The Case for Authoritarianism | Vitalik Buterin & Noah Smith

What if the information anarchy of the internet spells the downfall of liberalism? Economist Noah Smith and Ethereum Founder Vitalik Buterin join us for a fascinating discussion on why Authoritarianism might be the answer to the current information warfare. Yes, you heard that right. We start the episode by defining liberalism, how it has brought excessive polarization and why totalitarianism might be the only solution left. We then steelman the case against this same argument and how blockchains and crypto could play a role in all this. ------ ✨ Mint the episode on Zora ✨ https://zora.co/collect/zora:0x0c294913a7596b427add7dcbd6d7bbfc7338d53f/20?referrer=0x077Fe9e96Aa9b20Bd36F1C6290f54F8717C5674E ------ 📣STAKEWISE | LIQUID SOLO STAKING https://bankless.cc/Pod_StakeWise ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://k.xyz/bankless-pod-q2 ⁠ 🌐 TRANSPORTER | CROSS CHAINS WITH CONFIDENCE https://transporter.io/ 🔗CELO | CEL2 COMING SOON https://bankless.cc/Celo 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle ⚡️ CARTESI | LINUX-POWERED ROLLUPS https://bankless.cc/CartesiGovernance ⚖️ARBITRUM | SCALING ETHEREUM ⁠https://bankless.cc/Arbitrum ------ TIMESTAMPS 0:00 Intro 8:53 Defining Liberalism 21:50 Information Warfare 42:17 Summarizing the Argument 55:09 Could the Thesis be Wrong? 1:11:12 Information Leviathans 1:34:13 The Role of Blockchains 1:38:22 Closing & Disclaimers ------ RESOURCES Vitalik Buterin https://x.com/VitalikButerin Noah Smith https://x.com/Noahpinion Noahpinion Blog https://www.noahpinion.blog/ ------ Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures ⁠

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  The Chinese government and the Russian government have a lot of resources devoted to pushing their message out there, and the US government doesn't, right? Liberalism doesn't. US government sits back and says, you know, from an Olympian remove and is like, "I am the overall mighty hegemon of information, and so I'm going to let all these tiny little actors play it out," you know? And then, one of those tiny little actors is the government of China, a country four times the size of the United States with, you know, arguably a higher GDP than the United States.

• 0:36Ryan Sean Adams?

  Welcome to Bankless, where we explore the case for authoritarianism. What did I just say?

• 0:41David Hoffman?

  What?

• 0:42Ryan Sean Adams?

  Get into that. This is Ryan John Adams. I'm here with David Hoffman, and we're here to help you become more bankless. Now, I want to make it clear before we get into this episode, both of our guests today do not want authoritarianism to win the 21st century, okay?

• 0:56David Hoffman?

  Quite the opposite.

• 0:57Ryan Sean Adams?

  Quite the opposite. I think both have dedicated their lives in various ways to pursuing anti-authoritarian ideas, and in Vitalik's case, technologies. So today's episode is more of a steel man. The question is, if totalitarianism outcompetes free societies and wins the 21st centuries, how might it win? And what if the information anarchy of the internet spells the downfall of liberalism? This is a fascinating conversation with Noah Smith, who is an economist, and Vitalik Buterin, who you know from crypto. I would call this topic a non-crypto topic today, but actually, game theorizing on how the authoritarians might beat us might just be the most crypto thing ever.

• 1:34David Hoffman?

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• 2:19David Hoffman?

  There is a link in the show notes if any of this stuff piqued you. Bankless were of course known to be a crypto podcast, but if you are a long time listener of Bankless, you know that at the end of the crypto rabbit hole comes conversations on how do we structure society? And which structures do better than others? And how should we prepare for unfavorable structures like authoritarianism? And how can we prevent that in the first place? And with this episode, we kind of skipped straight to the bottom of the rabbit hole, talking about how technology is changing, society is changing, and how that's going to impact the way that society is organized. So without further ado, let's go ahead and get right into the conversation with Vitalik Buterin and Noah Smith. But first, a moment to talk about some of these fantastic sponsors that make this show possible, especially Kraken, our preferred place to buy or sell your crypto in 2024.

• 3:04David Hoffman?

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• 3:49David Hoffman?

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• 4:32David Hoffman?

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• 5:17David Hoffman?

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• 5:45Ryan Sean Adams?

  Bankless Nation, we are very excited to bring on two repeat guests. We have Noah Smith. He's an economist. He writes on his Substack called Noah Opinion. He writes about current events, macro, econ, geopolitics, some philosophy mixed in. Is there anything that Noah does not write about? Noah, welcome back to Bankless.

• 6:01Speaker 00

  Hey, great to be back.

• 6:02Ryan Sean Adams?

  We also have Vitalik Buterin. He is a philosopher, I would say, in the context of today's conversation and probably know him as a co-founder of Ethereum. Vitalik, welcome to Bankless as well. Thank you. Good to be back. So we are doing this episode on a post, an argument that Noah put out on his Substack, and the title of that post is "How Liberal Democracy Might Lose the 21st Century." And I want to provide some context for why we're having a Bankless episode on this. Isn't Bankless a crypto podcast? And this is certainly a crypto-adjacent topic, but I guess I'll give some framing for this. You know, when I read Noah's article, I was kind of a know-your-enemy type of reaction for me because Bankless listeners will know we are very

• 6:42Ryan Sean Adams?

  Much a friend of liberalism in lowercase l, civic rights, free speech, free markets, private property. We want that to succeed. I mean, we have a horse in this race. And I think in order to help it succeed, you have to understand the points at which it will fail. Liberalism, that is. So in the past, I think, especially in the way that I was brought up, I've been guilty of a blind faith in liberalism. You know, like it'll obviously win. I think I'm sort of a maybe a victim of just like a child in the US, like growing up in the 90s. And I don't want to live in a blind faith of like liberalism will always win. I want to live in an actual reality. And I think that's why Noah's article was so instructive.

• 7:23Ryan Sean Adams?

  And so Noah has this argument for how authoritarianism might actually out compete Western liberal democracies. And Vitalik, I think you called his argument, I saw a Farcaster tweet about this. The strongest case for authoritarianism. So I think you thought it was a pretty good case. And I know you have some takes here. So that's what we're going to do in today's conversation. Number one, we want to just frame out the argument. So have Noah explain it. Maybe Vitalik, have you help. And then two, we want to talk about maybe the counterpoints to this argument. And then three, we want to finish off with where do we go from here? Does that sound good? Amazing. I'm getting thumbs up. All right. So let's start with you, Noah. So let's frame this up because I think we need some background.

• 8:06Ryan Sean Adams?

  Can you just explain what we mean by liberalism? And why so many of us have this blind faith in it? I can't be the only one. So explain liberalism and why it just feels like everybody thinks that liberalism has won already, at least in the West.

• 8:21Speaker 00

  Well, so when people say liberalism, there's really, I think, three things that they mean. The first thing is markets, your right to basically buy and sell stuff if you want. The second is and own stuff, et cetera, property rights, all that. The second is democracy, your ability to elect your leaders. And the third is kind of civil rights, your ability to kind of do whatever you want. You know, as long as it doesn't hurt anybody else. Of course, that's always being, who knows what that really means. But those are sort of the three things people mean when they say liberalism. Your ability to elect your leaders, live your life the way you want to, and buy and sell stuff. And own stuff.

• 8:57Ryan Sean Adams?

  Okay, so Noah, why you start the article this way? Why were we raised in this age? And you say you were raised in this age of liberal triumphalism? Like the sense that liberalism has won already.

• 9:07Speaker 00

  Right. In the 20th century, at the beginning of the 20th century, people, we were just in the middle of the industrial revolution, the really fastest part of it. And people kind of didn't know how society was going to be organized. There were a lot of different ideas about how we were going to organize an industrial society. Nobody really knew what that was going to look like. And, you know, varieties of socialism from evolutionary socialism, you know, which is basically what Sweden looks like now, to, you know, revolutionary socialism, which is basically, you know, I don't know what North Korea or something Cuba maybe looks like now. And then, of course, you had various other things, social Darwinism and various kind of racial supremacy theories. And then you had, in the United States, the big idea that everyone was pushing was that

• 9:50Speaker 00

  both free enterprise, which is what we now call economic liberalism, free enterprise and democracy were both good things. And that was the best way to organize society, or at least American society. So there were sort of all these hats on the ring of what, you know, society is going to look like once we move from farms to factories and offices. And I think that by the end of the 20th century, that question had been answered, you know, in favor of liberal democracy by most people. In China, which was still, you know, still a lot poorer than America at that time, they were, you know, experimenting with various ways to liberalize the society and people, you know, were experiencing many kind of new freedoms, new personal freedoms and, you know, economic freedoms and sort of personal freedoms, if not democracy, right?

• 10:33Speaker 00

  They didn't have democracy, but you could certainly do a Mao impersonation as a joke in 2004 or something, you know, and lots of people did this professionally. You had these Mao impersonators, they were women, by the way, who dressed up as Mao.

• 10:43Ryan Sean Adams?

  And so in China.

