The Network State with Balaji Srinivasan

had somebody actually said oh I'm going to found a currency in 2007 2008. almost every VC would have looked to them like they had four eyes I had the absolute pleasure of talking to who I think is one of the most fascinating Minds on the planet right now that is biology Sweeney Boston who you might recognize as the former CTO of coinbase the former General partner at Andries and Horowitz he was also the co-founder of genetic testing company Council and earned.com which was acquired by coinbase an angel investor and many successful companies like deal replit ethereum and superhuman and today we brought him in to discuss his best-selling book the network state and as you can imagine when you talk to biology for three hours you can cover a lot of ground we cover the difference between a nation and a state how constants become variables the cloud continent the newest Leviathan digital power your identity stack calibrating risk polycentric law Cloud regulations building fast with atoms founding versus inheriting the powerful versus the powerless and just about everything in between so I hope you enjoy this conversation as much as I did the content here is for informational purposes only should not be taken as legal business tax or investment advice or be used to evaluate any investment or security and is not directed at any investors or potential investors in any a16z fund for more details BC a16z.com disclosures [Applause] [Music] all right we've got biology on the line balji thanks so much for being here great to be here I have to confess I am a biology fan I've probably consumed an unhealthy amount of biology content so very excited about this thank you for invading my brain I also read your book recently which is what we're going to be talking about today this idea of the network State and I also have to say that similar to when I learned about cryptocurrency it kind of forced me down this Rabbit Hole to reconcile what happened around me in in the outside world how monetary policy worked as an example the network State kind of did the same thing but with with other Concepts right like nation states what are these things so I'm excited to dive into that but I want to introduce the audience to a simple frame that I think was again an aha moment for me which is that technology has been able to reshape our lives at an individual level I think many people can understand that they can grasp that also at the company level right we've been able to start new companies that are digital it's also reshaped our ability to participate in that ecosystem and then more recently currencies as well right the network has changed change that and your book discusses how technology can actually potentially create new states very interesting concept and in order for us to dive into that why don't we start off with what we have today which are nation states so how would you define a nation and how would you define a state and how do those kind of interplay together I actually have this at the beginning of chapter five in the book and the thing is we hear the term nation state as a compound you know like uh you know the phrase really and we don't really give too much thought as to what it means but um it's useful to think about distinction between those two words because they're actually very different the nation that's like that comes from the same root as natality like the Latin like Nazis and so it's like common birth common descent so like the Japanese Nation they have shared ancestry shared culture going back hundreds you know of years and you know shared language all that type of stuff and then separate from that is the Steve which is the administrative unit that thin layer that sits over the nation okay and the state could be of you know the Japanese people themselves or could be you know for example 1946 after World War II the American government was basically the state over the Japanese Nation right and so once you think of this distinction between the nation and the state above it the const the nation-state was every you know ethnic group has the right to have its own government now the thing about this of course is um that's like an abstraction but in Con in concrete terms um many of the ethnic groups on the planet do not have their own government and or they do not have their own territory which is another part of it uh and so like you know if you're talking about the catalonians or uh you know the the Kurds these are groups that um have you know long histories and they have like a legitimate nature from from the perspective like the 1700s 1800s person who think about it you know the nation state uh that they have they they'd be considered a real Nation but they do not have um territory in the global game of musical chairs they didn't get a seat okay so like you have this map of the world and everybody's kind of moving around it and they just lost out in a seat they're a stateless nation okay and so like the Kurds for example their ethnic group overlaps or their historical lands overlap like turkey and other kinds of places okay and um the catalonians for example they overlap modern Spain the reason for this is that the maps that we have are actually very abstract constructs you know if you think about a map of Africa or actually even in the US you have these straight lines you know on a map whenever you see straight lines on a map that's like some surveyor said okay I'm gonna put this here because the latitude that's some like abstract political decision in a sense a map is like a digital layer above the physical world you don't see the lines of the map in the physical world right often those boundaries on a map do not reflect the ancestral you know long-running boundaries of language and culture and so on there is however a feedback loop where what happens is those Borders or those boundaries have humans impose then in turn change how humans start living and so you will have something where there's now a sharp transition from French to German as you cross the franco-german border signs change you know language has changed that human digital thing has caused a digital crease in the physical world whereas before it might have been more continuous right before we had modern map making before the world was mapped you sort of had a gradual Klein a gradual you know shift right so once you think of the difference between the nation and the state that the nation is this group of people with common birth in the state of this administrative layer and you think about how that relates to maps and so on you can start thinking oh okay the exact configuration that we have today is not only not how it's not always being but not how it always will be yeah I think that was another aha moment for me because in my lifetime those lines have been constant for the most part right there's exceptions but you kind of accept that this is the way the world works right these are the countries and I think another uh interesting uh concept that you you mentioned in your book is even the United Nations is perhaps named incorrectly right it should really be like the chosen States or something along those lines the selected States yeah there's a guy actually the Kazakhstan head he actually made this remark he's like look if we allowed every group in the world with a legitimate right to self-determination to get their own territory there'd be chaos we'd go from 193 countries to 600. that's what he said right I think it's probably way more than 600 but that just gives you a sense of oh okay I used to be against word games for the sake of word games but then I got more into it and one way to think about that if you know Dolly too yep exactly yeah so Dolly to two I had this tweet like the age of the phrase right the short phrase like whether it's a tweet you know on social media or whether it's a 12 or 13 or 14 word phrase to go and reset your cryptocurrency your wallet you know passphrase or if it's a short phrase with like just a single sometimes character or single word that's different that changes what the computer generates you can actually see that changing one word changes what is in somebody's brain you know um and the concept of Russell conjugation I sweat you perspire but She Glows the same behavior can be flipped neutrally negatively positively without lying necessarily you're what you're just doing is you're changing the tone of it and so you can flip all of those variables negative if you want to make somebody look bad or flip all them positive he is you know in an uncontrollable range but she claps back righteously you know that kind of thing right and you just characterize the situation differently you Russell conjugated right and uh so the point being that that slight choice of word now with Dolly too we can see a a tiny change evokes literally a different visual in the computer brain and it also evokes a different visual probably in the human brain okay this is a very quantity right okay so with that this just to descend onto this concept of the nation the fact that people have conflated the nation and the state recently like people just say Nation say they don't realize there's a difference in the nation state many states today are actually not nation states Japan is a canonical example of a nation-state Israel is others like let's say India that's like more of a civilization State there's lots of different ethnic groups India is more like Europe you know like the South Indian and North Indian are like historically as different as like you know a Spaniard or somebody from Finland okay they're they're actually India was not a country until recently it was a civilization they did have things in common but a civilization say is different from a nation state that's one example or you have something like um you know Singapore or or the United States which is a multinational state where there's many different ethnic groups under one administrative Zone it's not a nation state it is a multinational State now people could argue that there was an American Nation like by the mid 1900s there was a lot of effort to kind of pack down people like uh Teddy Roosevelt talked about he wanted the end of the hyphenated American you know he didn't want people to be I'm a Polish American of this America everybody's just an American right so it's an enormous process where the state was trying to pack in and centralize and remove those um points of distinctiveness everybody just think of themselves as American only and by mid-century You could argue that was somewhat successful and that was like Peak centralization and uh why is that important well then people start not thinking about the difference between the nation and the state we're all the state itself has formed the nation do you see what I'm saying the state now says uh the German state is Germany the French state is France right the Italian state is Italy the American state is America and it waves a flag and so on and it's to the states advantage to identify itself with the nation one way one analogy I have in the book which I think is a funny way of thinking it's like uh labor and management and in a small company they are actually literally the same you know the founder is both the CEO and the person who's going and taking out the garbage or you know fixing the computers or whatever like every job is done by like one person right there's no you know division of labor or what have you and then as the company scales then management and labor arguably get more alienated or whatever and then people can say oh management is just aligned with labor and what's interesting is those people who will accept that are often folks who will contest the idea that the state and the nation are disaligned but it's actually a very useful analogy to see that they can be aligned but they can also be disaligned right it's not I'm obviously not you know somebody who's uh anti-management but I recognize that you want Equity structures and things like that to align you know folks right once you kind of realize that the nation the state are different you can re-examine all these words example multinational right so multinational for multinational corporation it's actually a misnomer it really should be called multi-jurisdictional or multi-state because it's not as if Google has like a direct ambassador to the catalonians and the Basques and the Kurds and so on it's actually talking to the states that have you know the administrative units right so it's multi-jurisdictional or multi-state the United Nations as we just discussed is really best called the selected States because it doesn't have all the nations of the world right and in fact many nations missed out on that game of musical chairs and they don't have a seat at the United Nations and now you can actually realize oh there's a whole queue of people peoples really I should say groups right with long histories and cultures that are boxed out of the United Nations and uh you know one that's you know very prominent is like the um you know mentioned the Kurds catalonians one that's like sort of becoming a nation are like the Taiwanese you know where there there wasn't like historically this huge necessarily difference for mainland China or at least there's some difference in a lot of folks in Taiwan came from mainland China because you know the Coleman tang and the the nationalists lost the Civil War you know a bunch of them you know moved out now Taiwan is like this that that's a very famous example something that's sort of on the boundary between just a group of people and like a full-fledged country that's recognized by everybody because China leans on people to not recognize Taiwan right and but but that's like a famous example but there's lots of other things that are in this sort of boundary Zone in different ways where some countries recognize them but not all you know so it's not part of the club fully but it's also not totally not part of the club it's like in this nether Zone this is a book called invisible countries what I'm getting at is once you distinguish the nation the state you re-examine words like multinational you're example re-examine words like the United Nations you re-examine words like National Security or phrases like National Security really that's like Federal Security right nation is often used to mean the whole thing but really it's like Federal like the overall government right and you realize you've actually there's a base that's being stolen you know the nation in the state are different and once you realize Nations here are different you're like oh well America actually is not a single nation at a minimum it's bi-national as you said the nation and the state are not always aligned and there is this gray Zone many people accept that these lines are very concrete they're very binary and I think many of the examples you've given showed that they're not necessarily and I think that relates directly into this idea of a network State because if you accept that the lines are binary they're set you can't change them there's no point of even going into this concept of a network state but as you dive into these gray zones and actually just to bring up one quick uh example from from your book is even just naming countries that many people didn't realize have emerged in the last couple decades right you think back to like the largest countries like America China Etc they have much longer history Industries but there are new countries on the map that have happened within our lifetime so that was another example of gray becoming part of the existing infrastructure this whole concept of constants becoming variables I think is a very important characteristic of our age 14 years ago there was it wasn't like fiat currency and cryptocurrency right there wasn't a distinction it was just like you know it's currency but you're gonna go if you'd walked into a VC's office in 2008 2007. and you said I'm going to found a new currency okay well actually Peter Thiel and PayPal they kind of tried to do that okay but they didn't really say that that was the thing they said you know it's like online payments and so on that idea were found in currency but the fundamental issue you know which Satoshi later put a finger on but it wasn't obvious was decentralization and then how do you actually make a decentralized back end in the blockchain all this stuff we know had somebody actually said oh I'm going to found a currency in 2007 2008. almost every VC would have looked to them like they had four eyes and they would have said what are you gonna go petition like the IMF the World Bank oh it's like and it's deflationary to haven't you read econ 101 Paul Krugman proved that deflation is bad and you can never make you know they just quote these like priests to you basically to say that it's impossible it'd just be a joke you know to try and do something like that and so those people were thought of as jokes but Satoshi figured out uh a new way that literally started on a message board you know like he posted this on the uh like the Mets Dowd cryptography you know message board and what Satoshi realized that I don't think most people realize is uh even if this was implicit you can think of the internet as basically like giving rise to a new continent okay imagine in Atlantis that just arose out of the middle of the ocean and people were just taking commuter flights there back and forth each day okay so you'd spend eight hours in Atlantis and 16 hours at home that's really what the internet is you know how I can prove that well we're in it right now well right exactly like one way of thinking about it is ask themselves what percentage of their time they spend their waking hours do they spend looking at a screen of some kind okay whether it's laptop mobile phone tablet uh you know they're a smart watch something like that right what percentage of that time is that for you stuff I unfortunately have to say it's probably like 14 hours a day but I'm I'm probably in something like that uh I'd say probably the average person though right it's it's a third of their day maybe eight hours that's right so what that means and that's up from basically zero in 1991. yes right so you know this this Atlantis This Cloud continent right so just to extend the metaphor we're taking these commuter planes up to the cloud continent 14 hours a day and coming back and we're only spending two hours of her waking lives in your case on the land and 14 hours in the cloud right for other people it might only only be a few like three or four hours but like that's amazing billions of people have migrated huge chunks of their lives to This Cloud continent okay when you say billions I mean like three something billion just on Facebook right you add all the people with smartphones and so on so let's it's on there to three four billion people in the world half the people of the Earth have are now spending half their lives in this Cloud continent half their waking hours okay up from nothing in 1990 something when we think about that that is actually a different way of visualizing the whole thing and you realize the internet is actually on par with the discovery of the Americas for the Europeans right yes of course there were people in the Americas before the Europeans got there uh I talked about this in the book actually that like if you go and look at the bonto expansion or the Mongols sweeping across the world there's there's essentially no ethnic group that has ever had some location since time immemorial they just killed the previous folks and kind of took over their territory or whatever right so leaving that whole part of things aside from the perspective the Europeans like quote the discovery of the new world was this you know huge thing you know similarly like the folks who went over the Bering Strait their discovery of the Americas was this huge thing was this new frontier right which is obviously thousands of years earlier this internet Frontier where we've migrated to will over time give rise to new countries just like the Americas did right the Americas that people came there and they didn't think of themselves as American or Brazilian or Mexican or Canadian or something like that nowadays North and South America have they're all you know slotted into the same grid as like the old world right but initially they thought of themselves as English or French or you know they were colonists they were settlers right they didn't identify with the new land as primary and the old world is secondary right they didn't think of themselves as a Polish American or english-american right that also it's just English and that's similar to folks who spend all of this time In This Cloud continent but have not made the flip right you're spending the majority of your time in the cloud continent but you're not thinking of yourself as a cloud person yes first yet yeah is the key word I think yet I think one that's a keyword right interesting thing for you to share would be I think for for many people like the individual you might have just described they in reality spend a lot of time in the cloud but they don't actually see the cloud or the network as a true Challenger to something like the state or prior to that religion um and you talk about this as this idea of a New Leviathan and I think what would actually help people wrap their head around this is is what are some examples of where the network did challenge the state where there was almost like a head-to-head or a a strong sway that the network had in our wider world so I I mean one thing I've heard you talk about is Wall Street bets which people might think is is kind of a silly example but there are larger ones right so so what are some of those examples the concept of a leviathan generalizes and you know this is the the least common word in Silicon Valley is God okay or in technology is God all right so basically I'm going to talk about God for a second so the concept Leviathan generalizes God and what it basically means is in this context it's like Hobbs Leviathan and I'm just kind of you know take that concept and taking a little bit further and Leviathan is that all powerful force that stands above all men and makes anti-social people behave in pro-social ways okay so I have introduced three leviathans God State and network and it was actually gratifying I have this passage in there in one of the footnotes by a guy named Jacob Burkhart from force and freedom did you see that passage I'm not sure it's like footnote n or whatever of it uh there's a lot of no it's a lot of links but it's great why don't you uh why don't you share what that footnote is yeah so here is um here is this uh pretty cool footnote I think it's cool at least this kind of thing I think is cool um so this is from a book that was written almost 200 years ago okay force