{ "episodeId": "SLP15", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "stephan_kinsella": { "name": "Stephan Kinsella", "role": "guest", "tag": "STEPHAN" } }, "segments": [ { "speaker": "stephan", "time": "00:01", "start": 1.02, "text": "Welcome to the Stephan Livera podcast episode 15. And I've got a very special guest today. My guest is Stephan Kinsella. Stephan, thanks very much for coming on." }, { "speaker": "stephan_kinsella", "time": "00:11", "start": 11.27, "text": "Thanks very much. My first time, being interviewed by a fellow Stephan." }, { "speaker": "stephan", "time": "00:16", "start": 16.01, "text": "Very nice. I've followed you for many years, so this is actually a great moment for me. I really, I really like a lot of the material that you've produced. So I'll just quickly introduce you to the listeners. Stephan Kinsella, he's an attorney, he's an, he's a libertarian writer, he's a founder and executive editor of Libertarian Papers, he's also founder and director of the Center for the Study of Innovative Freedom, and, yeah, as I was saying, I've learned a lot from Stephan from reading his material and listening to his interviews on property rights, intellectual property, and many other topics. He has a fantastic clarity of thought and an ability to clearly explain very difficult concepts, so we're very lucky to have him on the podcast today, and it's quite an honor. So thanks again for joining us, Stephan. Thanks a lot." }, { "speaker": "stephan_kinsella", "time": "01:02", "start": 62.3, "text": "Glad to, glad to do it." }, { "speaker": "stephan", "time": "01:04", "start": 63.66, "text": "Excellent, excellent. so let's get started, as this is primarily a Bitcoin podcast, could you start with telling us your story on Bitcoin?" }, { "speaker": "stephan_kinsella", "time": "01:15", "start": 75.11, "text": "it's probably the kind of boring one you've heard from a lot of people, like around two thousand and thirteen I kind of got interested, I wish I'd gotten interested earlier, one of those things, but, Yeah, I was cautiously, interested for several years. I was always, interested in the basic idea and the promise of it. My main concern was I thought that, the-if it became successful, the state would step in right away and shut it down. So I actually lost a bet to one of your previous guests, Vijay Boyapati, who's a friend of mine, I bet that it would, it would be sort of collapsing by the end of two thousand and I think two thousand and eleven or twelve. And of course, I lost that, so I paid them in Bitcoin and-- So I had to buy a few Bitcoin to do that, so I bought a few more for me and- so I've been really interested in it ever since, and, I try to follow the, you know, the arguments in favor of it and all the maximalist arguments and the Bitcoin Cash versus Bitcoin arguments in one way or the other, I don't consider myself to be an expert on the technology except when I'm around regular people. They, at cocktail parties or dinners, they all think I'm the expert and I get barraged with an endless amount of questions about it." }, { "speaker": "stephan", "time": "02:32", "start": 151.72, "text": "I'm sure you know more than you, are letting on. So who, who would you say are your main influences then within the Bitcoin world?" }, { "speaker": "stephan_kinsella", "time": "02:41", "start": 160.62, "text": "Well, I mean, I am leaning towards a type of maximalism, I'm also still very skeptical of certain aspects of the, of Bitcoin, and I also believe that the philosophy and the arguments underlying it have changed over the years, which is understandable for something so new. So yeah, I follow the, the, the regular Bitcoin core Maximalists primarily, I've been very skeptical of the arguments given by the, by the, both the people that think you can have an in-any number of, you know, altcoins to me, it only makes sense to have basically one i-in the end. I don't really see a need for multiple currencies for different purposes because that defeats the purpose of money" }, { "speaker": "stephan_kinsella", "time": "03:27", "start": 207.06, "text": "and, you know, I listen to, I listen to the evolving arguments, by, you know, like Cepeda and Moos and these guys who say, \"Well, it doesn't have to be a medium of exchange, doesn't have to be cheap.\" Right away versus a store of value, and those arguments make a sort of intuitive sense to me, but I'm not sure how rigorous they really are and how in line with auction economics they are. I have trouble in my mind Separating in a rigorous fashion the three apparent, the three alleged functions of money, the store of value, the medium of account, and, I mean, a unit of account and medium of exchange, to me, they're all interlinked together. so that's, that's sort of how I am now. I'm cautiously optimistic, but I think it probably will be a while. one thing that I am leery of is the sort of doom and gloom mentality where the only way Bitcoin will ever take off is if we have a financial global economic collapse and then people sort of rub their hands in glee like at the prospect of that, which I, which I, I don't, and I don't actually count on it or hope that it comes. My hope is that Bitcoin would become Some type of