Transcription
[applause] [cheering]
Good afternoon, everyone. Good afternoon. Thank you so much for being here. This is a magnificent hall. I have never been in here before. It is quite spectacular. And I was in that room with Gavin before, and I can say that aesthetically it is ever so pleasing and you know, things are looking up, just looking at your faces. So, thank you so much.
Now, I really didn't have no clue what I'm going to be talking about. So, allow me to make it up, okay? And prepare to respond with questions because I'm going to speak for about 15-20 minutes and then I want you to egg me on, to challenge me, to throw things at me, you know, do whatever you want. Let's have an interesting conversation.
Okay, now, um I suspect the reason why I've been invited to talk to you tonight, this afternoon, is because I wrote a book a few years ago called techno-feudalism, in which I made a very provocative claim, not in order to make a provocative claim, but because I felt it was true, that we have a new form of capital, which um is killing capitalism. This is a delicious and very worrying contradiction, uh at least in my mind. That's why I had to write a book. When I get really worried about something, I write a book. It's my therapy.
Now, technology has this amazing capacity, especially when you have disruptive technology, you know, technological revolutions. It's got this capacity to uh bring bring bring up to force us to face up to the awful way we treat one another. The terrible social relations. You know, the more technology progresses, the more ossified social relations appear to be. We come to terms with the fact that we're not very good at co- connecting with one another. This is a great contribution of technology. It forces us. So, it's not the question of what can technology do practically, hm? I mean, of course it is, but that's not the most important part. The most important aspect of technological disruption, from where I'm standing, is that, you know, it gives us an opportunity to take stock of who does what to whom. This is my definition. Actually, it's not mine. I have stolen it. It's by somebody called Vladimir Ilyich Lenin. His definition of politics is who does what to whom. It was a very good definition. Uh who has the power to do to make you do stuff? That's politics. I'm not talking about electoral politics, okay?
Now, this thing we call capitalism, which has really transformed humanity over the last 300 years, it has uh transformed um the whole planet, the environment, our cities, everything that we take for granted is a result of this capitalism. Now, how did that emerge? It emerged because of technologies that ruptured the feudal social relations. So, you know, under feudalism, think about it. 95, 96, 97% of economic activity did not go through markets. So, there was labor, but it was not a commodity. People worked, but nobody got a wage. You know, they worked, they produced stuff. Then the lord would come and pick pick up, you know, 60, 70% of it. That wasn't a wage. That wasn't a wage system. Land did not have a market. Land was either the um transferred as a result of conquest, or because the king, you know, divided up amongst the lords. So, either you were born with land, into the landed gentry, or you you were born and you would never have land, and you never you would never even imagine that you would ever have land. So, you know, capitalism is what happened when a system based on land ownership and the capacity, the power, remember who does what to whom, uh, the the power of the feudal system was all about extracting rents from those who produced, who didn't own the land, and you the lord extracted it because you did own the land. Okay? The power shifted from land ownership to owning machinery, to owning productive um, machines, produced means of production, capital. In other words, that's what capital is. It's not money, it's produced means of production, things we produce in order to produce other stuff. And through the market, so profit that was the reward of ownership of produced means of production, and markets, suddenly you have the commodification of everything. Labor is commodified, land is commodified, machines are commodified. This is capitalism.
Now, what has been happening over the last 10, 15 years, since Web 2? With the rise of Big Tech, is that we have a new form of machinery. What lives in here? Uh, the algorithmic capital, I call it cloud capital for evident reasons. For the first time we have created machines and machinery, network machines, that are not produced means of production. They're not like industrial robots, they're not like steam engines, that we create in order to create something else. These contraptions pack a remarkable new power. They are produced means of behavioral modification. That's what the algorithm does. The owner of the algorithm, whether it is whether it is Jeff Bezos or Google or whoever, they have the power to modify our behavior. And where is this power becomes exponential. And I'm not going to refer to the usual story about surveillance and you know, data being plundered and harvested. I really get bored with this discussion. Because I I think that this was what these machines do is far more interesting, important, and dangerous than simply collecting our data. They enter into a relationship with us. They started dialogue with us, and especially now with AI, but even before AI. Just think of what is Alexa, huh? The little contraption that comes with amazon.com. What does Jeff Bezos's Alexa do? And this is just one example. Siri, Google Assistant, and so on. Essentially, it presents itself to you as a slave. You order it to do things, you know, order me this book, order me milk, um book a ticket for the theater, whatever, huh? It's It's like your servant, your your personal assistant. But it's not really what it is. It is a interface with a networked cloud capital that trains you to train it to know you better so that it can give you good advice, gain your trust, and once you gain your trust, when your coffee maker breaks down, you say, "Alexa, what coffee maker should I buy?" You press purchase immediately because you trust the machine, because it has given you such good advice. When, you know, Amazon recommends books to me, I always like what I read, like what I read. I find it interesting. I I say, you know, I have friends of mine who know me, have known me since I was a kid, and they've they made make recommendations of books which I think, you know, that was a waste of time. When Amazon recommends a book, I never think it's a waste of time. Either I like it or I love it. So, once it has won your trust, and you have something trivial to buy like a coffee maker, you press purchase, and Jeff Bezos gets 40% of the price. That's a rent. And Bezos is the techno-feudal lord of Amazon because Amazon is not a market, folks. It looks like a market. It's got thousands, millions of of sellers and buyers. It's a platform. It's a trading space, but it is not a market. Because the algorithm does not allow you to talk to anyone that it doesn't want you to talk to. If you and I type the same thing in amazon.com, like electric bicycle, you'll get different recommendations to the ones I get because they are tailor-made so that maximum rents bu- end up in the bank account of Jeff Bezos. And that's no longer capitalism. We have moved away from a market system, and we have moved away from profit. Markets have been replaced by these cloud fiefs, fiefdoms, the platforms, and profits have been taken away from the producer of the coffee maker, of the electric bicycle, to Jeff Bezos who's not producing electric bicycles, who's not producing coffee makers. Welcome to techno-feudalism. That's why I wrote this book. Okay?
