity increased, it tended to move; as we understand them today, private property rights tended to accrue more to people lower down the socioeconomic hierarchy. So, land rents would, instead of being paid based on income, where the lord is taking all the risk and he's getting a large percentage of the profits, but he owns the land, he pays to protect it, etc, they would start to rent it out at a fixed fee and then they would allow the local agriculturalist to own the land. So they could own the land at a fixed fee and then they could take a little more risk in land ownership, but they also keep a larger percentage of the profits.
I think maybe the easy or intuitive way to think about this is that productivity is like an energy source of itself, where we're harnessing resources and the more productively we do that, the more people it can provide for; so, as productivity increases, you tend to increase the overall level of freedom and property rights within the population. So, a lot of this waxed and waned over time. If there was a crop failure, if there's like a bad climate issue for a number of years and crops failed, then the civilisations would actually revert back to something more top down versus this kind of free market property right structure we understand today.
Peter McCormack: Sorry, I'm going to jump around a bit here though; it does make me question some of the theory behind anarcho-capitalism and the provision of private security because I mean, if we were to jump forward however many decades that we would need to jump forward for this, but if we do imagine a scenario whereby we've had the breakdown of government, we've moved to private protection, because whilst we can hide our Bitcoin and we protect our Bitcoin, we will still hold other physical properties and there are other crimes which are enacted on person to person, so we still will need some form of security.
If ultimately security becomes more centralised, then it was like what I messaged you on Telegram, I wonder if we end up, because of the way we are as humans and the way we organise, we end up with the same structure anyway?
Robert Breedlove: Yeah, we are very focused on Bitcoin in this move towards sovereignism in The Sovereign Individual, which it is very important to have this monetary property right that can't be violated by inflation, can't easily be confiscated and if you properly custody it, can't really be confiscated at all. But there is the outstanding question of what happens to all these other property rights, and how do we secure them?
I think the way I see it playing out is that by virtue of the nation state being starved of revenues at scale, where it can no longer just inflate the money supply to produce revenues, it forces it to become a smaller, more accountable organisation. So, it would still serve a purpose as government originally did in securing physical, local assets, but this would be done at just a much smaller scale overall.
Then another element in that equation is that today, armaments and defences of the industrial age are very large and expensive. You and I can't go out and buy a tank or a fighter jet, or whatever, what have you; but the digital age is changing that to some extent. There's a reintroduction of symmetry in the domain of weapons and defences, whereas sure we can't go out and build a $20 million F22 Raptor, but there are drones that cost a few thousand dollars that can destroy an F22 Raptor. You can't go out and buy, say, 100 assault weapons or whatever, but there's 3D printers now, that allow you produce your own weapons at scale.
So, it's just pulling down these barriers and these barriers create asymmetries in populations between haves and have nots, or those that can produce weapons and those that have weapons and those that don't. The digital age is dismantling that in a lot of ways. So, I would expect government to, in this movement to the digital age, just become more like it was originally, which was a small, localised protection service.
I further even expect, and I think you're already seeing this, especially people, wealthier people are going to have more private security forces; they're just going to have private security details, especially if things get dodgier as a result of all this inflation and taxation and social unrest. The gap between rich and poor keeps growing as a result, which it has been since the onset of COVID, and it just makes sense that the people with the means would opt to secure themselves with private means against others.
So, yeah, I guess the general perception here is just a breaking down of these barriers that restore a symmetry of violence, sort of like what we had in the hunter-gatherer age, but different in that we also have this large division of labour and specialisation. So, we have all this wealth and property but the actual access to weaponry looks much more like something in the hunter-gatherer society where everyone had pretty much the same thing.
Peter McCormack: During the Agricultural Revolution with the advent of protection, I guess protection itself became competitive.
Robert Breedlove: Yeah, of course.
Peter McCormack: You talk about the advancement of technology, but I guess the development of weaponry and perhaps the training of those providing protection was something that became important. Whilst the farmers would learn to sow the land and increase the turnover of their crops, those providing protection had to not only protect the land but protect their own self-interests?
Robert Breedlove: Yeah, that's right, but originally and this was -- we're pre-gunpowder revolution at this point; the knight on horseback was kind of a law in and unto himself. We talked about a few of these innovations before, but like the stirrup gave the knight on horseback the ability to strike at something with a lance without knocking him off the horse. So, this small little innovation allowed him to become much more sustainable as an offensive unit and you could have dozens of peasants versus a single knight, and they wouldn't stand a chance. He was basically invincible compared to a peasant with pitchforks.