alternative money in wider use, without having, you know, a Mad Max world first." }, { "speaker": "stephan", "time": "04:44", "start": 283.89, "text": "Yes, yes. So, I take it then that you, you, you, you think it will help human society flourish? do you have any thoughts on how, you know, on the potential for that?" }, { "speaker": "stephan_kinsella", "time": "04:56", "start": 295.85, "text": "Well, yes, so, I, i-- in, in a way, the, the idea of a Bitcoin is like the ideal type of money, because, of its low inflation rate and because of its censorship resistance. And because it doesn't really have another alternative use, which is in a way a waste, like gold is a good money, but, you know, then you're wasting away some resource that has a, a commodity use So Bitcoin is in a way like a pure type or perfect form of money, except for some of the drawbacks which are mostly technological, right? Like it's only really verified every ten minutes at most And you have to have some kind of computer network in reality to change it. I imagine over time those things will be overcome with various, you know, techniques like maybe Lightning or something like that so yeah, I have hope for it. My, my main concern about Bitcoin is that given the existence of a fiat currency with government legislation and support around it I'm not quite sure how it could ever become, to o- to overtake, say, the dollar, without a collapse. I'm hopeful that it can happen without it, but a-and also the tax, the tax treatment of Bitcoin makes it incredibly complicated if you want to be, you know, if you want to become in compliance with the tax law of your current country, especially the US, so, you know, capital gains potentially with every single transaction, and I don't really think most people keep track of that or that it's easy feasible. So something has to change either practically, you know, de facto or, or the law needs to start recognizing it as a type of legitimate currency so that it could finally- start being used more widely by more, more regular people." }, { "speaker": "stephan", "time": "06:39", "start": 399.17, "text": "Okay. and now another point that I think you're quite good at around clarifying the terms. I think many people commit a type of category error and they misclassify Bitcoin, you know, in-- as an example, sometimes people argue as though they're kind of almost expecting some kind of income out of it. now I've seen you comment earlier on how money isn't a consumer good, nor is it a capital good, but rather a- So we generate good. Could you elaborate?" }, { "speaker": "stephan_kinsella", "time": "07:09", "start": 428.83, "text": "Yeah, and this is a view held by some Austrians, Hans Hermann Hoppe and others, and Guido Holsman, and I believe some earlier thinkers. that money, you know, most goods, the classical goods that we think of are either consumer goods, you know, things that are direct and immediate use for consumer enjoyment Or their capital goods, which are things, further along the chain of production, right? But the, the idea is that these are goods, and they're usually consumable resources or, or scarce resources in the world, and, and increase in their supply always benefits humanity because that is what wealth is. Wealth is the abundance of these material things, either for direct use, which are consumer goods, or for indirect use Which are, capital goods. but money is a type of commodity which is a, a consumer good or something at first, let's say, but becomes used as an indirect medium of exchange because it has certain properties And that function of moniness or money solves certain problems that exist in a barter society. It solves the double coincidence of want, of wants problem where, you know, two people wanting to exchange things, if they don't each have what the other wants, then it's more difficult to trade. And it solves the monetary calculation problem, which is the, the, the ability to reduce different- Heterogeneous goods in the economy and future projects down to a common denominator so that you can do a calculation as an entrepreneur and estimate which project is more efficient, a more efficient use of resources. And so money, the, the, the emergence of money solves those problems, but it has emerged in the past out of a commodity. so I don't see any reason why they couldn't be formed even more perfectly or that, that function by something like, like Bitcoin. gold can still inflate and Bitcoin is still inflating, but it will stop at some point Gold can still inflate, but the biggest danger with gold, well, it's expensive to transport it and to store it, and also the government can gradually co-opt it, as we've seen. Like so the government, paper notes start being used as a convenience, and then the government gradually regulates and takes that over, and then people over decades and centuries forget The connection to what money usually was, and they think of money as these paper things that the government can print, the government cuts the tie to gold. So because of just the nature of the way money emerges Historically, the government is more able to co-opt it. I don't really see that happening as easily with Bitcoin because you don't really need to