• 10:44Speaker 00

  You know, and of course, Russia had the Yeltsin period. And even in the early Putin period, people thought like, oh, Putin's going to be a liberal, blah, blah, blah, because he had the support of educated, sort of liberal thinking elites in the city. And so by the end of the 20th century, by the 1990s and early 2000s, I think that people generally thought, okay, this is what works. It was Francis Fukuyama's thesis, the end of history, blah, blah, blah. And so I think that now it's the strength of China that's really challenging that. And not just the strength of China, but the weakness of the United States. So the United States has looked remarkably weak since at least 2008. In the War on Terror period, the United States looked kind of angry and pissed off about 9/11, was becoming less liberal.

• 11:25Speaker 00

  But then in 2008, you know, the United States economic, you know, model sort of appeared to have collapsed, the kind of financialized capitalism that we had. And then in, you know, after the election of Trump and the, you know, divisive rise of social media movements, I would say, people started asking, okay, is this society just total chaos? And then after that, you know, we started discovering all these things that our society had lost, seemingly lost the ability to do, like build housing, right? Or build trains or build literally anything. And so America got this image as the build nothing country. And China almost seemed a mirror image of that. Whereas in China, you could build anything you want because the government just says, do it and you do it.

• 12:08Speaker 00

  And, you know, China was economically growing and strong. And then if you go to their cities, you see giant glittering new malls and massive high train stations and beautiful high-speed trains that can take you anywhere really fast. And you see, you know, LEDs on all the buildings, right? And then drones delivering stuff right to your doorstep. I don't know, or little delivery robots anyway. And so then all of these things, I think, have caused people to question, was Fukuyama not just wrong, but the opposite of right? Is China-style authoritarianism actually going to win now? Is that the model that works now? And so I was trying to think, okay, how could that be true? You know, of course, it's possible that there's no model that really works and it's all just contingent in the fact that China happens to be this really big country

• 12:51Speaker 00

  that has historically authoritarian instincts and happens to be only at a third of American per capita GDP anyway. And, you know, it's sort of in its rising phase and looks really strong and just happens to be really big. And it's all just this big illusion and they put LEDs on the buildings, but actually they don't really look that nice. But I want to steel man the idea that authoritarianism is going to win in the 21st century. I thought, okay, so how do I do that, right? And I thought, what was the strength of liberalism? Why did we think it might have succeeded in the 20th century? And why might that strength turn into a weakness now in the 21st century? And the only thing I could think of was the internet. That's the only thing that's different now. Like, people aren't different very much, right? We have less lead poisoning, maybe, I don't know. But like, um, industry isn't that different? Like, there's a few different things.

• 13:36Speaker 00

  The main thing that's different now, between now and 1992, is the internet. And so I was thinking, how could the internet have totally changed the game in terms of whether liberalism or, you know, sort of, I don't know, authoritarian totalitarianism, whatever, naturally is stronger? And so I thought, well, the internet's all about information, so what's the strength of liberalism with regard to information? The strength of liberalism with regard to information, everybody will tell you, Friedrich Hayek will tell you, and a lot of people tell you, it's to aggregate information. So briefly, Hayek's theory is that a market aggregates information about costs and preferences. And that you know what to produce. Producers know what to produce because they know what people want to buy, and they know what their costs are going to be. And you consumers know what to consume because, you know, they know what the producer's costs

• 14:21Speaker 00

  are going to be. And so analogously, you can think of democracy as revealing information about what voters want. And you can think of civil society as revealing information about how people want to live, right? People argue about whether they like this or that music, I don't know, or, um, whether they think gay marriage is okay. So then you aggregate this stuff with public debate, the marketplace of ideas. So you can think of liberalism as this giant information aggregator. Now, how does the internet change that? Well, the internet makes information aggregation much easier, right? So we can get information much more easily. Maybe that actually reduces the benefit of liberalism because an authoritarian state can get much better data about what to produce, what to tell people to produce.

• 15:04Speaker 00

  And you know, an authoritarian state can get much better information about whether the citizenry is angry and you need to respond to what they want. And you can get much better information about what kind of things, what kind of behaviors you can restrict with only pissing off a few people. Well, versus what kind of behaviors you would piss off everybody by restricting. And so authoritarian states can get all this information from the internet, especially with AI, especially with sort of universal surveillance, kind of your phone is like a surveillance device that tells you everything about what, everything you do in your whole life can send to a central party apparatus or some authoritarian organ and tell you everything about you. And so now maybe that information gathering has gotten so easy for authoritarian states. Now, that doesn't mean I think they're better at it because of technology, but maybe they're less bad.

• 15:48Speaker 00

  Maybe they're still have a disadvantage, but it's ameliorated, right? It's less bad than it used to be. Meanwhile, maybe there were some advantages that authoritarian states always had over liberal states that have gotten more pronounced in the age of the internet. So for example, disadvantages of liberalism that were always there that have been exacerbated by the internet. And so I was just thinking, okay, well, in the internet, we spend all our time on Twitter just arguing and the smartest people in the world are wasting their time arguing on Twitter, like with complete idiots who think that like, you know, they're like, but did you adjust the inflation adjusted graph for inflation? And like, how many times, like, is it worthwhile to have the highest IQ people on the planet sitting there explaining once again that yes, inflation adjusted means you have adjusted for inflation? Thank you very much. And so that's, you know, giant waste of time. And so when I look at financial capitalism, I look at, you know, Elon Musk literally had

• 16:32Speaker 00

  to drive himself nuts to just to get enough funding to build some cars, whereas the people who run BYD did not in China, right? They did not have to drive themselves nuts. Maybe they're nuts anyway, I've never met them. But, you know, Elon had to basically break himself with stress over the Model Three rollout, raising money to do this thing because the funding wouldn't give him the money just, you know, because like, oh, cars, cool. And like, maybe this is analogous to a lot of things in financial capitalism, maybe the idea that fundraising for long-term projects is so goddamn hard because everybody is out there saying, it'll never work, it'll never work. And the people that, we will work, you know, or just bullshitting, pumping and dumping and blah, blah, blah, that in order to keep the fickle market focused on providing capital for a very long-term

• 17:14Speaker 00

  For a large public company, maybe that's just not possible. And that's why GM and Ford and all these old line companies seem so unresponsive is because everything is just quarterly earnings. And it's this information tournament. You know, if you really want to invest for the future, you've got to spend inordinate excessive amounts of time, you know, on the internet yelling that you're good. And so maybe this was always a problem with financial capitalism, and I think it probably was. But now that the internet allows massive real time dissemination of bullshit information, like all the people who said the model three would never work and would break Tesla and Tesla would die and it would never, nobody would buy it and it would never succeed. Right, there are all those people and they're like, Tesla's gonna fail, Tesla's gonna fail. And then, you know, that has required Elon Musk to drive himself nuts fundraising.

• 17:58Speaker 00

  So I think of this as an information tournament. You've got people yelling bullshit and you've got people yelling truth and truth does not automatically drive out bullshit because bullshit is very easy and cheap to generate. It's really easy to make a misleading graph. You know, it's hard to make a graph that teaches you something. It's easy to make a graph that if you decide on your point ahead of time, you just want to bullshit. It's easy to make that graph. It's easy to make bullshit arguments from an ideological standpoint. It's like ideology is like a muscle suit. So everybody just herps their derp, as I would love to say. And so everybody just throws their ideology, you know, into the ring and just becomes this giant shouting match. And so meanwhile, in China, they're just like, okay, there's just one ideology. It's Xi Jinping thought. What is Xi Jinping thought? Well, it's not really anything interesting. It's just this one dude and he's sort of a boomer conservative and he's like, let's

• 18:42Speaker 00

  make some cars, der. Let's not make internet stuff. The internet stuff is not real innovation. Let's make cars instead, der. And that's not optimal, right? You haven't really optimized, but maybe that's less bad than having a bunch of people screech that like, you know, arise in the price of literally anything is because corporations are profit gouging and the, you know, the evil corporations are hoarding all the stuff. And, you know, like, maybe, obviously, we're dealing with many very flawed systems here. There's no perfect system. But maybe in the age of the internet, the internet helps authoritarians get real information. You know, for all his authoritarianism, Xi Jinping was also able to see the white paper protests in COVID lockdowns and know really early, really quickly through the internet,

• 19:26Speaker 00

  when to cancel zero COVID, right? As soon as people started getting a little bit upset, there were like a few hundred people at those protests and still it moved national policy. So maybe authoritarianism has become more responsive in the age of the internet while liberalism has been paralyzed by people shouting disinformation and bullshit all day.

• 19:43Ryan Sean Adams?