They also had warhorses which became a really big deal and I think The Sovereign Individual goes into this a bit, and the example they give is, imagine if all of a sudden in the world some weapon were invented that cost $100,000 and that if you could afford that weapon, you'd be okay. There's a weapon, I guess it's a weapon and a defence in a way, because you can use it to defend yourself from other warhorses; if you could afford the warhorse, you'd be okay to protect and defend yourself, but if you couldn't afford the warhorse, all of a sudden, you're at the whim of everyone else that can. So, it very quickly bifurcated society, if you just imagine today this weapon that cost $100,000; those that could afford it would have undue power over those that could not. So, that was another change, a technological change in the logic of violence that really changed things.
Peter McCormack: What were the other changes to society and structure and people and education that happened alongside the Agricultural Revolution?
Robert Breedlove: Yeah, the really important one was writing, frankly. Once you had savings and you had a need to protect those savings, you now had a need to account for the savings themselves, not only to conduct trade but also to collect taxes. And this actually, if we look at some of the earliest Mesopotamian text and even the Rosetta Stone itself, which was an old tablet used to translate ancient Egyptian and I think between Sumerian, Ancient Egyptian and one other language, it helped us crack those languages. It was all tax records, so it created this need for accountancy essentially and the accountancy was a precursor to written language and written language is the basis of modern civilisation. Clearly, it's how we think and talk, it's how we pass down our learnings from generation to generation, it's how we codify these things in institutional forms.
It led to the dominance of the various institutions we've got across history. The church, which for a long time controlled the production and distribution of information in the scriptoria, this was pre-printing press so they actually had monks that would sit in a chamber and copy books. This made the church the monopoly on knowledge that had its own consequences. Cleary that, the written language got us into the modern age. Once the printing press was invented and it cracked that monopoly, led us into the enlightenment, led us into the industrial age and even today, the digital age is really premised on language at its base; it's just code. All of that originated from the agricultural age.
The one other one that was important was that it lowered our time preference, so we started thinking longer term, because we had to plant crops and figure out what to do right to optimise yield, when to harvest, where to store them, how to deal with them. You had to learn all these techniques for husbandry and agriculture in general, to then pass those things on; so, we started developing almanacs, we started paying much closer attention to astronomy, so we're actually measuring seasons, when to plant, when to grow. We get terms like harvest moon from that.
So, we're kind of developing this abstractive capacity for written language while at the same time we're being encouraged to think longer term about crop yields and agriculture in general. So, it made us a much more thoughtful species; it made us a lot smarter in the long run.
Peter McCormack: How under threat were landlords to revolts and revolutions from those they provided protection for?
Robert Breedlove: I'd say it varied a lot, and a lot of it was contingent again on productivity, so if productivity was low, then basically the peasants were desperate to survive so all of their actions were just thinking about engaging in the labour necessary to produce crops, satisfy their feudal master, so that they can eat and be sheltered. But when productivity increased that tended to stimulate trade more and one of the consequences of this was that we lacked good transport and communication systems.
When you're trading agricultural goods especially, they're very prone to risk of theft and spoilage, so the answer to this was the application of bureaucratic systems where they'd actually install officials, gatekeepers if you will, to check how much agriculture left this point, check it at point B and then check it again at point C, passing paper back and forth, making sure that all the boxes are checked and nothing's getting skimmed off the top.
This decreased the risk of theft and spoilage because you had some oversight, but it increased the cost of overhead. The other risk that it introduced was that these actual officials become corrupt themselves, they always skim a little bit off the top, doctor the records, collude with one another; and that they would ultimately become threats to the centralised power, the feudal lord or whoever was controlling -- whoever was benefitting from the trade. So, yeah that was another interesting consequence, so again it moved in tandem with productivity; so as productivity tended to increase, I would say the threat of social revolt increased alongside.
Peter McCormack: Do we know at what point money came into the equation, because my assumption is at the starting point of the Agricultural Revolution, money wasn't a thing, early farmland -- and I'm assuming most of the trade was through barter, but eventually we have money and that kind of changes things; but was there tax before money?