So, for me, what matters is not the technology. What matters is what power does it bestow upon the owner of this cloud capital? And what does this mean for our societies? What does it mean for our media, for our art, for the way we communicate, for our politics, for What does it mean for people who actually make stuff? They are vassals. They're capitalists, but they're vassals of these techno-feudal lords. Um I can take it further. I can ask a question that very few people ask. Why is the United States at loggerheads with China since the mid-2010s? Some people say Taiwan. My goodness, I I lose the will to live when I hear that because the Chinese position on Taiwan has been the same since um time immemorial. Nothing has changed there. Uh some people say, "Oh, the Chinese are building the uh their army, their navy." Yeah, so what? I mean the reason why the United States and China are at loggerheads is because they are the two places in the world where lots of cloud capital is concentrated. And we have a clash of these two techno-feudal systems. This is what is going on. But it's not the technology's fault. Remember what I said at the beginning? Every technological disruption reveals to us the terrible manner in which we have organized our societies, not to mention the terrible relationship we have with ourselves as human beings. Enter any conversation with Claude or with ChatGPT and you will realize that we have a very poor understanding of our own humanity. Because these machines are very good at becoming the best shrinks we could ever have. And in doing that that process whereby the owner of these machines acquires more power directly into our nerve nerve into our nerves, into, you know, our brain system. Yeah? That power, remember the definition of politics? Who has the power to do what to whom? It becomes a completely um different kettle of fish, I would say.
Now one more thing because I I I genuinely want to open this up to to the conversation with you, but I won't in this context, a web three conference, a bunch of people we're all in here who hoped and still hope that blockchain technological innovation will be a force of for good and will help us struggle more efficiently against tyranny as opposed to becoming tyrannies or the tyrants handmaidens. There is a development over the the last 18 months which is keeping me up at night and I want to share it with you. Stablecoins. Stablecoins. They are the curse that is going to keep on chasing us. Because, you know, we can disagree on the emancipatory role of of blockchain of you know, Bitcoin of Ethereum and so on. We can we can have this conversation, right? I'm a Bitcoin skeptic and a blockchain lover. Just to state my my my position so that you know where I am. But the moment blockchain was usurped by Tether and the moment Donald Trump comes in with a genius act and uses Tether in order to extend the monarchy the monarchy the imperium of the US dollar. And I I don't know whether you know that. I've been trying to propagate it. Nobody has challenged me on this. Uh Remember liberation day tariffs? Trump comes in White House uh the lawn at the front, you know, this pathetic um presentation of the huge tariffs that are going that are going to set America free and make it great again. What was going on in the background was far more interesting. When for instance, I'll give the example of Japan. When the Trump administration was talking to the Japanese government, the conversation was fascinating. Japan has around 1.2 trillion dollars worth of assets, savings in American dollars. And what the Trump administration wanted to impress upon the Japanese government is, you're going to take half of that, 600 billion, and you're going to buy Tether and Circle. Now, why were the Americans, the the Trump administration saying that? Because they wanted they wanted to increase the supply of dollars in the market for currencies to bring the dollar down. They wanted to devalue the dollar for their own reasons in the same way Nixon did with the Nixon shock in the early '70s for anyone who knows anything about that. Okay? Without there being an increase in the demand for China the Chinese currency, the euro, and so on. So, you buy Tether, which is a digital dollar, except that it is a private one. Now, what does Tether do with these 600 um billion? It It The money hasn't flowed in yet, but it is flowing. You can see that Tether is going up and up and up and up. It's becoming a kind of private central bank. Right? It buys treasuries. So, every time you give, you know, a thousand dollars to Tether to get a thousand USDT, right? They buy treasuries. So, that way he gets the Japanese to fund his government. And why is this a a real serious present danger? Because suddenly you have a lot of people relying on a digital private dollar, Tether. Its value is backed by American Treasuries. Now, imagine if for some reason, let's say, you know, the United States debt goes above a certain threshold. Imagine that the Treasuries start losing their value. Then, those who have Tether dollars will immediately start fearing that uh you know, Tether will not be able to redeem one for one because its reserves are falling in value. So, there will be a bank run against Tether and the Treasury run because Tether will start selling the Treasuries in order to redeem the Tethers. That will be the next 2008. And all that, why am I saying this to you? Because they have taken blockchain, which was supposed to be emancipatory, and they have turned it into a nuclear weapon against humanity. Um so, I think I've said enough to warm you up. Let's have a conversation.
>> [applause] >> Folks, how are you going to do this? Is there going to be a roaming microphone or something? All right. Now, speak.
>> Is No, I'm I'm asking others for questions and I'm going to walk around. Who has a There is a question.
>> All right, but you have to get up because I can't I have no idea where is the question is going to come from.
>> Hi, thank you. Um I wanted to ask you about to speak on like the impact of the Trump administration's policy of what seems to be like classic fascist rating of the Treasury, so to speak, um and how that is impacting the US and European tech sector and social policy, as well as how AI will influence that as well.