and freedom and uh I I found this after I had written much of the book or whatever just like just like you know just flipping through old stuff and I was like haha um and he identifies essentially three forces in the world uh he calls him State church and then the third Force he calls culture right and this is way before the internet or anything like that obviously right and but the state and church are kind of uh you know that you can kind of guess what those are right um culture he defines as all the peer-to-peer interactions between people everything that is so as soon as you get peer-to-peer he didn't say quite peer-to-peer he says uh I'll just give the exact quote our theme is the state religion and culture in their Mutual bearings we are fully aware of the arbitrariness of this division into three powers uh the division hour is a mere device to enable us to cover the ground indeed any historical subject must proceed in this way right the three powers are supremely heterogeneous to each other and cannot be coordinated and even if we were to coordinate the two constant state and religion culture would be still something essentially different the state and religion the expressions of political and metaphysical need may claim Authority at least over their particular peoples and indeed over the world for our special purpose however culture which means material and spiritual need in our sense is the sum of all that is spontaneously Arisen for the advancement of material life as an expression of spiritual and moral life all social intercourse Technologies Arts literature and Sciences is a realm of the variable free not necessarily Universal of all that cannot lay claim to Compulsive Authority wow okay that's like 200 years ago and what he's talking about in modern language would be culture is the network of peer-to-peer volitional interactions between people as opposed to the top down and positions of the church and the state respectively and this relates to council Leviathan so the three leviathans I describe as God State and network right and how do you think about this or in the 1800s what's the most powerful force in the world God why you do something wrong you steal God will punish you right that's why you don't steal okay by the 1900s enough people didn't believe in God you had nature writing about how God was dead and you know essentially the uh the basis for a lot of civilization you know you had this you went from this decentralized law enforcer who had hit you with lightning bolts if you did something bad people actually believed in that as like the super cop right people didn't believe in that anymore so instead you had the rise to a greater extent of the state filling that void right the uniform police forces the boys in blue in the extremists it's the Soviet Union of the totally Godless State and so on and in fact that was a huge Collision in the 20th century between the Soviet Union which was a pure state in America which is a god State combination like the Marine Corps of mid-century would say you know forgotten country so in the 1900s why do you steal because the state would punish you right even if you didn't believe in God the boys in blue would get you that's why there's so many police procedurals on TV right because the state is portrayed as omnipotent domestically all of those things even like a small little boy you know who knows what a cop and a robber is right they can see the uniforms and so on and so forth they are also you know taught oh the U.S military abroad can go and invade any country blow anything up it's big bad all-powerful blah blah right and until I think about 2019 those kinds of things while rickety they like people kind of believe in them and now what we're getting into is the third Leviathan which is a network and what that is is that's uh the cryptocurrency network that's the social network and now the network you have a third thing you you don't steal because the network won't let you either you'll get canceled by The Social Network or you will not be able to take it because the encryption prevents you and it is a third way of thinking about it God would Smite you 1800s state will punish you 1900s Network won't let you two thousands okay these are three different theories of the prime mover what is the most powerful force in the world is it God is it the US military or is it encryption all kinds of political arguments moral arguments um cultural arguments social arguments a lot of them reduced down to who is my Leviathan like what is what is the final thing that I'm invoking that says like basically like my dad can beat up your dad like my God is stronger than your god what do I think of as that you know thing and of course there could be conflicts within people of God right and there can be conflicts as I mentioned between people of God and people of the state Christians and the state like the Soviet Union persecuted you know people who got and there could be conflict between people the state and people of the network like you know the antitrust cases against tech companies or you know the state department versus Tornado cash and so on and so forth right once you kind of see this it's actually like a vocabulary for parsing the world and just to generalize is this a part that's not in V1 of the book but it's coming in V2 so with you know God we're familiar with the concept of atheist monotheist polytheists right okay so atheist doesn't believe in God there's also agnostic and so on but for our purposes right so atheist monotheist penalties uh atheist doesn't believe in God a monotheist like you know a Christian or Muslim believes in one God and a polytheist like a Hindu believes in many gods zero one and we can now generalize this to the a statist the monostatist and the polystatist and let's say the a coinist monocoinist polycoinist or you might say a new Mist like numis is like the study of coins right so what's the a status the a status is an anarchist okay they don't believe in the state at all so it could be a crypto Anarchist it could be an anarchical communist they just don't believe in the state of all okay zero States monostatus that's somebody who believes that their empire should run the world right like a national greatness neocon or like somebody who thinks China should dominate the whole world or whatever right um or back in the day like someone the Roman Empire the Soviet right Soviet imperialist that's like a mono status our state should run everything and then the polystatist is uh like somebody who's into competitive government digital Nomads okay switching between countries uh multiple passports okay now you can also apply the same framework to coins to the network a coinist is the no coiner they don't believe in coins at all they hate coins right you know web three critics blah blah okay monocoinist is like the uh let's the Bitcoin maximalist or a maximalist of any one you know that they think their digital currency or their network is just the number one everybody right the polyclinist I mean you know there's actually uh there's poly chain right there's multi-coin those are literally funds that were set up on the premise that multiple coins will exist which was controversial at the time that they set it up right like in you know I think polishing was set up in 2015 and issue they're about multi-coin on the exact time frame but around that time I'm just aiming those as two funds which are polychain and multi-coin so the polycoinist okay or the polynomist is another term numis is like numism is the study of coins like numismatic right they believe in multiple coins now here's what's interesting once you have this cleavage of the world right you can realize so that's like a three times three times three uh many ideologies can be further slotted into like combinations of these for example you have somebody who's the atheist monostatist a coinist right that is somebody who is like your secular East Coast establishment person who believes doesn't believe in God believes in the US government and especially the regulatory State and hates coins you know crypto Anarchist Bitcoin maximalist they're an atheist often sometimes they're a monotheist or polytheist or let's say often an atheist they are in a status they don't believe the state should exist but they're a mononuced okay so that's a real conflict that's going to happen between the atheist monostatist a newest and the eighth atheist a statist mononymous right that's like that's a collision because they they have different gods right that's going to be as big like the U.S government and the U.S dollar versus Bitcoin is as big a clash as like you know I don't know Christian Muslim was during the Crusades or something that's that's a that's a clash of um you know or like the Soviet University us those are two fundamentally different class of ideologies right go ahead I think to many people that would seem a little outlandish and I'm just you know being The Devil's Advocate what comes to mind is these are all Collective um terms or structures or things that we all believe in or don't believe in right some level of belief depending on where you fit in that Matrix and for many people let's say if we use God as the Leviathan The repercussions as you're saying of like not behaving in certain ways for them the people who believe in that they're like I'm going to hell that's like a lot of force or at least imagined Force the same thing is true with the stage right so if if I do something wrong I'm going to jail a lot of force again what's interesting about the New Leviathan that you're describing as the network there's Force but it it's not um approached the same way if that makes sense like it it's actually yes a lack of force in some ways it's it's cryptography and it's it's using the network to enforce certain things but without the same force that you imagine through God or the state and I think that's maybe why it's hard for some people to imagine this being a leviathan because a lot of people view the network as well this is just a bunch of semiconductors and servers and and bytes running back and forth um but I think that's why it's important to think through like or to to give these examples of where the network has actually been incredibly strong relative to other leviathans well so here's the thing is basically um one of the things I I touched on there and I talked about more in the book is fusions of leviathans right so you introduce these pure forms of like God seated Network and you can have like Fusion so I mentioned like God plus state is the American state right and there's different versions of network plus State uh one is the version that I you know the titular version of the book uh the eponymous Network state which is a fusion of network and state that uh you can think of as the network is the state like it's it's the government right the network is the nation that underpins the state because you have a Social Network online that is actually giving legitimacy as opposed to a physical physically based Nation where everybody lived together it's a digitally based Nation where everybody thinks the same and they're they're aligned that way rather than same language they have same culture but the culture is online there's different ways of parsing that but to your point in terms of force well um one Fusion of a a kind of network state is sort of a China's building right and actually what the U.S establishment is building and so you connect the network to drones right you connected to robots you connect for those physical actuators and that's like one way of thinking about it so now that absolutely is forced in the physical world and in fact that's already being deployed and so on right another way of thinking about it is um which is already there so this thread that I just pasted into chat so this is a while back but basically you know I was thinking about digital power and how to articulate it digital power is not really soft power okay if you're de-platformed and seeing all your money Frozen that's much more than just influence but it's also not what we traditionally think of as hard power because it's invisible it's intangible you can use it on 100 million people there's no Optics there's no like fireworks nothing blows up there's no nuclear explosion like the human brain is not trained to react to the use of digital power it's not dramatic in that way it's like a bit flipping on a server right um so I was trying to think about how to classify it and then I eventually was like oh you know here's a four-part classification analog soft power analog hard power digital soft power Digital hard power right you could all say physical soft power physical hard power digital soft power digital heart power and what is that analog soft power that's culture and influence okay analog hard power that's bombs of bullets this is the Classic Soft heart pair digital digital soft power is ranking and recommendation Digital hard power is de-platforming freezing and seizing and so the key differentiation is soft power is probabilistic and hard power is deterministic soft power you're persuading hard power you're compelling okay so now you start to actually see okay that's another way besides the obvious thing of drones and so on or you know that's like compelling in a very gun gun points at you kind of way you can compel in a different way with with the network where you lock people out either of their accounts online or their they can't access a building their key card is disabled right their their funds are frozen their account it has permissions reduced they're suspended Etc that's actually a very significant punishment in China for example like people uh their covet codes are used the red and green zones uh are often marked as like coveted red and then they can't travel their WeChat doesn't work and yeah in theory like it doesn't actually affect their physical body like they're not like hurt okay but they're basically unpersoned they are disconnected from huge chunks of the Chinese Network they have to rely on a friend to do things and so on they are just much less like independent than they were right it's similar though it's not quite there to like Exile like when you're exiled from the community in like Greece or whatever right so it's like digital exile I I think digital power should not be underestimated even if it's like flips on bits on servers it's growing in power drones are the most obvious example but locking you out of an account or digital soft power like downranking you these are big things that can totally crash somebody's uh you know company they can make or break you socially you know Etc yeah and I think it's it's directly correlated to our dependency on the network so as more people go online as more people spend more time online as we talked about before if people are spending eight hours of their day online that's a third of their living hours at half of their awake hours in which that is important to them to some degree and as it gets more integrated with work let's say that's that is a meaningful sense of power to your point one interesting aspect to consider as well is that with all of these forms of powers there's tears right so like you could think of the most extreme tier of hard analog power or force is like the death penalty right but but but you can actually dissuade someone from doing something by saying you know applying a night in jail or maybe it's a month in jail right so there's there's tears to it and I think there's going to be tears as well to digital power right where it's not just um the extreme version at all times but also it can be where you lose all access to your digital life and that's that's quite significant and the thing is your Digital Life just becomes your life you know in the sense of it's your login to all kinds of things right yeah why don't we return to this idea that you know it sounds like this digital power concept may not resonate with everyone but I want to give a couple of these examples because they really resonated with me that you've shared in your book and otherwise so I mean I mentioned Wall Street bets that's maybe a silly example another example of a network uh utilizing some degree of force is Amazon hq2 that's an example that you gave where actually like some concept yeah persuasion though exactly yes so that that so you know there's convincing and there's compelling yeah I mean something else that you've said is your immigration policy is your firewall you've also shown how networks can be utilized in unison with humans of course so another example that you've given is the power of 12 Instagram Engineers to beat 12 000 from Kodak right so Kodak yeah not not an example that's original to me but yes it's an important example right and so I think it's it it's important to recognize how the network does change the game it changes people's ability to participate Within These systems to challenge the state to Talent challenge previous leviathans and I think with that understanding it let's return back to the idea of the network State and actually building these new lines that many people assume are are very much set yeah so um so I actually I start off the book with this which is like you know because people skim nowadays and so never see it in one informal sentence is a highly aligned online community with a capacity for Collective action that crowdfund's territory around the world and eventually gain diplomatic recognition from pre-existing States that's like an informal sentence but just to kind of describe that highly aligned online community okay so it's not just you know A Game of Thrones Facebook group okay such as people who are there to pop popcorn they are highly aligned they all think of themselves as literally part of of the same Community okay and they've got leadership and they've got an org chart of some kind and they've got probably membership dues and a cryptocurrency and like this is at the top of their identity stack okay you know what you do is not what you are you may not think of yourself as a left-hander even if you are left-handed it used to be I'm Jim I'm 32 I like the Steelers you know live in Philly whatever something like that those are less and less common as bios right instead what people do is they put pound X you know like pound BTC or you know pound this movement pound that movement in their bios they will um they'll basically put their tribal Flags there boat their attack and their defense like if you kind of instantly know where somebody's coming from when you know their tribe right there's various shibbolets various words and things people put in there that identify what gang they're informally a part of what social network they are self identified with and that probably also accepts them to some extent they are also ready to sort of defend that entity they're putting it out there on their sleeve and often the attacks on somebody will attack them haha LOL another Bitcoin Nutter or something like that you know people will say that right and the next step is it has a capacity for Collective action right so it's aligned and it has common beliefs capacitor Collective action that's the part I was talking about with respect to the org chart and the leadership so again this is an extremely selective filter the vast majority of online communities do not have a capacity for Collective action why because I can you know if you look at a a Twitter following right let's say somebody has a million followers on Twitter okay how many likes does this does a typical tweet get actually a pretty good thing would be if you have a million followers to have a thousand or two thousand likes that's actually pretty good all in the order of 0.1 percent to point two percent are actually engaging with it that is not what I'm calling a capacity for Collective action that is a capacity for popcorn action okay uh yeah is it cool to eat food like this right okay a capacity for Collective action would mean that when you put something out to a thousand people you get a thousand likes you don't get one right you put something out to a million people you get a million people hitting the button basically that's what a capacity for Collective action is it's something where the group moves as one if you go and look at the web 2 internet okay you look at Hacker News and you look at Reddit and you look at Twitter there's an aspect of it which is um you can't unsee once you see it which is its entropy it's just 30 random links every time you refresh the page 30 random links okay and what that means is it's like intellectually you're like oh hey you know a shiny object oh there's another one that direction oh that's cool look right and so what happens if you randomly move like you know a meter in this direction and randomly in this direction and then randomly in this direction right do you make any progress probably not right that's actually what's like the so-called spherical random walk you you just kind of just drift away from the origin or what have you um and you know by contrast if you have a focused Direction and you're like I'm learning Ai and I'm learning this today and that tomorrow and that and that and that then you're moving in a direction now there's ways of combining these by the way I'm not saying Serendipity is always bad um the flagella of E coli famously that have the tumble mode you know where it like randomly seeks it out and then it finds the nearest food supply and then it runs along uh that that thing right so it has uh it's like tumble and run okay so you can combine the random search with the directed search and you get a good combination okay um similar in somebody so like stochastic Center or something like that and so the point being though that um if you're just doing lots of entropic stuff you're not making progress on an axis and if you have lots of people who are just online to hit random buttons to Doom scroll to whatever to just click this and that and just popcorn there's no compulsion they're that's why they're wasting time right they're turning an hour of just looking at the screen into like a few clicks it's a very low efficiency conversion of their intellectual energy into output the capacity of collective action changes that so now you have this meta organs okay what's the third part of the definition I never see is a highly aligned online community with the capacitor Collective action that crowdfund's territory around the world once you've gotten people you know a thousand people in a Discord or something like that it might turn out to be by the way another kind of app because for example Discord doesn't like in force tasking once you've done that once you've shown a capacity for digital Collective action once you can get a thousand people to like something which is hard by the way it's very hard to do that okay and