Robert Breedlove is a decentralized finance entrepreneur, philosopher, and podcaster. Please support this podcast by checking out our sponsors:
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OUTLINE:
0:00 - Introduction
2:37 - Sovereignty
9:42 - Territorial imperative
14:19 - Property
20:24 - Anarchism
23:03 - Inflation is theft
27:26 - Volatility is truth
32:05 - Taleb and Bitcoin
36:13 - Life is information propogating through flesh
47:12 - Intelligence
51:25 - Space and time
58:07 - Pragmatic truth
1:09:05 - Creative destruction
1:12:54 - Capitalism vs Communism
1:25:38 - Jordan Peterson on religion
1:29:54 - Inflation
1:33:45 - What is money?
1:47:21 - What is Bitcoin?
1:58:27 - Bitcoin vs other cryptocurrencies
2:06:38 - Can governments ban Bitcoin?
2:19:20 - Bitcoin toxicity is tough love
2:32:39 - Crypto scammers
2:41:50 - Eric Weinstein and Bitcoin
2:48:12 - Satoshi Nakamoto
2:52:42 - Money is energy
2:59:56 - Proof of stake vs proof of work
3:02:36 - Morality
3:17:21 - Collapse of the Soviet Union
3:20:51 - Jordan Peterson and Bitcoin
3:33:20 - Book recommendations
3:52:40 - Advice for young people
3:56:11 - Love

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The following is a conversation with Robert Breedlove, someone who caught my attention and was recommended highly as a rigorous scholar and thinker in the space of decentralized finance and Bitcoin.

Is a good representation of the way his mind works.

He's willing to talk through ideas for many hours, willing to listen, willing to think, which makes him a great companion in conversation to explore the history, philosophy, and future of money.

Quick mention of our sponsors, Fundrise, Element, MonkPak, and BetterHelp.

Check them out in the description to support this podcast.

As a side note, let me say that I'll have a number of conversations in the coming months on Bitcoin and other cryptocurrencies.

None of these conversations are financial advice.

That's a genuine description of my goals and approach with these chats.

At least for a while, I personally won't actively invest in Bitcoin or any other cryptocurrencies, except to learn about the technology itself.

I don't think this should be a journalistic standard like the New York Times trying to establish, which I very much disagree with.

In my humble opinion, I think journalists should be free to invest in Bitcoin if they want to.

I just know my own psychology and I feel that my thinking will be muddled by excitement if I invest before I understand.

I feel the same way about Tesla, for example.

I still don't own any Tesla stock and I am still indeed fascinated by Tesla Autopilot as an artificial intelligence system.

I work hard to be cognizant of the biases that arise in my mind and always try to choose the path that maximizes or maintains a freedom of thought as much as possible.

Also, let me say that I try to be very careful in selecting guests based not only on the contents of their ideas, but the richness, complexity, music, style of their mind and character.

Yes, I will talk with people with whom you and I may disagree, people who some may call bad or even evil human beings.

I want to understand them because I believe that, as Solzhenitsyn said, the battle line between good and evil runs through the heart of every man.

I think if you always run from evil, you become blind to the truth of human nature.

This is the Lex Friedman podcast, and here is my conversation with Robert Breedlove.

Rousseau opens his 1762 book, The Social Contract, with the following statement.

Man is born free, and everywhere he's in chains.

So you talk about freedom and sovereignty quite a bit.

Freedom and sovereignty, I think they're very closely related.

It started as focusing on sovereignty, which is a word I don't think we talk about enough.

And the general definition of that I would give is the authority to act as you see fit.

And it's a word that's etymologically associated with words like monarchy, money, reign.

So historically, it's referred to whatever the locus of supreme power is in the sphere of human action.

So whether, if you go back in ancient Egypt, The pharaoh had absolute sovereignty and everyone else was pretty much operating according to his interest.

You fast forward to today, modern Western democracy, we have more decentralized sovereignty in that we all get to go vote and elect officials that make decisions on our behalf.

So the theme of sovereignty across history is that it's been gradually decentralizing across our different models of socioeconomics.

And it's largely, you could say It's rooted heavily in the money, I would argue, which is something we'll get a lot into here, where if you have money, you have the authority to act as you see fit in the world.

Even in our current political sphere, if you have enough money, You can actually reshape the rules.

If you're in a certain situation like many billionaires, you can negotiate your own tax treaty such that you can get favorable tax treatment with certain jurisdictions in the world.

This concept of sovereignty, which today we call, it's common to call states or nation states or governments sovereign, meaning that they have power over people.

But as I argue in a lot of my writing, I actually think that sovereignty inheres within the individual, and that we each have our own interiorized space of choice, which is something like Viktor Frankl called the final human freedom, and that we, no matter what our circumstances are, no matter what exogenous situation we face, we always have this endogenous power to choose how we respond to it.