pay someone to store it, you know, there's no need to guard it, you can just use a private encryption key. I just don't see the government worming its way into it. And also, by the way, I've long been an opponent in economic terms of the fractional reserve banking idea, which some Austrians- The free bankers promote, I think it's total economic nonsense. I al-- I've always thought that. I don't think it's fraudulent like some, some Rothbardians do, but I do think it's complete economic nonsense. And I don't think that could emerge with, with a, with a, with a digital currency because you wouldn't have this initial confusion where, where people are putting their money in the bank and they think that they own it, but then the government, I mean, the banks loan some of it out, it's credit, and there's this gradual confusion, and then there's a confusion over time between credit And, savings actually in a bank, which results in the fractional reserve system we have now, which results in the business cycle and inflation and government controlled money. I just don't think that would get off the ground with a, with a Bitcoin money system because if there would be a clear distinction always between a loan or credit and between who kind of owns or has control of Bitcoin, which opens up another legal topic about ownership and property rights." }, { "speaker": "stephan", "time": "11:00", "start": 660.13, "text": "yeah, no, those, those are some great comments. I think, yeah, I would agree, I would put myself in the same camp with yourself. I don't necessarily think it's fraud, however, I do think it's economically harmful, but Yeah, so maybe that would be a great time now to enter into the discussion on the scarcity of Bitcoin from a property rights point of view, and even though we might hold a Bitcoin private key, can we own Bitcoin? Right." }, { "speaker": "stephan_kinsella", "time": "11:27", "start": 687.48, "text": "And this, so, you know, to most regular people that I speak with, they think I'm a Bitcoin nut or a Bitcoin enthusiast, when in fact I don't really recommend anyone buy it if they don't know what they're doing, because I don't want them to blame me later if it goes down by fifty percent, which I've had happen. So I've been burned already by-- I don't give advice anymore, I just say, \"Listen,\" I'm doing what I do, you can do what you do. but, so most people, I, I, I, I think I'm a Bitcoin, a pro-Bitcoin person. I want it to emerge, I want something like that to work, I think it has great potential, economically and in terms of freedom, right? Because I think it, you know- If the government is removed of its ability to control money, that's a huge dagger in the stake of the heart, in, in the heart of the government, because inflation and central banking is how they fund their wars and their insane policies and their debts. but when bit-- when I, when I tell Bitcoin people that I think Bitcoin isn't property or isn't ownable, they think I'm criticizing Bitcoin, but I'm, I'm actually not, I'm just speaking as a libertarian theorist thinking through these issues. especially from the point of view of being a complete, opponent of intellectual property and intellectual property law, which is sort of one of the things I focused on In my career, intellectual property law is, is a huge, area of law that a lot of even libertarians take as legitimate because it's got the word property in it And because they sort of mix in together these utilitarian and pragmatic arguments with principled arguments, and they just-- they basically are taking for granted the existing legal system and assuming it's compatible with capitalism or the free market, and therefore they get confused. And intellectual property does tons of harm to the free market and human liberty. It's completely incompatible with it. and that's a topic for maybe another day or for later on if we have time, but the point is that error emerged from a, a, a lack of a clear understanding of property concepts and from- Lots of notions like, you're entitled to the fruits of your labor, you know, you're, if you're an entrepreneur, you're sort of somehow entitled to a profit stream If you do what, I don't know, if you innovate, if you, if you so-called create something, you know, the Lockean, the idea from John Locke about how we own ourselves be-because God gave us to ourselves or something, and therefore we own our labor, and therefore we own things in the world that we've mixed our labor with, which is the justification that we give For the ownership of natural resources in the world that we homestead or appropriate, it's this idea that, well, the reason we own them is because we own our labor, and if you mix your labor, which you own, with something else, then you get to own that thing if it wasn't owned. It's this really complicated, convoluted- Metaphorical, metaphysical argument that's not that rigorous and it's got a lot of unnecessary steps in it. I think you can simplify it and it still works. It's, you know, you don't own your labor, labor is just an action that you perform. You own your body, that is true, and owning that body means that you have the legal, the legally exclusive right to control that body, which