you might need new kinds of apps once you can do that well you can get to a very high bar of collective action which is not just getting a thousand people to like something but thousand people to buy something and in fact not just by any old thing but to crowdfund territory and move in together I'm gonna pause you there because I want to get to the rest of the definition but but that is something that you know is quite the leap of course yes I agree with you getting a thousand people to do anything even if it's liking a tweet that that is hard but get me to from there to crowdfunding land sure totally so I had this um this article called software's recognizing the world uh you know almost 10 years ago and had a little table in there which I will let me see if I can find it classification of cloud formations taking physical shape right it's a very picturesque term a cloud formation I Define it as a group of people who meets on the internet okay and taking physical shape means they materialize out of the cloud and actually all calm and aggregate in person and even in 2013 almost 10 years ago I was tracking these cloud formations taking physical shape and here's a table right there's scale and duration right scale is the number of people and duration okay so the simplest is two people scale is two duration is one day so coffee with a LinkedIn contact okay you meet someone LinkedIn get coffee with them whatever that was I don't know if anybody's using LinkedIn today no offense the LinkedIn people listening to this all right but that that was happening back in the day all right so all right coffee LinkedIn content then two people for a month is you meet a remote engineer you interview them online okay and you bring them in for an on-site okay come in for a month okay two people for a year that's like match.com even in 1995 I mean obviously now there's Tinder or whatever but point is like match.com was like the beginning of that let's say 1995. two people for 10 years that's like eharmony.com like oh they come together they're you know it's like very high intention form of you know matrimonial bond with somebody right okay 10 people for a day that's like hackathon obviously been going on for a while right 10 people for a month that's like a data science type program or you know one of these one of these sort of immersive courses where people come and meet up you know they take a course for a month and come somewhere right 10 people for a year those are like hacker houses which have started in the late 2000 you're probably aware of some people who have kind of moved in and just get a big house in you know uh and and the downside is communal living but the upside is communal living so the downside is there's other people around uh so you don't have total privacy or whatever but the upside is you get a much nicer house than you would otherwise like economies of scale get really good quickly with house there's also the digital Nomad version of that too right where you don't actually have communal living but kind of as you talk about Cloud first land last the digital Nomad hubs like changu or Lisbon or Chiang Mai are equivalents of this right like I would put them probably on the like 10 000 people for a couple years well it's funny because people people flip through them but they don't stay it's interesting it's one of those things where it's like maybe the 10 000 people in the cloud there's like a hundred people who are in that location at any one given time or something like that right that Community is kind of there and then it's gone it's it's like a it's like a cloud like drifting through an area versus them all actually being present right well I think so that's an interesting perspective I I would say that's true for some of them I would also say that some of them are actually quite stable and there are many Nomads that spend like you know many years in in a given place if not their intention is but 10 000 digital Nomads in one location while it's good and it's on the kind of track towards this is not what I would call a cloud formation unless all of those 10 000 people are basically friends with each other I see okay and this is actually this is an important Concept in the book one of the things I developed and this will be more more in the V2 I've got a lot of graphics and stuff quantitative definitions of terms from that we've been using sort of verbally for a long time right so for example what is a nation there's like like a dozen definitions that I've gotten the book or something on that order you know somebody's like it's got a Common Language oh no it's it's uh the folks who lived in a territory or no it's a common ancestry or you have um like Vernon's definition which I really like it's like a group of people who have done great things and wish to do great things together my definition is it's a densely connected subgraph in a social network what exactly does that mean a graph in in the math sense it's like nodes and edges right densely connected means um all nodes are connected to all other nodes for example if you have four nodes as a subset of a giant graph that has 100 nodes and those those four nodes form a complete graph they're density connected if each of those four is connected to the other three you know it doesn't have to be a fully complete graph but just a densely connected graph that's much closer to complete graph than a random group of 10 000 digital Nomads might have no connections between themselves so that's not what I Define as a cloud formation this gets to our original thing about people are used to using the internet individually and informally collectively and this is now formally and Collective if you have a densely connected subgraph amidst a bunch of loosely connected nodes that's a natural unit of Association where these folks should be capable of self-government right because they all kind of know each other my my friend Jan talin uh who's like early Skype engineer you know very prominent investor and so on um he had a really amazing take on this which I'm gonna quote this is this is Jan's phrase he's like balji like you know he's kind of paraphrasing and he's like uh you know I've been early to three things in life AI crypto and dance I'm like dance no so he's like the investor in deepmind right which is obviously right and uh you know I've you know like I've also I've been we both seen early on a bunch of this type of stuff so yeah I'm like dance what do you mean and so what he meant was basically that when you see um you've probably seen this in movies but maybe you've seen in real life you know let's say there's a a couple who's really good at dancing right what happens is they're like locked on you know uh like a very choreographed kind of thing the entire dance floor kind of clears back in admiration and looking at the coordination of these two people people like seeing other people moving in formation or put in another way when you can get a group that is very highly aligned as demonstrated by the fact that they've even if you're not constantly thinking of oh they must have practiced a lot for that right their motion is pleasing to the eye but they have their obviously self-sacrificing like one person's elbow is not where their person's face is at that time you know right they have coordinated the whole thing okay that is now something that Garners respect from the outside because that's a unit it's a coordinated unit you can visually see it's a coordinating unit these people are all acting together and uh so as such because they respect each other they gain respect from the outside world so to a non-obvious extent this community if it's highly aligned if it can do a dance digitally right where it's moving in formation that group now you start thinking of it as a unit and you both respect them and you don't want to mess with them if I have to rephrase another way it's AI crypto and social okay okay walk me through because social Technologies allow people to coordinate yes right messaging apps discords you're allowing people to do this digital dance one way of kind of putting it all together have you seen the movie Transcendence I haven't with Johnny Depp no no okay so I'm going to spoil it for the viewers spoilers okay go watch it all right fine so uh you can pause it right now watch it um Transcendence is Awesome Movie um it's underrated I think I think it's a pretty good movie uh there's a lot of stuff that I like like this like Sarah gets or whatever they're just good Sci-Fi explorations of you know potential future even if they're dystopian which we can correct by the way uh on that note digression on digression many Hollywood movies are dystopian because they steal the bass they implicitly assume the present is okay and then some tech guy came in and ruined it with their autonomous robots or something they messed it up oh my God we had this good Eden going and they came to the Garden Eden spoiled it right and the alternative framing is that the present is dystopian and there's like a few Founders that just might be able to get us out of the situation if only they could get past a bureaucracy et cetera et cetera right and that's a different framing of like implicitly as a present matter with you okay point is Transcendence is I don't think it's dystopian hints at being dystopian early on but then it actually gets more positive one of the things in it is you have Johnny Depp is this AI that coordinates all these human beings and I thought it thought provoking because it extends the concept of um like what you can do with smartphones in terms of coordinating humans to another level right where it's not just you know let's say You're an Alien looking down at the Earth and you saw like somebody walking in New York right and then they suddenly take a right angle turn and you know they're just going in a totally different direction why because somebody in Hong Kong hit some keys to send them a text message saying oh no actually the office is down the street the other way okay that logic like if you were some alien observing this and trying to I mean there's an obvious logic to it from our perspective but like it seems like it's a very subtle signal that moved from this person over here like backing that out is like really difficult to figure that out okay but in the network it's very visible it's like oh this person coordinated the sort of person they did a dance okay and if you take that up and it's not just like I send a text message every day or hour or something like that we're sending packets now you can have a bunch of robots dancing in unison like this right or a bunch of people dancing in unison or some combination of people and robots people in servers okay and you can coordinate and so Transcendence shows like essentially many becoming one right this is actually something else that's going in V2 of the book um there's at least three different ways of thinking about many becoming one there is um let's call it uh there's democracy right which is an aggregation an election many become one because you all vote and then the decision and it goes out there's markets where many become one where you have an order book you have supply and demand let the market decide right you get a price and there's actually a third version which is harmony right many become one because many actually become a single organism in the in the case of network States though you go from yes I understand this Collective Unison online um what would be the reason that someone would want to go from that online digital Collective Unison to doing that in the physical world one point I make in the book is look obviously I love digital space and so and so forth this is something by the way which I found the V3 is hard to communicate um because people will hear something and they'll immediately bucket into V1 or V2 but not V3 okay and so let me so Cloud first land last but not land never okay why do I say this whenever I talked about the network state or something like that people would hear one of two things they'd either hear oh it's totally digital yeah that's great you know the physical world doesn't matter we're all online cryptocurrency Internet blah blah blah or they'd hear it's purely digital you like you know the humans are still physical beings we sell guns they're still buildings you're gonna eat online what are you know you idiot like another tech guy stupid Tech bro whatever right okay so they'll basically hear that it's purely digital but it's not purely digital it is a cloud formation that has the ambition of projecting into the physical world okay just like Google has offices all around the world and your login gets you into any Google office right why do they have physical offices well they do have Meetup points and so on right you might argue there's less need for physical offices than there was but there's still a need for it you still want to have meetups you still want to have you have data centers you have this kind of thing Cloud first land last but not land never right um another version of this are like the embassies of a country around the world right uh another version of this are like Starbucks chains around the world right you know like you know like basically a chain that has uh restaurants or storefronts around the world okay um and the examples I've just given are those that are basically you know commercial real estate or or you know their companies or their states like embassies it's like States or companies it's like a Starbucks around the world but you could have it where it's not a Starbucks or a Google office but residential real estate you could have essentially a network of communities where it's not a Google login to enter and you see a Google logo it's not your workplace it's your residence right you have essentially an ethnic diaspora around the world and you walk in and it's a little piece of Home everywhere you go right so I understand that why would you want so why would you want something like that well even more so than that so I can imagine why a digital Community would want to have these physical like locations around the world Google's a great example for offices I can also Imagine an example where it's a bunch of people who want these yeah these co-living houses and they just operate around them but one very important aspect of the network state is the need to be diplomatically recognized so why that step why not just operate within the states that already exist where you have these communities that are digital with a physical element why that extra step to be diplomatically recognized in your own State not every business needs to have the ambition of becoming a public company let alone becoming Google or Facebook right like so it's totally fine to have you know a sandwich store or like a hardware store or something like that okay in the same way think of there being a funnel okay so in the book uh you know in V2 the way I'm defining it is Network Society Network union network archipelago Network State okay Network Society or Star Society that's just like one person with a dream okay Network union now you go to uh or it starts as a network status website it's one person of the dream and they assemble a small group right then stage two is a network Union where they're now able to have that Union being able to take Collective action right so which is a huge step above like 99.9 of online groups do not have this capability in fact messaging apps discords are not built for tracking Collective action this is kind of the unification of cryptocurrency and Discord you will get something that actually tracks that and has leaderboards for people and everybody can see who did what Collective action and so on who participated there's a Karma board all the type of stuff right um many things will be useful so the short answer to your question is there's things that are useful just as Network unions and just as Network archipelagos that don't need to become full Network States just like there's things that are useful as hardware stores or small businesses that don't need to become Google right what's an example of a useful Network Union that's that can do digital Collective action an example I give in the book is of uh like a professional Guild okay so it's a guild of designers and why so those thousand designers let's say they're in a they're in a network Union um well 99 of the time they're just chatting and they are exchanging info on their latest designs uh maybe each day somebody says hey you know like here's my work um I'd love a boost right and uh so you know you maybe like if you think about it there's a thousand people so if you have three people a day each person gets like one boost a year or something like that Kaboom so they can ask for it they're actually asking for something from the community in return they are expected to give to the community and then RT or fave or whatever and uh this is disclosed on their thing they're like look I'm part of this community I'm part of this network Union we're all signal boosting each other and um then some folks may not be able to put in time or they may not have an account they could put in capital instead they'd be like look I couldn't make it today but I'm paying my uni induce in capital rather than time and that exchange rate is determined by like the union leader right so 99 of the time this you know Guild it's boosting its members it's helping to find those members a job right somebody needs a job I'm out of work okay and then everybody just okay the other 999 people someone can find them a job right away right it starts to be a very powerful support network a professional Guild that's why these things existed for many years we're kind of rebuilding them online okay and that's useful in its own right then one percent of the time that person is under attack online and then the the union leader looks at their bylaws and you know it's not unqualified defense of them right but most of the time online attacks are distortionary or you know there's a shorting of some some kind and uh say basically say okay this guy is being attacked or canceled or you know something unfairly here's their version of the story we're gonna signal boost that to get them out uh get get that up there because it is actually in somebody's time of need when their status is lowest that they need the Boost the most and if everybody in the community acts together the other 999 people cannot be attacked for supporting this person right so you essentially join the union 99 of the time it is for like kind of upside one percent of the time it's like cancellation Insurance protection against downside right so that's an example of a structure that should exist that will exist that we're going to see lots of that's a purely digital structure and you can do that for designers you can do that for electrical engineers based basically you'll see all kinds of guilds like this right okay next step is something and that's digital only though you don't have to have any physical for that okay it's just protecting your digital life you're okay the next step is like a network archipelago which takes that capacity for Collective action that the network Union has demonstrated and now applies as I mentioned to crowdfunding territory in the physical world and having people live together now when even two people from an online Community start living together let alone 10 people it completely changes everything right you know one concept uh you know they mentioned is like companies have logos but communities have Flags and an important thing is you know like if you go to the networkstate.com if you see the logo in the upper left it is what we call the plus flag the plus flag stands for new country okay get it that's kind of clever I thought right yeah yeah and because you know the plus every day you're hitting that in the upper right of chrome right there what do you see the plus new tab right every single app the plus is new this new that right so it stands for the principle that one can create a new country right it also stands for win and help win right positive sum so you could imagine each of these people they're part of this network Union and they want to become part of a network archipelago and so they're hanging the flag of their community in their room they're seeing it every day they've got it on their profile and eventually they save up the money or the time they're able to get to a remote work job or something like that and they're able to find one or the other 999 people in the community and be like hey look why don't we go and get a group house together and now let's say there's six people who are associated with this in Boston they start doing meetups and stuff they don't live together right away but they do meetups and other kinds of things I mentioned this in the book they start doing meetups build trust and you might like three of the people there but only want to live with two other people or something like that okay this concept of group houses hacker houses all that stuff is a big thing among you know kind of the younger generation as you know or as your scale increases you buy an entire apartment building with like 300 people or you buy like essentially a small town and guess what now you've got self-driving car town because you have unanimity you're the self-driving car community you put 400 people into middle of nowhere in Nebraska okay a thousand people whatever and now the roads are all zoned for self-driving cars you can rip up the roads you can do whatever you have root access to the physical world because you have alignment if you're building a network archipelago you want to build it on like burning man style territory probably right or at least territory that nobody else wants there's a website called like land and farm.com you can see that there's like properties which on a per square meter basis are like 1000x cheaper than Palo Alto you know why is why is Cornell why does Ithaca have higher property values than other things you know nearby it's because lots of smart people move there and thereby increase property values by moving there so these thousand people can make something out of nothing into something in the same way you can take a domain name that doesn't have any value and turn into something because all these pointers are now looking at all these backlinks that are looking at it so capacity for Collective action you have those thousand people they take a territory in the middle of nowhere that doesn't mean anything and they make it into something and now suddenly it's valuable right this this dance right that Collective action turns something that any one person could not have done into something that a thousand people can do together when they're moving as a multicellular organism just one example by the way of that is is chengu which