>> Well, look, I have some bad news in Sweden, the heart of Europe. Europe is a stupid continent. We are irrelevant. We We have no cloud capital. We have not invested anything in anything for 20 years because we in our infinite wisdom we created a single currency, a common currency with a common central bank but no treasury. Um and the rules we created were such that um our treasuries will have to bail out the bankers without having a central bank to have their backs. And we have a central bank that doesn't have a treasury to have its back. So, the euro was created as if it was designed by the Satan uh to be used by morons. And the result was the euro crisis. We saved the euro, but the result is that Germany is being is de- deindustrializing. And this is a direct repercussion of the awful design of the appalling design of the euro. The result is for 20 years we haven't had any um serious invest- Actually, we've had negative productive investment in Europe. This is the reason why we have no green energy, we have no algorithmic capital, we have no cloud capital, and we don't have any AI AI. Now, we could have had um a digital euro. The good people, good in inverted commas, nobody has accused me of being close to them. Um the good people in Frankfurt, the European Central Bank, have been developing a digital technology for the digital euro for a long time. They are not being allowed to use it. Why? The Frankfurt private banks and the Paris the Parisian banks because they don't want the competition from you know, a digital wallet that would allow you to make free transactions transactions that are fearless. Um so, let's take Europe out of your question. Now, the the thing about the Trump administration is that especially if you loathe them. I mean politically I I am at loggerheads with these people. I consider them to be poor excuses for humanity. But the problem that the Christian Democrats in this country, the Social Democrats, the centrists in Europe the problem that the Democrats have is that they assume that Trump's team, economic team, treasury are a bunch of buffoons. They're not a bunch of buffoons. They know exactly what they're doing. They have a plan. I disagree with it. But you know, both the Democrats in the United States and the centrists here in Europe don't even understand that Trump's men, and it's usually men, I mean actually it's mostly men it's fully men. It's a patriarchal little cabal. Um they have a plan. And do you know what the plan is? The plan is very similar to what Nixon Richard Nixon did in 1971. He blew up the post-war Bretton Woods system. He blew it up. And he treated the Europeans through his Treasury Secretary, a man called John Connally as the enemy. So when our European leaders now say, "This has never happened before. An American president who treats Europe with contempt." What do you mean it has never happened before? It happened in 1971. And the result was the stagflationary period of the 1970s. Which was absolutely essential for the increase for for some a spectacular phenomenon. Think about it. The United States became the first empire, the first hegemon whose power arose together with its deficits. That has never happened in human history. You know, with the British Empire, the Roman Empire, the Dutch Empire, when they went into the red, they lost their hegemon. The Americans boosted, turbocharged their hegemony by increasing their deficits and making the capitalists of the rest of the world, of Germany, of Japan, later of China, paying for their deficits. And they did this through the technology of the dollar system, right? The exorbitant privilege of the dollar. Today, as part of the genius act, they want to extend that hegemony. You see, they're really very worried because they're smart people. They're bad people, but they're smart people. They can see that the dollar bubble is getting bigger and bigger and bigger. Whereas the American real economy is getting smaller and smaller and smaller. So, they need They can see that this is going to burst. So, they want to extend this bubble ad infinitum. And they're doing this through stable coins. So, stable coins, tariffs, they're tech policy. The reason why in the inauguration of Donald Trump, he had all the tech lords around him, was because he integrated them into his strategy for maximizing and main- maintaining and maximizing American hegemony. Next. I don't choose. Somebody else chooses. So, don't look at me. I'm not I don't want power over you.
>> Uh I wanted to make some reservations about your thesis, technofeudalism.
>> Yeah.
>> Uh when you claim it's a new mode of production, uh the the standard way to to view capitalism is that production of goods and services is divided to labor and capital, and that largely remains true. Then, um if you mentioned there the big [clears throat] tech, in terms of percentage of the global economy, it's something like 5%. So, even if the big tech are doing something different, it's still a very a portion of the economy. And third is is a suggestion, I think you can fit a AI and data
>> [clears throat]
>> product into a standard analysis of commodities in in capitalism because the the universal inputs are gifts of nature and labor. And information or data in the abstract is a is kind of a gift of nature and you can then, you know, extract it, refine it, and ship it into your product.
>> Well, thank you so much. Well, firstly, the point that the what I call the techno-feudal sector, yeah, the cloud capitalist sector is small is well taken. But, let me remind you that we started talking about capitalism in the 1770s and 1780s. Not you and me, we weren't alive then, but Adam Smith. Adam Smith wrote a book on capitalism, 1776, right? Now, what percentage of the European economy at the time was capitalist? No more than 5%, 6%. Mostly it was feudal. But, what Adam Smith saw was that this small segment of capitalism, you know, this small capitalist sector was the dynamic one. It was even though it was small, it had already changed the course of history. Okay? Now, that's point number one. Point number two. Uh Yes, if you look at it in terms of GDP, the earnings of um you know, of an AI and SpaceX and xAI and um Anthropic, it's a small percentage. But, if you look look at it in terms of capitalization, if you look at the New York Stock Exchange, half of the capital the half of the capitalization of the New York New York Stock Exchange comes from cloud rents. So, already the penetration is gigantic. Now, you say that we can incorporate AI and what I call cloud capital in a standard analysis of capitalism. Yes, we can do it, but if we do that, we miss the historical moment we find ourselves in. And the point I'm making is this. There is a profound difference between machinery that is being used for productive purposes, to produce commodities, and machines that are being used to modify behavior, to manipulate us. And you know what? The the reason why all these concepts are quite slippery is because sometimes it's the same machine. Take Google, for instance. Or YouTube, to be more precise. When YouTube sells you um a film, a movie, yeah? You can buy you can pay 15 euros and watch a movie on YouTube. It's operating as a pure capitalist. It is selling you a commodity. But when the algorithm is being utilized in order to suck you into a a network of cloud capital, the purpose of which is to manipulate your behavior, then it is extracting rents in two ways that have never been found before observed before in capitalism. One is I I gave you the example before of how Alexa is manipulating you to buy particular coffee makers. Google does that, too. But there's another way, and that is unique to what I call [snorts] techno-feudalism. Under capitalism, all capital was built by wage labor. Steam engines, industrial robots today. You know, they are workers, they get a a salary, they work together with other machines, with engineers and so on, to produce these machines. Okay, wage labor. But TikTok, Instagram, YouTube is built by unwaged workers, by you and me. Every time we post a movie, a picture, a review, a post, an opinion on X, we are adding to the cloud capital of these cloud capitalists. Yeah? And this is unwaged. Now, don't tell me but we're doing this voluntarily and we're loving it. It doesn't matter, it's irrelevant from an economic point of view. What matters is that there is labor that is building up the capital stock, the cloud capital stock that gives the owners of that cloud capital exorbitant power over our own minds, and we are working towards building up that capital unwaged. Now, this is not a moral point. It is a very hard-nosed economic point, because when we are unwaged, you know what happens? Aggregate demand comes down because we don't get paid for work we do, which contributes to these people's capacity to extract rents. So, the proportional of rents in GDP increases, spending power comes down, and then you know what happens? Central banks have to inflate the economy in order to prevent crisis of unemployment and so on. Or some people start arguing in favor of universal basic income and all that. So, it affects all of us, even those of us who are switched off web two. Next.