  That's a great articulation of it, and I want to continue to steel man this. Eventually, Vitalik, I want you to kind of weigh in and try to articulate what Noah is saying here. But Noah, let's continue to steel man the argument because you made a whole bunch of connections that I just want to reinforce. But your basic idea is that totalitarianism might be better adapted to this world that we find ourselves in the 21st century. And the core reason why is because, as you say, the internet or the cost of information has gotten very cheap, right? Whereas in the 20th century, maybe the cost to produce information was a lot higher. And so this technological shift of cheap information has really possibly given totalitarian,

• 20:26Ryan Sean Adams?

  authoritarian regimes a fitness advantage, like kind of in this Darwinian struggle of which society is going to produce the most economic output. And so let's just reinforce that a little bit. This idea that liberal democracies are information aggregators. I think bankless listeners will be more familiar with the idea of capital markets as information aggregators. You know, there's that clip, that Milton Friedman pencil clip where he talks about how it's from the 1980s, and we'll include a link in the show notes. But he basically holds up a pencil and he says, you know, no single person knows how to make this pencil from scratch. And then he goes through all of the different components of the pencil, you know, the graphite

• 21:07Ryan Sean Adams?

  inside, the rubber, all of it sourced from different places in the world. And he makes the point that all of these things require specialized skills and labor. And so something as mundane as a pencil is really this unique creation of capitalism. And isn't it great that we can all coordinate around price systems and have market signals? We could do this without war, you know? We could do this in a peaceful way. And so that is kind of like information aggregation theory as applied to capital. But what about applying that to democracies? So what about the idea that I think is core to your argument here, that liberal democracies are information aggregators? And so they have a superiority in their ability to aggregate information effectively,

• 21:52Ryan Sean Adams?

  like leading to better decisions and like more buy-in and public goods? That wasn't necessarily clear to me going into this episode. Could you steel man that a little bit? Why are democratic liberal democracies information aggregators? And why have they in the 20th century had an advantage there?

• 22:08Speaker 00

  Right, so I would direct you to Bruce Bueno de Mosquita's electorate theory, which is really interesting theory. The idea is in a democracy, right? So we have the same understanding of how markets aggregate information. But let's talk about democracies also aggregate information just a different way. Say you have two parties, right? And one party is like, I'm gonna raise your taxes, I'm gonna lower your tax. And the other party says, I'm gonna lower your taxes. And the party that says, I'm gonna raise your taxes, says, okay, I'm gonna raise your taxes and I'm gonna buy you healthcare with that, right? And the other party is like, uh, no, I'm gonna lower your taxes and you can go buy your own healthcare if you want, you can buy whatever you want. And so those are the two ideas on offer. And so the question is, what do the masses want? Right? Then you have people vote based on that. This is an incredibly simplified, stupid model, obviously.

• 22:50Speaker 00

  But this is the first model you learn in public economics because it's just illustrative, right? It's an illustrative example. And so then you have people vote on which of these they like better. Do you like the high tax, high services candidate? Do you like the low tax, low services candidate better? And then you vote on them. And if more people want high tax, high services, they'll vote for that candidate. And if less people want it, they'll vote for the other candidate. And so then by voting, you aggregate information about what people want, about people's preferences. And by the way, this is called the median voter theorem. You've heard of it. And so that's the idea of the median preference gets into policy. Because then the candidates do what they say they're gonna do and everything works nice. And then either you get your high tax, high service Denmark, or you get your low tax, low service, I don't know, Hong Kong, whatever God.

• 23:34Speaker 00

  I know they didn't really have a democracy, but like. Anyway, you can't use the United States for that anymore because we're not that anymore. Yeah, and Singapore is way different. There's no real libertarian example I can use versus that. But this is how people used to talk about this. So that's how democracies aggregate information. Now, are democracies perfect information aggregators? Well, no, but neither are markets. There's reasons why this information aggregation fails. And so the idea that democracy is the least bad system, you know, which is a famous Winston Churchill quote. This idea came from the idea that, well, when you have a totalitarian state, when you have. You know Nikolai Chachescu is in charge, right? You know, he's like, oh, I'll ban abortion. I'll do these other things that he like thinks are right because he and his buddies think that all the guys around him are like, that sounds legit, let's do that.

• 24:19Speaker 00

  Then the normal people don't like it. And he's like, oh, well, okay, they bitch and moan, but it's just a few loud people, blah, blah. But because you don't have the aggregation, because they can't vote for Chachescu and you can't see him punished at the polls. You can't see him thrown out, you know, in favor of some other leader, blah, blah. The leadership just doesn't realize what the people really want. And so does things that the people don't want and then gets thrown out violently via revolution, which causes chaos in society, which leads to problems. Although maybe in the long term it's good, but then, you know, it's better if you can throw the bums out with an election than throwing them out by hanging them from a gas station and by burning the capital. And so that's the idea of democracies aggregating information about what voters actually want.

• 24:59David Hoffman?

  Vitalik, you put this into a pretty interesting metaphor that I kind of want to bring up in this point of the conversation. On WarpCaster, which is where we saw your interest in this article, you say, this might be the strongest case for authoritarianism. And then you link to Noah's article. Basically, the war for people's hearts and minds has no stable equilibrium, except local hegemony of one dominant elite, much like and for the same reasons as what Hobbes points out for regular war. And so this is Thomas Hobbes' Leviathan, a concept that I think you're alluding to. And you're saying Hobbes alludes to this idea that first there's a global state of anarchy. And then there's a war against all, which suppresses the anarchy, which leads to a governing elite with a monopoly on force, which is kind of like how we have the stable equilibrium of countries to this day.

• 25:40David Hoffman?

  And you allude to the fact that this produces a same pattern with instead of a state of physical anarchy, you have a state of information anarchy. Where, and I think again, alluding to the fact that like putting out a tweet is so cheap these days. And so the same pattern exists where like, if we want truth, we kind of need a governing elite of a monopoly of memes. It's kind of how you say it. Maybe you could also just like add to this illustration of just like what happens when like information markets and capital markets interact with each other and how they can kind of get distorted. And overall, just how you resonated with Noah's article.

• 26:12Speaker 03

  Yeah, and so I think you definitely gave a pretty good introduction to, I guess, the thesis already, right? But basically, if you think of like what the public discourse game is, and like you imagine the most pessimistic possible interpretation of the public discourse game, there is basically no truth-seeking. And instead, what you have is you have multiple tribes. And each of these tribes basically, you know, fires off a type of, you know, like missile or warship or, you know, like a tank or whatever. That's could be a meme or could be an article, could be a tweet or a video or whatever.

• 26:52Speaker 03

  And often, you know, these, you know, a million of these info missiles fired at you would have some common themes. And so you have one group that's like basically trying to essentially have their memes colonize your brain. And then you have a different group that's also trying to have their memes, that are completely different memes, go and colonize your brain. And so you basically have this like zero-sum conflict, right? It's like, you know, if you say, you know, one side is pushing capitalism, the other side is pushing socialism. Or if, let's say, you know, it's a foreign policy issue and like, let's say, you know, Greenland and, you know, Sweden are at war.

• 27:33Speaker 03

  And, you know, you have one group saying, you know, support Greenland, and the other saying, support Sweden. These are just like very zero-sum things. So like you have people pushing in one direction, you have people pushing in the other direction. And it basically all kind of roughly stems up to zero. And you just have like a huge amount of wasted effort, huge amount of stress, a huge amount of people not getting literally killed, but, you know, like definitely getting like much worse, you know, like emotional experiences than they otherwise would. And so you basically ask the question of like, okay, so you have this war of all against all that looks very similar to a war between two armies to conquer territory, except instead of it being two armies battling over a forest,

• 28:17Speaker 03

  you have two meme armies battling over each and every person's brain. Like, what is the equivalent of a peace treaty, right? And the equivalent of a peace treaty is, so basically, in the Yahobzian case, like you have local territorial monopolies, right? And then after that, you know, you had, you know, things like the Treaty of Westphalia, which like formalized a lot of this, and then they kept going further and further from there. Basically, you know, saying that, okay, you know, we have distribution of territory, and within each territory, then, you know, you have a local monopoly. And actually, the Westphalia's example is interesting, right?

• 29:00Speaker 03

  Because I think, you know, that was also when the concept of a koyos regio, ais religio, right? Like, who has the region has the religion, uh, came about, right? Basically, that one of the ideas is that kind of the local monarch would also have the ability to choose the religion of the country. So it's an interesting example to harken back to, because we're basically saying like, even back then, it kind of, you know, like, recognized that like this concept of saying, like, one person having hegemony over a piece of territory, and then different people having hegemony over different pieces of territory, is something that applies to a physical war, and it's also something that can, in the same way, apply to information war, right?

• 29:44Speaker 03

  And so the way that this works in, you know, the space of information war is basically like, okay, yeah, you know, you have one country, and, you know, in this one country, you're supposed to, you know, the only memes that are allowed to spread are the Xi Jinping thought memes. And you have another country, and then in that other country, the only memes that are allowed to spread are some different memes. And in the third country, you have some different memes that are allowed to spread, right? And you have this kind of equilibrium, where basically, you don't have at least as much, you know, zero-sum memetic warfare, because for every country, there is like one dominant elite that like has a reliable hold over the meme war, right?

• 30:28Speaker 03

  There might be other groups that wants to, you know, get their memes out into the meme war, but they're just like... So much less powerful than the dominant party that like, you know, it's like the US governments versus like random cultists in Texas or whatever, right? That like, you know, the second group has no chance. And so most of the time they don't try. And so there's no bloodshed. That's kind of the analogy that I made between, I wouldn't say authoritarianism, though it's a very related concept. I would say like info hegemony as opposed to info pluralism might be one of the ways to think about it. And how things ended up turning out with physical warfare. And so basically, one of the things that

• 31:08Speaker 03

  this thesis implies is that if there is this analogy, then if we want to argue that info pluralism is something that's actually better than info hegemony, then we might want to look for deep and enduring reasons why physical war and NIMOR actually are different from each other.