I mentioned earlier back in I think it must have been around like 2013 or so chengu was very empty you know there's pictures of it back in the day where there's like Deus and one other building and then a bunch of rice fields and it took one person uh who ran a co-working space or wanted to open one and he worked with the locals he built a fiber line there and now if you look at chengu it's I mean it's it's completely full thousands of Nomads and to your point about property values I think I saw a tweet the other day of someone a friend of mine who lives there who basically said that his rent there was more expensive than his rent in Singapore where he used to live and so yes that's it like a a perfect example of where property as you're saying that no one cares about can be turned into property that people care about but do a lot of people want to do this how many people do you need to do Google how many what percentage of the world moves to the United States tiny percentage right that completely changed the world yeah I mean it strikes me that that there are people who will want to want to do this but will they want to move to like rural Utah or some some land that no one cares about I guess you just need a few is what you're saying a tiny percentage of the world moved to the US and the example of the United States though has been because there is new land right so to speak at least from the protective Europeans um there were social experiments in democracy and capitalism in particular that then propagated back to Europe and to the rest of the world like the French Revolution while it was bad was influenced by the American Revolution all the democratization a lots of the market stuff all kinds of things happen in the new world and came back to the old world right to an extent that I don't think people fully appreciate you know it's like the Margaret Mead thing right never doubt that you know a small group of highly motivated people can change the world indeed it's the only thing that ever has right and so Mass Appeal I mean one thing I think that's kind of interesting is just to hover on that point for a second um Mass Appeal comes last right like that's like after something is completely being proved out and and so and so forth and nothing ever goes from zero percent to mass movement I should say nothing ever um it is hard to get it to mass movement overnight and even if it does seem to do that it is because lots of prerequisites were installed billions of people with smartphones and they've got experience with Instagram and you've got 5G LTE and you've got the app store and you've got this and you've got that that's why Tick Tock could ride behind all those prerequisites because people knew what social networks were they knew what smartphones were they knew what app stores were they knew what a feed was blah blah so sliding behind all of those things I mean tick hours like you know a good company or whatever it's well executed um I'm sure you know people also say it's spyware blah blah but leaving that aside they were not an overnight they were not just an overnight success 10 years in the making there were like 10 companies in the making it's very easy to dismiss this idea of startup societies and then eventually a network State because there are going to be many failures just like there are many failures with startups and then we look at the successes today but there's you know almost infinite numbers of people who tried to build the next Google somewhere in the last 30 years right and and of course we we see the eventual success and I wonder how you think about that in terms of the number of experiments that need to happen in order to you know see this this network State how valuable do you think plant flight is I don't know very valuable yeah yeah very valuable right okay so click this link and this is a century of aircraft accidents and so you can literally see you know in this graph it's like as of you know uh August 2022 28 896 accidents with 159 859 fatalities in basically the last hundreds of the years of Aviation okay 28 000 accidents fatal accidents right and a lot of non-fatal accidents okay so the point I mean no plane crashes no planes no train crashes no trains right no explosions no internal combustion engines right basically no risk no reward and so you know in a in a big way like we have virtualized all risk and that's progress right instead of all of risk but a lot of risk has been virtualized where it's just Financial Risk and so on and so forth I I kind of think people are foolhardy about physical risk where people will you know uh like do bungee jumping or skydiving or things like that they will you know do they'll take risks in my view with no reward Beyond just the thrill of it or whatever but there'll be a verse to okay let me try an experimental drug that could save save your life right you know euthanasia is legal in fact it's like the sixth leading cause of death in Canada like you can kill yourself but you can't take an experimental drug okay that's a that's actually a misallocation of brisk in the physical world instead an alternate society would lionize those people who took one for the team and took a risk on an experimental drug this is actually at the beginning of the pandemic by the way we could have had a vaccine in a week why because mRNA vaccines could be printed out all that time over those nine months was not spent I mean some of it was spent manufacturing or whatever but a lot of it was spent information gathering on whether the thing worked there's a way to fast forward all of that and that would have been with challenge trials what's the challenge trial you have a bunch of healthy Brave volunteers at the beginning of the pandemic okay and they get the vaccine and they volunteer to expose themselves to it I mean you could have you could have drafted the military for this by the way if you wanted to have groups people who said I will risk my life for the country or whatever right soldiers you could have asked for military volunteers you would have gotten soldiers who would have volunteered okay and you could have gotten it from different demographics so some people are in their 40s and 50s or whatever even in the military right you could have done this you could have gotten extremely good data very quickly and iterated on it if you had people who were willing to risk their lives for the greater good for the health of the population and of course you'd pay them and so on just like you pay soldiers in a battle and you give them Awards and whatnot and and you reward them for taking this risk for the whole team and they're not doing it to kill other people they're doing to save lives right look I'm not saying that you don't need a military at times okay but this is actually the kind of thing which is like a brave thing to do right now that kind of society which is uh clear-eyed about physical risk taking okay and that is considered the pros and cons but what it does is it basically says again no plane crashes no plans I mean there's another there's a book called The CRC Handbook of chemistry and physics here you know what this is I have not read that yet the CRC Handbook of chemistry and physics is the kind of thing that I would flip through in high school I it was basically like printed out math world or printed out the math portion of Wikipedia before that existed you know all the compounds especially the older compounds you'd see you know smell and taste like cyanide it had you know and how did we know that cyanide smells like almonds there's some guy who took a hit for the team he's like um is you know croaks after that right because they like the old school chemists were crazy enough to like smell and taste the compounds that's why we have you know that that's why we know how to do um flavors in Foods right that's you know it is it is because somebody is taking the hit to take that test at some point it needs to contact the physical world someone must take a risk at some point right no risk now the thing is this is being pathologized to be like oh you're encouraging to take a risk so you're exploiting them you're exploiting them to take a risk and so on okay well like the issue with this is it kind of assumes that there's no informed consent that's possible you know if you're if you're not paying somebody to do something you're exploiting them if you are paying them to do something because you're paying them you're convincing them to do it when they wouldn't have always do it so you're also exploiting them everything is exploiting other than convince people to go you know letting people go bungee jump and take purposeless risks and self-destructive risks and Military risks and that's all fine but but you can't have calculated risk right okay so I disagree with that philosophy and I understand why people have that philosophy that all other people's physical risk is expectation but I think it can be done in a proper way and I think the way to do it is you start with this online community you start with a network Union you develop lots of movies it's basically a Content unit okay you develop movies you develop books you've got little short films all this stuff is open source okay why it's almost like have you heard the term devotional content no it's basically like like Bitcoin maximalist in a sense or devotional content lots of folks on Twitter are cranking out what I consider devotional content for their hashtag they're cranking a devotional content which is here's why my cause is good here's why you are bad right here's why I want to abolish the police here's why I want to like Social Security or something like that okay that's possibly is more like the kind of thing that gets you to zealous level right Bitcoin gets you to zealous of devotional content okay so what you'd have is lots of movies like Dallas Buyers Club okay not exactly in that register in that tone but like some Dallas Buyers Club and some Limitless you know Limitless I've heard of it I haven't let me describe yeah please do I've seen Dallas fires Club but please for those who haven't so why don't you describe Dallas photo so the movie is about a man who happens to get HIV and at the time I think there are drugs that potentially could cure him but he cannot get access to them am I remembering this correctly that's right yes yeah and it's his fight to to basically get that access and also get that access for other people and I think he basically ends up breaking the law getting in trouble because he's getting these drugs to himself and other people uh he ends up dying I think but sorry another spoiler um but am I remembering that correctly that's right but basically the primary agency preventing him from getting the drugs is the FDA right and this is based on the true story of like act up where um you know people would do die-ins uh where the FDA was preventing them from getting access to these I mean these people were you know had this life-threatening condition obviously sleep fundamentally they're miscalibrated on terms of risk right they want to minimize PR risk for themselves the agency as opposed to allowing people to take a risk on their own right and why is that it's because media only covers it when a drug doesn't work and doesn't cover it when um a drug does work but is being delayed calculations of so-called drug lag um depending I mean like Alex tabrock and you know others have pulled things together on this right you know Daniel hendinger has written about this depending on how you calculate it the number of lives that's been caused by the FDA basically if you have a drug and it was held up by 10 years and then once it was approved it reduced morbidity and mortality by X percentage that means fda's delay of 10 years multiplied by that is how many lives it cost relative to just taking the risk at the beginning and shipping it right now there is risk okay but once you start having the ability to take calculated risks you can move at the speed of software basically do you know for example who Banting investor I they're familiar but why don't you share we need to get Banting in best zones okay banking invest they've won the Nobel Prize in the 20s 1920s why because they came with the concept for insulin supplementation to uh treat diabetes they had the hypothesis they tested it um on dogs okay then they tested it on themselves then they tested on patient volunteers and like you know it's like a miracle drug like people jumping out of bed type stuff right and then Eli Lilly had like scale production for the entire North American continent in like two years and they won the Nobel Prize in like two years after they started okay that is like when Pharma moved the speed of software that is what is possible in the physical world once we can get a Zone outside the FDA once we can exit the FDA people don't understand how bad the FDA is your entire life it's like tens of trillions of dollars of values being held back by FDA it's like incalculable how bad they are as an agency and we saw this during covid where they were holding back I mean FDA is why we were Flying Blind in you know February 2020 because they were holding back the tests that's why the journals were reporting that oh there's no problem it's not in the US yet actually it was in the U.S why was it in the U.S because it actually come in Via China and uh people were not able to run tests to confirm it because they had to get a so-called emergency use authorization from FDA which was delayed so what happened was actually some Labs actually did Civil Disobedience just like Dallas Buyers Club and they defied FDA and they just went and ran the test and later they got sort of a blessing from the journals which was okay Dave Russell conjugated it as civil disobedience versus running an illegal test blah blah blah right so they they basically blessed it retroactively so FDA did not go and crack down on those labs that actually managed to get the testing data out there okay vaccine could have been had in a week okay the tests could have been there immediately fundamentally FDA is the problem with it is it's uh it's got control over the entire world the single most important technological problem to solve in the world is the problem of regulatory harmonization regulatory harmonization is a process by which a group of unelected bureaucrats in the U.S write the regulations for the entire world just like a small just like a small website right will Outsource its log into Facebook login okay because you know hey Facebook's big you know right but in so doing it's beholden to Facebook you know I I respect Zuck but I also don't necessarily want the login system to be completely at the discretion some engineer there right in the same way a small country you know Czech Slovakia or like you know some small country will Outsource their regulation to the FDA the SEC you know FAA right and they'll say oh well look you know America's Regulators uh should be good enough for us we're a small country of a few million people this is a big country it's got a big Market therefore if a country if a company can get through FDA regulation then we'll approve it for sale the product for sale in our country if the plane can get through FAA will approve for sale if it can get through um SEC then okay it's it's like seems like a decent Financial product we might list on our Stock Exchange or something or allow our citizens to buy it or something like that this is actually something that is sought by FAA SEC FDA respectively if you go to their website look for harmonization they intentionally convene working groups with all the rest of regulators in the world to say use U.S regulations harmonize have everybody singing in unison the thing is both big business and big government like this obviously The Regulators like it because um when you when you become a federal regulator you're not doing it for profit you're doing it for Ambit right Ambit in like this the scope like a you know Ambit same route as ambition right um you know it's like a relatively uncommon word but it's like the scope extent or bounds of something right so if a CEO wants maximum profit for their company a regulator wants maximum Ambit for their regulatory agency they just want scope I'm like the most baddest you know biggest regulator around right FDA brags that they regulate something like 30 cents out of every dollar they like brag about this how big their regulatory Ambit is the most powerful regulatory ages of the world it's a Food and Drugs Administration literally everything you put in your body every bite you take every single day is regulated by FDA in the US and around the world right so it's power is absolutely immense we have bionic eyes they exist we have super soldier serum it's already real do you see that post of mine no I didn't there's a little mouse on the left hand side and there's a myostatin null Mouse on the right hand side okay and then the second row that's the chest of the mouse on the left and the mouse on the right and that's literally like Captain America before and after that paper is coming came out like 15 years ago people have known about myostatin and all literally this one and if you just inhibit myostatin there's different ways of doing you can do knock down other stuff and there's other things folio stat and blah blah you could make somebody basically naturally jacked and you know the side effect would be because muscle is metabolically expensive they'd be able to eat whatever they want and of course you know people say oh my God you know they'll have to be side effects it's like Icarus we flew too close to the Sun Well actually no they don't have to be side effects yes it might be plane crashes but we eventually figured out how to get Aviation basically without plane crashes in the same way you could figure out dosage and with enough volunteers enough people you could probably get like very effective either natural or artificial steroids or equivalents that would make somebody naturally muscular and fit just like we take caffeine every day it's a known drug with known plus and minuses you have something that's like that right this is just like one example I can give like 50 more okay the point is the FDA is holding back so so so much so that is like where you why you want like a network state okay so Network Union as I mentioned so you know the progression Network Union just does things digitally and collectively so it's like a like a guild working together right a network archipelago now you're getting offline territory but some things do yes require changes in law so that's the highest level in network state is something that has that Collective action capacity and the content has which which aligns people has the physical footprint and it has like the square meters of physical space and then the last step is it gets big enough and strong enough and morally aligned enough it can do the dance right that a city or state or country recognizes it and does it deal with it okay and what are the Precedence for this so like Wyoming has its Dow law it's literally built an interface effectively to the ethereum network right or El Salvador bitcoin's national currency there so it's built an interface to the Bitcoin Network or uh Nevada has you know done a deal with the lawn for the geiger Factory right so that's like there okay or Amazon with hq2 um Google tried something like this with sidewalk Labs it got pushed back but the concept was there okay point is that lots of these Sovereign entities cities states countries um or let's say not lots enough of them okay have been doing deals with companies and digital currencies that there is feasibility there and so this the what you'd want is you want a group of people which is large enough motivated enough maybe it's a thousand people maybe it's ten thousand maybe it's a hundred thousand maybe you need a million people I don't know the scale of it that's an empirical question that they can go to all of the different mayors and governors and maybe presidents of the world because they're they're it's a parallel process that's the awesome thing you're no longer just negotiating with just the U.S government Etc right forget them like the US federal government will be the last mover on everything like everybody's over indexed on we need to reform the US government no you need to exit the U.S government I shouldn't say ignore but just assume they can do nothing good okay assume they can do nothing good and basically just focus on the other 96 of the world right who are not American and the enormous part of the us which is breaking away from the US government uh meaning you you want to try to get a sanctuary City for biomedicine a sanctuary City for cryptocurrency a sanctuary City for self-driving cars where federal law is not enforced right officially and is that not enforced only along that plane or is it you are you are creating completely lots of laws well it's both so basically the thing is you can do this both within and outside the US right outside the U.S harmonization is rejected inside so basically the unelected bureaucrats of Silver Spring Maryland no longer have power but why do I say that because those bureaucrats I mean for example when Facebook is criticized you know who runs Facebook it suck right you know he's in control of it he's like attacked by name constantly people personalize it it sucks company blah blah can you name a single person who works at FDA no right despite the fact that every single bite you take every day is regulated by them there's zero personal accountability okay if they're ever criticized it's this abstract thing of the agency which has billions of dollars in annual budget and essentially infinite hit points can't go bankrupt right it has Appropriations from the government right you know so no individual is Ever Accountable there they're not accountable to the electorate there's no elections okay and they're not accountable to the market because they have career tenure and can't be fired and they're Anonymous they're not even accountable in terms of public criticism so this is totally unaccountable agency that determines everything you eat and drink your vaccines your drugs your this and that and has delegitimated itself in its performance over covet where it held back the vaccines it also you know the Johnson Johnson vaccine got held back by like a few weeks over some stupid scare like you know the problem by the way with the coveted conversation around like vaccines is either being like Yay everybody you know is forced to take the vaccine or you know oh my God vaccines are a world economic Forum conspiracy Cloud Schwab Etc and what there hasn't been is option three which is we needed this in a week and we could have like essentially gotten them to the vulnerable first even if manufacturing needed some time to