That's 1 of my favorite books is Man's Search for Meaning.

Maybe we can break that apart a little bit.

So you've kind of spoken about sovereignty as closely linked to power, but is there something about your own mind being able to achieve sovereignty no matter what the monetary system is, no matter who has the control over centralized power, the money, or whatever the mechanisms of sovereignty and the societal level, you as an individual, isn't ultimately all boiled down to what you can do with your own mind, how you see the world, how you interpret it.

And as we get a little bit deeper into this, I think we'll come to see money as an extension of your mind.

So there's a feedback between money and mind.

For instance, you think in dollars today, I almost guarantee it.

It's a tool we're using to decomplexify the world around us, to deal with it, to understand the sacrifices and successes across an entire history of economic transactions.

And if you can change, if there's a central body or central governance mechanism that can manipulate that money, it can have an impact on your mind.

For instance, today, so I agree with you on the first hand, say that I do believe in free will.

I do believe in individual autonomy, but I also think that there are certain devices and powers in the world around us that can actually influence how we think.

And it's fascinating to think about the fact that money might be actually deeply integrated into the way we think and into our mind.

Like this is, you think about what are the core aspects of the human mind?

What influences cognition, the way you reason about the world?

You have the Chomsky like languages at the core of everything.

But you're kind of placing money as pretty close to the core of what it means to be an intelligent reasoning human.

I think money is a direct derivation of action and speech, actually.

If we even think of what it means to think, is that we are generating 2 different courses of action, potential courses of action.

And we're populating them with avatars, maybe ourselves or others.

And then we're comparing how we may act in each situation and what we think the result would be.

Basically, it's comparison and contrasting of possible courses of action.

And That's the same thing with words themselves.

Like most words, the vast majority of words, only have meaning in relationship to other words.

It's all contextual definitions of a word or more words.

Now, people have argued with me about this because there is a first word where you pick up rock and say rock.

But most other words and much in higher abstraction tend to be relative.

And what's funny about action and speech, and this gets, I got into a bit of this in our paper here, is that it's linked to evolutionary biology.

Once human beings adopted upright stance, we freed our hands.

We no longer needed our hands for locomotion.

This gives us an ability to manipulate and particularize the environment in a way that most other animals cannot.

And what's interesting about this is that as we gain this ability to manipulate natural resources and count, point, pointing was a big deal, and that we could indicate prey or items that are far off distance, and we could organize ourselves.

We, at the same time, we co-evolved this fine musculature in the face and tongue.

So it's as if speech developed, co-evolved really with our dexterity.

And as a natural extension of that came us making tools, right?

We started to create things to better satisfy our wants over time.

And the most tradable tool in any society or the most tradable thing is money.

So I really, I argue that Action and speech are quintessential modes of self-sovereign expression.

And the money is just sort of a tech layer we've put right on top of that, and that it's a natural derivation of action and speech.

Okay, that's fascinating to think about sovereignty from the evolutionary perspective.

And then ultimately money is the technology layer that enables sovereignty.

So, you know, it's really fascinating to think about our modern human society as deeply rooted in these like evolutionary roots from the very origins of life on earth.

So what, some of the ideas you just mentioned, what do you see are some interesting characteristics of just life on earth that propagated to us humans?

Like what ideas have propagated through, have roots in the evolution?

Yeah, I think 1 of the deepest impulsions in life is the territorial imperative.

So All life is seeking to expand its dominion over space and time.

We think about, again, physically with space, it's advantageous to an animal or an organism to have more territory under its control to raise offspring.

It's all about reproductive fitness at the end of the day.

We'd also think of reproduction itself as the genetic impulse to have more, to replicate oneself across time.

It's territoriality across time in a way.

This is very common in most animals, not all animals are territorial, but many are.

And you see very interesting behaviors resulting from territoriality.

This is like animal combat, the reason birds sing is territoriality, a number of other things.

And it's my hypothesis, and others have shared this hypothesis as well, that mankind is clearly, I think, would argue a territorial species, and that he expresses this territoriality in property rights.

So property, when we hear that word, we typically think of an asset.

We think of, oh, this house or this stock or whatever.

But property is actually the socially acknowledged relationship between a human and an asset, such that you have exclusive rights and responsibilities to a particular asset.

And then it comes down to how do we organize ourselves such that property that the contributions people are making are commensurate with the consideration they're receiving.

So if you're adding value to a piece of property, you're developing a piece of land for use, in theory, to be fair, you should have the rights to that fruit, right?

If you go out and plant a garden or whatever it may be.

And this is very, this is rooted in natural law where we have rights to life, liberty and property.