• 31:30Ryan Sean Adams?

  Okay, so Vitalik, you were just framing things in kind of this Hobbesian world where we have this anarchy of information because the cost to produce information has been very cheap. And the only remedy is that we have some sort of centralized monopoly on information, almost like a ministry of truth, right? That's the force that will bring equilibrium and cure the anarchy, right? And so that's the idea here. Noah, could you make the jump for us? Because I'm still not clear on the jump between you said the internet may have possibly brought this about. And so the cost of information, the price to create information has maybe plummeted, or the cost to distribute information has plummeted. Why is the cost to distribute propagate information going down? Why does that help totalitarian types

• 32:15Ryan Sean Adams?

  of regimes and ministries of truth? That link is not quite clear, I think, in the case we've made so far.

• 32:22Speaker 00

  All right. So there's a cell phone maybe in your pocket or close to you right now. Unless you've taken extraordinary precautions, that cellphone records information about your entire life. Everything you do, everything you buy, everything you search for, everyone you talk to, everything you say to people online. Maybe in real life too, if it is sneaky enough, but certainly online, where you are day to day, minute to minute. That cellphone, that little brick, knows everything about you, right? And so what can that tell someone? Well, if you're a large corporation, or if you're a government who owns a bunch of large corporations or a government, it can tell you what you'd like to buy. You know, it can mine your data and say, oh, you know,

• 33:06Speaker 00

  I think this guy really likes broccoli now. Maybe I'll go produce some broccoli. So that can aggregate information about what you want, right? Of course, it can do it in the Hayekian way, right? In Hayek, you need prices, right? How do you know whether people like broccoli? You look at price data. If the price of broccoli goes up, that means maybe people like broccoli more now. But on your phone, you can see exactly who liked broccoli, when they bought broccoli, what they were doing when they bought broccoli, whether they were talking about broccoli, whether they searched for broccoli, blah, blah, blah. You can get a lot of information about that. And that's information that you couldn't get in 1957. That's information you couldn't get in 1995. And that's information that's now available.

• 33:48David Hoffman?

  Noah, can I just like regurgitate that? Just to make sure I totally understand. The way that I wasn't trained in as an economist like you were, but just like as a meme, I always understood like, why did communism fail? Oh, because like central planning is inefficient, right? It just doesn't have the information that a free capitalistic market has. But I think what you're saying is like, there's such a strong centralization of information due to modern technology that all of a sudden like, central planning perhaps has a lot more of information that it previously would not have had thanks to technology. I think that's just like what you're saying in a short way.

• 34:20Speaker 00

  Right, and the hypothesis here is that it's gone from being, say, 20% as good as free markets, to being 60% as good as free markets. It's still significantly worse, but the disadvantage is less. And perhaps that disadvantage is now small enough where it can be more than compensated for by advantages in other domains. And that's hypothesis. Of course, I think that- Personally, you know, I was briefly a finance professor and I think, you know, about capital allocation, things like that. Personally, obviously, whether people want to buy broccoli or not, that's the classic example. But if you think about productive efficiency, which companies are best? Right? Suppose you have one country where the government is allocating money to companies and saying, okay, you can have this much funding, you can have that much funding.

• 35:02Speaker 00

  And another country where how much funding you get is based on, you know, a whole bunch of investors deciding what's price to value your stock at and what interest rate to charge you in the bond market. Right? And then in the other one, you just have some banks, which are owned by the government, saying, okay, we think you're going to have good opportunities or you get money, you get investment capital. And so the internet can provide the people doing, you know, loan evaluation or whatever, with massively more amounts of information about both who's buying their products and how their stuff is organized and what their technology is like and all these things about a company that you just couldn't get that information in 1995, even if you like, and I know because the Japanese bureaucracy really tried and they weren't, they, you know, Midi was constantly behind the curve on this and they were the best of the best.

• 35:46Speaker 00

  Back in the 90s, they were just racking up one L after another, doing this. And of course, when the Japanese economy thrived, it was often, you know, kind of because people just went around Midi. You know, sometimes Midi did have some big successes, but that's another topic and that was mostly earlier. But then, so I guess the idea is that maybe the internet, when we say the internet, we don't just mean like people arguing on Twitter, right? We don't just mean people podcasting like we're doing now. We also mean things like the massive data collection. So the amount of data about, you know, buying behaviors and demand and what people are doing with their workday, you know, and whether people are productive and all these things and about who has what technology in their company. The amount of information is vastly greater. We store massive amounts of information. So databasing is really the thing here.

• 36:31Speaker 00

  And so databasing and then the fact that it's all networked means that you can transmit it easily, but you know, you can run regressions on it too. We have much better information. I'm sorry, much more. I don't know whether it's better, much more information about what companies are doing, how they do it and what they might be able to do in the future than we did 20 years ago, 30 years ago. And so an authoritarian state might be able to use that to allocate capital, say that before they were only 20% as good at allocating capital as a, you know, market economy. Let's say now they're 60% as good at allocating capital as a market economy. Well, that has significantly eroded their disadvantage. You know, they're still disadvantaged. Maybe markets are still the best, you know, and Hayek's still formally right, but the difference has shrunk to the point where authoritarian

• 37:13Speaker 00

  states' other strengths that were always there can now shine through more. That's the worry. Yeah, I don't think this is true necessarily. I just think it's worth thinking and worrying about. I don't think any of this is true. You know, I'm making a case here. I'm being a bit of a lawyer for this idea because I don't really strongly believe that this is right. And I also think that like, you know, I fervently hope that in 20 years we'll be saying, well, that's why Xi Jinping's, you know, regime collapsed because, you know, obviously liberal democracies are much better. I hope we're saying that. I want to be able to say that in 20 years, but I don't know. Standing right here, I don't know what's going to happen. And so I'm sort of pushing this scary idea so that we can think about it. This is the hypothesis.

• 37:55Ryan Sean Adams?

  Okay. So Vitalik, from your mind, have we sufficiently explained the argument that Noah is making? Or would you add anything else? I know, Noah, you touched upon information tournaments a little bit and it kind of like the drive by explanation, but you know, like maybe we could touch upon that or just like in general, do you think we've articulated the case he was making in his article, Vitalik? Or what would you add?

• 38:15Speaker 03

  Yeah, I mean, I think I would only add one small thing, which is like, you know, we talked about info Hobbesianism, but there's definitely a kind of a generalized, you know, Hobbesianism that you can talk about. And like, to the extent that you can model aspects of finance as a war against all, then like, fine, you know, throw that in there. Like, you know, if you think about like some like billion dollar hedge funds, you know, like using like high leverage to try to like attack and like break particular companies' positions. And like, if you interpret that as a zero sum behavior, then like, you could kind of, I mean, squint and make a case for like putting up financial walls to protect against that. Then, you know, you can apply similar ideas to.

• 39:01Speaker 03

  I mean, potentially, yeah, offline, kind of internet things, potentially to, I mean, like the biospace. Like, basically, yeah, it's a pretty generalizable argument. And so you can try to, like, apply it to issue by issue to, you know, like, different kinds of things and basically see, I mean, like, is this a zero-sum game that's like analogous to physical warfare in the right ways? And that it feels like it has the same equilibrium? And like, if it feels like it doesn't, then, you know, you can, like, actually, like, dig into a specific example and explore the reasons why.

• 39:37Ryan Sean Adams?

  Yeah. One example that Noah gives, maybe this gets into the idea of, like, wasteful information tournaments that might be going on in, like, Western liberal democracies, is the idea of an election. And, you know, you commented that the average US politician spends about 30 hours of their work week actually just trying to raise funds, raise capital, in order to what? In order to go get elected again? And it's like, which leaves you the question of how much of their time is actually spent on governing? And the question of, well, is this just wasteful? Right? It's like, will a regime that does not need to have elections, will that regime just outcompete, maybe govern more, and spend the 40-hour work without actually governing, not wasting all this capital on getting elections? So is part of the idea here, Noah, that we have this waste going on?

• 40:22Speaker 00

  Yes.

• 40:23Ryan Sean Adams?

  In liberal democracies? And how would you pattern match that with what we've discussed so far?

• 40:28Speaker 00

  Let's think about why congresspeople are out there fundraising all their entire time. If you're holding national office, what do you use money for? Use it for television advertisements. Use it for internet advertisements. Use it for ads. Right? So now suppose the other side also raised a bunch of money and uses that for ads. Okay? Now, television isn't the internet, but the fact that the internet makes it very easy to spread misinformation. So, for example, we've seen a lot of people spread, you know, misinformation about how good the economy is doing. Often in order to discredit Biden, but sometimes to defend Biden, too. We've seen people use alternative methods of inflation that are just absolute

• 41:09Speaker 00

  terrible methodology, but broadcast that with scary, scary charts or numbers to, like, a whole bunch of gullible people. We've seen people do charts where you adjust one of the lines for inflation, the other isn't, to show that people's purchasing power is collapsing, when actually it's not, because you've just, inflation adjusted the wages and you didn't, inflation adjusted the prices. Those are just a couple of things I encounter in my daily life on the internet arguing massive disinformation and these memes take hold, you know, and a lot of people believe them. Right. And, you know, so how do you counter them? How do you counter these memes as a politician? If someone shows a viral chart showing that wages are flat and prices are way, way up. And it's because they adjusted the wages for inflation. So the wages, you know, only increased slowly while they didn't adjust the prices for inflation.