scale which it would have you get them to like the elderly rapidly right and you could have avoided like a million dead that million debt is on the fda's head like because challenge trials could have been done you know and so that's like a different interpretation of like the problem with this right now the thing is that no country around the world has this formulated in quite this way that is to say despite the fact that these are you know ostensibly Sovereign countries they don't have the narrative that a FDA is illegitimate and or delegitimated and B also and this is important I want to make this important I'm not saying zero regulations and a total free-for-all of all kinds I'm actually saying a V3 right so I'm not saying just ndfda I'm saying exit the FDA just like you didn't just end the fed and replace it with nothing you're ending the fed or exiting the fed and replacing with Bitcoin the reason being just to talk about this point for a second because I think it's important I've just spent all this time tearing the thing down land let me give something to it to build it back up again people want a regulated Marketplace in the sense of they want a regulator that will do star ratings like quality ratings of you know most actors and bands of Bad actors right so you get a star rating one to five stars on like you know something you know that's that's a product in the market and the zero star Bad actors the scammers are just like kicked out of the market entirely one way of doing that is a national state-based regulator like FDA FAA SEC Etc another way of doing it which is actually not thought of as such but it's really important is a cloud-based International regulator like Amazon eBay actually even Gmail Apple Etc how are those Regulators what do you mean well obviously Amazon has star ratings eBay has star ratings and they also kick Bad actors right and to kick Bad actors on The Merchant side Uber and Airbnb are also Regulators they're International Regulators they're better than the taxi medallions or the hotel Regulators because Uber is tracking every trip right they're giving R ratings on both the driver and the passenger they're checking that payment can go through and that the passenger is good for it and so on and then they are decommissioning people who have low ratings on either side or abusive this is just in a sense a much more intrusive regulator no taxi Medallion could possibly do anything like that right they do a I mean a very cursory inspection every six months that the windshield wiper still works they're not getting reviews from every Rider certainly not collecting them in real time certainly not looking at the they have to get a series it has to be like an accident for them to actually write up that Taxi Driver it has to be a right tail kind of thing so The state-based paper-based Regulators fundamentally less efficient than the cloud-based International regular which also has data from around the world moreover it's inefficient in a different way where typically we think of the state-based regulator as adversarial to the industry right oh the taxi regulator is supposed to be adversarial to the tax companies keep them in check what actually happens is they form a duopoly against the customer whereas the Cozy relationship between the taxi regular and the taxi drivers since the taxi drivers sort of they get to know the regulator but the taxi Riders just flip in and out you know like taxi Riders have nothing in common besides driving a taxi but the drivers keep meeting with The Regulators eventually form social bonds in the same way the FDA is in many ways adversarial to Pharma companies but it's also Cooperative with them against startups and against patients who want novel treatments okay so Uber and Lyft actually changed this Airbnb changed this because now you have a regulator customer provider complex it's Uber the regulator the Uber driver and the Uber passenger versus lift the regulator and the Lyft driver for the passenger right so the star rating and the provider are linked together and the efficiency comes from competition between Regulators it is it's what's called polycentric law okay so it is within the same jurisdiction you have choice of law okay I pick the Uber app or the Lyft app or in another country go check or grab right you have choice of regulator right now even two choices is better than one yeah I get that it's due optimistic in some ways but there's other like ride sharing apps and so on right that's a model where you're not seeing no regulation whatsoever you're seeing a choice of regulator Regulators are actually incredibly valuable like like these are multi-billion multi because the reason being because people want to pay one price to enter a market the diligence a regular say that's a legit regular that one isn't and then they don't want to go and test every product in the market they want to know it's at a basal level of quality and look through it otherwise you have a situation where every coffee you get at Starbucks you need to put a dipstick in it to see uh you know is this poisonous or not right okay so the point is the V3 combines aspects of the V1 and the V2 to get like a third version for example with Bitcoin right it has aspects of gold which people talk about but it also has aspects of Fiat why you can send it across borders you can represent it digitally you can program with it and so and so forth you can't do any of those things with an inert block of gold so it's digital gold right it is not just a dumb you know throw back to V1 it's not competitive as V1 V2 beat V1 for a reason V3 takes the good aspects of V1 and the good s was V2 to make something that's better than both right um this would be a V3 where yeah you don't want the totally unregulated market for patent medicines and scams and so they had a great upside and they had a great downside we also don't want this you know harmonized environment where unelected bureaucrats just impose uniformity on everything and no one can take any risks and it's so risk intolerant that it's the riskiest of all right because if you don't take small risks you end up taking the biggest risk which is not taking risks and then you you just you never explore anything new and you can't adapt right so the V3 says no regulation is bad but this regulation is also bad and we can do better with Cloud Regulators right International records and what would that look like again just to go into the FDA example because the reason I go into this in great detail is this is one of the most motivating things as to why we need new States right there's a certain level of innovation you can get to that's sub-sovereign and there's a level that you actually need sovereignty for of some kind at a minimum Sanctuary City for biomedicine some Governor right could put their state on the map by saying this is a Zone where let's say it's Texas right they say guess what approvals will now go through UT Austin we do because the thing is the reason is you need some name brand right for that that people respect locally to be the regulars okay we've got some scientists there we've got some Physicians there and so on so you have some reputable brand in this jurisdiction which is taking over review so you're really not changing that much what you are doing now is you're introducing the crucial thing of competition between Regulators right you might say oh this is in biomedicine I don't know man like you know bio is like really important and and so and the thing is people just don't know about this Market okay but basically routes outside the FDA like write try laws like clear labs in the LGT pathway like compounding pharmacies off-label prescription by MDS and countries that aren't fully harmonized with FDA for example you go to Germany for stem cells each of these things has been attacked by FDA so off-label people think it's bad right but there's a it's a good you know article called like assessing um the FDA by the anomaly of off-label prescription right I think this is by tabaroc which is worth reading this almost 20 years ago and essentially his point is that while off label sounds bad oh right it actually means that a doctor can prescribe a drug for some purpose other than what the FDA approves it for and that's actually the way that like all kinds of things seem to work right okay once you understand the degree to which FDA holds things back once you understand that they've harmonized the whole world I want you to understand that they cannot be you cannot democracy doesn't work in this case because they're not up for election you've never run an election on the FDA okay uh markets don't work because they can't be fired they're not like a company they don't go bankrupt so whether you believe in an electoral or market theory of accountability they're completely unaccountable and Anonymous right the Press isn't holding them accountable either right so you can only exit them and you need a new technique to exit them that can be uh outside the US you get places like Germany and so on to to allow for stem cells uh you you get places that allow for um biomedical treatments that the U.S is holding back right um or it's inside the U.S and you're having Sanctuary cities just like Sanctuary City they won't enforce Federal immigration law right so Preston is being sent in fact actually states are diverging from the federal government on education on gun laws on abortion laws on marijuana laws like if medical marijuana can be legal why can't you know like like every other kind of experimental drug that you might want to take be potentially legal right and you just have obviously you have some framework around it it's not no framework but finally you have choice you have something that's outside this Monopoly of the state regulator right again unelected and unfireable the FDA free zone alone I mean there's so many other reasons I think that we need Innovation on sovereignty but that alone is how we get to life extension that alone is how we get to transhumanism we get to brain machine interface we get to limber generation and super soldier sarum and all this stuff there's so much stuff that's being held back okay like by I mean that's why you ski articles constantly like scientists have discovered X right you're like wow that's amazing you're you're you're taking like reversing this guy's aging by like 10 years their their hair is re-pigmenting from from Gray to Black right um here's an example of that because people have to see this stuff because they don't believe it otherwise they don't have the same exposure if you don't see the examples outside of your reality of FDA or non-self-driving cars or whatever society that you live in it's it's impossible to even imagine that there are these other realities exactly it's basquiat's Point seen and unseen are you familiar with that I think so I I didn't realize that was from him but yes exactly like it's it's impossible to imagine those realities until you see it and then it's like this spiral of wait a minute that's right it's basically it's like you know it's basically something where it's like I show people so for example take a look at this thing that I just sent you one it says patient image pre-treatment and patient an image post treatment and yes exactly like you said it's like gray hair the man looks like he's in his 80s to a full head of brown black hair people don't understand that we're not like you know within 10 of optimal or something like that in many areas we are a thousand x 10 000 x 100 000x off from what is possible right you know people said the pandemic was not going to be something and it's like you know millions of people were affected by it like it takes years to build a train station in the Bay Area and it takes less than a day in China that is not a oh they're 10 faster they are literally a hundred X faster maybe a thousand X if you're talking one day or like let's say nine hours right versus a year okay that is about a thousand X faster it's just a totally different thing you know your cost by the way the cost for everything comes way down because it's now a subroutine you can just invoke that boom boom okay train station transition clone stamp like this right versus the completely Antiquated kind of thing in the physical world in the US and all of that is the state all of that is the state holding this back right and so ways to exit the state and gain sovereignty are how we reinvent the physical and in a sense by the way we talked about the V3 you know TL has talked about how we can innovate in bits but not in atoms right and what the network state is is among other things it's many other things but it is a recipe for using bits to reopen innovation in atoms well yeah I think I think that's a really important point because it's easy for people to see the exponential difference between physical and digital a simple example is physical mail can take days weeks months digital mail take seconds right so so they can see the Delta there but I do think it's hard for people to imagine that exponential Delta within the physical world because it feels slower inherently but I think the train station example is showcasing that yeah it's not going to happen in seconds but there is a massive Delta between what we have in certain Arenas and what we could have yes so you know a friend of mine when I showed him those videos he's like okay you reset my belief in what is possible Right This is senior executive at a trillion dollar company didn't know and it was basically like you know he's like this is why we're doing bits and so and so I'm like atoms are actually possible in other places and times right so other places so I'm showing China here where there's a thousand X there's another link that's worth looking at which is Patrick Collison fast you know patrickcollison.com front slash fast right that's also worth putting up on screen where he goes to other times and shows that the US used to be much faster in building things and by the way you know people will say oh China's authoritarian that's why I can build fast we're a democracy we you know they're basically making a virtue out of incompetence right that's actually not the case because quote unquote the US was a democracy I mean if you think the U.S was a democracy mid-century it was able to build fast then I actually do argue that part of the nature of the political system but it's not necessarily democracy versus authoritarian and in fact actually the Democracy of the mid 20th century America was quite authoritarian right democracy like capitalism or Christianity or communism is so capacious a term that can mean both X and its opposite communism for example meant kill all the capitalists and then it means capitalists can be in the Communist Party right Christianity meant tear down the Roman Empire and it also eventually meant have Christian Kings and build a Holy Roman Empire like democracy means tons of different things over time periods like the ancient Greeks thought democracy uh there's a great book called uh against elections the case for democracy it's a hilarious title okay and it basically says that the ancient Greeks they use a mechanism called sortition rather than elections do you know what that is it's like no random selection from the population and any they drew lots and anybody so so your president could be anybody from the community what did that do it eliminated the whole process of running for office and what it also did is it kind of ensured that you had to maintain a high level of virtue in your community and actually a high level of equality because anybody could be the leader so you know right and you know you drew Lots right and you know at first it seems like a crazy system but the awesome thing about history is you know people estimate there's a hundred billion people who've ever lived right you have one life and so just like we look at other places in the galaxy and we know what our star system looks like but there's like Dual Star systems and black holes all these crazy things in the huge expanse in in space there's this enormous expanse in time or there's other configurations of humans that are totally counterintuitive to our current orientation we think we know this current state well it doesn't work anymore but let's say this current state of affairs kind of works at least the ones we've already always known over our tiny window of 20 or 30 or 40 years on the world but when you take take the 100 billion human lifetimes and look at all these other configurations like other star systems you're like oh that's how elections used to work that's how regulation used to work that's how it worked here you can pick little subroutines from there and say this was compatible with human nature back then and maybe we can update it and make it work in the present day one one thing that you brought up which is important is this idea that there there has to be the potential for a challenger so like you know if you take the taxi example before it's like yeah I could choose person A's taxi or person B's taxi but I didn't have an alternative outside of the taxi system and something that's coming to mind is as we talked about the lines drawn around the world or at least within our lifetime or let's say in my lifetime they've been mostly fixed obviously outliers um but mostly fixed and to me that that reminds me of this idea that there there are many people around the world who who just assume that there is no Challenger um and and we've seen that competition drives innovation in many domains and so it's almost fascinating to just imagine that we can get to potentially exponentially better societies if we do have Challengers but there's almost like this underlying assumption that there aren't there are Challengers within the societies that we have but not Challengers to the societies I mean just to talk about this for a second like the U.S establishment is currently fighting has been fighting simultaneous conflicts with uh Tech with half its population with Russia with China with in to a lesser extent with Israel India Hungary France Brazil with the brexiteers in Britain um with web 3 now and with crypto like it's just fighting on so many different fronts at the same time at the same point it is printing tons of money and in many ways its state capacity has fallen through the floor where SF takes 20 years to reopen a bathroom or you know I had this thread where it's like a trillion dollar disaster for the F-35 and like the Zumwalt this is you know like this uh Navy ship and that's a disaster and uh the Ford class carrier another multiple like does that incredibly expensive things that we just sort of were numb to it because you see another 100 billion dollars here 100 billion dollars there a trillion dollars here a stimulus here it's just money being thrown down a rat hole it's like a kid who I mean one of my points you know the article I wrote called uh founding versus inheriting one really good way of thinking about the current U.S government and the US establishment really because more than just the US government the reason that it doesn't unders it can't execute partly because it hasn't had competition but partly because it's intentionally inherent a monopoly from better men if you think about the difference think about a Founder who sets up a factory okay they pass it down to the air who passes it down and it's just cranking out widgets and churning out money and it's a great grandson or whatever all the founders narrow the factory okay one day and so it seems like the thing is working it's you know Dupont brand Widgets or something like that right and the great great grandson has the famous name and you know he's got the money and everybody looks at him legally as a legitimate heir of that founder because hey look at here's all the documents the chain of custody or whatever right then one fine day that factory has to switch from making widgets to making masks or uh like servers or something new it has to do something new this great grandson does not have the skill of the founder they cannot change the assembly line they don't know what they're doing neither do the career managers who have been hired over the time like the ability to do something from scratch to do something new that was the domain of the founder so all these people are just running systems that men better than themselves set up years and years ago right they're not the founders of The Heirs and so we understand this within the context of a factory that the like great great grandson of Rockefeller or Dupont or whatever is not Rockefeller Dupont um I mean in one sense like you know half your genes go to your child and then half again and half more Generations you go down it's not like the same person anymore it's like one one half to the nth power and generation sound right so not the same person but they are legally they're legitimate they're just not competent they were selected for legitimacy but not competence right and so what you want to do now conversely if you select for competence but not legitimacy that's like someone taking over the factory blah blah blah hostile takeover or not even hostile taker that's at least a legal thing like seizing the factory maybe they're actually good at operating it but they're considered illegitimate the studies like you just stole it from them blah blah okay that's like for example nationalization of oil fields and stuff like that you know with various Independence movements this kind of thing so so you want is both legitimate and competent and simply just identifying that as an axis right legitimate and competent well that's why you need to have refoundings because you know nobody would have elected a lawn to run Tesla or elected Mark Zuckerberg to go and run you know at 30 something years old to run a 3.6 billion communication Network had he he could only have proved it by doing it by founding it right from scratch so the from scratch aspect is so ridiculously important and that relates to all of our current institutions because there are decades in some cases hundreds of years old and they're just built for a different time and by better men the the people today you know like George Washington organized like the armies of the United States from scratch right the NYPD was at one point organized from scratch right even FDA or whatever is organized from scratch at one point right these organizations are now so many generations down that they're just inherited by heirs okay and sometimes they're literal errors in the Senate and I talk about this in the book in the founding versus inheriting chapter I just pasted in here but sometimes they're little literal errors in the sense of like a Dupont or a Rockefeller or you know like salzburger who's inherited the New York Times from his father's father's father's father's father right likes