basically means You, you need to consent to anyone invading the borders of your body, and if you don't consent, then it's aggression, that's what we call aggression. And we extend that to other resources in the world that we start using first. And we say that if someone uses that resource without my permission, it's analogous to aggression against my body, and so we call it aggression, even though it's not really aggression in, in the sense of hitting someone, but it's using their resource without their permission. So this is really the root of the libertarian, understanding of, of, of justice, and it's, it's in a way the root of the common law understanding of justice, but it's more it's, it's more consistent and more, more streamlined in the libertarian sense. but when you start thinking of labor as ownable, then you get all these crazy ideas like, well, if I, if I write a novel or- Then I own the novel. If I come up with an invention, I own the invention, even though these things can only be implemented in physical resources of other people that they already own. So it sets up a conflict between people that have claims to these resources. so it, it leads to the idea that information can be property, and if you understand what Bitcoin is, I mean, in basic terms, I would say it's a distributed ledger A decentralized distributed ledger, which just means it's a ledger is just a, like a, a database or a spreadsheet of information correlating different accounts to other accounts. and it's, it's information, and it has to be stored somewhere, and the way Bitcoin is set up, it's stored not on the internal centralized servers of IBM or Google, it's stored on the hard drives of various Nodes around the world, thousands of them, right? Or at least hundreds or tens of thousands. And so these are just people's hard drives that they already own. They own their computers, and so they, they own the hard drives Information is just the way that their hard drives are impatterned, and they're impatterned that way, they s-that is, they store a pattern of information, a combination of ones and zeros and the magnetic or optical configurations of these drives, right? which- Which cooperatively work together by the voluntary consent of everyone voluntarily participating in this private network, the Bitcoin network, the Bitcoin schema or scheme. and so the information is just information stored in a distributed fashion. It's not owned by anyone. It's like if you imagined, you know, Ten thousand copies of a photo of the moon, and they're stored on ten thousand people's computers around the world, that photograph of the moon isn't owned, that, that image of the moon, it's just bits of data and- It's just the way that people's hard drives are arranged. So when I say Bitcoin's not ownable, all I mean is that the essence of Bitcoin is it's an information pattern, and that information pattern is the way that people's private property is arranged. And if you were to own a Bitcoin, which is what's implied when people say he stole my Bitcoin, right? They use this word steal loosely, just like they use words loosely when they talk about, You know, someone stole my girlfriend, or it's my country, like they use possessives to denote ownership, but it's not always really ownership. It's my country, but I don't own the country. It's my girlfriend, but I don't own my girlfriend, right? A suitor, a competitor stole my girlfriend from me, but he didn't really steal in the same sense that if he took a piece of property. That I own. So we have to be careful with language. And, you know, if a competitor moves into town and \"quote unquote\" takes some of my business or \"quote unquote\" steals my customers, he's not really violating my rights in a free market or a libertarian sense because I don't have a property right in my customers or in the potential future profits. I could have made, right? Which is, which is what's implicit in this way of looking at, at bitcoins as an ownable thing. I think that the reason people use the word own and the word steal is because Most people think in practical terms and property rights as a system emerged for pragmatic reasons, like it emerged because people need to use scarce resources in the world to accomplish their ends. This is just basically Mees is a human action, his praxeology, and because there's, there's a threat that other human beings or other actors might want to use the same resource as me, but they can't because it's a scarce resource There's a potential of conflict, which is interpersonal conflict over these resources. Then most civilized people prefer a system where there's a system of rules which determines who owns what. That's what property rights are. So we, we favor these rules so that we can use these resources to accomplish our ends unmolested by others, so that we can use them more efficiently and have more certainty over the long term, have more long-range plans, more prosperity. Etcetera. So in the mind of most people, they're in favor of property rights because it enhances their ability to just practically use resources, and so they associate these things Now, when something like Bitcoin comes around and it uses cryptography basically in a