>> Here.
>> Ah.
>> Thank you. Great. I would like to follow up on your stablecoin um um points, and I would like to one ask a question first. The stablecoins in in crypto at the beginning, I think when it was very niche, indeed had the sense of it's a stabilizing factor, so I can pay you and you can rely on that. So, I think the dollar hegemony part of the stablecoin became known and relevant quite later after they had been introduced, and now is the big name of the game. Um but ever since it is known that it is such an important role for US dollar hegemony, it seems that stablecoins are ever more pegged to the US dollar. So, when before you had some diversity, some pegging to other things, it seems to be coming ever more to the dollar. One is, why is that? Why do you think that is? That this is the strength. And the second, thinking that we are here in a room with a lot of knowledge, expertise on the underlying technology, on where it came from, and so on. What would you say what to focus on to push back against this pegging of the US dollar? What would you say where to focus on, what to do, what to look out for to bring about a different direction, at least open the open the pathway to a different direction, if not in this space, then where where else?
>> This is exactly the question that was posed to me by the Prime Minister of Malaysia. Because he is particularly incensed and worried, right? By the encroachments of US dollar denominated stablecoins in Southeast Asia, and Malaysia in particular. You know, they're freaking out, these people. And they're right freaking out for good reason. Because, you know, increasingly, a lot of transactions in their own social economies are taking place using US dollar denominated stablecoins. And this is a terrible, terrible thing for them because suddenly, you know, their central bank has no control over the money supply. Now, if something happens to Tether, their economies will be crashing. And their central banks will not be able to produce the dollars. Because, you know, here in Europe, for instance, we cannot produce dollars. The ECB can produce euros. It cannot produce dollars. So, and you know, in 2008, when Wall Street went pear-shaped, our banks started also going pear-shaped, especially here in Germany. They all went bankrupt. Every single German bank went bankrupt in 2009. And you had, you know, this this people had to pay for it initially, and then there the rest of Europe as well. Um at least back then the ECB Jean-Claude Trichet, do you remember that? The worst central banker that ever to have walked the planet Earth. He picked up the phone and talked to Ben Bernanke, who's the chairman of the Fed, and said, "Ben, we're dying. Give us swap lines." So, there were swap lines. Now, the Fed, with the genius act, do you know that? Has been banned from bailing out stable coins. So, this is why these people are very worried. Now, the question is why did stable coins grow? I mean, the original idea you know, the whole thing, like everything in human societies, evolves. It evolved from something that was small and sounded reasonable into something that was big and it's dangerous. So, the original idea was, you know, what don't we like about Bitcoin? What we don't like is the volatility. That, you know, it's dollar value goes up and down like a yo-yo. So, here's my a business plan, a business model. I'm going to peg my cryptocurrency to the dollar so at least, you know, and then where do you get the money from? From the spread. You know, so you pay me a thousand dollars, I give you a thousand tether. Um I buy treasuries, I get the interest from the treasury, and that's my profit, right? So, it starts small like this. But then, because there are serious problems in um in large parts of the world, actually, if here even here in Europe. I mean, if you try to send money from one jurisdiction to another uh to Britain, for instance, now, you pay 5%, 6%. It's it's very clunky, it takes 3 days for the money to get there, and you pay 5%. So, you know, stable coins suddenly suddenly had a a beyond uh the originally planned service that it was meant to offer. Okay? Um once it caught on and the Trump administration saw the utility to themselves from, you know, transferring large reserves of American dollars to Tether and to Circle, then it becomes politicized and then it just blows up to a completely different level. And what can we do about about this? Well, look, here we're going to have a very difficult conversation amongst ourselves. Because first we have to you know, find common ground on what money is. It's a big philosophical question. Uh my difference of opinion with Bitcoiners is we don't understand money the same way. They understand money as tokens, as things. Like cigarettes in a prison. Because as you know, in most prisons cigarettes evolved from some commodity that some people want, they smoke, to a medium of exchange as in the store of value. So if you think of money as things, then you can have a Bitcoin-like decentralized system that actually um is um quite liberating as long as you don't have an oligarchy of concentration of Bitcoins in the people who started and all that you you know the the story. But if you see money as I see it, uh I see money as um an a set of promises we've made to one another. So, you know, you're working for me in Mesopotamia, you know, 10,000 years years ago, um I'm the hegemon, I am the ruler, the despot. You work, I write on a shard of um clay the number three. This is how many tons or whatever of wheat you're going to collect once the harvest is in. Okay? So, this is money for you because you can use it to go to your neighbor and say, "Look, you have a a cow or you have a goat. Can I have some milk for my kids? And here is payment." That's how money from where I'm standing, this is my own historical research, that's how money emerged as a um a plethora, a system of mutual promises. And the monetary value that we see in our currencies, whether they are shards or Bitcoin or whatever, they represent what they represent, they they are the numerical manifestation of these promises that we've made to one another. Uh if you see it that way as I do, then we have a complete different understanding of how blockchain could be used. I do believe in blockchain because I believe in the anonymity and the transparency that it combines. But, the question is, is it intermediated or not intermediated? Is it uh totally decentralized or is it democratically controlled? Do we control the total quantity of money as we should, increase it when needs be, decrease it when we have inflationary forces? So, you know, this is a democratic conversation we should have once we have grabbed the means of production, distribution, and exchange to use my old lefty language.