like five generations um and by the way just on that I do talk about that in the book it's like there's this great website that you should check out it's called Tech journalism is less diverse than tech.com and the point being that actually the journals who endlessly talk about tech diversity and so it's a far less diverse than Tech itself right A lot of these Tech journalists are basically employees of some East Coast nepotist who has inherited millions of dollars and or a newspaper and is funding their whole operation so their meritless nepotists and or employees thereof who are attacking the self-made right and once you see that you're like oh these these journals are basically like dogs on the leash they're hitmen for old money right assassins for the establishment they have no legitimacy whatsoever it's literally old money attacking new money the Merit list attacking the Merit you know the meritocracy or the more meritocratic as privileged it's like the privilege to you know it's like actually this amazing inversion when you when you apply that lens to it the thing is this entire establishment has you know it's declining legitimacy but it has legitimacy it doesn't have competence and so it can't innovate because it's not selected for Founders like if you're a Founder but you go to the US government or the U.S establishment no that the whole point is you can't found anything you can like your career ambition is to try to paste some language into an 1100 page Bill the night before it gets approved in a vote where nobody reads it right like and it's deployed to the entire country it's imagine if like that's how like Google was coded some giant political meeting blah blah and someone like Payson some JavaScript obviously that could be malware obviously it could be self-interested obviously that's not like the way to test something to roll it out to deploy it like future historians will look at our current time and these institutions as so insane in many ways like just one example is the thing I just mentioned where you're deploying code to 300 million people that you haven't read you haven't tested in the sandbox you haven't got any you know room for iteration the people who are responsible for writing it aren't responsible for implementing it it's like totally broken on that level on another level you're voting for somebody and the contract isn't binding they give some campaign promise they say they're going to do something they're not going to do it it's literally like buying something that's labeled milk and getting orange juice that's fraud in the commercial you know in the commercial setting that's fraud right so electoral fraud is when I mean the most routinized version of it is when a politician says they're going to do acts gets your vote on that basis and does why then people say oh that's representative democracy there like well your vote literally didn't count and your vote doesn't count there's literally no you have no recourse they've got like where it's you know some form of immunity right basically you cannot sue them for not voting your way right so it's all completely symbolic and the alternative I mean those are just like two examples of like ridiculous examples of how bad the current system is and so you cannot fix that system you have to figure out a way to get outside it why do you want to get outside well I mentioned the FDA is a huge motivation but there's lots of others you want self-driving you're going to need sovereignty do you want drone delivery you're going to need some form of sovereignty do you want like you know to be able to have nuclear power you're probably going to need some form of society like Wyoming is pushing some of this there's there's good things happening in some places they're like accelerating it you want to innovate in the physical world you're going to need some form of sovereignty one of the big recipes of the network state is not just say Teal's correct observation you can innovate in bits you can't innovate in atoms you can build a billion dollar Business Online you need a billion permits to build a shed in San Francisco that is true we reconcile that tension by using bits to innovate in atoms by building this aligned Community online and the alignment is ridiculously important they need to do the dance right they need to coordinate and choreograph together you need to be able to if they can't all hit like on something they literally can't do anything else but if they can do that then they might be able to do a lot of other things you've turned them into a multicellular organism right the content is also really important it's not just the code it's community and the content as well as the code right so all the messaging they're putting out the Declaration of Independence it actually had that thing at the beginning which says with it with an eye towards the opinion of all men right actually here was the Declaration Preamble I just want to get that right when in the course of human events it becomes necessary for when people dissolve the political bans which have connected them with another uh you know a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation okay that's a really critical thing essentially something that tech people underestimate and undervalue is that something like 10 or 20 or 30 percent of your actions you need to allocate like at the header just like HTTP headers you need to allocate space for the moral justification for what you're doing and almost everything you're doing basically let's just say first order everything right it's almost like I'm doing this because and then you do it for example if you're fighting back on Twitter you might think that everybody has seen the full context of the whatever number of tweets and attacks and so on back and forth you basically have to assume that most people are coming in with absolutely zero context and in your limited space you need to include the reason that this person you know like this person attacked you in the first place you're defending yourself and then the attack so literally the this very spare space sphere capacity you have there you have to put your justification for the attack or the counter attack or the defense before you actually do the defense right in the same way for every product that moral justification we are doing this because X is good and Y is bad right that is there and that is like you know just baked in it's like it's like whether it's a logo or it's a slogan or it's a mission statement or it's a catechism or whatever you want to call I call it the one commandment right which is your moral differentiation from society at Large dad tells you okay we are you know studies large has gotten something wrong we're going to get it right and to get it right we're going to need to shape the physical world so you use bits to come to consensus and you say this group is now aligned we need self-driving why because the current nhtsa is an Abomination the current thing of tens of thousands of automobile debts a year is an Abomination we have the technology to fix it we can't just retrofit the roads necessarily why because it's like trying to send maybe electoral power over a water line okay the current roads were not built for self-driving if you built a town for self-driving it would look totally different you would have uh the roads would have sensors instrumented there they might be segregated farther away from Human traffic you wouldn't have like human Crossings of the roads all kinds of things you can engineer your way out of the problem where you just assume the road is completely self-driving everything changes in terms of an engineering thing you're not trying to send electoral power over water line that's one of the reasons self-driving is so hard is you have to assume all of this Legacy baggage there if you could take that away it could be easy and in fact we know this to be the case because guys like Rio Tinto these are this is a huge mining conglomerate even as far back as like 2013 on closed roads on private mines that they were running when they're the only ones who are running the the miners and trucks they just run them all from Perth in Australia they can run the mine remotely okay and move the things around because there's no one else on the road or because it's a private road where they know all the all the cars on it right this is a great example of self-driving car Zone you have this moral commandment you align people with their bits you get that alignment and then they go and take physical territory and they just relentlessly negotiate with enough governments until they get a sanctuary City or they get a deharmonized Zone and they don't just replace it with nothing and replace with a new regulatory Paradigm one clarifying question so when you say that they develop their own regulatory framework is that just using the example of self-driving is that just around self-driving or is the intention that they regulate or re-regulate everything from education to taxes Etc or is it embedded right so the one commanded concept is I think it's a it's a it's a useful thing in the book it's actually one of the more important things in the book and the concept is when you talk about morality right uh so I'll get the short version of the longer version the short version is you cannot change everything Society at once but you can also not give up completely on societal change so just like a startup sets out to fix one thing right in the market a startup Society sets out to fix one moral failing of society okay so you're not saying okay uh profitable unprofitable you're saying good bad were you starting with a moral premise it's not a market premise this is really important like a lot of dows for example we'll start with a market premise and they'll be like hey you can all make money come here right and um you know what it reminds me of is uh that scene from idiocracy you know the guy's like you like sex and money too wow me too right like you know it's like these are these are like the human universals where there's absolutely no Community there people are just there for the money they're there when air drop right when token it's like joking but it's like you know dogs like waiting for some scraps and those grab the scrap and then run off or whatever right and so there's nothing in that's not a real Community that's just a bunch of people who are just there for like an airdrop or something like that right so join a bunch of discords for the airdrop or whatever right so starting money first is wrong right money comes it's a superstructure on top of the community okay it's a way for the community to represent its debits and credits between each other and that's why you see a bunch of these coins just dropped to zero because there's no true Community there's speculation on whether they build a community and then it drops to zero because they don't build a community one way of thinking about it is um so one commandment what's what are examples of one commandment so I mentioned the um the digital Sabbath example right uh where you're saying look technology is uh technology is good but you can have too much of a good thing just like you know highways I think the internal combustion engine is good cars are good generally I mean Electric engines are even better whatever but you could overdo it where uh you know San Francisco for example had a highway that blocked access to the waterfront and so you had overdone it so you you say I'm not against cars I want a V3 that takes away that highway so we have a walkable Waterfront um and so in the same way you're like look I'm pro-internet but I'm not pro-internet all the time with all the notifications so we have community support and we say we're offline 12 hours a day and just internet is cut 12 hours today and everybody's now just like the weekend synchronizes people and they're like okay we have Saturday and Sunday off right the Soviet Union actually tried making it so that they could work seven days a week so you had Mondays and and Tuesdays off and somebody else said Tuesdays and Wednesdays and somebody else said Wednesdays and Thursdays they tried these kinds of experiments okay and the problem is that there's a utility of everybody knowing that Saturday and Sunday are off generally means you don't have the coordination imagine you have to schedule your weekend like that and you could never overlap with somebody else okay so coordination and everybody picking the same defaults totally changes things once you have everybody accept in this community that I'm offline 9 pm to 9am guess what like that changes the community okay hey guys let's go and you know I'll like we'll go for a run or or you know um you know we're all gonna uh have a Outdoors dinner or something like that I don't know you could figure out the exact timing and maybe on the weekends it's actually like you're offline 12 p.m you know like an entire day you're off or something like that right and this is offline day and we're gonna all do things right and so once you have that coordination just like the weekend new things arise out of that when you can assume everybody's points at the same thing you know literally new societal adaptations arise and the thing about this is money runs out but a moral premise doesn't being part of that Community if if digital Sabbath is important to you being offline some of the day is important to you if you know like just okay everybody knows I'm offline and it's okay that I'm offline and as this community expands like more and more societal conventions people know not to email you then if you're offline by the way 9 pm to 9am 95 of jobs will be fine right like some jobs or whatever you need to be a site reliability engineer or something like that maybe it's more like more than 95 but like most jobs don't expect you you know that's only like plus four hours or something like that relative to where normal working times are uh because people expect you to be asleep eight hours something like that so 9 pm to 9 A.M you should be pretty much okay even outside your Society but as it grows it becomes a million people it's a totally different world you know like um all kinds of things get scheduled for offline time for sunlight time the coordination thing this is a resource that doesn't run out money Runs Out morality and moral premise doesn't this is differentiated from the outside world in like a permanent and persistent interesting way it's like a Wellspring that doesn't run out right another example keto kosher okay so you've got a network archipelago by my definition so you don't just have an online community you've crowdfunded territory and you're treating sugar Like Cocaine okay you're interditing it at the border you're literally not allowing so every store and every restaurant doesn't is not filled with high fructose corn syrup and chocolates and you know because we have it you have these really sophisticated corporations that have set it up so that when you're at the checkout line for something you're hitting the face for five minutes with some you know chewy chocolate like you know sugary kind of thing right so the point is like to wear down your resistance you just want to be on a diet or something and avoid sugar but it's like literally you know these experts from Madison Avenue have set up something to be maximally tempting to you and put it in the checkout line so you're looking at it the whole time right so you're trying to whittle it down right against that giant Corporation your community collectively can provide some resistance by setting the defaults in a different way right this is now you know what I'm describing there is like sort of outside of the normal like left right kind of spectrum right because you're talking about a community that's in the interest of the community it's neither uh you know it's not either left or right it's like it's basically something which is just for what the community's values are right and what they would do is they'd say okay no sugar at the border just not there you have healthy food you have lettuce you have you have you have fruits you have tomatoes you have other kinds of stuff every meal is healthy every meal that somebody's you know you don't have to ask what are your dietary restrictions everybody's now snapped to Grid it's not I'm offline 9 P.M to 9 A.M it is uh I am Snapchat grid on a different thing which is I'm either full keto or I'm just very low sugar or some something like that you can imagine variance of this there's keto kosher there's the Paleo people there's the carnivorous Community you could also have the vegan Village which is as different from the carnivorous Community as um both are from mainstream Society but I would bet that both the vegan Village and the carnival Community would both be far healthier than you know McDonald's eating mainstream America sure I mean like they're quite different from each other but those are both self vegan Villages they're eating lettuce and tomatoes and stuff carnivorous they're eating at least they're eating like real meat and stuff but they're not eating this processed horrible stuff right and so probably 20 pounds light or 30 pounds lighter okay and this again this is a resource that doesn't run out when you join that community that moral premise where you have inverted something that Society said was good you're saying it's bad study said is good or at least acceptable to have sugar you're saying it's actually morally bad and everybody in your community agrees with that so you get social support for that the defaults are set for that you literally need to travel outside of your day outside the town to go and pick it up it's literally like getting drugs right so you've now got several levels of defense and this is again it's morality focused right and you know what's interesting about this by the way just to put it on uh to relate to something else Mike Moritz uh you know famous investor at Sequoia he's like quasi retired now famous guy and you know I uh he has this saying which I think is very clever that all of you know sequoia's best startups are you know have they satisfied one of the seven deadly sins okay so it's like uh sloth or gluttony Pride lust Etc right and what he means by that is it's really hard to build a company and so you need to satisfy some sort of visceral drive right the more intellectual the more academic the more idealistic one's view of human nature like we will all gather to deliberate on X right the less likely that is going to uh be a thing right um not impossible but less likely and so once you start doing this you can actually take a lot of startups and you can map them Tinder is lost uh Twitter is wrath Instagram is pride and so on and so forth right ubereats is like gluttony right um and many things productivity apps are arguably sloth or whatever right because that it is hard to build a company and you do want to align it to a visceral Drive the problem is that the seven deadly sins are sins for a reason because you can overdo it right the reason they're sins is they all relate to lack of self-control and the and when you have lack of self-control well that's bad in various ways you're fat you're not on a diet or something like that you spend too much money you know you get mad when you shouldn't get mad like not being in control yourself often means if you don't have self-control other control is imposed on you others will control you right if you don't control yourself others will control you in some way which is bad the other issue is that once these companies get really big they're no longer simply like fighting for survival and they have this official Drive instead they're kind of actually creating the deadly sin Netflix you know is this is an offhand comment I'm not like holding it against them or whatever but they did say something like Netflix is competing with like having wine with your wife right they're competing for your time yeah but they said attention that you have yeah yeah it's like this famous quote it's like competing for all of your time including like wine with your spouse or something like that it's meant to be tongue-in-cheek but it's also true it's like people would rather have that than Netflix most of the time right like you know maybe once in a while you watch a movie or something but so the issue is that these companies once they get to a certain level are exacerbating genuine like sins right and in many ways America has become like uh not just America the west where lots of the world has become like a sinful Society in that sense right where people are being pushed out of their desired like self-control by these companies that are pulling them in these directions for private profit right and now again I'm like you're like wow this is a really different tone from you I thought you're like a super capitalist pro-profit VC kind of person I am but I'm also really fundamentally a community person with you know both with capitalism democracy by the way are tools or conflict resolution tools you know democracy is elections capitalism is markets but like within a family or even within a company or a community not everything is an election or an auction many things are just a decision that is arrived at organically where people are just aligned they're harmonious you know it doesn't have to be like it's it's a conflict where you've got multiple competing options between election you need to have an auction because you know like people really want this they want to bid on it lots of things can be allocated by Community if you have a real Community what's the opposite of the seven deadly sins well keto kosher is the opposite of gluttony right it's satiety right digital Sabbath is like um it's opposite of several things but it's probably the opposite of like wrath you're not getting mad on Twitter it's opposite of sloth you're getting out of the house right rather than being you know online all the time and so now the opposite in some ways the startup company is saying look it's hard to build a startup so we we have this visceral Drive they're satisfying here what we do is we actually flip it and probably you could take the seven cardinal virtues and build a startup Society on this each of the seven Cardinal bushes you invert the Moritz thing right and again I'm not critiquing Mike here like his his framework is a good framework in the sense of satisfying those visceral desires but any good thing can be overdone okay and I think we've overdone it in some ways how do you bring it back these startup societies as opposed to Sharp companies have a moral Innovation that may start with the seven cardinal virtues or there's other things that are like this in other religions seven current which is from Catholicism but there's other religious kind of things you take one of those and you're like keto