Those are kind of just the base, the fundamental layer of morality and capitalism, frankly.

You could think of, to get really primordial with it, the first capitalist in the world, just to get some definitions out here, I'll say capitalism versus communism or socialism as the spectrum I'll speak on.

The first capitalist in the world would be the guy, the caveman that maybe dug a little hole for himself to shield himself from the elements.

Right, Maybe there was a rainstorm or a snowstorm and he dug a little enclave and he protected himself.

were gonna go, because you said primordial, I thought you were gonna go back to like earlier biological systems.

And then the first communist or socialist would be someone that decided the fruits of his labor belonged to him.

So he would have violently encroached on that individual and taken his plot for himself for his own use.

That's the spectrum across which capitalism in the pure sense and communism in the pure sense operate in that capitalism, each individual has the exclusive rights to the fruits of their labor.

So anything they spend their time, effort, energy creating in the world, they own the rights to that, and they can trade those rights with others, other self-owned people that have done similar things.

Communism or socialism would imply that other people, typically the state, have the rights, at least some rights, to the value you've created.

So there's this interesting moment when that first caveman, that first capitalist, drew a line, a circle in this cave and said, this is mine.

You could say it was free to be claimed at the time he claimed it.

But it's an interesting moment when asset becomes an asset.

When space time, as you were referring to it, becomes something that's now, can be possessed by a human being.

Is there something special about this moment?

Because it feels like, first of all, in terms of space and time, it feels like there's a lot of available space time yet to be claimed.

So if we just look at like the universe, right?

We're talking about, there's a funny thing with Elon Musk and Mars.

I think they sneaked in there for SpaceX that nobody on earth has any authority on Mars or any, this is a very interesting question.

It seems almost like humorous at this time, but perhaps not, perhaps there'll be sections of space, not just on planets that are going to be even fought over.

So is there something special about this moment?

Because in discussing sort of violence and respect for property, it feels like this is a special moment because ultimately conflict arises when you make claims on a particular territory.

It's not always in conflict where people say, when you look at Hitler or something, for example, his claim would be in many of the lands that he attacked and invaded, that this is ultimately, this has always belonged to Germany.

So is there something you could say as to like what it means to own an asset or a property?

Yeah, so in the ancient days of hunters and gatherers, we could say that Property was mostly a loyal title, which meant it's just whatever you can defend.

So if you've got knives and daggers and satchels and maybe some pelts you've hunted, whatever you can hold and defend is yours.

And There's not like there's a government to appeal to.

You're just sort of a free agent operating in the wild, defending the assets you can protect on you, more

What really changed the nature of property is when we get into the agricultural age.

There's a big flip where we went from just foraging and hunting all the time, constantly moving, trying to stay alive, to deciding we're going to settle here.

We can increase the population because we can harvest more energy from the sun, and we can establish a longer-term civilization.

What happens in that transition is that we begin creating economic surplus.

For the first time in history, we have grain, stock houses of grain to defend, or maybe meat or cattle, or whatever it is we're creating, we now have savings.

And it's at that time when government emerges as well.

Because once you have savings, or you have an economic surplus, you have something that other people want to steal.

This 1 thing we'll touch on a lot today is people always want something for nothing.

People are always seeking the path to get something for nothing.

I think that drives a lot of our decision making and actually encourages us to be innovative in a lot of ways, right?

We're trying to, you could say it's our laziness that's helping us be inventive in a way.

We're trying to accomplish greater results with less efforts over time, but we can cross that line in seeking something for nothing where we start to violate the life, liberty, and property of others.

That's where we shift from capitalistic society to something more communistic.

It's a protection producing enterprise for the economic surplus generated by a trading society.

When people begin to trade, they create what's called the division of labor, which is a very common economics term, basically means you're better at making hats, I'm better at making boots.

If you specialize in hats, I specialize in boots and we trade, we've created a positive sum game where you and I both benefit.

So we become collectively more than the sum of our parts through trade.

And that's why human beings do trade, because we become more energy efficient as a result.

We create more outputs per unit of input.

And you can think of government in that respect, if we're looking at it maybe in a tech sense, that the economy is the trade network that generates wealth, generates innovation, generates all this whole lap of luxury we live in today that we've inherited from our forebears is from the market.

The government is the network security, if you will.

So we're paying expenses to a vendor to protect peace, to preserve life, liberty, and property in that network so that we can have, when there's inevitably disputes over private property, we can have nonviolent dispute resolution in the rule of law, and we can have a reasonable expectation of being able to conduct commerce without violence.

The problem has been that the protector tends to, they're in a monopolistic position, we'd say.

They tend to start abusing that position to obtain property for themselves.

Again, trying to get that something for nothing.

