[Applause]
so I wrote this book with Eric Posner
that came out about six months ago and
sort of surprisingly maybe a majority of
all the interest in it has been from the
blockchain space now why do I say
surprisingly at least to me the book I
think manages the mentions the word
blockchain once and it's not even really
a book about technology at all it talks
a little bit about technology it's
mostly a book that attempts to revive a
historical political philosophy and
update it with new insights that have
come out of economics and sociology and
so forth it's a political philosophy
that Vitalik and I are increasingly
calling liberal radicalism and so the
question is what does a book about sort
of like some modernization of the
history of political philosophy have to
do with blockchain why have people in
this space gotten interested in it
that's a question I get all the time
actually especially from people outside
of the blockchain space we were really
puzzled by how these things are related
to each other and I think that the
answer comes from the fact that
decentralization which is really the
fundamental principle that animates
what's going on in the blockchain space
is not in fact such a new idea in fact
decentralisation while it is a
hot-button word in technology circles
these days is actually just another way
of putting probably the deepest and most
persistent attitude in the politics of
developed countries for the last 250
years a concept called liberalism so I
would define liberalism as the political
tradition that is opposed to centralized
hierarchical historically derived
arbitrary Authority
and tries to break down that authority
in favor of a market-driven
society that's largely neutral across
different ways in which people choose to
live their lives and to define what it
means to have a good existence and
liberalism is the basis of most of the
social institutions that exist in
wealthy countries it was what motivated
capitalism what motivated many modern
democratic institutions people talk
about the liberal international order
that's what they're talking about so the
principle of decentralization far from
being some new thing associated with the
blockchain is really an attempt to
maintain this cherished political
tradition in the face of new
technological arrangements now the
problem that liberalism has persistently
faced and the reason why it needs to be
renewed in face of new technology is
that while being this deep important
political tradition it's also in terms
of how it's been instantiated in
institutions traditionally been quite
naive it's ignored some fundamental
features of social life which make it
operate in ways that might go contrary
to its original intention so liberalism
has this sort of individualistic
character and yet almost all of human
life all civilization is built around
the notion that people can accomplish
more together than they can accomplish
on their own what economists would call
economies of scale and liberalism has
tried to deal with this by having some
sort of democratic institutions that
capture aspects of that and yet the
problem is that there are minorities in
most societies often persistent
minorities and democracy may not deal
with so well with those a fundamental
liberal institution is capitalism and
the private ownership of property and
yet those things work well
according to economic theory only if
there's what's called perfect
competition if there's lots of similar
things and yet most assets most property
are not identical to other things each
house each flawed of land is in a unique
place and a unique relationship to
things around it liberalism is based on
some way in which we communicate with
each other and have some common
political culture and yet those common
political cultures can be a source of
oppression there's a story from la
petite prawns a famous book by antoine
sun exuberant and presents basically the
theory of general relativity in his
turkish fez and he gets laughed off the
stage and then comes back and presents
it with a suit on and everyone you know
applauds the minions of winning the
nobel prize so just the ways in which we
communicate the ways in which we try to
make meaning together can be sources of
illiberal oppression and capital tends
to be far more concentrated than
laborers so there's a natural tendency
for capital to be a source of
concentrated power if you don't find
some way to restrain it and this is
meant all of these issues which you
could call radical critiques of
liberalism have men that liberal
institutions that have actually been
built have ended up ironically
undermining themselves that attempts to
create decentralization have actually
led to more centralization this has
happened over and over again and if you
look at the rhetoric around the early
internet it's a perfect example of this
so when we try to treat individuals as
if they can just on their own in an
isolated way in a trustless way you
might say govern their affairs you end
up getting concentrated powers taking
over things and without some form of
collective organization individuals
can't oppose those concentrated powers
democracy tries to be liberal and yet it
can lead to the oppression of minorities
by the majority property tries to
protect a
space for the individual and yet because
property is not perfectly competitively
used it can end up creating monopolies
and concentrations of power that are
sources of oppression and we can end
slavery and institutions like that and
yet find that the concentrated power of
capital creates wage slavery in its
place so liberal radicalism is a
tradition as opposed to what I would
call isolated liberalism or
individualistic liberalism that tries to
not just not forget about these
challenges but to say look if we want to
have a truly liberal decentralized
society these are the challenges we have
to solve this is the way that the world
actually works and we need to design
institutions that are non hierarchical
that are decentralized that are open but
they take into account the economic and
social dynamics that they will create in
the real world so that we can actually
maintain a persistently decentralized
society rather than turning back into
some form of central power and this is a
political tradition associated with many
folks with pictures in black and white
with Alexei de Tocqueville who talked