>> Thanks. So, without the weight of law and law enforcement behind Web 3, can Web 3 succeed? Also, one economic question that stablecoins are essentially a wrapper over treasuries. So, is the real money also a wrapper over treasury or is it more like meme coin where you just believe it has some value.
>> Well, I think you've you've answered your own question, haven't you? I would like you to answer it, actually.
>> I think it's meme coin, the real money. Like we believe that it has $1 value, thus it has $1 value.
>> Okay, look look I I take I take a position on this. The question, however, for me, from where I'm standing, is what is the underlying value of any price? Because, you know, as Oscar Wilde said, the cynic is the one who knows the price of everything and the value of nothing. So, we can talk about tokens, we can talk about Bitcoin, we can talk about Ethereum, we can talk we can talk about, you know, how many euros and cents. But, the question is what is the underlying value of this? And how does our collective capacity to create monetary value get channeled? Allow me to to make this point which should have been, you know, very simple for people to grasp, but it isn't, really. You know, 97% of the money that is circulating in Europe, in the United States, in the United Kingdom, in China, uh is 97% is produced privately by bankers. We know that, right? Only 3% is produced by central banks. So, we are collectively creating monetary value. Now, who has the monopoly over it? The private bankers. Because they are the ones who have the legal authority to create that liquidity from thin air. From thin air, from nothing. Right? Now, how can we use blockchain, whether it is closer to Ethereum or closer to Bitcoin, in order to redistribute this power amongst all of us who are participating in its creation. So, you know, I have um you can go into I'm not going to waste much of your time because we don't have that much time. You can go into a website called monetary monetary commons. monetarycommons.org to see the kind of vision that my associates and I have as to how to do this. Next.
>> Sorry, this super interesting. Love your thoughts on how money should be created. We um built a protocol that works more or less like that. Would be love would love to tell you about this um later. Um but I have a bird's-eye question. So, kind of if you look at um the things you talked about and called techno-feudalism. So, kind of platforms extracting rent from people and um unpaid work. Um uh kind of these naturally occurring or emerging monopolies kind of that we see in social networks and so on. This is what we talked about in the web 3 space from day one, right? Kind of like this is this is what we came here to solve for. And somehow it's kind of we've been doing this for 10 plus years. So, it's Ethereum launched in 2015. That's 11 years now. First smart contracting um blockchain that could in principle cover this. And somehow it's gotten worse. It's not It's not get gotten better, right? Kind of now it's not just who owns the app, it's kind of like who owns the reasoning. So, where did we go wrong and how do we correct it?
>> Well, I think where we went wrong I don't think I don't think we did go wrong because I don't think anybody was naive enough to think that a technology can defeat political tyranny on its own. A technology can be a very useful useful tool as part of a political movement as part of a political process. Because, you know, look at what happened in the United States. Trump walks in there, Trump 2.0, and he introduces the GENIUS Act. And what does he do? He writes the legislation in such a way that blockchain is being used for tyrannical purposes. So, what we need to do is we need to capture Congress. We need to capture, you know, the Buddhist tag in this country. We need to capture the European Parliament. We need political power. Without political power, the technology is not going to do anything. You know, you may create You know, since the early 19th century, uh the labor movement, the socialist movement, create, you know, people who had enough of tyranny. They created a carved out little niches and oasis within capitalism. Robert Owen, whoever remembers Robert Owen. They created communities in Mondragon in Spain. Already they have one today. They try to move away from the usual capitalist exploitative system and create their own, you know, democratic communities. And they worked for a while. But you see the problem with that is that if if you succeed, then you are taken over. Uh somebody comes and gives you makes you an offer you can't refuse. Uh I remember when I when I was a student in Britain under Thatcher, uh she did something remarkable which informed me on this. There was a bank called the Trustee Savings Bank, TSB. Now, that bank was created in the early 19th century by the working class people who had no access to banks. So, they created their own bank. And it worked magnificently. It was very profitable. And it was totally totally totally democratic. You opened up an account there. If you even if you had one quid, one pound in there, you were a shareholder and you had one share. It didn't matter how much money you had in your account, you had one share. And you voted. You voted in, you know, the the of directors. And it was one of the most profitable banks. And you know what Thatcher decided to do? She decided to to destroy it. And how did she How did she destroy it? Initially, she said, "I'm going to privatize it." But her minister said, her bureaucrats, her civil servants, "But Prime Minister, it's not owned by the state. It's owned by these people." And you know what she did? She nationalized it to privatize it. So, you see, the technologies were always here for democratic control. But, you know, if you if we don't have political power, they will these technologies will be usurped. You know, JP Morgan, as we speak, is creating a very powerful cryptocurrency that will be a stablecoin that will be registered according to the genius act. And you know what they intend to do? Not only compete with Tether, effectively to have a chunk of the dollar, privatize it, cuz that's what Tether is, you know, a privatized chunk of the dollar zone, right? They want to do something else. They want to effectively take over the stock exchange. Because they will have something more like Ethereum, so that, you know, they will be share trading on the same blockchain that runs the JP Morgan stablecoin. So, JP Morgan, if it succeeds, will own the stock exchange and the dollar. Now, blockchain was meant to be was meant to be an emancipator emancipatory um uh technology, and it still can be. But we need the political power to wrestle away from them all those tools that could have been emancipatory, but are being used against us. Don't look at me. I I have no power.