certain system which is tamper-proof basically, right? which doesn't allow other people to- Take the bitcoins that you control, and you can use these bitcoins to achieve your ends, right? Because they start serving like a currency or like money, you can trade them with other people to achieve your ends. So they're as useful as other resources to the user, and because you have the practical ability to prevent someone from, from so-called taking it, we start using analogous terms. We call it a taking, or we call it stealing. But if you notice, in most of the cases where you would say someone stole my bitcoins, it's never that someone guessed your, your key, because that's almost impossible" }, { "speaker": "stephan", "time": "20:51", "start": 1250.78, "text": "Yeah." }, { "speaker": "stephan_kinsella", "time": "20:51", "start": 1251.2, "text": "It's that they did something else, like it's the government, like the FBI coming in and raiding your computers and, and basically forcing you to give your keys over. So that's the act of trespass that we aggressions would oppose, but that's not really stealing the bitcoins, it's basically invading your property rights, and, and then there's a consequence of that, which is some kind of damage to you. Or if someone- They violated a non-disclosure agreement or a confidentiality agreement or an employment agreement, and they hacked and they u-- and they took information from your computer system, which is your private system, which they promised not to use for personal reasons or whatever. Then they violated a contract or they committed a type of trespass. Or if someone breaks into your business and they, you know, they actually take your computer or they hack into it to get your private key, or if they torture you and, and, you know, they use the hammer trick or whatever to get you to-- there's always some underlying act of coercion or aggression that which is already covered by libertarian principles, so you don't need to say stealing the Bitcoin. So I would just contend that the idea of stealing a Bitcoin is impossible and the idea of ownership is impossible. But that it doesn't matter. I mean, as a practical matter, my possession of my bitcoins is probably more secure than my possession of my car because the cryptographic system that Bitcoin sets up is probably more secure than the law enforcement apparatus which protects my property rights in my car." }, { "speaker": "stephan", "time": "22:17", "start": 1336.61, "text": "Yeah, okay. No, I think that, yeah, that, that makes sense to me. I guess the, the other question I have then is, let's say it's, we're sort of living in that, in that Bitcoin standard world in the future, and, you know, person A wrongs person B and they sue them, and can they, you know, sue them for like, compensation in denominated in bitcoins if they don't own the bitcoins?" }, { "speaker": "stephan_kinsella", "time": "22:44", "start": 1363.67, "text": "So this, so yeah, so that's an interesting question. Let me, I'll, I'll tell you a few ways I would think about it. well, let's just go ahead and imagine a future world where Bitcoin is the, is the primary money, like Bitcoin itself, all the other coins have vanished. Ethereum has crashed, Bitcoin has crashed, the dollar has crashed, they're all gone. We-- everyone, and gold isn't even used anymore, it's just a hobby. So Bitcoin is the money, everyone uses it, everything's working fine. Your money goes up in value every year, right? Because the supply is zero or almost limited and the economy's expanding, so we have a deflationary currency, which is great. So it's, it's all good. Now, if someone, we can have two types of situation. We can just have a debt, like someone owes someone money. Now, money would be Bitcoin, like maybe I borrow a thousand bitcoins from you, and I-- well, not a thousand, let's say a thousand satoshis. Yeah. I borrow a thousand satoshis from you to start my lemonade stand, and I'm supposed to pay you eleven hundred satoshis back in a year, or maybe I'm supposed to pay you nine hundred back because we have deflation, but whatever it is." }, { "speaker": "stephan", "time": "23:48", "start": 1428.46, "text": "Yeah." }, { "speaker": "stephan_kinsella", "time": "23:50", "start": 1429.9, "text": "I owe you some bitcoins, but the, the ownership of those bitcoins-- well, first of all, there's never any ownership, but Of Bitcoin. But what would happen is you would have a contract which would say, you know, A has to pay B nine hundred bitcoins, and by pay we just mean transfer the keys over to so that you have control of that ledger entry, right?" }, { "speaker": "stephan", "time": "24:12", "start": 1451.73, "text": "Yeah." }, { "speaker": "stephan_kinsella", "time": "24:12", "start": 1452.45, "text": "on this date in a, a year from now or something like that. And if you don't do it, you know, then you're in default of the contract and certain consequences follow. Now, in the law up till now, The law tends not to award specific performance, which is if you have a contract for, for, to do something, the law just isn't gonna order you to go do that, to sing a song or to paint a fence. They're just gonna say, \"Look, you have to pay damages to the guy.