Robert Breedlove: Yeah, I mean this is a very hotly debated topic, like when is money actually money. My general point on this, if we define money as the most marketable good and we understand that goods don't have to be physical, like a service is a non-physical good, the oldest form of money was in all likelihood just the IOU. It's, "Hey, I killed a woolly mammoth. I can't eat the whole thing. You can eat some of my woolly mammoth now with the understanding that I can eat some of your woolly mammoth next time"; that's the original store of value, is your reputation. Or could be something still asynchronous, but maybe of a different product, "Hey, I'm going to go out and pick apples and I know you're going to go catch fish. I'll give you a bushel of apples today and you give me the next three days of a catch".
So, these locally traded favours I would say is really the original form of money, but then when you get into agricultural age, another form of money that was very important was salt actually, because salt was a preservative for a lot of foods. You've probably heard before that it's the root word of things like salary and we get all these sayings like, "worth his weight in salt" and "salt of the earth"; all of this was rooted in really the monetisation of salt. All of its utility value was centred on its relationship to food and agriculture.
So, my argument is that money emerges any time where there's trade even, so I would say even in the hunter-gatherer society, technically we had money, right. We were trading favours within your little 150-man band, but trade becomes much more sophisticated in much higher volume when we get into the agricultural age and that's what tends to promote a more sophisticated tool as money, ultimately leading to the monetary metals.
Peter McCormack: Do we know when the monetary metals came in?
Robert Breedlove: I believe gold's been used for about as long as it's been the agricultural age, so 5,000 or 6,000 years, yeah.
Peter McCormack: Okay, can we talk about the transition into feudalism; what was the most significant changes and what was driving it?
Robert Breedlove: The books goes in depth on this, but there were a number of reasons why crop yields were collapsing, so productivity was declining; and at the same time the technology for knights was increasing, right, they were getting the stirrup, the lance, the warhorse, all these things. It created this bifurcation in society where the local political body could no longer manage knights, essentially; they became sovereigns in and unto themselves.
Peter McCormack: So, were they the first sovereign individuals?
Robert Breedlove: Yeah, you could say that. I mean if you want to go all the way back, when you're a hunter-gatherer you were a sovereign individual, right.
Peter McCormack: So, the first re-emergence of a sovereign individual?
Robert Breedlove: Yeah, and this a debated topic as well too, because Mises would say in Human Action that no one ever actually had individual sovereignty because they're always subject to the guy with the bigger club, kind of thing; that we needed some established institution to honour life, liberty and property, to preserve natural law. So, I guess that's a bit of murky area to explore but, yeah, I forgot the original question again!
Peter McCormack: So, it was just trying to understand this transition into feudalism and the most significant changes that we saw in society; you talked about the knights.
Robert Breedlove: Yeah, so productivity is declining, again productivity is an energy source, there's less to go around; so we'd say that scarcity is increasing and when scarcity is increasing, divisiveness and conflict tends to increase alongside. People are fighting over a shrinking pie, and knighthood, the technology associated with knighthood was on the rise and things got pretty bleak actually. Basically, knights were just running amok, there was a lot of violence, there was a lot of plundering, the governance structures had basically lost control because they couldn't do anything to corral these knights.
The church actually stepped in and implemented feudalism and they just made negotiations where you could give up -- say if you owned property that you could no longer protect, if you were one of those few people that couldn't afford the equivalent of the $100,000 warhorse, the church basically brokered deals where you could sell that property to the knight effectively, with the guarantee or the promise that you and all your descendants could work the land to survive, so you could become a serf essentially to this knight or feudal lord.
The church sort of created stability there and it offered a lot of advantages too. The book goes into a number of the contributions the church made to productivity and there was one quote in there I really liked; it said, "The social function of a religion is independent of its truth or falsity". So, it's making the point that the church, as an institution, it helped create rules at a time of anarchy, where there was again contracting productivity but increasing returns to violence, we could say, in this period of knighthood.
It also gave people a way to overcome incentive traps and behavioural dilemmas. So, what else was interesting about this time is a lot of people thought this was end times, because the climate was bad, there was anarchy in the land, so people started giving their land to the church, thinking that it was all over. So, the church ended up becoming this kind of ballast in the dark ages and contributed to productivity in a number of ways.
It also, as we touched on earlier, it was the main source in this time as civilisation was regressing in preserving and transmitting the technical knowledge of the time. So, it was again preserving knowledge in books, passing them from generation to generation. It was extending the very minimal education of the time; there was basal education that was being provided to serfs and agriculturalists.