about the role of communities in
preserving American democracy John
Stuart Mill who talked about the role of
social organization and making
capitalism possible Henry George who
talked about common property and at the
necessity of common property for true
competition Beatrice Webb who helped
found the modern labor union movement as
a way to preserve the power of free
markets Hannah Arendt who realized that
the extreme capitalism and new broadcast
technologies of the interwar period in
Europe had so isolated people that they
were vulnerable to takeovers buy
totalitarian powers and of course my
favorite William Vickery the father of
modern mechanism design whose whole
career was premise on trying to address
these sorts of problem
with creative new economic institutions
and who is the inspiration for all the
work we've been doing so what I want to
try to do today is give you a few
examples of how we can maintain a truly
decentralized society if we move beyond
superficially set liberal sounding
institutions like private property and
one-person one-vote and so forth and
instead ask what will actually lead if
we follow through the logic of the
incentives created to persistent robust
sustainable decentralization okay so let
me start with the first example perhaps
the most fundamental principle in
liberal societies and certainly within
the blockchain is the idea of private
property and that sounds good that
sounds like oh this is my stuff no one
can touch it will maintain everyone will
have their things it'll maintain their
space but the problem is because things
are not identical to each other because
there's no sense of just everything
being somehow equally divided and it
just going forward from there because
people end up through a social dynamic
in unique places private property
creates huge problems it leads to
problems in bargaining it leads to the
need for people to take on debt to buy
assets it leads to speculation where
people hold on to something and don't
use that asset just to see it increase
in value and that ends up leading to
poor uses of assets two concentrations
of power and in the process undermines
the whole liberal project that motivated
in the first place so how do we solve
that well in this work with Anthony Lee
Zeng who's a Stanford graduate student
of Business School of Business student
we argue for at least partly replaced
replacing private property an absolute
right to hold on to something unless you
voluntarily agree to give it up with a
system of auctions where people have to
bid
in order to maintain control of assets
and have to stand ready to surrender
that asset back to the Commons if
someone else out bids them for control
of it with the revenue that is thereby
generated being distributed not through
a state but through some sort of
protocol in an egalitarian fashion and
I'll talk about one way we envision
doing that in just one second but what
this system does is it maintains two
centralization because everything is
determined by individual bidding but it
also maintains equality not just in the
total number of resources people have
but in the access that they have to
compete for control over assets and you
can read more about this idea in our
book radical markets now another
fundamental problem is that even if you
have these competitive mechanisms for
allocating property there's still the
issue that most things in the world by
their very structure are not
appropriately supplied by capitalism or
a competitive mechanism most things are
in fact increasing returns to scale what
does that mean that means that all of us
can get more if we do it all together
than if we did it each separately and
that's kind of obvious if you think
about it that's why most of us don't
live in a shack in the woods most of us
live in cities and with other people and
we rely on the ideas that they create in
fact the whole principle of civilization
is increasing returns to scale that we
can do more together than we can alone
and capitalism because it's not built on
a principle of public goods or
increasing returns to scale it's built
on a principle of individual payment
tends to atomize people this is one of
the oldest points in sociology it leaves
them isolated and it leads to dramatic
under provision of public goods as
epitomized by the crumbling
infrastructure we see so liberal
societies have recognized that from the
beginning it's one of the oldest
arguments that we can't do without
sort of collective organization and
they've sought to solve that with things
like the democratically governed nation
state but demmick democracy is based on
a principle of majority rule and
especially increasingly wealthy
societies are diverse
there are earth no racial minorities
there are sexual minorities there are
all sorts of different groups that would
be oppressed if we allowed a simple
principle of one-person one-vote to rule
and so both of these liberal solutions
either capitalist applying things in a
capitalist way or democracy fail so in
work with
Vitalik and with Zoey hits igloos a
philosophy and economics PhD student at
Harvard we propose a solution to this
problem which is called liberal
radicalism and is available in our joint
white paper and before I go into the
mathematics around it let me give you an
illustration think about news media I
think all of us realize that it's a
ridiculous way to supply news to have it
just be funded through private markets
you think about if somebody were to
discover that Donald you know completely
clear evidence that Donald Trump was
literally owned by Vladimir Putin that
would obviously have a huge effect on
world politics a huge amount of value
and yet the number of times someone
would actually read that newspaper and
watch whatever ad they put aside it
bears almost no relationship to the
value that was created so clearly it's a
public good but on the other hand and
that's the nature of society most good
things are public goods but on the other
hand you don't want the government
funding news the whole point of news is
to be a check on the government so
imagine that we had a system where
through some public process like the tax
revenue that we raised from this system
that I was just describing from bidding
for these control of these assets there
was matching funds where individuals
could make charitable contributions and
