Today’s episode features a conversation between the legendary author and investor, George Gilder, along with entrepreneur and investor Erik Torenberg, and Blockstack’s Head of Growth, Patrick Stanley.

The three dive into George’s wide-ranging perspective on economics, information theory, and how how they relate to the world of cryptocurrency - ideas George explores in his latest book, “Life After Google” (https://www.amazon.com/Life-After-Google-Blockchain-Economy/dp/1621575764).

Show Notes

• 2:38 Patrick asks George to talk about information theory and how it relates to economics and what George calls the cryptocosm.
• 4:49 Erick asks George to unpack his theory about the relationship between knowledge and power.
• 6:42 George: "I don't align knowledge and power. I say they're two different ways of seeing the world."
• 8:56 Patrick asks George why he believes information theory can be applied liberally outside the realm of computers it originated in.
• 9:16 George: "Money is not and shouldn't be an instrument of power. It's a measuring stick. The idea that money is wealth has been one of the great pitfalls of economic policy for centuries."
• 10:25 George: "Enterprise is an information process, rather than chiefly an incentive process."
• 11:55 Erik: "In our current economic paradigm, there's a lot of people who believe that technocrats have the knowledge. You believe it's the entrepreneur. Arnold Klen believes the knowledge lives in a broader market system. Why are those other models incorrect in your view?"
• 12:15 George: "There's a great effort throughout the history of economics to eliminate creativity from the economic model."
• 13:46 George: "I believe that entrepreneurial creativity transcends chemistry and physics."
• 14:14 Patrick: "What should we be measuring in the future to make a science of this entrepreneurial creativity and surprise?"
• 15:15 George: "Money is ultimately based on time. Time is what remains scarce when everything else becomes abundant."
• 17:49 Patrick: "What do you expect to happen in 2200 and there are no longer Bitcoins being minted?"
• 18:39 George: "This whole idea that money is an instrument of sovereignty was not true until 1971."
• 19:10 Patrick: "How much do you think the British Empire benefited from Newton calculating the gold standard?"
• 20:45 George: "Satoshi made a wonderful first draft of a potential new monetary standard that identifies money as an essential, immutable scarcity rather than some kind of manipulable instrument of government power."
• 21:19 Patrick: "Presumably Bitcoin could make a good measuring stick for 100 years or so?"
• 22:11 Erik: "One critique of an entrepreneur-centric model: some people say it's all about market - that some markets are destined to happen and entrepreneurs are just riding the trend. Why is this incorrect in your view?"
• 23:31 George: "How does the market come to be? My thesis is entrepreneurial creativity and the division of labor is dependent on the extent of knowledge and enterprise. The market is a product of enterprise, not the other way around."
• 24:29 Erik: "How else do you think your view of the economy has shaped your view as a venture capitalist?"
• 25:55 George: "The real, fundamental innovation is cryptocurrencies, which address the two great crises I see in the economy: (1) the collapse of internet security, which makes for a broken paradigm and (2) money, which is no longer a measuring stick or source of knowledge, but an instrument of government power."
• 27:31 Patrick: "Didn't Patri Friedman say that five billion dollar figure of currency trading is inflated?" (https://twitter.com/patrissimo/status/1119481823480827904)
• 28:37 George: "A measuring stick cannot be part of what it measures. This was one of Milton Friedman's great errors. And even he said in one of his last interviews ‘I wouldn't control the money supply as much as I once did.’"
• 30:19 George: "Everyone's suspicious of everybody because Internet architecture is a porous pyramid and endlessly hacked."
• 30:39 Erik asks what George would change about the government’s role in the economy.
• 30:51 George: "We desperately need a real money system. And I believe this will spring from the crypto currency realm."
• 31:28 George: “The problem with Bitcoin is because it is so restricted in the total amount that can be emitted it's going to be necessarily very volatile and unpredictable."
• 32:42 George: “The other thing we have to understand is that big banks have essentially been nationalized.... They're part of this morbid financialization whereby banking absorbs some 40% of government profits.”
• 33:37 Erik: "What is the ideal role and purpose of the financial sector?"
• 34:55 Erik asks George if he’d be excited about a world in which people were allowed to equity invest in other people.
• 35:32 George: "As long as they don't demand guarantees. The student loan program was not a loan program because the whole program was guaranteed. … The crucial thing is these various projects be allowed to fail."
• 36:30 Erik: “Bill Janeway argues government is more than just a low-entropy carrier. Do you think there's an active role in government investigation in in long term R&D projects?”
• 37:12 George: “I think governments do do valuable research and development. ... But the Internet - just as the semiconductor industry - only took off after it  broke loose from the government laboratories."