It also engaged in some public works and even entrepreneurial experimentation, so there is demand for this certain kind of sacramental wine in Northern Europe and this caused monks to experiment with hardier varieties of grapes, so they were actually filling this -- the church preserved this little enclave where there could be some entrepreneurial experimentation that contributed to better wines. That was just one example; they also ground grain into flour, things like that. Then, essentially the church was filling a lot of functions that the government provides today, as in they were in a time of anarchy, they were creating public works and public projects and jobs for people, sources of income.
The book has this great quote on this insofar as the church essentially helping -- at a time where the market is unravelling entirely, the church becomes this little bastion of supporting and insulating a more complex market process that helped us bootstrap back towards the modern day. The quote is that, "In the same way that military spinning of the nation state during the Cold War unintentionally helped incubate the internet, so the building of medieval of cathedrals led to spin-offs of other kinds including the incubation of commerce".
Yeah, it's funny, it's war and conflict and the attempts to preserve peace, just driving innovation and creating unintended productivity in the process.
Peter McCormack: Well, it was quite a defined class structure at the time as well. I'm just going to bring something I was reading in reference to feudalism, that Fred Chester and Mark Block contend that peasants were an integral part of the feudal relationship. And so there was a requirement for, whilst the peasants needed the protections of their vessels, without the peasants they wouldn't have the productivity to provide what the higher classes need as well. So, it was quite a symbiotic relationship with all the aspects of the different classes.
Robert Breedlove: Yeah, and The Sovereignism Part 3 that I wrote, I talk about this bootstrapping process that I've alluded to, and I got this from an excellent piece by Frederic C Lane, who's a big influencer of the authors of the book, The Sovereign Individual. He's got a piece, it's available online on JSTOR it's called, The Economic Consequences of Organised Violence, and he goes, it's almost like society has this natural process where we start out in pure anarchy and plunder and then a few people figure out what's -- the kernel of the process is figuring out that we can sacrifice today to produce more tomorrow, right; just the kernel of economic truth is delayed gratification.
Once someone figures that out, we naturally converge on agriculture as a chief source of that, where we can plant seeds today and till the ground and make much more energy essentially, increase our productivity a lot through food. That creates this pocket of economic energy that's coming out of the ground, or harvesting sunlight more efficiently, we're supporting larger populations; with that comes more profitable investments and weaponry and defence, the emergence of government.
Then in stage two once, those specialists in violence or government, they've adequately defended the territory, their costs collapse, because again it's an inherently centralising monopoly. So, once the producer protection has cleared all the internal threats, they're basically just taxing and securing the perimeter, right? But they are a monopolist so their costs of production collapse but they have no competitive pressure for them to reduce their prices, so they keep their prices high; their margins just go through the roof.
Then eventually, this stimulates a lot more wealth production, but a lot of that economic surplus has been captured by the monopolist in violence and it also stimulates a lot of inner regional trade, because they're producing a lot more of the surplus; other groups are producing similar surpluses but they're not the same thing, right. They might have a different type of spice or different type of livestock; so, these economic enclaves start to trade with another
It's at this point that merchants, the actual merchants that are trading, figure out what Frederick C Lane calls "protection rents", but you could also say that these are just like jurisdictional arbitrage. They figure out ways to not pay the taxman basically; they'll either self-insure, they'll do smuggling runs, they'll have their own defence, they'll hire their own armies, their own people or whatever. At some point, these protection rents actually start to capture more of the economic surplus than the monopoly on violence itself. So now all of a sudden, merchants are capturing more of the economic surplus and because they have such a high propensity to trade and reinvest, it's what they do for a living, that they start to allocate a lot of that back into -- they reinvest a lot of the profits versus consuming a lot of the profits.
Then this leads to the next stage, that reinvestment, we start to get longer production processes, there are more sophisticated tools; and then another stage is reached where technology starts to yield the highest proportion of economic surplus. That leads us to kind of modern capitalism as we understand it, where we just have this -- the other important piece is that governments, because you've created peace internally, you've pushed the specialists in violence to the edges, so they're actually out there trying to conquer new lands and whatnot; so internally, politicians become more of the people pulling the levers. It's more about cunning and intelligence and charisma, all the things we associate with politics.
That causes the distribution of spoils becomes less authoritarian, let's say, and more about we develop this governance through voice that we have today. We're actually selecting officials that we think represent the interests of the whole. So, it decentralises sovereignty and morality in many ways; and then in the final stage of economic development is capitalism proper, where we actually have a democratic governance model, at least the representative democratic governance model and a socioeconomic structure premised on free trade.
Peter McCormack: So, feudalism was essentially pre-capitalism?