• 41:52Speaker 00

  So the prices, ah, you know, and so they show this chart and it goes around. And now you're a politician and you've actually done a good job and wages have gone up adjusted for inflation, you know, real wages have gone up and you've done a good job. And now you have to counter that message that it was easy to misunderstand that chart. Like it always goes viral because it looks really dramatic. It's total fucking disinformation bullshit. Like, I know you should adjust inflation for both. You adjust both time series for inflation. If you're going to compare this, you know, this is not an ambiguous case. Right. This is just a mistake and often it's an intentional mistake. People intentionally do this just to get clicks. I could do it tomorrow. I could just show you how it's done, right? But I'm not going to, but you can, and people do it all the time. The Wall Street Journal did it by accident once and had to like retract it.

• 42:36Speaker 00

  So what I'm saying is, how do you counter that? Well, perhaps you can pay to put your own message out there. Actually, real wages went up and you know, you can pay to do TV ads saying, real wages went up. You know, wages went up by this much, where the cost of living only went, but that costs money, money, money, money. And you have to be out there fundraising for that money all day long. While someone else, you know, a 27 year old staffer does the job of governing.

• 42:58Ryan Sean Adams?

  So the cost to create misinformation is just like very cheap. And it takes a very high cost to sort of validate or verify that information is true or not.

• 43:08Speaker 00

  Right.

• 43:08Ryan Sean Adams?

  So in all of this, I'm curious to tell like you called this like sort of what we're up against. You seem to find Noah's argument that he's making pretty compelling as to why totalitarianism, maybe let's call it could dominate and beat the idea of like Western civil liberties. And this is all very ironic, I think, because it would be sort of defeating a device that was supposed to propagate, you know, democracy and liberal values, let's say, which is like the internet. And so the idea that a tool of liberal democracy creation could actually be used by totalitarian regimes to beat them at their own game is somewhat counterintuitive. So why did you call this argument sort of what we're up against?

• 43:50Ryan Sean Adams?

  And maybe you consider it a good argument against liberalism in the 21st century.

• 43:55Speaker 03

  I think the idea of like info war as a zero sum game is one of those ideas that's like at the top of a lot of people's minds and like it's definitely something that is concerning a lot of people and it's definitely something where if you were just like go and you know look out onto the Twitterverse yourself, you know, you can very clearly see evidence for it. I mean, I think also just one of the interesting things about the being in the crypto space, right, is that, you know, in a lot of ways, you know, we get to be a couple of years ahead to some of these trends and, you know, there is definitely, you know, huge amounts of zero sum

• 44:38Speaker 03

  info warfare that's happening, you know, between Ethereum and Bitcoin maximalists, Ethereum and you know, the XRP army, Ethereum and Solana, Ethereum and whoever, like at least, you know, between the, you know, the kind of more hawkish and maximalist factions of each of which, right, I think, you know, under the surface, there's a lot of devs that actually get along quite well, that's kind of not visible if you just look at Twitter, but like, you know, the info war of all against all layer is definitely a layer that exists. You know, we see how all of these info wars are kind of coming out and we see like the obvious need for some kind of, you know, like better

• 45:22Speaker 03

  way of actually doing this function of aggregating and eliciting a lot of different people's, you know, wisdom and thinking power and information and a lot of what we have today is just like not actually meeting that. It is worth thinking of, like basically, yeah, I mean, like what is the worst case scenario out of all of this and like the worst case scenario definitely, yeah, I mean, like basically, yeah, like seems to be, yeah, I mean, like what in the outcome where like all of these problems don't get solved at all. And, you know, it turns out that kind of the more serious, you know, like versions of all of the problems actually are true and actually will

• 46:02Speaker 03

  continue to be true and like basically nothing survives aside from, you know, essentially islands of various sizes that are run in a very centralized way internally, right?

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• 49:18Ryan Sean Adams?

  Yeah, isn't the worst-case scenario what Noah pointed out, which is basically like liberal democracies are on their way out? So in a similar way that agricultural societies disrupted hunter-gatherers and like, you know, industrialization kind of like beat out the monarchies, then maybe information tech just, you know, spells the end of liberal democracies? Isn't that the worst-case scenario for fans of liberalism? Yeah, yeah, no, I think it absolutely is. Well, I hope that that's not true. Maybe we can get into how this argument could be wrong. And I'll throw this over to Noah to start. So you've put forth the argument, which is, you know, the cost to create information as it plummets, maybe it gives an advantage

• 50:01Ryan Sean Adams?

  totalitarian regimes and disadvantages liberalism and the idea of liberalism and, you know, these totalitarian regimes just outcompete liberal democracies in the 21st century. So let's talk about how this argument could be wrong. And I just want to maybe throw this to you, Noah. So we've had technologies in the past that have brought the cost to propagate information like down to zero. Like, one of those technologies was the printing press, right? And so it did not lead to totalitarian regimes kind of, you know, taking charge and winning. More or less led to Renaissance. More or less led to the splintering and forking of sorts of different religions. Protestantism sort of had its way with the introduction of the printing press.

• 50:45Ryan Sean Adams?

  So it seems like we've had technologies like the internet in the past and it bred more liberalism. It bred more freedom. Like, why is that not the case here? I am asking you to maybe argue with yourself. Do you think that's a compelling reason for why this thesis might be wrong?

• 51:01Speaker 00

  Well, good. So I think that that's basically something about lowering information costs made liberalism strong in the 19th century and then really in the 20th century. And maybe in earlier centuries, too. You know, you can make an argument that the 30 years war was won by the less illiberal side, and they're both pretty illiberal, but you could make an argument that the Protestant states, at least, you know, didn't have the overarching and at the time quite corrupt Catholic church, and that made them more liberal, that the Habsburgs were really, in some sense, the bad guys. But so you can make that argument. But I think to make the argument that I'm making, you need to look at nonlinearities, right? You need to look at a U curve. The idea is that as information becomes cheaper, it becomes possible to aggregate information with mechanisms like markets more easily.

• 51:46Speaker 00

  With the printing press, you can have people and the telegram and all this stuff. You can send information about prices farther and faster, and this allows you to get, you know, aggregate information through the price mechanism faster. Same with like voting. It's easier to get information about what the candidates actually want. Of course, you had plenty of disinformation there, too, at the time, but still you can make this argument that information aggregation becomes easier with just a little bit of reduction of information aggregation costs, but then that plateaus over time. You know, so you have this thing where at first, a little bit of information technology like the printing press and the TV and the radio make it easier to aggregate preferences, but then the internet doesn't necessarily make it much easier on top of that to, you

• 52:30Speaker 00

  know, figure out what people want to buy and stuff like that for the market's sake, to aggregate information preferences, democracy. It doesn't make it much better. And then let's say that the disadvantages might be a concave. A function like this, right? They might be an upward bending function. Where the social resources that you waste on information tournaments. Might simply increase a lot. And so you have this crossover point, right? So at first, your information tournament cost is only increasing slowly while your information aggregation benefit is increasing very quickly. And here's where a liberal democracy wins. But then when they cross over here, here's where a liberal democracy starts losing. Because the costs keep growing and growing and growing while the benefits asymptote.

• 53:14Speaker 00

  Or let's say decline in its convex. Or I mix up concave and convex, but it's whether the set under it anyway. But the curve go up. So convex costs, right? Or in concave utility. Is the whole idea here. And you get this pattern with a lot of things, right? You get this pattern with like investment in the solo model of growth, right? You have diminishing returns to capital, but you have straight line depreciation costs or even increasing depreciation costs as you. Build more and more capital. And so eventually there's some crossover point where building more capital hurts you instead of helps you. It's like, do you need one more bridge? Do you need one more, you know, office building? At some point, the balance flips, right? So to get this argument, you need to get an argument where you have this crossover and this flip.

• 53:56Speaker 00

  And the idea is that when information costs get, you know, or they start out very high because you know, you're just like grog the caveman running around your club. And then as you get better technology, you get information costs gets lower and lower because people learn how to write and things like that. And printing press and television, radio, blah, blah, and liberal democracy, better and better and better. And then you hit some crossover point with the internet where suddenly. Your benefits have really just asymptotically out while your costs continue to explode from information tournaments. So in order to make this argument, you need to make an argument for a non-linearity. You can't just say more information equals more gooder or more liberaler, right? That's straight line thinking. Right? So you have to think non-linearly and have some crossover point in order to make this argument.

• 54:40David Hoffman?

  But talk, I'm wondering if you could give your perspective. I'll pull in a metaphor from the AI safety people of just like, what do you think your like P doom is when it comes to like totalitarian structure? Being the most fit as a result of the curves that Noah is illustrating. You talk about in your warp cast, just like some reasons about why this argument could be wrong. Maybe you can like, give us some assurances about why this is a thought experiment and not reality.

• 55:05Speaker 03

  Well, I mean, I think one thing that we have to kind of nail down first is the difference between being the best fit and winning, right? Because one property that a lot of like systems that are organized and are very centralized, the way you have in practice is that like, economies of scale in extraction are higher than economies of scale in actual production. And so even if they're kind of less fit in some utilitarian sense of improving human flourishing, like it's, they could easily, still end up like extracting more and like succeeding more in zero sum conflicts for various reasons.