kosher is attacking the gluttony problem how are we doing this the community is giving you support our one commandment is sugar is bad right and then that one commandment by the way leads to other things if sugar is bad continuous glucose monitoring might be good so everybody gets CGM meters and now you're snapped to Grid in a different way you can assume everybody in the society a thousand people ten thousand people a hundred thousand people have continuous glucosponders and maybe they all opt in and some privacy preserving data sharing way to say here is the glucose response of you know when I eat lettuce I get this result then you go further down the tech tree hey I'm not just monitoring glucose I'm monitoring my vitamin D levels and this level and that level so you get a Quantified self-community out of that right so once you have that moral Innovation the moral Innovation actually enables the technological innovation this is something that we've sort of Forgotten because what's happened in modern society is the technological progressives and the political progressives have separated and the moral innovators who are coming up with new slogans online are different than the people who are making new technologies in the past that was actually one movement for example Public Health right in the early 1900s the moral Innovation was like cleanliness is Next to Godliness let's not all be filthy and so on the technical Innovation were like sewers right hand washing and all that type of stuff right and those two things went hand in hand that moral Innovation doesn't cost you anything but it does mean you actually have to be concrete about what you believe in that is different than Society at large and I'm not saying come up with your own Ten Commandments and your whole new religion I am saying however one commandment just like a focused startup has one thing you have one commandment like sugar is bad and then you can take that you build a community out of that and then you'll get your second and third and fourth derivation for that like the CGM stuff and so on that comes out of it right and that's just one example but in this fashion everybody has one thing that they think or maybe a few things but often they can identify one thing they think of is like the problem with U.S society like they might say people are gambling too much on coins and assets and so on and so forth they might say people are eating too much or or people are too mad online they're canceling each other or they're too lazy and they're not fit or or something a lot of these things line up with the cardinal virtues thing I was talking about right or Tinder encourages like bad personal relationships and we need something that's you know like much higher commitment level and much more courting beforehand right everybody has some critique of society like this and now you can be president of your own star of society okay you can start solving that problem because you set up your shingle your one commandment you have your whole set of graphs and charts all your historical arguments that say why you actually think this is bad you're willing to put this at the top of your Twitter profile and defend this in public okay because people will the thing is you're arguing Society is wrong right you're arguing you are right Society is wrong and then you've recruited community of like-minded people that believe in this and then either it's all online or it's offline or some combinations or if you start getting territory and then maybe you eventually need like uh like a sovereign recognition to become a full Network state but even a network Union or network archipelago can get very far you're solving the problem for yourself you are remember the thing we were talking about the bastia the scene and unseen which you mentioned you are now making the Unseen scene you are showing in this sugar-free Zone what the impact of sugar is on the sugar full Zone everybody's 30 pounds lighter here right diabetes is dropped X percent everybody's like much better looking oh my God right whatever right you know like they they have just let all these other conditions maybe go away when they're not overdosing on sugar all the time and so that thousand people reforms a million people 10 million people because they make movies about what they're doing I like the analogy or almost the framing of evidence over confidence right in the in the societies that we have today they tell us what should be done um and perhaps the best way to to actually show an alternative is through evidence right so through these small societies that show not say what is better that's exactly right and basically the key thing is so I mentioned the term president of a star Society president of a network Society okay the number of people in the world who could feasibly become president of the United States is actually so you have to be like 35 years old Natural Born American citizen some other requirements okay so only four percent of the world is American and to apply those requirements it probably it chops it in half again right let's say it's maybe under two percent of people could become president and we're told this thing in school that anybody can become president and so on but it actually means 98 of the world cannot become president United States and even the president United States cannot actually fire these Regulators who have career tenure and so on and so forth there's a whole to do over that right schedule F and practically speaking first 98 of the world cannot actually become president and that President doesn't even have power of these Regulatory Agencies so the current pathway cannot fix those Regulatory Agencies there is no path to reform within the system it's literally like making Blockbuster into Netflix right making Barnes Noble try and become Amazon making Blackberry into Apple you couldn't do it you just disrupted you had to build the alternative system right you could not have turned England into America or the UK into America you had to build America right so now though you declare yourself president of a star of society and guess what the vast majority of the world 90 they'll all laugh at you LOL look at this idiot like oh you're president of the store right you know it's like you know basically imaginary present and you want that you know why you want them to do that because they won't stop you exactly if you do have enough power if you do have enough attention then you are actually putting friction between you and your goal for that's right time that's right so so like the whole Gandhi line which is overused but it's also you know first day laugh you want them to laugh at you right they're not taking you seriously you know what because here's the thing you don't need to win an election you do not need to get 51 support that thing you're mentioning at the beginning of will the majority go this everything doesn't have to be calibrated to whether the low attention voter can be convinced of this premise right uh you know with Co and and actually the way they're convinced here's another deficit of the current system it's all acting you know you're increasingly seeing people who are selected just for being influencers or actors in a literal sense you know whether it's Al Franken or it's Trump or it's Reagan or it's you have folks who are literally actors and are selected for their acting ability to be politicians but actors are liars like we don't think of it that way because actors prestigious Liars not procedures but an actor is a very skilled liar they're they're incredibly convincing on camera you believe they have that emotion they blend into the character and then cut and they stop crying you know just get a tissue like all right what's my next scene you know like that right and so you're selecting for politicians that are liars because you know there's that saying like actions speak louder speak louder than words they actually don't online words speak louder than actions you know why you see the Twitter feed of I don't know AOC or like you know any other politician whatever you see their Twitter feed but most people are not looking at anywhere near as constantly is not just their voting record but their actual actions their actions are not legible in the same way one of the things that crypto does by the way is we're going to be turning the LinkedIn resume of self-declared things into a feed of crypto credentials that is awarded to People by you you close a sale you get a crypto credential it's an on-chain proof from your CEO at the time that you close the sale for this amount at this time you solve a math problem you get a crypto credential from your professor right so you now have a machine readable on-chain resume that's provable it's not simply assertions it's time stamped it happened at the time it's digitally signed by that person Now actions starts speaking on the same scale as words and now you can start a work because there's a feed of them it's visible in the same way as the words on on online except it's on chain and now you can actually start filtering your Society by those people who actually are doing actions and not just words or actions plus words right actions plus words is valuable actions alone is valuable words alone is usually not as valuable and so you know you put this together and what you've got is something where you have your your concept of evidence overconfidence is really good because confidence is the confidence of the actor it's also the confidence of the confidence man okay evidence is the evidence of one's own eyes you can go and here's the thing you don't have to go and move to the society you can tour the society you can tour it in VR you can tour it online in fact a good startup society as I mentioned you know 20 30 of your case is making the moral case for what you're doing they're constantly preaching their case from scratch over and over again just like you're constantly pitching your startup right that tagline that you've heard ten thousand times that person on their side is hearing once the first time right yep so you're constantly making their moral case you're making videos you're making in content because you're recruiting people to your community but even more than that you're trying to set an example for the rest of the world and they may not adopt the entire thing okay they may not say oh you know well look digital Sabbath we can't be offline 12 Stars a day but maybe we'll do eight or some silly iteration thereof right but that's good it's just like Google's example of using Linux eventually forced reform on Microsoft and now they own GitHub or whatever right that would never have been done within the organizations reform had to come from without but it was reform it was but it was practical reform it wasn't saying hey let's rely on this thing to change you have the Thousand X you have the people exiting to that jurisdiction you have the loss of faith and the old but you also have the building up of faith in the new and that forces reform yeah I think the parallel to startups is really Illuminating in the sense that every startup as you said has some sort of tagline some sort of minor thing minor at the time that they're founding that can extend it has inertia in some cases all the way to Google in some cases it ends up just being a bootstrap startup in some cases it's somewhere in between and they similar to the idea of these startup societies are often ignored and then as they get bigger and bigger and bigger they become too big to be ignored and then there's other routes at that juncture too right some of them are absorbed and bought some of them continue to ascend and actually overthrow the the existing uh company in that space and so yeah I think it's really interesting to consider that many of these startup Society ideas will sound silly to many people at first but they do become something or or they evolve over time or they can evolve that's right and basically like startups sharp socies are like start companies in this way where uh sharp companies as I mentioned in the book it's like you think about Twitter or SpaceX right Twitter sounded insanely trivial SpaceX sounded insanely ambitious okay oh 140 characters breakfast tweet uh what is this you know and SpaceX sounded okay yeah sure you're gonna beat NASA all right good luck right so essentially they were at opposite ends of the spectrum but they're both now like 10 billion dollar companies that have changed the world one of them was considered too trivial though it was infeasible lots of startup things are like that where they're just outside the original window and all of it is in the execution and so you know this guy Idan Levine had this great tweet where he's like what is like the craziest thing and he's like a fan of this and so he's like let me see Pat prayers he's like what is it the craziest thing that would work as a one commandment and that's what is your question to that oh I mean there's gonna be things I couldn't even predict right I mean the obvious stuff is like language communities you know like religious communities you know you're going to have uh for example like Rod draher has this book called The Benedict option right if you want to be a religious Christian guess what now you can actually do that and you don't have to impose your values on the rest of society nor do you have to so it's at V3 right you're not imposing Christianity on people who don't agree with it nor are you seeing your Christian culture eroded or what have you you go and gather with others and you actually go in crowdfunterra and you practice and you actually live that Holy life and that's always harder to do in practice than in theory people will have you ever if you heard the term Trad right people will LARP being Trad I know that's two internet abbreviations in one okay but they will sort of pretend that they are like super traditional or whatever online because they inhabit this sort of fantasy world but the actuality of how the Trad stuff interacts with modernity you know for example there's um in in Judaism there's something called like uh modern Orthodox right I don't know if you've heard the term right modern Orthodox it's basically it tries to synthesize like traditional you know Orthodox Judaism with the modern world and it has to make interesting kind of trade-offs for that you know when you actually build that Society maybe it'll be pleasing maybe it won't be and the way you can test it is whether it attracts immigrants from the rest of the world right in fact there's this really here's a here's something this is going in V2 of the book this is a new content okay ready for new content take a look at this pretty cool uh video okay and then here is a like uh here's a visual version of it so you can see it in a graph okay let's click the second link first the population rank of every U.S state over 100 years okay and actually you know there's a better version of this that has like you know goes all the way back to 1770 this is only over 10 years you can watch that YouTube link as well which kind of has an animation of this thing is that the US has had something where especially over 200 something years different states have been like number one and and the ones that are pulling in all the internal immigrants from other places right people talk about the us as a nation of immigrants and that is talked about as coming from other countries but there's two wrinkles on that first is it's not just a nation of immigrants it's a nation of immigrants right tautologically every immigrant emigrated from somewhere so they left why did they leave Poland or India or Iran right or China you know sometimes it's leaving like communism like China or Nazism fleeing Germany or you're leaving an economic Basket Case like India was or you're leaving you know just for a search for a better life like many people are right but fundamentally the people who leave are not the wealthy necessarily what they are or the politically powerless this is really important by the way because people say oh apology earlier exit stuff it's all about like Rich guys leaving and leaving us holding the bag blah blah and I'm like have you looked at the profile of immigrants globally like they are not on balance the wealthy right in fact the wealthy and Powerful have big houses and political power in places like San Francisco and they control the government whereas the the new money right the immigrants are the ones who do not control the government and thus had to leave San Francisco because they could not get EMB through because they could not fix you know the streets or whatever because they got attacked because they got priced out and so on and so forth so those who leave are not those who are financially wealthy those who leave are those who are politically powerless right and once you look at it they are often those who are in a sense fleeing right I mean one way of putting it is and this is kind of reduction at observe them and it may seem like a digression but entertain me um was Stalin Rich depends in in what part well society as things it wasn't money right in fact it's a quora quote or something else I'm not sure this is true but it's very plausible like you know Stalin didn't even have change in his pocket right but he could walk around and it's like you know Grand Theft Auto you just carjack a car right that's like how Stalin and like the nomenclatura walked around like the Soviet Union they just had like root access to everything they could commandeer your house sometimes your wife you know like you know like your your farm or whatever that's what collectivization meant it was the people and it was the people it's a Communist party and it's a nomenclature that controls everything right so was he Rich no he was powerful right meaning rich I mean like a wealthy person must still persuade right they're giving you money for something and you could reject that offer or not but the powerful can compel so persuasion versus compulsion right convincing versus coercing those are different things so was Stalin Rich no he wasn't Rich he was powerful and once we acknowledge that as a limit case right you can pull it back and be like okay actually power is a different axis from wealth and there can be people who are powerful but not wealthy they're people who can compel who cannot convince and vice versa those who control territory are those who are powerful and those who set the lawsuits are powerful if you could set the laws why would you leave right you wouldn't right there's no incentive there's no incentive you're setting the laws this is all bespoke made to you blah blah blah why would you leave right this is you've you've carved out some stupid you know bailout or something like that you know um you're you're not seeing the folks who own housing in SF and who have been blocking housing those are not the folks who are leaving it's uh it's the new people who are leaving right the politically powerless are leaving and so the reason this is important by the way is often things are framed as masses versus Elites or like these rich Elite are leaving it's actually typically it's at least three groups there's masses there's Elite and what Peter churchen calls the counter Elite once you have that term is a glorious term because it clarifies so much right you're no longer basically you don't get this silly kind of situation of saying that someone who VC you know millionaire or like a tech founder or like uh you know biomedical you don't get into the silly game of like are they Elite or are they massive in set they're the counterally the tech folks are a Global meritocratic Group relative to like basically the white nepotis of the American establishment now I'm not the kind of person by the way who thinks white is an insult okay but the U.S establishment does and the so once you kind of apply that lens you see how many of their businesses how many of their media corporations how many of their East Coast kinds of things are either literally inherited in the sense of like passed by father to son like the New York Times company like Salzburg or Salzburg are five generations or informally inherited like the Kennedy name the polo you know like the Pelosi name it's not East Coast I mean she's on the west coast but like you know these are like famous family dynasties right um a very large fraction if you go to that uh that article founding verse inheriting there's a paragraph there which is like I say now of course someone who attends political office isn't always a familial error though it's more common than you might think and if you click those seven links you'll see an article on so-called widow's succession hereditary politicians history of wives replacing their dead husbands in Congress the candy family the Bush family the Clinton family the Roosevelt family and the list of the United States political families and there's actually quite a lot of them right this is also there's this movie The distinguished gentleman which is about like name recognition you know so America has an ability it has de facto like hereditary titles that's a huge advantage in running for office is that hereditary name of being a Kennedy or something like that right and so against that Elite that hereditary Elite sometimes in the literal sense of inheriting a media Corporation these what I call the meritless nepotists right and just calling them that by the way scales fall from the eyes so much becomes clear old money against new is an eternal story it's literally the old money calling the new money Rich that's like literally what it is okay once you kind of see that you're like okay it's elite versus counter Elite and what that will probably mean is the U.S establishment wins within the territories of the us that they control but they lose outside the there's parts from the US that I think become more Sanctuary city-like uh you know diverging in different ways to the left and to the right of the federal government and there's countries outside that diverge away from the federal government and so what happens is the establishment will have more power over fewer people well well something that that comes to mind is I think I heard you say something along the lines of Google News basically made every magazine compete with every other magazine yes or every other blog compete with every other blog and I I want to hear your take on how certain technological shifts like remote work you know we can we can relate this back to the network state but even separate from that change the game in terms of every state or every city competing with every other City out there for talent the US is a nation of immigrants but it's also a nation of immigrants where the people who left were those who were politically powerless as we just talked about from other countries but it's also a