• 37:45 George: "You have to accept the world as it is and see how it can be improved. I'm not a libertarian and don't believe all government can be eliminated."
• 38:04 George: “These should be low entropy carriers - that is predictable carriers - that allow creativity to flourish.They shouldn't be manipulable carriers that stifle innovation.”
• 38:49 Erik: "How do we incentivize people to participate in activities with lots of value created and little captured? Like having kids, writing books, etc."
• 39:47 George: "I support low entropy carriers that support high entropy creations. This insight let me predict that all information in the world would migrate to the electromagnetic spectrum."
• 41:29 Patrick: "What elements need to remain low entropy in this full stack to ensure that we have a very prosperous, highly creative civilization being built on it?"
• 43:10 George: "Julian Simon wrote decades ago about 'The Ultimate Resource' and ‘Time Pricing.’"
• 45:36 Erik: “What problems arise when people don't understand money is time?”
• 48:04 Erik: "How do you think about the importance of community - the role religion used to play - and how we  think about measuring it in society?"
• 49:10 Erik: "Robert Wright has this idea of 'non-zero,' where our fates tend to become more intertwined over time and continually force us to create “Win Win” vs “Lose Lose” games. What do you think about his thesis?”
• 50:12 Erik: "What does that mean for the people that get left behind?"
• 51:29 George: "Having such a bureaucratic welfare system has made the real welfare system the homeless system. ... [A]nd it's making our cities increasing unlivable."
• 53:20 Patrick: "Part of me wonders if this is just a part of an ongoing cycle between essentially common sense and compassion and bureaucracy and ‘tragedy of the commons’..."
• 53:37 George: "Philip Howard just wrote a series of books about the death of common sense and shows how bureaucracies trying to guarantee outcomes kind of eclipses common sense."
• 54:53 Erik: "There's been a constant push and pull in governments over time between centralization and decentralization. ... Yuval Noah Harari writes about this. Is it self evident to you that systems tend towards decentralization over time?"
• 56:22 George: "One human brain has the complexity of connectivity of the entire Internet, yet one human brain uses 14 watts of energy to function, compared to billions of times more energy for the Internet."
• 57:12 George: "Efforts to supplant human brains with computers is futile and - thus - self destructive."
• 57:48 Erik: "Reflecting out to the future, do you envision global governing bodies or more fragmentation between independent city states?"
• 59:47 Patrick: "My concern is how you stop the lone nihilist from pushing the button as destructive technologies become increasingly available."
• 1:00:25 George: "I don't fear the Panopticon, particularly."
• 1:01:21 George: "New technologies are our only answer to problems like the ones you describe."
• 1:02:08 George: "I think one of the great contributions of cryptocurrencies is attestation: a timestamped record of your transactional behavior allows you to document to predatory corporations, or tax authorities, or tax collectors just what in fact you did do."
• 1:02:55 Patrick: "What would the Jews have done in 1941 in Germany if there'd been a surveillance state in place?"
• 1:03:24 George: "All this violence expressed was a collapse of the global economy and the destruction of money."
• 1:04:04 George: "I think it really is important the world economy work in a “Win Win” way."
• 1:05:06 Erik: "Would you be against the charter city movement?"
• 1:06:29 Erik: "In the next 20-50 years do you imagine that language or currencies will be more concentrated or more dispersed or a back and forth?”
• 1:07:02 George: "The condition for the world wide growth of capitalism after the industrial revolution was a single global money."
• 1:07:25 George: "I think money is intrinsically unitary - it's like the second. We're not going to have different timing systems all over the world that aren't interoperable."
• 1:08:16 Erik: "What do you make of David Graeber's ideas around debt?"
• 1:09:47 Erik: "Where do you find yourself disagreeing with Hayek's view?"
• 1:11:15 Erik: What would need to be true for you to think that the federal reserve is doing a good job or serves a core purpose and should continue to exist and flourish?"
• 1:12:09 Erik: "How does your view differ from the Austrian school that would even disagree with the Fed serving the role of last resort lender?"
• 1:13:04 Erik: “How have you evolved your assessment over time of what are or aren't low entropy carriers?"
• 1:15:46 Patrick: "What do you attribute your recent book's success in China to? And what do you notice about your recent visits to China and how has it changed over the years?”
• 1:16:09 George: "China and the US are a fascinating contrast."
• 1:17:26 George: "Huawei is a great capitalist story in China."
• 1:18:46 Erik: "What's your next book or three going to be about?"
• 1:18:54 George: "I’m writing a biography on Carver Mead - the engineer and physicist at CalTech. Considering writing about ‘Life After Silicon’ and potentially another book on connectomes.”
• 1:21:26 Goodbyes.
• 1:21:43 Credits.
• • George Gilder: twitter.com/ScandalOfMoney
  • Erik Torenberg: twitter.com/ErikTorenberg
  • Patrick Stanley: twitter.com/PatrickWStanley
  • Zach Valenti: twitter.com/ZachValenti