• 55:46Speaker 03

  So that's like one big caveat that's really important to make, right? But yeah, I mean, in terms of like P totalitarianism or P whatever, I think, one of the challenges of giving this number is that it's like so hard to define what all of these terms are even going to mean 50 years from now, right? Because like we're talking about transitions, there were some like pretty massive technological changes, whatever AI is going to do. You know, whatever that's going to do with the global economy or whatever advances in biotech are going to do. Whatever advances in just like other kinds of digital technology are going to have.

• 56:27Speaker 03

  You know, the concept of even, you know, like something like private property, it just in some sense becomes less and less meaningful with every passing year as things become more and more digital, right? And as I'm going to look, we're just basically turning into like everything being network effects. So. Yeah, I mean, it's hard for me to give percentages because there's definitely a case to be made that if you like took someone from a hundred and fifty years ago and you woke them up today and you showed them how any modern society works, that then they would say, obviously, totalitarianism has won. Like, what do you mean? You can't legally hire someone without like filling in a whole bunch of forms and like giving them forty, like, it's like the most totalitarian thing out there, right?

• 57:11Speaker 03

  It's difficult to like make a numerical comparison for like even just some of those reasons, but, you know, like, maybe just to give some concretes. Or maybe to start going into the counter arguments a bit? Yeah, I think, basically, if we go back to, you know, like, the Infoboxian thesis, right, which basically says that the Infowar of all against all, like, one is a war. And so, meaning it's, you know, a negative sum game rather than zero or a positive sum. Two, it does not have stable equilibrium that are not physical borders. And three, it does have stable equilibrium that are physical borders, right? Like, I think those are the three claims.

• 57:56Speaker 03

  Like, I think you can ultimately attack each one of them in turn. And, you know, we can start from the end, right? Milk, does Infoboxianism even have equilibrium that are physical borders, right? Well, go on Twitter and one of the first things that you see is, you know, you'd still see people from, and like, or bots of different countries that are very hostile toward each other. That are still fighting the meme war against each other in all kinds of different contexts, right? You know, even if they have a very strong censorship internally, like, you know, the meme war continues, right? Like, that's one question, right?

• 58:34Speaker 03

  And then, you know, we kind of joke about how like, oh, you know, the only memes that you're allowed to spread are, you know, the local governments and like approved thought or whatever. But if you're like, actually go to like any one of these countries and possibly with the exception of North Korea, though, like, probably even there, like, it's not. Actually like that at all, right? And like, it's actually, you know, the meme ecosystem is still actually quite porous in practice. So that's like the first question, right? Like basically, in a digital environment, then, look, is the natural equilibrium even

• 59:12Speaker 03

  like national borders? Or is it the case that like, oh, well, actually, the only equilibrium that makes sense from a hobbyist perspective is one where there's basically a single elite that dominates the entire world, right? That in some ways is like an even scarier thought, right? Because we're not even talking about hegemony within one country. We're talking about like a single hegemonic actor that just takes over the entire world. And at that point, even if they're completely unfit, there's like basically, yeah, no, like no pressure that can effectively unseat them, right? Like world government is deeply scary in a way that national government is not. Then the question is like, well, if that's actually the case, then like maybe, yeah,

• 59:53Speaker 03

  there's enough people around the world that just like find that kind of scenario as horrible as I do, that they'll actually start fighting against it. Right? So that's like the first thing that I think is worth being skeptical about, right? Like, are there actually equilibrium that don't involve or that do involve borders? And then the second one is like, are there equilibrium other than war that don't involve at least physical borders? And I think here what's interesting is like, like this is where a lot of the differences really start to shine, right? Because, and this is, I think, something that's very second nature to the crypto space, right? Which is basically that like, the possibilities for defense exist in the digital world that just do not exist in the physical world, right?

• 1:00:38Speaker 03

  Like theoretically, in the physical world, people can wear body armor, right? But in practice, body armor is super inconvenient, it's sweaty, it's incredibly annoying in a whole bunch of ways. It's unfashionable. I'll say that. Yeah, it's not cute. Yeah, I mean, you can stick body armor into suits if you want, but like, you know, these days even suits are becoming more and more lame. So it's

• 1:01:02Speaker 03

  But then in the digital world, if you think about like your internet experience using HTTPS in 2024 versus your internet experience using HTTP in 2009, like, do they feel different? Right? I mean, obviously, the applications feel different, but like, does the difference between HTTP and HTTPS feel like anything? Right? And I think the answer is clearly no, right? Now, that's kind of a bit of us, I think, somewhat of an artificially unreasonable example, right? This gets into the divide between what I call cyber defense and what I call info defense in my big, long techno-optimist manifesto from last year, right?

• 1:01:41Speaker 03

  And basically, it's like, cyber defense is the type of defense where, like, every reasonable person can agree who the bad guy is. And info defense is like when there is room for an interpretation. But even in the case of info defense, right? You know, you can ask things like, what even are the physical world equivalents of community notes? What are the physical world equivalents of prediction markets? Or to even go low-tech, what even are the physical world equivalents of different groups of people being able to be on different social medias and be on group chats, right? Like, one of the kind of lines of skepticism that, like, I think you can really legitimately raise

• 1:02:24Speaker 03

  against inferring the extents to which the info sphere is a war of all against all on Twitter is basically that, like, Twitter is the worst of it that you see, and it's the worst of it precisely because you can see it, right? If you think about, like, private group chats, for example, like, private group chats consistently maintain higher levels of quality and high levels of productive discourse. Smaller social media platforms, whether it's, you know, Farcast or whatever else, they maintain higher levels of discourse, right? Actually, like, Noel even wrote an article about how the internet wants to be fragmented, right? And like, the counterargument is like, what if, you know, the suspicion of the global water cooler

• 1:03:06Speaker 03

  that we all got addicted to in the 2010s just like happens to be the worst possible version of all of it? This from a you know, info warfare being negative some perspective and now we actually are learning and we actually are adapting in the internet. It's like already in a whole bunch of smaller and larger ways, reconfiguring itself to be uh to already starts to become less warlike. In ways that have no equivalents again in the physical world, because you know, the mechanics of like constructing digital walls and constructing physical walls are just so fundamentally different. So I'll stop here.

• 1:03:41Ryan Sean Adams?

  Noah, what do you think of those arguments against the thesis here that Vitalik just made?

• 1:03:45Speaker 00

  I like the observation about the internet becoming more fragmented. That will reduce information tournament costs, as in, we don't spend all our day arguing on Twitter. We spend our day talking to people in Discord who have useful information to, you know, for us and who are not just some, you know, some angry jerk blowing off steam by talking bullshit. And then everyone else has to jump in and refute that bullshit. Uh, and then we just talk to interesting people with interesting ideas and maybe we lose a tiny bit of that long tail of information. Because you know, maybe there's some totally random person who'll pop up and tell you, you know, a little bit of extra information you didn't know that wouldn't have been invited to your Discord. But now, you know, at least we've reduced the information tournament. So I think that's that point I really like.

• 1:04:29Speaker 00

  The idea that perhaps there's some natural self-equilibration mechanisms in the kind of marketplace of ideas. I like that idea. The analogy to Hobbesianism, I think we shouldn't lean too hard on that analogy to show why this idea is wrong. I think, yes, the idea of information tournaments has some superficial similarity and some real similarity to Hobbesianism, but it's not a complete analogy. And I think saying, okay, here's why if we make everything seem exactly like Hobbes's, you know, Leviathan. You know, if we just make a one-to-one analogy between these concepts and then we show how the classic sort of assumptions of Hobbes don't hold. Well, then we've disproven the information tournament thesis. I think we shouldn't do that. We shouldn't lean too hard on that analogy.

• 1:05:11Speaker 00

  And so, for example, one idea is that the analogy of information competition to violence.

• 1:05:19Speaker 00

  If two people meet in a town square and have a physical fight, right? One knocks the other, like if Ryan and David meet in the town square with clubs and go at it, you know, and then like one of them will bounce the other with a club and then he falls over unconscious and then you're done, right? But then in information, quote unquote warfare, yes, there's a competitive thing, but it's like, imagine if both people had like infinitely powerful suits of armor and were just wailing on each other like in some Marvel movie. So I can yell correct information, someone else can yell disinformation, or we can yell two competing forms of disinformation, right? I can tell you, so suppose that you tell me that the job market is terrible under Biden, was amazing under Trump, and I tell you that the job market was terrible under Trump and is amazing under Biden.

• 1:06:03Speaker 00

  Well, those are both wrong because it has been great under both. Like, the job market has been great throughout both of those presidents' terms. And so that's the truth. But suppose we, we have competing disinformation, right? And we just wail on each other and wail on each other and wail on each other. Physical violence, you know, naturally ends in one person winning and the other person getting clubbed to death. I mean, yes, I know World War I lasted a long time. It's not always quick victory, but then information warfare can go on forever. You know, that's just one difference between real violence and, you know, disinformation war. And so the cost of disinformation war, there may be no natural resolution. So the thing about Hobbes, the idea is that everyone's always running around trying to fight everyone.