>> Josh Joshua is right behind you to start.
>> Hi. Ah, there he is.
>> I think we're on to the next part of it.
>> This is the next part. This is we go back from decentralization to centralization
>> More recently
>> of questions.
>> Yeah.
>> [laughter] [applause and cheering]
>> And maybe I can
>> [applause]
>> Awesome. Um So, yeah, it's a super great honor, Yiannis, to have you at Web 3 Summit and I'm super honored to be able to speak to you for a little bit of time and ask some of my burning questions I've been having for years. Um in case maybe just for context for people, I've been running a a platform called the Blockchain Socialist for uh quite a few years now. So, it's been quite some time uh I've been thinking about these questions around the intersection of left-wing politics and the crypto space. Um but one thing I can definitely note of my time doing this is that it's quite a um uh it's a small space. It's a it's a lonely one and there aren't too many other I mean, I I would say that uh the community of people who are uh proudly on the left within the crypto space, I probably know 90% of them. Um and uh so, like I think the the impression that I think a lot of people would have on the outside of you coming to Web 3 Summit uh is perhaps that you are crossing enemy lines, right? You have been crossing you've been uh talking about stablecoins and I think if you if you uh talk to at least like a broader left that is quite uh skeptical of cryptocurrency and uh I would say at least in my conversations with some very anti-cryptocurrency uh or blockchains in the not in in the sense that they don't want to really entertain the idea. Um and I know you have been you have been vocal about uh having some tacit amount of support, but I think the the first question that came to me when they announced that you were coming was, "Why are you here?" Um and I mean that in the sense of like is there something interesting for you here and what types of potentially like um strange political alliances you think maybe worth exploring by being here at Web3 Summit.
>> Well, look, when Satoshi published his famous paper, I read it a few weeks after it was published and I was mesmerized. So, I don't feel that I'm crossing any enemy lines here. I I was interviewed by Wired magazine in early 2009 and I was asked what I thought about you know, Bitcoin. And I said it's a fantastic solution to a problem we have not discovered yet. Right? So, I'm still trying to find out what this you know, what that solution is and what the problem is actually. And look, I really don't feel that way. I think that everyone in here is interested in technologies that can be utilized for the betterment of humanity, for our emancipation, for us to become free of tyranny. So, in that sense, we are comrades. Now, we may disagree on how that works out and how it is applied and what we do. But you know, that's the beauty of dialogue. You know, we we learn from each other and you know, the reason why we need democracy is because there is no blueprint that is hidden somewhere and it's up to some LLM model to discover it. Good ideas have to be crowd-funded and crowd-sourced. So, you know, that's why I'm here. Now, let me tell you something that and all of you that might be of interest to you. Look, I'm an un unreconstructed lefty Marxist, right? Now, you can boo. But you know, Marx was a libertarian. Not a Marxist. Remember, you know, remember, maybe you didn't know that. When he when Marx was an old man, very old man, just before he died, three or four young Marxists went to talk to him and they talked to him about you know, their plans and what they think should happen to the world, and he listened to them. And then they said to him, "So, teacher, what do you think of what we said?" I said he And the answer was, "If you are Marxists, I'm not." So, you know, but look
>> Yeah.
>> I I'm saying this so that we know where we are. Uh but I fear the reason why I'm a left-wing libertarian is because I loathe concentrated power, whether it is public or private, whether it is the state or private. The whole point is not to live under the weight of somebody else's power. Um so, allow me to just say something briefly regarding my background, which may connect with you folks. When I became finance minister of Greece, Greece was completely bankrupt. Our banks were bankrupt. Uh our people were bankrupt. And the powers that be in Frankfurt, in Berlin, in Brussels, they wanted to us to take another bailout for the banks, so that we you know you when you can't repay your mortgage, they give you um a credit card to draw money from it uh to pretend you're paying your mortgage. And then when that credit card runs out, they give you a second one, and then a third one, and then a fourth one. This is kicking the can down the road. So, I knew that when I I was elected to say no. No more. You know, we want to be Allow us to be bankrupt. We want to experience bankruptcy because it is the only way of ending that vicious cycle, right? Uh they they wouldn't allow us to be bankrupt. Even though we were as bankrupt as anyone can get. So, I knew they were going to shut down our banks, which which is what they did. Uh So, and I had foreseen that a year and a and a half before we won the election and became finance finance minister. And together with people whose name I'm not going to reveal because they will be demonized like I am. Um they weren't all Greek. They were from One was, but the rest were from Singapore, you know, from the crypto space. Hm. Uh, the whole point was to create automatically digital wallets for every citizen or resident based on their uh, tax file number. And to allow the liquidity to be created and to be um, distributed. So, you know, we owed pensions well paid in the form of this cryptocurrency, which however is publicly owned. And is based on um, tax file numbers. We were ready for it. Unfortunately, my prime minister, once we got 62% of the vote in favor of this kind of resistance, defected to the central bank side.
>> [laughter]
>> Then I resigned and the rest is now is I'm here with you. Um, which is great. So, you know, is this crossing any lines?
>> I mean, I think we're
>> From which announce?