Robert Breedlove: Yeah, it's one of those stages in that sequence of economic development, and I guess that would be around stage two, where the local monopolist on violence is just capturing most of the surplus. But there becomes a point where the surplus gets so high, and trade becomes to such a high magnitude that the merchants begin capturing more of the surplus. So, it's all about we are creating surplus in the land, it's like whose hands are capturing that surplus energy? Is it the violence specialist, is it the political class, is it the merchants?
Then eventually, once it's sort of radiated our far enough, it becomes technology that's creating most of the surplus, and technology tends to be much more evenly distributed because it's just an idea at the end of the day.
Peter McCormack: Do we know about where the emergence of kings within the structure ever happened and how was that? Was that just the ultimate centralisation and a first elected king; it's nothing I've ever read about?
Robert Breedlove: From my reading of the book here, I think those were just the earliest when sovereignty was super centralised and someone was dominant in an area, they were just, originally, they were god kings; you think of like the ancient pharaohs of Egypt. They literally considered themselves to be Gods or instantiations of God. So, the ancient societies worshipped these principles that were embodied or encoded in the mythology of the religion and then the king was that guy. He was the living incarnation of that principle.
But yeah, it's interesting, they actually held him, I'm thinking of Ancient Egypt here, where I think the king was supposed to represent Marduk, which was their god back then; and every year they held him to account. There was like, how good had he done embodying the principles of Marduk from this ancient mythology? I would say the more hereditary form of kingship that we think about in Western civilisation I think just branched off of that over time.
Peter McCormack: There are people who believe, I've seen the debate on Twitter, but a monarchy is a better form of governance than democracy.
Robert Breedlove: Yeah, there's a great book, called Democracy: The God That Failed, and it makes the point, and The Sovereign Individual makes this point as well, that in democracy it's essentially governed by its employees, and they don't really have an interest in decreasing the cost of that structure; the point here being that it's tyranny of the majority, right? It's whatever the voice of the majority says, the minority is forced to comply with.
Whereas if you look at an anarchic structure, or an anarcho-capitalistic structure, that would be governed by the force of optionality or exit. When you can exit, it tends to be much more efficient and smaller governance models, because it can become more particularised to suit the individual wants and desires of the people expressing their voice.
In the large nation state model, it's like we don't have that, we have red versus blue wrestling for majority control and whoever gets on top gets to basically impose their beliefs or wants or political views on the minority as a result. I mean there's constant wrestling back and forth. Whereas if you think more like a free market enterprise, businesses are always free to fork, you're always free to get a few of your employees together and quit and start your own company kind of thing.
This idea that society should be able to fork to most particularly suit the needs and wants of individuals, I think makes a lot of sense. I think The Sovereign Individual points that direction; it says that's what the next logic consequence of government is, is that it will no longer be this imposed institution, it will become something much more like a free-market enterprise that's subject to this forking and customisation process that we see in the free market.
Peter McCormack: Yeah, I've not read the book, but I've had it recommended to me before, it's Plato's Republic, where he discusses the issues with democracy as well. Do we understand or do we know where the migration from kings to a structured democratic government happened and why? Was that pre-industrial or post-industrial?
Robert Breedlove: I don't know off the top of my head where it falls in. I would say it's come up with the American Revolution, to the best of my knowledge. The best implementation of representative democracy started in the United States, I believe; I could be wrong on that.
Peter McCormack: When you kicked us out, so around 1776.
Robert Breedlove: Again, that was a mega-political transition, right. We were on a new topography, we had new technologies. The information and transport systems of the United Kingdom, or I guess Great Britain, was just unable to govern this new economic enclave, so we forked, right; we forked off of the colonial superpower. And the book I mentioned earlier is Democracy the God That Failed. I think it's by Hoppe, and it just goes through how this model of governance doesn't create the best outcomes. It actually induces short-termism, which I think is pretty evident in the electoral process today where everyone's just pretty much vying for re-election.
There is a quote that, "Every public election is an advanced auction on stolen goods"; someone's just trying to get into office trying to write some rules that they can probably then rotate out of office and go and consult for a private enterprise, exploiting loopholes in those very rules.
Peter McCormack: Which we are seeing again and again. We're seeing that in the UK right now with our previous prime minister, David Cameron.
Robert Breedlove: Yeah, it becomes a game premised on political positioning and more like who you know better than what you can do, right. Whereas, if you're operating in a purely free market, the presupposition is that you should only be rewarded commensurate to how well you satisfy the wants of others, basically; the better you serve mankind, the richer you become.