• 1:06:46Speaker 00

  And so you need this leviathan, right? That's similar to the idea that maybe having information, you know, filtered through some monopolists at the New York Times and CBS News in like 1960, maybe that was actually good. That's the analogy there. But there's other dimensions in which the analogy breaks down. For example, borders, right? Do we really need to have information hegemon's? Do we really need information to stop and start at national physical borders? No, we don't. So, yes, we have Twitter and you go on Twitter and you see people from all countries, right? But the Chinese government and the Russian government have a lot of resources devoted to pushing their message out there and the US government doesn't.

• 1:07:27Speaker 00

  Right liberalism doesn't US government sits back and says you know from an Olympian remove and is like I am the overall mighty hegemon of information and so I'm going to let all these tiny little actors play it out you know and then one of those tiny little actors is the government of China a country four times the size of the United States with arguably a higher GDP than the United States and so that's one of the tiny little atomistic actors and so the rest of us are these tiny little guys having to run up against that behemoth having to run up against Russia who has less resources but still a lot more than your average American and you know has a little bit more practice pushing up bullshit to Americans and so I'm having to fight those guys every day on Twitter and in the information space and they're much

• 1:08:10Speaker 00

  better resource than I am and there's no physical border there right there's a physical border for where those armies can go but there's not a physical border for where their information things go and so you can have cross-border information warfare in a way that it's very difficult to have cross-border physical warfare and that's a structural difference between the two things that makes the analogy break down a little bit I think and so the idea that okay we information is borderless and therefore you're not going to get a Hobbesian situation

• 1:08:38Speaker 00

  well but information warfare is borderless in a way that violent physical warfare is not and so I think that that means that the analogy can't you know we can't just lean too heavily on that analogy and say well since information doesn't have borders you're not going to get a Hobbes that situation well yeah but Russia and China are going to continue to just use their resources to push out their messages to everywhere and if you look at I think as Anne Applebaum had a great article in the Atlantic recently that shows that the combination of Russian message crafting and Chinese money around the world is actually proving a fairly effective propaganda tool so for example this idea that there were all these secret bio labs in Ukraine you know that's made up by the Russians secret American bio labs in Ukraine and that's why Russia had

• 1:09:21Speaker 00

  to like go invade Ukraine that's made up by the Russians but it is being spread in you know poor country in developing countries and in developed countries but people in developing countries are buying it a bit more because they don't have that as robust a counter information ecosystem You know, it is being spread by Chinese networks and China really picked this up and ran with it and distributed this and China's commercial connections to the world allowed it to do this. Ryan and David, have you ever heard the Ukraine Biolabs idea? I have not, no. Okay. But Alec, you've heard that one?

• 1:09:51Speaker 03

  Yes, I have.

• 1:09:52Speaker 00

  Right. And it's borderless, but these well-resourced states that have borders for the collection of taxes and, you know, and borders for the enforcement of crime and borders for the where their army goes do not have borders for where their information goes. And yet they, in some sense, raise the information cost to the rest of us because I'm sitting there battling whole governments on Twitter.

• 1:10:12Speaker 03

  Yeah, okay. I mean, I think I get the feeling that Noah's somewhat disagreeing with me, but actually agreeing with quite a lot of, you know, like what I said, right? Which is that like, you know, like one is that it's like a major difference between, you know, physical warfare and internet warfare is definitely that like internet war is, you know, like significantly, yeah, like much less of, you know, like actually warlike. And, you know, like especially once you get off Twitter. And like, that's a place where the analogy fails. But I think on the first one of like the issue of borders, that's one thing that's kind of valuable to disentangle there, I think, is like

• 1:10:53Speaker 03

  the idea of like info hegemony as this abstract concept, right? Which can exist at any level of a stack, right? Like you can have info hegemony in a country, you can have info hegemony inside one of Elon Musk's companies. You can have info hegemony in your family or in your cult or across the entire world. And then there is kind of this very, like much more specific ideology that like really emphasizes the idea of national sovereignty and basically treats info hegemony as being one part of national sovereignty alongside like physical military hegemony within a local area, right?

• 1:11:34Speaker 03

  I think these kind of disanalogies between or like the breakdown in the analogy between, I mean, like physical and info hob, you know, some like it basically. Yeah, to me, it definitely suggests that specifically the nation-state bound version of all of this is one that's less likely to be a long-term, stable equilibrium, which could mean something good or it could mean something bad, right? The good thing that it means could be that we find some kind of better approach and some kind of better equilibrium does not involve like basically unlimited, you know, like info hegemony that any particular person is subjected to, right? Or it could also mean something worse.

• 1:12:19Speaker 03

  And the something worse is basically info hegemony at an actually worldwide level, right? And so the question to basically think about is like, well, if you, you know, like have all of these different like actors and we can think of them as being nations or in some cases, they're like meme plexes that have partial overlap with nations. Sometimes they're meme plexes that overlap collections of nations or even parts of nations. Like if you are one of these meme plexes, what to you is the ultimate safety? The ultimate safety is basically banishing all competing meme plexes from the world forever, right? Because if they're not from the world, then like wherever they're not banished from, they can come back, right?

• 1:12:59Speaker 03

  And so this is kind of the bigger risk, which is basically going out even into the long, long term into a time when, you know, like even, you know, the words, you know, like democracy and totalitarianism and, you know, like United States and like Russia and so on are long forgotten. Like what is, you know, like the long-term equilibrium? And like, is that a global info hegemony? And is that like a situation that eventually, you know, like we fall into? And once we fall into, it's like super hard to get out of, right? Yeah, I mean, I think like basically the porousness of borders and like the way in which digital borders are much weaker than physical borders. It's like, it's both a blessing and a curse in that exact way, right?

• 1:13:44Speaker 03

  It's like the blessing is basically that it enables other possibilities. And like the curse is that like, well, actually, you know, there's definitely something worse than nation-scale authoritarianism that's, you know, like might be looking at us eventually.

• 1:14:00Speaker 00

  Yes. So in other words, right now, we're seeing so-called sharp power by China reach into many areas of the rest of the world. We're seeing companies censor what they say in their own home markets because China threatening to cut off access to the Chinese market. And various actors, basically China's conditional opening saying, well, dangle the promise of this giant Chinese market, which usually does not materialize, but let's say we can dangle it and once in a while it will. For anyone who's just willing to go push our message back in your own countries, blah, blah. That's called sharp power. And so we're seeing the effects of that across borders. The question is, so what's the scenario? I guess my question, again, I don't really strongly believe in this thesis, right? It's just an idea I had.

• 1:14:45Speaker 00

  I'm not going to be like, yes, liberal democracy is going to fail. I'm not that guy, right? I think that there's a good chance that everything I'm saying here is overblown and that this is not even a good way of, and that liberal democracy has other advantages in addition, like a feeling of inclusiveness and, you know, public goods provision. Those are other arguments for why liberal democracy is good. Maybe those are more important and I just haven't even considered them. Maybe the information tournament problem isn't actually that big. And what looks like all these people wasting these resources actually is people having fun. Well, actually, we're just as good at getting information as we ever were, which never was really great, but we're just watching people have fun shouting each other for consumption purposes, and that's how we're using our leisure time. And it looks like we're, you know, in actuality, you go back to like 1950 and the average person was worse informed than now

• 1:15:30Speaker 00

  and that the actual amount of time and effort we spent was maybe about the same because now we're just consuming, we're just having fun. So these are counter arguments that I can make to this, right? I can make counter arguments to everything I just said. But I think it's worth asking, if this thesis, if the scary theory is wrong and if the new totalitarianism is going to lose, you know, Xi Jinpingism is going to lose, what's the scenario by which it loses? And so I think economically, the scenario by which it loses is that Well, China's still just not nearly as rich as the West and as this Chinese state gets more controlling of the Chinese economy, it's gonna get worse and worse. It's already slowing down much faster than other, you know, developed countries did back in their day. It's slowing

• 1:16:15Speaker 00

  down early and China's just, you know, yeah, they can produce a bunch of EVs, but they're all gonna rust in the parking lot. And, um, you know, unless they're massively subsidized. And in the end, all we have to do, you know, is wait and maybe there'll be Soviet Union too. And so that's economically, I think that's the argument. Politically, the argument is eventually, you know, when the economy slows down and when people realize that Xi Jinping isn't that competent and he's like been around for like 20 years and people get really restless, you're gonna see the same pressures you saw in Korea and Taiwan, you know, for democratization, blah, blah. So those are the counter arguments. The counter arguments are just like, just wait, bro. Like, people said that totalitarianism was gonna win in the 30s. They said it was gonna win in the 70s. They were full of shit both those times. And they're full of shit now.

• 1:16:57Speaker 00

  Just wait, you know, wait and like do the normal thing. But in terms of the marketplace of information with the massive messaging apparatuses of China and to some degree Russia, which are now coordinating hegemonizing the American internet with bullshit and the European internet with bullshit and the Latin American internet and the Middle Eastern with bullshit. You know, how do we beat that? Like, what's the scenario? So this is my question to Vitalik. What's the scenario where that loses and how does it lose?

• 1:17:28Speaker 03

  So I think one of the sets of arguments that we haven't talked about at all is just the possibly very large benefits of info pluralism in a context where when people are sharing info, they're doing something other than fighting each other, right? I think one of the best things that you can have in an ecosystem is like not just having like one group that has a tight internal consensus where they all agree with each other on everything and then they just kind of veer off in their own direction and assume that each other are right, have perfect confidence in each other.