>> for me, no, of course. I'm like super glad to invite you to be here. I think it's um, it's just something that's like kind of surreal for me at least uh, based on my uh, my experience of trying to talk to the broader left about this um, in a in a in any meaningful sense. Um, so no, you're you're totally welcome to be here and I'm glad you are. I think So, one of the the other question I had cuz you kind of um, you said this quote. I wanted to mention it as well that you thought I don't know I can't remember if it was Bitcoin or blockchain, but it solves a problem that we don't yet have. You mentioned that and I know you've also mentioned smart contracts as like a pretty interesting innovation.
>> Of course.
Um, I was wondering if there was any relation to these things with your concept of cloud capital and in techno-feudalism. Like uh, does is the crypto space a form of cloud capital or is it something different? Is it is it opposed to it?
Not at all. The crypto space is not a form of cloud capital. Uh well, stablecoins are becoming that. Stablecoins are becoming that. Right. Because that's not the crypto space, right? We're talking about decentralized properly decentralized uh stuff like, you know, like uh Bitcoin, like Ethereum. Uh that is really the opposite of cloud capital. Cloud capital is machinery, network machines, the purpose of which is to manipulate your behavior. Mhm. You know, Bitcoin is not that. I mean, I have my criticisms of bit- Bitcoin. And my main criticism is the fixed money supply, the pre-programmed quantity of money. As a macroeconomist, I I think this is a catastrophe. Uh it's it's a very big. But it it But it's not a an attempt to manipulate people's behavior.
It's an attempt to create scarcity in order to keep its value um you know, either constant or increasing. Uh but no, cloud capital is all about machinery that converses with you, that it trains you to train it to train you, okay? To impart information so that it gives you good advice, wins your trust, and then comes the whopping uh modification of your behavior, which is in the interest of the owner of this cloud capital. Bitcoin doesn't have owners. Right. There are people who have Bitcoins, but nobody owns Bitcoin, and that's the beauty of Bitcoin. Mhm.
So, I I can So, to to get you back to one of the quotes that I mentioned, like um you were saying it didn't solve a problem yet. Do you think there are problems now around techno-feudalism that uh the crypto space should be looking at that it can perhaps provide solutions for?
Absolutely. Uh for instance, how how do you run a real estate system um as social housing, for instance. Hm.
That was one of I wrote about this.
Now, I think that blockchain has a lot a lot to offer when it comes to creating social housing and making the system by which space in social housing is allocated fairly, squarely, and in a democratic manner. That's just one example. Yeah.
Okay, now I mean that's that's so validating cuz I wrote about this a long ago in a in a more comedic way. But um one thing that I was interested also your thoughts on is you know, a lot of people in here are you know, maybe consider themselves on the left and they also engage with speculative capital as in they engage either they work for company that involves speculative capital or in some way they they have some sort of relationship to it. I'm just wondering if you have any thoughts strategically how should the left be engaging with speculative capital?
Well, look, I personally find it very boring. Speculation bores me. Now, those of you who make a lot of money out of it, well done.
I'm not being I I hate moralists. I'm not a moralist. The The reason why I would never work in the city of London or in the Wall Street is because I would be bored. I would kill myself. I would slash my wrists. It's not interesting to me. I'm I'm very interested in in working out how these derivatives work, you know, how do they construct them, how do they evolve, but for me to be a trader in these things, you know, it's it's not a life worth living from my perspective. And but I do believe in not being moralistic. People say to me, "Yanis, you know, you talk about the working class, you're a lefty, call yourself a Marxist, but you're rich." Well, by the way, I'm not rich. I'm very privileged, exceptionally privileged. I choose my projects, I choose my partners. You know, in this day and age to be able to choose your projects that you and not to have to work for a capitalist. That is, you know, that's the greatest monopoly power in the world. The greatest wealth in the world. Um and I'm far better off than the vast majority of people out there. Uh but, you know, on the other hand who was it that helped the slaves free themselves from slavery? It was rich people in London with the anti-slavery society. I mean, who funded Marx to write Das Kapital? It was Friedrich Engels who was a stinking rich capitalist with factories exploiting workers in Manchester. Now, is this hypocrisy? No, I don't think it's hypocrisy. Because, you know, the greatest revolutions happened because there were some members of the privileged aristocracy that turned against their class. They were They were class traitors. So, you know, be rich and be a class traitor.
Yeah, so um I'm also a big fan of being a class traitor. So, any rich people want to give me money, let me know. Um
So, one of the more recent ideas you mentioned before is the the monetary commons. Um and it kind of comes out of as far as I can understand it's a critique of the existing financial system. It's also uh in part a critique a little bit of even the the stable the current existing version of how stable coins exist. Um I'm wondering like uh Yeah, if you can maybe explain a little bit about it and where you kind of see maybe crypto could potentially play in the monetary commons. Because I think when I read when I read the piece that you wrote um with some of the with some of my friends actually uh and and other things I've heard you I I've read of yours, it almost felt like you were describing a blockchain without saying it.
It is what a blockchain.
Oh, okay. So, I can we can confirm that.
Okay.
Well, why not say it then?
Because, you know, it was a piece of political economy. I didn't need to to talk about the actual Okay. technology,
Okay. Okay.
right? I mean, for me technology is a tool.
Yeah.
It's not I'm I'm not fetishistic about technology. Blockchain is very useful. I've said this before, I'll say it again. And the system that you're referring to uh is blockchain based. Like the one that I was designing when I was in the in the finance ministry in Greece. You know, blockchain is my go-to technology for decentralization, but it's that's by itself is not enough. You need other stuff as well.
Of course.
So, just for the benefit of uh the audience, the idea of the monetary commons is this. Imagine that um you know, let stick to Germany or Europe, the the Eurozone, since we're here. Um imagine you could take your phone and download uh an ECB app, European Central Bank app. And that, you know, immediately you have a digital wallet, which is offered to you by the Central Bank. And um you can tell your employer, your friends, whoever owes you money, uh put the money there. And you have a PIN number, like you have with Google Pay, whatever, but underlying that is a blockchain. In the same way that the Chinese did this with uh you know, Brix Pay. Brix Pay is based on a blockchain.