niche and it's not the financial politically powerless but it's also a nation of internal immigrants less appreciated is the degree to which the number one two three and four states in the US have been in flux over time they have attracted people and repel people and so on and looking at that over time actually tells a really interesting story again you know we live 20 30 40 56 like if you're very old you've seen some of these ups and downs right but once you take the window that's longer than human life because we've got data going back remember I think about a billion 100 billion people have lived if you go back you get more data you only have one life right so let's once you get some leverage out of that right that's what history is it's leverage right financial leverage in a sense it is Alpha okay other configurations of humans work so you look at these charts and you see oh wait a second like in the 1800s Ohio was a really big deal it was like one of the top states attracting lots of people like Pennsylvania you're like oh yeah that was like when it wasn't the Rust Belt it was like making stuff right like the higher River all this stuff is like really important and then you come you know forward and you see like New York was like for example the very beginning of the US Virginia was big and now you kind of vaguely remember this you've read any early American history you'll hear people talk about like and as a Virginian you know like State identity was actually a big deal then why because we have to work back but in the like the 1700s individual what are now U.S states like Pennsylvania was settled by like William Penn and his you know followers and like Massachusetts Bay colonies like the Northeast and uh like Virginia is like the uh the Cavaliers and you know tiger all these different districts right uh not districts like like sub colonies they were as different as tech companies were in like the year 2008 right so you have Larry Page and Google you have Zuckerberg and Facebook you have Steve Jobs and apple you have Bill Gates and Microsoft you have Jeff Bezos and Amazon these are founder run companies with different cultures and different personalities and so on now today now that four out of those five companies have had their Founders leave right now today Microsoft Google Amazon and uh and apple are much more similar than they were 10 years ago a lot of people who have the resume of I did three years here and two years here and three years here but like big Tech is its own thing Facebook is the outlier because Zuck is still a founder and so he can actually do big things like rebranding to meta that can take risks okay point being that putting those States together like Virginia was an identity of its own like Virginia was a whole thing after the Civil War it went from the United States R to the United States is like these states lost more of their you know like individual identity and became like you know a federal government like a like a union where they were just administrative subdivisions right and even more of that was knocked down over the early 20th century and the great centralization you know FDR did another big step with the 10th Amendment basically being repealed everything that was supposed to be left to the States was now something where you could set up these Regulatory Agencies like the FDA and so on they just said hey everything is interested Commerce therefore the federal government regulates anything right so all this centralization happened but even during this period even during the high centralization you still have people moving between states and now you have something like Florida that's been coming up over the last 20 years and it's really with the Miami thing and so on it's really giving California competition right but that's not something that just came out of nowhere if you look at this graph the visual capitalist graph you see like you know Florida's being like gaining traction for decades and so it was it's an overnight success like you know 50 years in the making whatever you see with this is that internal competition of this kind between administrative subunits is very important for keeping things healthy um and this is the remember we're talking about like the different leviathans this is the polystatus model as opposed to the monocytus model right there's always a tension between these okay there's this whole uh Chinese um saying which is the Empire long United must divide long divided must unite why because when it's long United you have stultifying bureaucracy harmonizing like I was talking about it's it's not responsive Etc then you decentralize you divide then what happens you have a period of oh it's all chaotic oh my God I wish we had common sand Etc it's only reunify oh wow we've reunified and then there's a honeymoon period and you know so each time there's like a honeymoon period of wow we've got our independence oh my God it's chaotic oh let's reunify oh my God it's sclerotic oh let's divide right so it goes in Cycles like this and that's not to say that you come back in the same place one of the points I make in the book is the helical theory of History where from one axis it looks like progress from another acts no projection it looks like going in a circle but if you look at it from outside it's like you know maybe it's a x of T equals cos t y of T equals sine t z of T equals T is the parametric equation for like a helix in like three space so it's like cyclical and sub axes and it's you know linear on others right so you are still making progress sometimes even if it seems like you're going in a circle uniting dividing bring that to the present day what we are going through and what we are going to see is much more polycatism and the network state is a way of not just using the existing administrative units like Florida and what have you but setting up new ones imagine a United States where you couldn't just found a company but you could found the next California let's say the first order the 34 million Californians own California okay like this huge territory or whatever right the 500 000 let's take a smaller uh State Wyoming like about 500 000 wyomingans or wyomingers actually don't know what the I'm sure someone will be like it's I don't either yeah it's like you know Wyoming guy I don't know like something like that right okay 580 000. yeah so it's the smallest city in Union I think so the 580 000 wyomingans basically own Wyoming right they could in a sense crowdfund Wyoming let's say I don't know the exact ratio but let's say on the order of 80 or 90 of Wyoming territory belongs to Wyoming residents it's some out-of-state holding some Chinese Holdings and so on but let's just say Okay first order that's interesting because what that suggests is 500 000 people that you unify in an online Network Society Network union network archipelago could have a territory that amounts to the territory of Wyoming just spread out I could actually found an administrative unit that competes with these other administrative units and the key thing is that because I'm being able to buy a piece of territory that aren't connected to each other I don't have to expand it in one place right this is a key Insight like I talked about this in the book that the big thing about the nation states see you know they're city-states nation states and network States this again the V3 right the city-state was like this independent unit it was Innovative and so on but it got beaten by the nation state you know why because the nation state had scale you know what we now think of is Italy and like language Italian most people in the Italian Peninsula you know depending on how you like uh people argue that most people didn't speak Italian at the time that Garibaldi was unifying Italy people argue like um Eric Hobson argues that at the time the French Revolution most people in France didn't speak what we now know as French they spoke other dialects other languages right Germany you know Bismarck unified Germany and there's a whole thing in the 1800s called the German question about you know whether like uh Hanover and Austria like how would how would they actually attract it's like it's sort of like you know who would run the American Republic would be Virginia or would be the capital B in DC right Garibaldi unified Italy after the French Revolution France Got unified and homogenized the state actually shaped the nation because now all those people have no memory of a time when their ancestors spoke a language other than French right the the nation instead of an interplay where the state has all this power so it can actually reshape the nation and rewrite people's brains like Men In Black you know like flash you know now the children are educated by the state and so the state sheep's a nation there is a feedback effect right um it's sort of similar to uh you know the whole currency argument what comes first barter you know or is it like like debt right that's like you know various arguments on this and I do think it's barter that comes first but it is true that you can you know have a feedback effector okay why did I bring this up the city state lost the nation state because the nation state had scale okay and so it rolled up all of these smaller units into this big thing and it had the scale to beat others and in fact once one group had that scale then the nearby neighbors needed to also get together like so the French Revolution and the Napoleonic Wars are what helped lead to German unification all these guys are like hey we got a gang up together because France is going to beat us right there's actually a relic of the past like a like a duck-billed platypus that it's like a missing link that lives into the present have you ever been to you know what San Marino is I I recognize it but I actually don't know why don't you explain what it is San Marino is this tiny little patch if it's in what we think of as Italy that is like a sovereign thing in the U.N it's got a flag it's like 30 000 people it's like this weird thing what what a country of 30 000 people in like it's an enclave also it's like in the middle of of Italy and so what it is is basically before the unification of Italy um Garibaldi sought Refuge like basically San there's it's a whole complicated story about how it got unified but Garibaldi was able to seek refuge in San Marino at one point and in gratitude he's like okay I we'll just do a contract with you guys we won't fold you into the full Italy okay and so San Reno by hook and by crook managed to preserve its sovereignty to the present day and they're like a relic of the past when the whole thing looked like that lots of little San Marino's all over the map right if you look at um a map of Germany before Bismarck right that's a map of Germany before Bismarck right um now here's another one you know a map of the the princely states okay when India got independence it wasn't just independence from the British oh that wasn't the only problem they had to solve they also saw the problem of the princely states take a look at that basically there were 562 princely states that I think that's the exact number about that constituted what we now know of as the Indian Union if you look at that map look at how complicated that looks it's wildly complicated wildly complicated right this is the physical world used to be complicated like this but it meant it was very simple within those communities because people basically spoke the same language they had things in common and so and so forth you're trading off like one kind of complex I'm not saying it's like all roses or whatever right but you often can trade off one kind of complexity for another right clean lines on a map in Africa you know have put people who don't speak the same language don't share the same culture together and has led to a lot of the African Civil Wars is these artificial Nations that didn't reflect actual ethnic groups okay and uh you know this is actually you know the Sykes Pico lions in the Middle East it's actually something that like Isis and others also hate but basically whenever you see these straight lines in the Middle East um you know these are like artificial countries that don't reflect ethnic boundaries and so just gives rise to like endless conflict because people need to share culture before they can agree on law you know if your religion says this must be done and this guy's religion says this must not be done you're just gonna Slug It Out endlessly you can't just agree and it might be something really stupid you know it might be some dietary thing or something that doesn't really matter in the grand scheme of things or at least not to not to people who don't share either religion but they'll just Slug It Out endlessly if the boundaries aren't set in the right way this is how the world used to work if you look at San Marino you get a piece of it you look at the map of Germany before Bismarck you look at Indian princely States this is how actually the world also kind of works today you know why because a lot of countries are small countries yes so you know that part the other thing is if you've seen the county map of the U.S and who's Democrat and who's Republican that also looks fractal in this same way it's complicated right right yeah and the lines aren't representative necessarily of the nation behind those lines that's right and so in fact you know they're saying like one nation under God indivisible right so there's this really important the unfortunate one-liner is it's now two Nations that don't believe in God highly divisible right why because you know you can take a look at like this graph that's at the level of um Congress okay but you can literally see it going from you know people basically voting together on things to essentially all Republicans voting with all Republicans all Democrats voting with all Democrats right and there's the rare bipartisan things like where there's like gray lines that connect them are like 911 and like the financial crisis so for like the you know bombings or bailouts type stuff that's like that's the bipartisan stuff but otherwise they just never vote together on anything you know then you you look at that that's at the you know level of Congress and then you look at this graphic that I just pasted in this is at the level of Twitter or Facebook okay uh there's a you know article cjr uh study 2017 basically both Twitter and Facebook look the same where it looks like this blue and red separated thing right so this is this is literally two Nations going back to the very first thing in our chat it is not one nation it is two nations with different values like and one way one way of thinking about it is something like uh 96 of Democrats marry other Democrats only four percent married Republicans okay so Democrats will not marry Republicans and what that means is ideology becomes biology in one generation like this is becoming or already is in some ways like Sunni versus Shiite it is not a political conflict in the traditional sense it is a tribal conflict between groups that do not marry each other right if you look at if you look at this graph over here right marriages between Democrats and Republicans are rare it's like the here it's the one that I just pasted in there right so when you have something like that like they are becoming different ethnic groups as different as you know what you call them racial ethnic groups like Sunni and Shiite you know um or Protestant and Catholic you know for a long time that was a huge thing in Europe right or you know hudu and Tutsi or whatever right and this relates to your idea of primary identity right because these people are Democrats or Republicans they're also American they're also many other things left-handed right-handed as you said but there's one identity that people are now trending towards right as their Primary in certain cases and that's why you're saying basically the nation which previously would have been primary identity American exactly or in the past primaries Catholic that's right it's like Yugoslavia where that primary identity was a national but now it's a sub-national identity it's kind of actually there's this book um by I think it's by Barbara Walter okay it's called like how Civil Wars start she talks about how in Iraq uh you know She interviewed like a girl there she's like what was different about you know after the U.S occupation and so she's like well people started asking me a question they never asked me before which is are you soon to yours yet so Saddam for all of his many faults basically like kept the lid on Iraq if you were in Iraq before Saddam there are bad things about it but it was not in Civil War and Isis and the like insanity that followed and the sectarian violence because in the absence of the state once the state was knocked out and the Americans were considered illegitimate you had God you people fell back on that Leviathan and she had these sectarian disputes which of course were fueled by Iran all these terrorists but it became Sunni versus Shiite the the national identity went away right and so what you're you're mentioning here is exactly like the American flag is not actually uh that's the state right but people don't identify it you'll see all these articles nyt other places they'll criticize oh my God I don't like the American flag instead the way of thinking about it it's not just Republicans that are nationalists it's Democrats that are also nationalists they're for Democrats and Republicans are for Republicans both are for their own tribe they're they're nation is Not The American Nation it is Republicans for the Republican Nation democrats for the Democrat nation and both them actually have their own Flags they're not called the Democratic flag and the Republican flag but you can immediately think of them you know where it's a blue line like the the blue lives matter flag or The Thin Blue Line flag the don't tread on me flag for the Republicans um or the progress flag for the Democrats et cetera like you they have actually their own flags that are actually the flags of their Nations we don't recognize them as such today but that's why I was saying like if in the 2010s the question is what is the currency the 2020 is the question is what is a nation once there is no longer an American Nation there's a Democrat nation in the Republican Nation you have these fractals that look just like the princely states of India in 1947 or Bismarck before Germany we already have the fractal Democrat Republican America that complicated thing that I showed you that seemed like it's part of the distant past is actually our present how does this relate the internet has actually made this possible to deal with not I mean I'm not saying this is all going to be roses or what have you but one of the things the internet has done as you progress in connected to the previous thing from city state to Nation State's Network state those city-states like San Marino that were little tiny things that couldn't survive on their own versus a big nation state can now with the internet group together around the world and have a collective scale that is again bigger than any local nation state a nation state can no longer expand right because the boundaries there are fixed the network State can expand at the speed of a tick tock or a Facebook right it can grab all these people globally it's constantly competing for for for people and so it can get greater scale than any nation state or not any let's say many nation states right and I mean it'll be hard to be bigger than China or India but Facebook is right now Facebook is not a network State because it was not set up as such the Facebook employees report to zoc they are in the leadership hierarchy the Facebook users are just using a tool and they're not taking orders from Mark on this or that but you could imagine a network that did have that kind of social contract where when you came in you're like look here's the thing this is a president here's the folks here's what we're doing here's the one commandment um here would be like your slot in the hierarchy if we have to break up tasks and so on just like when joining company right here's your title and your position it doesn't have to be quite like that as hierarchical but it could be okay different network societies will have different varieties and then you are signing that social smart contract upon entering it and now you've got something that has it's like the V3 it has aspects of the city state where it's like um Everybody agrees on something like it's Innovative it's agile it's Nimble it's like founder-led it has aspects of the nation state which beat the city-state because it's got scale you know it has uniformity like it is useful to have people in a large group all speak Italian or French it allows laws and all the types of there's there's a reason the V2 happened and this V3 combines aspects of both just like Bitcoin combined aspects of both digital gold and fiat currency right and that is maybe what we're going to need as we move into this fractalized America where you do have two Nations not under God because people don't believe in God anymore like that's dropped off a cliff as well divisible you're going to need some new thesis of how to govern and I think Network States may be a piece of that um but even if you take America aside for now the rest of the world all of these other countries all of these other groups within those places the 96 in the world that's not American they can also now have new ways of doing self-government that don't require winning a war or an election or what have you anybody can declare themselves present Society set up a one commandment fix the problems they see in the world and be an example for others well I think that's a good place is to end it this was really really informative I think I think I'm glad we covered certain topics like is this just for the wealthy or can this actually scale to the point that that we consider states to be today so apology thank you for going through all this if people are interested they can go to what the networkstate.com and um also tutor.com so it's free online and you can also get it on Kindle awesome and if people are state.com dashboard looks like you have 20 six startup societies that you're starting to track so also a very interesting place to see who's building what they're building and there's a lot of diversity there too that's right so this space is the things are happening here awesome thanks biology thanks for listening to the a16z podcast if you like this episode don't forget to subscribe here on YouTube to get our exclusive video content we'll see you next time [Music] um

Channel: a16z

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Id: 8rWIsc34N9Y

Length: 172min 32sec (10352 seconds)

Published: Wed Nov 16 2022