When you control, you are the security guard for the economy.

The first thing they tend to monopolize is money, because if you can control the money, you're effectively controlling people, their energy, their perceptions.

And that becomes a, particularly through inflation, becomes an avenue to get something for nothing.

And that you can just print more money that everyone else is forced to sacrifice their time and energy to obtain.

So I talked quite a bit, he'll be here in a few days, actually, Michael Malice, about ideas of anarchy and his idea or the idea of anarchists is that any amount of government will eventually become the very kind of thing that you're referring to.

So there's almost no way to have a government that doesn't then try to monopolize power, money and all those kinds of things.

Do you think it's possible to have a government sort of on that spectrum of like anarchy, maybe libertarianism?

I'm not sure how exactly the spectrum goes, but where you have a small government that protects the liberty and property rights and those kinds of things and doesn't expand to then also control the monetary system and all those other things.

It was not possible until Satoshi Nakamoto.

So for the first time in history, we have a money that cannot be monopolized, cannot be corrupted, cannot be changed, cannot be weaponized, frankly.

Our current monetary system is weaponized by those who can print money against those who cannot.

And I think when you have, at the heart of every modern economy, which even we could say the US, we pride ourselves as free market capitalist.

We out-competed communism in the 20th century.

We think that this is the superior model.

Most business people will tell you that the free market is the best allocator of resources, all of these things.

But what we have at the heart of every modern economy, including the US, is an anti-capitalistic institution, which is the central bank.

The temptation to monopolize money throughout all of history has been too strong for anyone to resist.

So any even benevolent quote unquote dictators that have taken over, many dictators have inherited say an inflationary regime where society is coming apart because someone was clipping the coins or someone was printing too much money and they'll commit to going back to a hard money standard.

So they'll keep society on a gold standard, for instance, such that they cannot violate the money to benefit themselves.

But inevitably over time, because it is a political institution, there's an incentive there, right, for again, to get something for nothing, to spend more than you're making through tax revenues.

And with that incentive, people typically ultimately end up pursuing that inflationary path.

So we can get deeper into that about inflation is a term that we've been conditioned to think today is just something normal.

The prices just go up and then it's pertinent to a healthy economy.

But it's actually, if you look at it from real first principles, it is just theft integrated into the money.

It's a technology backdoor is another way to think about it.

You wouldn't buy a cell phone knowing that someone could siphon your data off your private calls and sell it into the market.

know we do that with a lot of social media stuff today, and that's something else we can get into, but you wouldn't do it willingly.

You would prefer that your cell phone and your data was monetized by you, or if you're going to sell it, you would be able to selectively sell it.

So it's a money that only a few people can siphon value off of surreptitiously, typically slowly, but eventually, as we've seen throughout history, that slowly builds up into a rapidly and then causes the monetary system to collapse.

Do you think there's a benefit to inflation possibly?

So when you have perfect information, perhaps you don't need inflation, perhaps it is purely theft.

But I think of inflation as like the snooze button on the alarm.

Like you just, so if you have a hard standard, you better wake up when the alarm rings, but you know, all of us kind of like probably shouldn't, but use the snooze button.

It's like, okay, well, 5 more minutes or 10 more minutes.

And then you're saying there's naturally a slippery slope where it becomes a drug that you fall in love with in your abuse.

But nevertheless, the usefulness of the snooze button is that you don't know how you'll be actually feeling when the alarm rings.

It might be like you really need those few more minutes like to psychologically get yourself out of bed.

This metaphor is just not working at all.

Do you think there's a use to inflation sometimes from an economics perspective?

I think the drug metaphor is a little more apt in that inflation does provide an immediately stimulative effect when used early on.

But what it's doing is it's, again, we talk about the balance between incentives and disincentives, right?

That being necessary for a system to function properly.

If With inflation, you're essentially giving the people that can print money a way to dampen the disincentives they face.

It destroys feedback loops, I guess you might say.

And Another way to look at this is when you So using inflation, using quantitative easing, you can decrease short-term volatility in the marketplace.

So the market is basically this idea, This form of free exchange that's trying to 0 in on the best ideas.

The ideas are those that are most fit to reality, to satisfying the most wants.

It's going to overshoot, it's going to undershoot.

But when it's undershooting and you're experiencing a business recession, in a capitalist environment, the market needs to clear that malinvestment, that misallocation of capital.

That means someone made a bet on a certain idea that it would satisfy wants in a particular way, and that bet did not pan out.

If you then paper over the losses that business is creating, you're now delaying and exacerbating the volatility that that idea created.

This is kind of a Talebian concept where you can dampen short run Volatility, but volatility is truth.

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Robert Breedlove: Philosophy of Bitcoin from First Principles | Lex Fridman Podcast #176