But in these overly complexified legal environments, specifically that involve a legal monopoly on money, a central bank, it's all about getting close to that spigot, because that spigot can be used to steal from everyone else. You don't need to do any hard work or figure anything out, you can just get this perpetual something for nothing until the monetary system collapses or there is a social revolt or whatever it may be. Yeah, it's clearly not a sustainable or useful structure for human beings.
Peter McCormack: We should talk about the gunpowder revolution before we talk about the Industrial Revolution then, obviously it precedes -- that had a significant change to the logic of violence.
Robert Breedlove: Yeah, so the authors went into this in further detail in one of their other books, the title of the book escapes me at the moment. But essentially, we were talking about that knight earlier that could just run the countryside and do whatever he wanted and anyone that could not afford the $100,000 warhorse was just at his control. The Gunpowder Revolution changed that.
All of a sudden, which again we talked about earlier, is technology reducing the cost of armament, right, giving us today the power to run that drone against a $20 million fighter jet. This would be a similar dynamic back then where a peasant could now go buy a hunting rifle for not $100,000, maybe it was $500 at the time or the equivalent; they were typically trading in livestock. He could now defend himself from that knight on horseback from 100 yards away, one peasant, whereas before the rifle you could have dozens of peasants with their pitchforks just totally vulnerable and weak against a knight.
Just a simple technological innovation, in this case gunpowder, totally changed the one-sidedness of violence, if you will. It flipped it the other direction and all of a sudden, the knight and the code of behaviour, which was chivalry at the time, crumbled, just crumbled as a dominant marshal form in the world. With the collapse of chivalry, these other moralities came up after that.
Peter McCormack: That would assume that significant change to civilisation and organisation of people?
Robert Breedlove: Yeah, I mean it allowed people to defend themselves at a distance much more easily, it changed the nature of warfare forever. If you've seen a movie like -- actually if you think about the revolutionary war, or the American Revolutionary War between United States and Britain, how did we fight? Originally, there's this movie, The Patriot with Mel Gibson; have you ever seen that one?
Peter McCormack: Yeah, I know that, yeah.
Robert Breedlove: The Brits are lining up; they all point their guns and then on command they all fire at the same time and then a certain number of people in front get shot dead and then the next row steps up and they repeat the process. I mean we literally went from knights on horseback running the countryside to that, with a much larger scale organised violence. And that too crumbled, where that was the honourable form of warfare for a while, but eventually the United States, or at the time I guess the revolutionaries, adopted a much more guerrilla style warfare tactics. That was only possible due to firearms; we could go and hide in the bushes and ambush people from a distance and do all these militaristic feats that weren't possible with something like being a knight on horseback.
Peter McCormack: What else came at these times? I mean we had the rise of the printing press, that must have significantly changed things too?
Robert Breedlove: Yeah, the printing press, as we touched on earlier, I guess the best way to understand that is that wealth is knowledge. If you've got the knowledge to create and do something and the ability and means to acquire it, your civilisation becomes a reflection of how much knowledge you have. The church was essentially a bottleneck for the distribution of knowledge, so there was a large cost related to the processing, which would be the actual scriptoria producing the books, and the distribution of knowledge at the time, because books were a luxury. They cost a tremendous amount of money at a time where there wasn't much wealth being produced, and the invention of the printing press just collapsed the cost curve for the production and distribution of knowledge.
All of a sudden, ideas started to move across the world much more quickly. With that came an increase in the quality and variety of thinking and thinkers; thinkers that were ultimately heretical to the institution of the church itself.
Peter McCormack: Sorry to interrupt, is this because knowledge then became competitive because it was easier to spread ideas?
Robert Breedlove: Yeah, I think so. If you just consider that when we lower the intervention in a marketplace, and there's more free flow of ideas, whether these are -- if you think of a company as an idea, right? The more competitiveness we have in a marketplace, the more wealth we will generate because competition eliminates error and bias and all of these things that don't work, and we settle more quickly on the ideas that do work, the ideas that increase our productivity the most. So, the more competition you have among the ideas, the more specialised the knowledge becomes, the wealthier we become as a result; so, by breaking this bottleneck, this church monopoly on knowledge, we just amplified the Darwinism of ideas in the world.
As a result, we error corrected. For the longest thought, the Earth was the centre of the universe, and the church was the dominant institution of the Earth; and because the Earth was the centre of this finite Aristotelian universe, that the Earth was the centre, atoms was the smallest thing, there was nothing below them. The whole universe was a macrocosmic atom, there was nothing beyond this sheet of stars, the church was the dominant institution of the centre of the universe, which was Earth, so the church ran the world.