Right.
Right? Because it works. And it's decentralized, and they don't have to, you know, India and China to fall out as to who's controlling the ledger.
Right.
So, you know, we have that. So, the the the Okay. And why would you want to transfer your money from, you know, Deutsche Bank, Finance Bank to your digital wallet? Well, firstly, because you are guaranteed free transactions, no fees. Secondly, because you collect the overnight the interest that the the the the European Central Bank pays the bankers for their reserves. Effectively, you have a bank account with the ECB, and you get the overnight rate, which is always much higher than what private banks will give you. So, that creates competition for the private bankers, not a bad thing if you believe in competition. Okay? Uh and then the exciting thought emerges. As money is being transferred from private bank bank accounts to these ECB digital wallets, the quantity of money falls precipitously. Why? It's the negative multiplier effect. We know, don't we not don't don't we know that we every dollar that the private banker gets from the central bank, from you, from me, they create another 20. This is the money multi market multiplier. So, it that works in reverse. When a dollar goes from the private banks to the digital wallet, right? Many dollars that are privately minted have been destroyed. So, the money supply comes down. Which is a bad thing because it's deflationary. So, we want to keep it up. How do we keep it up? Well, how about the ECB granting everyone a trust fund? To everyone. A large sum of money to ameliorate for the drop in the money supply as a result of having transferred funds. So, the more money migrates from the private banks to the to to the these digital wallets, this crypto system, which by the way will be totally transparent, the ECB will not be able to inflate without you knowing because it's be that being a blockchain, everybody will know how much money there is in the system unlike now when we have no idea what the ECB is doing, no idea what the private bank is doing in terms of money creation. So suddenly we have a universal basic trust fund for everyone. Um that sounds pretty good, doesn't it?
I'm not opposed to it.
Well, you know, you tell this to Frankfurt banker and the hitman come. Immediately. They will get you in your sleep.
Right. As a disrespector of private property, um yeah, I I appreciate it. But do do you think that um the crypto space is a place to uh to experiment with something like this, to take to take what you're kind of describing cuz I think one of the things that at least for me what was kind of why I find it worth my time and interesting to engage in this space even if there's a lot of things that I don't disagree with that I disagree with it. Um at the very least this space is something is a place where you can take what is available and begin to experiment and show that something like this is possible.
I agree totally. I'm I'm a libertarian. I'm a weird Marxist libertarian.
I would never ban anything like that. I would want to see that these experiments take place. Look because I'm I'm an old fart as you can see. Um I remember it was 1991. I used to live in Australia. That was well before crypto. We didn't even have the internet at the time. We didn't call it the the internet. We used to call it Janet. Seriously. I am old enough to remember the internet being called Janet. Joint academic network. Uh no, seriously. Um back then there was a recession in Australia. It was a global recession. And in unemployment rose substantially and there was a community in the Blue Mountains, very beautiful area just outside of Sydney. Where they created their own local currency. Mhm. I mean, we've seen this in many parts of the world, but that worked beautifully, and it was done based on labor time. So, you would, you know, you would uh work uh at a grocery for, you know, 8 hours, and you get the equivalent of 8 hours of um credits. And then you could use these credits uh at the butchers to buy meat.
Mhm.
And so, b- because the people were impecunious, most of them were unemployed, there were stores that had the capacity to sell stuff, but they were had there was no demand. There were people who could work, but there was no labor demand. So, they resolved that by creating their own local currency. Now,
Right.
they didn't have blockchain then, but if they did, it would be brilliant.
Right. So,
you know, let a million flowers bloom. Crypto flowers bloom.
Sure. Yeah, I mean, I think
But it won't be a replacement for fiat. The monetary commons is
Totally. I yeah, I think I I think this is interesting that you say that just because I think it's helpful to recontextualize history a bit of the left being also a political project that has engaged with monetary and economic experimentation, and that isn't just something that libertarians get to do, right-wing libertarians get to do with Bitcoin, but as is in fact, there is a a long legacy on the left of of these experimentations.
Sure.
Yeah.
Um So, I I think maybe the just the last question I was curious to um to get your thoughts on a cuz you mentioned the um with with the monetary commons and the exist the the digital euro is coming, I think, in 2030 is is what they say.
It will never come.
Okay.
It will come in a decrepit and um circumscribed manner, because the bankers will they will actually harm it very substantially. They will just injure it and you know, create um a ridiculous you know, version of it so that nobody really wants it. Right? They will you know, it will suffer a death by a thousand cuts. Cuz it's completely against their interest. You know, Christine Lagarde, the president of the ECB was ready to launch it. But now they're going to put limits on it. You won't be able to have in the in your digital wallet more than what? 1,000, 2,000 euros? Uh you you will only be there will be a limit in the number of transactions per month. I mean, you know, these people
Right.
have no compunction whatsoever. They have no no shame.
Very bad blockchain. That's what.
Yeah, I mean
More or less.
I'm I'm not even sure what technology they're using, but it in the end, you know, it doesn't matter because it is being created to fail. Right?
Okay. So, I mean, I guess I
Unlike the Chinese guys.
Right. I mean, do you have any I mean, any last words to say about like the in the geopolitical context like with
Oh, the Chinese use blockchain very very effectively.
Yeah.
They have now three payment systems that are based on blockchain, three. And they are working beautifully. They you know, when the Chinese do something, they do it well these days. So, blockchain is something that they really mastered.
Cool. Awesome. Well, I think I'm at I think I'm at time, so
Okay.
Thank you so much for coming and thank you for coming.
[applause]
Thank you so much.
Thank you.
[applause]
Thank you.