• 1:18:10Speaker 03

  And instead, actually, I mean, like have an ecosystem where you have different groups that actually you know, like have some form of competition with each other, right? This is, I mean, like something that the world as a whole, um, definitely has like as a unit. This is something that, I mean, the US as a country, I think, definitely has, I mean, like quite a bit of that um, as a unit, um, you know, like there's, uh, you can identify, you know, like sub bubbles in a bunch of ways, right? Like you have the reds and the blues, I mean, you know, you have the, yeah, east coast and the, uh, you know, like intellectual cluster, then you have Silicon Valley, you have people who care about, you know, the different, uh, branches of tech and like, there's lots of these subcultures that actually have the ability to like,

• 1:18:55Speaker 03

  actually, yeah, take their ideas and like actually push them forward out, uh, to their conclusions and start, um, executing on them. This is, uh, something that I think, uh, the better crypto ecosystems tends to actually, yeah, have, right? And, uh, you know, the ones where it like actually literally is just a cult of personality by around, uh, you know, like one guy calling the shots or like the, the, uh, the ones that's, uh, you know, like pretty quickly, yeah, tends to fail. You know, like, sorry, Craig, right? So the benefits of, um, you know, like actually having this kind of pluralistic environment where like you actually have

• 1:19:34Speaker 03

  different groups and where each of those different groups like actually has enough breathing room that it can actually take a couple of steps and actually start, you know, like pushing its, uh, ideas forward to some kind of conclusion. Like that feels like something that it's very plausible to believe that it's something that has massive benefits and like you just can't really come up with, uh, good ideas without it, right? And I think what's interesting about that is that, uh, the kind of world where, you know, like there's, uh, like one, you know, like leading dictator and like you can't get anywhere if you disagree is like obviously the exact opposite of that. But then the world water cooler is also the exact opposite of that, right? So like both the dictator and the world water cooler are actually not info.

• 1:20:20Speaker 03

  And so actually figuring out like, how do we optimize for info pluralism, which basically means both pluralism existing and at the same time, the interaction between the different groups like actually being not just competitive, but also, you know, you don't want like full kumbaya, you want like some kind of healthy mixture of like competitive and cooperative.

• 1:20:43Speaker 00

  So the answer of how do we beat the info leviathan of China and Russia? The answer is we hide from it that it is very powerful in the town square and rules the town square. So we go to our houses and talk in whispers to each other where the monster cannot get us.

• 1:21:00Speaker 03

  Well, there's this famous infographic or comic or whatever you call it that got it, that was in a Swate Store Codex post. I think it was actually the one on community and dystasis and civilization where basically, you know, someone starts off making a garden and then the garden expands and then the garden expands and then the fence kind of eventually stretches out across the entire world. And then at some point, you know, the garden becomes the new reality. Yeah. So I think I'm not advocating for kind of like people constantly, you know, like playing cat and mouse games and expending a lot of energy running. I'm basically advocating for developing the tools to make the internet

• 1:21:40Speaker 03

  landscape, one that actually is like friendly to multiple, you know, groups that are not hegemon's that actually are able to and where the actual incentives align for them to interact in ways that are more productive. I mean, I think, you know, if there's a, like, you can never get a hundred percent of the way there, right? And, you know, there will always be there to like say crazy things and fight zero sum games against other people who are saying the opposite crazy thing. But like you can clearly go much further than zero, right? Like, you know, the world water cooler is kind of probably the closest to zero that we can have. And then the question is like, well, even that, like, if you look

• 1:22:23Speaker 03

  at the early internet architecture, right? Where, you know, you had a lot of blogs, you had a lot of forums and it did not look like anyone running and hiding from a single main thing. But, you know, it did look like something that produced a lot of productive output, right?

• 1:22:37Speaker 00

  That's a great point. What we're really running and hiding from is maybe the inefficiency of centralized information marketplaces.

• 1:22:43Speaker 03

  Yes.

• 1:22:43Speaker 00

  Rather than the fact that Russia and China are in there trying to do their thing.

• 1:22:47Speaker 03

  Right, I mean, ultimately, again, you know, like if an info ecosystem has a mechanism by which it's vulnerable to Russia, then it's like also going to be vulnerable to Elon Musk, right? And it's also going to be vulnerable to the Democratic Party, and it's also going to be vulnerable to the Republican Party. So to a lesser extent, because you do have more avenues to kind of push on those actors to be nicer, but like to some extent still, right? And so I think, you know, there's an extent to which those two things are similar problems. And like, to me, the ideal outcome is not having, you know, healthy info ecosystems in a particular subset of countries that we label liberal democracies, and then they

• 1:23:30Speaker 03

  can prosper and everyone else, you know, goes to dust. Like, the ideal outcome is like, the world becomes a healthy information ecosystem, right? Where, like, a pretty wide diversity of different actors can participate, which inevitably means some that have, you know, quite crappy intentions, but we still figure out how to muddle through and make that work reasonably well.

• 1:23:53Speaker 00

  So here's my question, and I have to go fairly soon here, but you guys are all fans of blockchain, of course. And so maybe blockchain can help here, because maybe, so Americans don't necessarily need blockchain to talk to each other. I know there's, there's Farcast or whatever, but maybe Chinese people do, or Russians. Maybe there are ways for people to completely secretly talk to each other. So obviously, you can use Signal to just do encrypted, but then someone can like, maybe raid the offices of Signal, or, you know, kill anyone who's Signal on their phones. I don't know. But maybe, are there ways technologically for blockchains to help Chinese people talk to other Chinese people about what they don't like about Xi Jinping? And for Russian people to talk to other Russian

• 1:24:36Speaker 00

  people about what they don't like about Putin, et cetera, et cetera?

• 1:24:39Speaker 03

  Have you seen Freedom Tool?

• 1:24:40Speaker 00

  No.

• 1:24:41Speaker 03

  This interesting group, it's this company, I think, based out of Kiev, and they have like people from a bunch of ex-Soviet countries. The company is called Rarimo, and they built this thing called Freedom Tool. It's with I believe it was a like Pussy Riot connected lawyer, Mark Fagan. And basically what it does is that if you have a Russian passport, then you can digitally prove using, I mean, like zero knowledge proof technology, that you're a Russian citizen without revealing which one you are. And then you can like go and basically participate in an online vote. And the results of the online vote are like visible and they're guaranteed to be tamper proof.

• 1:25:23Speaker 03

  Right. So basically, yeah, it is an anonymous voting system that basically lets us, you know, have like shadow votes among the, you know, shadow Russian nation. And like actually, yeah, at least, you know, create consensus of like, you know, like what do Russian people actually think? Um, it's very clearly this kind of like version one beta thing in a lot of ways, right? But it's interesting because to me, one of the big, you know, like debates that you sometimes get around the discussion of like internet anonymity is basically like, the 1990s idea is like, freedom comes from the fact that on the internet, nobody knows you're a dog. Right. But then you have this debate of like, oh, well, you know,

• 1:26:06Speaker 03

  either you're verified, but then if you're verified, people know who you are and they can go after you. Or you're anonymous, but if you're anonymous, then like no one has any need to trust you. And like these days, it's pretty much impossible for you to distinguish yourself from a bot. Right. And so the question is like, can we actually solve both of those two things at the same time? Right. And like, can we actually have like strong privacy? And at the same time, like various forms of trustworthiness, whatever that means, in a particular concept and like have those things together. Right. And like, it actually feels like this current batch of, you know, zero knowledge proof technology. And there's a couple of blockchain use cases in there too,

• 1:26:47Speaker 03

  especially for, you know, like making these votes like censorship resistant. Um, like it feels like that batch of things like actually manages to solve both of those problems. Right. And so the frontier for creating an info sphere that is at least guarded against, you know, shall we say both, you know, like centralized and, you know, decentralized cyber attacks is like actually better than ever in some ways. Right. So I think it's, yeah, in this way, it's an exciting time, right? And we actually, yeah, you know, get to see some of these things go live and see how they work.

• 1:27:19Ryan Sean Adams?

  So there's a partial answer for you there, Noah. We're making some progress on that front. Guys, this has been a fantastic conversation. I've really enjoyed to kind of interplay between the two of you. I guess as we sort of bookend this, maybe I'll read a quote. So even if your thesis is right, Noah, you still think it's a good idea to continue fighting for liberal democracy. You say this, "We should continue fighting for liberal democracy and hope that technology and human nature allow for its continued victory." Maybe that's a place to end this episode, and we appreciate both your time.

• 1:27:50Speaker 00

  Thanks so much. Vitalik muted himself, but I'm sure he's saying thanks as well.

• 1:27:54Ryan Sean Adams?

  I think he is as well. Bankless Nation, we will include a link to Noah's article that we discussed throughout the duration of today's episode. It's called "How Liberal Democracy Might Lose." We, of course, hope it doesn't, and we are betting that crypto is part of the solution and part of the reason why it does not lose. Of course, got to remind you, even though we didn't discuss crypto today, it is risky. None of this has been financial advice. You could lose what you put in, but we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the Bankless journey. Thanks a lot.