All of a sudden, we had the printing press, and I wrote about this in The Number Zero and Bitcoin, but the zero-based numeral system started to spread really quickly, as a very useful numeral system for trade. The problem is that it implied infinity, so the whole universal model with the church was using to proselytise people into its order was broken. It ultimately led to, I guess, is it 95 Theses, Martin Luther, where he pinned them on the door?
Peter McCormack: I don't know, I can look it up.
Robert Breedlove: The guy that basically said the church is a bunch of bullshit and he started the reformation.
Peter McCormack: Yeah.
Robert Breedlove: Forgive my crude recollection of history here, but we got smarter. We got smarter and realised we didn't need this particular institution and its dogma to organise ourselves and eventually it fell from grace, basically, as the dominant institution in the world. That freed up the space for this post-enlightenment institution that dominates the world today, which we call the nation state, but the scale of the nation state is achieved by its apparatus of theft, which is the central bank.
To tie it back into what the printing press did, it's when we decrease the distribution costs of information, we reduce information asymmetries, so all of a sudden, again the best ideas spread much more quickly. Society tends to become much more fair, we start to reflect this decrease in asymmetry or increase in symmetry if you will, much more closely and institutions that were thought to be formerly necessary or dominant for even hundreds of years, as in the case of the church, suddenly collapse.
The church responded to this, by the way, they tried to attack and sequester the printing press. We had the Spanish Inquisitions and all these other things. They were trying to tighten their grip on this technology, but because the printing press is just an idea, it's just a set of blueprints, which like Bitcoin was a composite of other ideas, it was four or five inventions that one guy put together into one invention called the printing press, sort of like Satoshi did with proof of work and one-way hashes and public private key cryptography, etc, every time they tried to sequester it, it would actually highlight the value proposition of that idea and it would drive its proliferation through its very own technology. It was like people would print more books about how to create the printing press and it would spread more quickly.
So, the church's attempts to put the genie back in the bottle or the toothpaste back in the tube actually accelerated its own demise, so I think there's some analogy there for central banks --
Peter McCormack: There's a real parallel, yeah.
Robert Breedlove: Yeah, trying to put the -- this real race we're seeing, especially in the US, where we're trying to get the central bank digital currency rolled out more quickly. I think everything they do to try to fight Bitcoin is just going to highlight its value proposition and accelerate its proliferation. We had Tom Brady turn on his laser eyes today.
Peter McCormack: Dude.
Robert Breedlove: You know this thing is like, it's out there.
Peter McCormack: Well, it isn't just central banks but it's retail banks as well. We have a big problem in the UK now with banks closing down bitcoiners' accounts, and that's not stopping people buy Bitcoin. That's leading to people realising that they need Bitcoin more, I mean ever since I had my accounts closed down --
Robert Breedlove: That's right.
Peter McCormack: -- by Lloyds I probably get an email or a DM once a day from someone saying, "What was your solution?" I found a bank that would allow me to buy Bitcoin, which is revolute, and that's who I mention to everyone, and people are just moving their accounts to other people, but it doesn't stop you. It's like when you're a kid, "Don't put your hand in the fire", you put your hand in the fire. When you're told you can't have something, you want to know why.
Robert Breedlove: That's correct.
Peter McCormack: I mean putting your hand in the fire isn't particularly good for you, you learn as a painful lesson, but other things such as Bitcoin, you kind of realise you need it more, so that's an interesting parallel there with the church. I didn't realise it was the rise of the printing press also that caused the fall of the church.
Robert Breedlove: Yeah, man, it's all -- I love the reframing of, people don't have ideas, ideas have people; we are just a bunch of ideas. Even DNA itself is just an organic informational idea or it's propagating through us; and there's this universal Darwinism where the best ideas win. So, in this age of hyper fluid ideas where they exchange more quickly than ever, specifically through memes like we just talked about the laser eyes, that thing is just running rampant on the internet. That was a joke two months ago. I mean what has it been, six weeks maybe? I turned my laser eyes on maybe six weeks ago, I thought it was silly, I was like, "Who came up with this? Kind of silly, kind of fun, let me turn it on". Now, it's fucking Tom Brady.
Peter McCormack: I know, Dude.
Robert Breedlove: It's incredible.
Peter McCormack: I've turned mine off by the way.