these would be
matched by some common resources smaller
contributions would be matched more and
the more people that contributed to
something it would be matched more so
that you would never have the attitude
that I would contribute if everyone else
would contribute but given that
everybody else isn't going to contribute
I'm gonna slack off and it turns out
that you can perfectly solve that
problem mathematically using a formula
that Vitalik Zoe and I derived which is
shown up here where the contributions
that the the amount of funding that a
charity or organization receives rather
than being the sum of the contributions
made to it are equal to the square of
the sum of the square roots of the
contributions made to it so again we
match more contributions by more people
and smaller contributions because those
are the ones where someone is most
likely to feel that they're a small part
of a big community and therefore have an
incentive to freeride on everybody else
and in fact this instantiates a notion
that comes out of philosophy which is
called the categorical imperative which
says you should always act as if by your
action everybody else would also act in
the same way that you did and for
selfish people who don't act according
to that principle you can actually
through economic incentives recreate
that using this formula as we've proven
in this paper now there is a fundamental
problem with this however which is that
you can Sybil attack this system why is
that
well the quadratic function is not
linear and because it's not linear you
can do much better if you can pretend to
be many people rather than just to be
one and this is much the same problem
that happens in democracy where if you
can pretend to be many people you can
commit voter fraud and you can control
the democratic system however
in trying to solve this identity problem
many have I think incorrectly taken an
approach which ignores the lessons of
democracy which is that identity is
fundamentally social identity is not
something that can be meaningfully can
meaningfully belong to just an
individual in fact almost all the
information that we call private or
intamin is private or intimate in
relationship to other people you even
think about the you know most intimate
things like your sexual history most of
that was experienced with someone else
right and that's the whole point the
whole point is that things are social
fundamentally all of our identities all
the things about us are defined in
relation to others so it's not even
meaningful to think of a in an isolated
ultra individualistic completely
trustless way self sovereign identity
but on the other hand we certainly don't
want some single central trusted
Authority running a whole identity
system and I think that if we think
about things in this way it again
naturally select suggest a solution how
can we get a notion of identity so that
we can't get civil attacks in this
without relying on some central
authority well we have to recognize this
social nature of identity which we're
doing in this work with Matt Jax and a
Stanford professor which we'll be
releasing soon which recognizes that all
that really goes on in in a quote
centralized unquote identity system is
that someone who's trying to verify
someone else trusts a central authority
and that central authority trusts the
individual being verified but that's
just one special case of a much more
general structure where we all trust
some people and those people trust some
people and those people trust some
people and they know things about other
people and you can imagine every time
you need to verify a property of a
person sending a message along this
network which doesn't need to be
centrally stored
it can be a lot like tcp/ip protocols
work actually locally stored and you can
do local graph search to find
connections along that network and then
you can send messages of verification
along that Network and you can use these
even without cryptography to
disambiguate different individuals by
asking enough questions that with high
probability there will not be two
different people that are the same that
that will according to that set of
questions and at the same time is
there's so many things about us that we
share with so many different people
within our communities we can do that
without ever telling the person trying
to verify very much that's very
meaningful about us so taking that view
that actually your identity is a
property of all the communities you're
part of you actually get a far more
robust sense than you do if you try to
think of a individual on their own
owning or controlling their identity now
these are all ambitious long-term
visions of how we can transform basic
social structures in order to make a
decentralized world but we're facing a
more near-term problem than that at this
moment right now we are in one of the
most centralized periods of power in
human history a few global platforms
have established a control over the
digital ecosystem that really is no
parallel and I felt this before myself
but travelling around Europe in the last
week I was really amazed by this clear
across the political spectrum in Norway
I heard almost everyone I talked to use
the word totalitarian in referring to
their fears about what was going to
happen with these digital platforms and
we need things that start to push back
and reduce that power today not just
things that maybe we can test out and
eventually scale we need ways to
organize today to reduce that power or
there's not going to be the space
to build a better decentralized future
and so in the interim until we can build
these systems and and I love all the
work that we're doing in building the
system that's what I spend most of my
time on we need to find a form of
organization that is inspired by the
ideas coming out of this other tradition
but that doesn't rely on as much
speculative technology to make them
happen and in work with Jaron Lanier
we've proposed a framework along these
lines called mediators of individual
data these would be organizations a bit
like the way that unions were in the
late 19th and mid 20th centuries that
would serve three roles that we think
are really important first they would
act as collective bargaining
organizations to protect the value of
data and to ensure that a fair share of
the value of that data goes back to the
people who produce a second they would
play a lot of the roles in these
discussions we're having about
information quality and fake news and so
forth we can't allow those decisions to
be made in a central set of platforms in
Silicon Valley and we can't allow them
to be made by governments and if we
don't come up with a civil society based
alternative to that that is not
implementable in ten years scalable in
ten years but scalable in the next two
or three years that's what's going to
happen and the moment that marine lepen
gets elected the moment that you get a
strong extremist government they are
going to take that power and they are
going to use it to establish potentially
much more frightening totalitarian
systems than we've ever seen before
so we need to create these new civil
society organizations that can be
repositories not just of this economic
value and these privacy issues but also
of the information that we're getting
and certifying that information is
writing and as quality rather than at
all being done in some central way and
these are gonna have to help people deal
with the tension there's a huge problem
with attention hacking by these
platforms and we can't just rely on the
state or even a single civil society
organization to give us the right answer
in this there is no right answer we need
to find a new way for people to organize
collectively in order to manage their
own agency and this is starting to
happen this is something that can happen
in the near term there are hundreds of
startups that are trying to do things
like this and and there are pluses and
minuses we have a piece in the Harvard
Business Review called a blueprint for
better digital society that tries to
discuss some of the principles they
should obey but it's happening and
Angola Merck will give a speech talking
very much along these lines and even the
large tech companies are increasingly
thinking about this because they see the
unsustainability of the extreme power
that's being put in their hands and the
risks of that being co-opted by someone
else but we're also trying to build a
movement of people around these things
both near-term and long-term to allow
them to communicate and talk and to
start to transform people's ideas so
that they can embrace these radical
decentralized visions of the world and
this is what we called radical exchange
this is going to be a conference about
1/5 the size of Def Con in March and
it's led by jeffrey lea who's the
executive director and it is a community
to bring together so many different
types of people there have been enormous
investments dozens of startups I'm sure
there's many people in this room who are
doing things related to radical markets
within entrepreneurship and technology
there's all sorts of research going on
but there's also wonderful artists
making things around this and art is so
critically important because the truth
is in a decentralized world power comes
from people's ideas and their senses of
legitimacy not from central authority so
we can't just go to policymakers and
make them implement this we have to be
the change we want to see by actually
helping these idea
pervade the feeling of life of the broad
public not just tech nerds and we're
also engaging we're building all sorts
of activist organizations these
organizations are popping up on college
campuses in countries all over the world
and we have an incredibly diverse range
of people involved with it because
that's what we need to have robust
systems that take into account all of
the social problems that are necessary
to really build decentralized future
leading our ideas and research track is
not another economist like me or a
computer scientists it's a Nonya
Chakravarthi a post-colonial historian
at Georgetown University leading
entrepreneurship and technology is your
beloved Mamie Rheingold who is leading
Devcon this year yeah let's give a hand
for Mamie she's done an amazing job and
we're so lucky to get some of her
attention going forward for radical
exchange and we've got a wonderful
artist Jennifer Lin Marone who's been
doing great work on data slavery and the
way in which people are oppressed by the
corporate form but it's not just lefty
people these ideas speak to libertarians
and they speak to socialists they speak
to centrist and they speak to populist
these are ideas that can connect so many
of these different visions because they
embrace the challenges of liberalism but
seek for a liberal society and so
leaning our activism and government
track we've got one of the largest most
the most important activists for charter
cities Marc letter and I hope some of
you out here will consider getting
involved with this if you really believe
in the principles of decentralization we
need not just the cryptography we need
not just the technology not just the
data we need the social technology we
need the social organization we need the
institutions that can maintain
decentralisation
persistently so it doesn't degenerate
into the plutocracy that I fear the
naive principles that ended up getting
embodied into a lot of block chains are
leading us towards so
with that I I guess I have one minute so
if there's one question I'd be happy to
take it and I'd love it if it was from a
woman or someone from an
underrepresented community anyone okay
go ahead
sorry for not being a woman yeah I know
it's fine don't worry about it so
unfortunately I haven't read your book
yet yeah but I did read about harberger
stacks yeah and your solution for the
monopolizing assets yeah
concretely real estate for example and
is it applicable in these cases for
social networks and marketplaces which
basically are also can be concerned seen
as a common good yeah yeah absolutely
and I think I think that this can be
applied to the ownership of intellectual
property it can be applied to the
ownership of corporations but also we
can seek even more radically than that
to fund organizations that are not based
on a monopoly for profit principle but
are based on a principle of the public
good that they bring to people which is
the idea of behind liberal radicalism so
could also fund alternative new forms of
organization that are actually based on
this principle of public good with that
I will leave things thank you so much
and I'm looking forward to working with
all of you in the future
you