Robert Breedlove: You turned them off?
Peter McCormack: Yeah, I turned them off because I had this moment. I was having a discussion recently, well someone actually criticised me and they said, "You're too much of a cheerleader, you're not asking -- I used to listen to your show because you asked the tough questions where you try and find holes in narratives". I was like, "Shit, if I have laser eyes, I'm just a cheerleader", which I am often because I am a bitcoiner. But at the same time I was like, "No, I need to not have the laser eyes. I need to question why we have laser eyes".
Because sometimes one of the things I worry is I feel there are certain coercive narratives which if you step outside of, you can come under a lot of pressure. Fine, which is good, I agree there's some nonsense arguments out there but at the same time I do think it's good to prod and poke and question things like I do with say anarcho-capitalism. So, I was like, "I'm taking off my laser eyes", because I think it's more important I step back and question things; but I then cheered on Tom Brady this morning.
Robert Breedlove: Well, the meme man, the meme is super powerful, and we think it's a joke and between you and I it's like, "Okay, we get Bitcoin. We don't need the laser eyes to reinforce that belief", but I think it's hard to understate how significant it is when Tom Brady turns on his laser eyes and you have umpteen million people that are into Tom Brady that don't know shit about Bitcoin that are like, "What's up with these eyes?"
Then they do a simple Google search, and they figure it out and it sparks their curiosity about Bitcoin and maybe 1% of those people start to go down the rabbit hole, but that's one guy, one instance and the power of mimetic data compression is not something that should be underestimated. No judgement on you, turn them off, turn them on; but on balance, the whole force is really something to be reckoned with.
Peter McCormack: No, I agree and it's different people in different sectors. It isn't just Tom Brady, we had Paris Hilton with laser eyes.
Robert Breedlove: Yeah.
Peter McCormack: She has a whole entirely different audience and I absolutely 100% support her becoming a bitcoiner, I think it's an amazing thing as well as Tom Brady.
Robert Breedlove: I think she's actually a bigger deal. I think she's probably 20 million Twitter followers to Tom's 2 million, but for me I was just, I don't know, I guess I'm just a typical American, more impressed with Tom Brady.
Peter McCormack: Well, I just think what it is, is it feels like we are at that tipping point now where we're crossing over into pop culture, sports.
Robert Breedlove: That's right.
Peter McCormack: Actually -- and politics, we even have politicians with laser eyes.
Robert Breedlove: That's right.
Peter McCormack: Which is kind of insane. I feel like we've reached a good point to close out this one because we go into the life and death of the nation state. That's going to be probably another hour, hour and a half, so I think we should pause this one here, and we should do the life and death of the nation state next time.
Robert Breedlove: I think that's a great idea. Maybe this one quote just to seal it next time, is from Robert the Borsak he says, "Most important of all, success and war depends on having enough money to provide whatever the enterprise needs". That's why the nation state is going to fall, because Bitcoin bankrupts the model.
Peter McCormack: Yeah, interesting, right. Well, we will do that probably sometime in June, man, but I appreciate you doing this. Always love talking to you, I have to go away and think about some of it, you take me up another level. Also just appreciate all the other public interviews you've been doing at the moment; that four-hour interview with Fridman was excellent, but I would say to people if they're like, "Holy shit, that's four hours", I think if you're nervous about that, at least do the first three hours, because the first three hours is you in your zone and the last hour you and him like discussing outside topics such as how you read books. But I think if you can afford four hours for the whole thing, I've done it twice now, so I've actually committed eight hours to that interview, and I'll probably do it again soon.
Robert Breedlove: All right, man, thank you. Yeah, feedback's been great on that one and I really appreciate you having me. Yeah, this is, again, this is a tough topic, this whole thing is a dense tough topic. I encourage people to read the book; I've been writing a series on it, it's also hard to read but just it's worth thinking about. It's very important, even though it's a hard topic.
Peter McCormack: How much total time do you think you've dedicated to that book and your work related to that book; it must be considerable?
Robert Breedlove: I really don't know, but I'm only on part 3 of 12, so I've got a lot of time to go.
Peter McCormack: All right, man, well listen we all accelerate our learning through you doing this, so I'm hugely grateful and congratulations on the success with your podcast and everything you're doing, man, and I will see you in Miami in about three and a half weeks, three weeks-ish?
Robert Breedlove: Looking forward to it. Always good to talk to you, Peter, thank you.
Peter McCormack: All right, man, take care.