\" And damages are always measured money because it's fungible, it's the easiest thing for the court to administer and to handle, and probably that's what would happen in a private system too, of arbitration, because the cost would be lower to administer, and, you know, courts just don't wanna have to- to monitor whether they ordered you to sing a song at the birthday party and you, whether you did a good job or whether you kind of flubbed it on purpose because you're pissed off. So that's why they, they're gonna- Court judgments would tend to be in terms of property being transferred, and that would tend to be measured in terms of money because it's the most liquid and fungible thing. There could be some exceptions for like transfers of land, like if I'm gonna sell my plot of land to you, they might just say, okay, then now the new guy owns it. They just recognize that transfer, but other than real property transfers, everything would probably be measured in money. And so someone who doesn't come up with the, with the bitcoins they owe for the award would just be seen as just like someone is now, they didn't pay their debt, they would be seen as a bad creditor, and they would have whatever effects the legal system and the commercial system. generates for that right now, which is a bad reputation, a bad credit history, maybe even seizing of some other assets like your house or something to satisfy that Obligation." }, { "speaker": "stephan_kinsella", "time": "25:58", "start": 1557.59, "text": "now that's just for a regular debt, and a regular debt can arise from any contract breach or any kind of wrong that you do someone, like, you know, if, if you, if you, if you assault and batter someone, or if you trespass against their property, or if you steal their television and you destroy it. Then you owe some kind of damages to the victim, or if you breach a contract, you owe whatever the contract provided for. But in all these cases, the legal system simply determines what the, the offender owes to the victim. And whether they can repay or not and how they repay is a detail, but it's not really the actual question. So I think you would just be ordered to pay in bitcoins, yeah? And if bitcoin is the only money around, you'd have to pay in bitcoins. And if, if you're bankrupt Then you couldn't pay, and if you're not bankrupt, you would have to pay or suffer consequences. Yeah. Now the one difference is in today's system, well, if you think about it, dollars, let's say, aren't really actually literally owned either. It's-- the, the dollar system is actually very similar to Bitcoin. It's a fiat system. There's no commodity behind it. It's a big ledger maintained by the Federal Reserve, and you don't really even own those either, because if you have a paper dollar bill, you're not supposed to burn it, you know? So it's, it's not like you own these things really anyway, but the government maintains this legal tender fiction where they can order you to pay and they can go seize your bank account. The thing with Bitcoin is, I don't see how that's possible because Most people would have whatever bitcoins they possess in some kind of encrypted system, right? It wouldn't even be in like, Coinbase or something. It would just be Inaccessible to any legal system. They couldn't issue an order, ordering some central authority to transfer a balance from A to B like they can now. It would just be impossible, which is another reason I say you don't own them, because if you own them If, if, if the victim owns the coins held by the other guy, you could issue an order to the ten thousand or a hundred thousand people around the world, you-- we hereby order you to go into your computer and change your hard drive structure the following way to update the ledger, the blockchain, to reflect the new ownership. But you, you can't order these innocent third parties to do that because you don't own their computers. That's why the idea of, of, of, of some centralized legal authority ordering a change in the blockchain ledger is inconceivable, which is another reason why I would say that you don't own bitcoins, because to own a bitcoin would imply owning all these people's hard drives, and you, you just, you just don't. Which is, again, another reason why we call Bitcoin uncensorable, because there is no central point of failure that some centralized governmental or even other legal authority Could order to change the ledger, you just can't do it. So you just have to hold the individual accountable and use other measures to make him, to make him transfer his Bitcoin balance to the victim" }, { "speaker": "stephan", "time": "29:00", "start": 1739.7, "text": "Yeah, good point. I like that. okay, let's talk a little bit about intellectual property. So I think in this new digital age that we're moving into, there's, there's less ability for the government to enforce some of the intellectual property, you know, laws like, you know, we think file sharing and MP3s and so on. And I think in some way there are some parallels with Bitcoin in that the world is just gonna have to, quote unquote, deal with it. And so, for example, right? Record industries had to deal with the rise of MP3 file sharing, do, do, and so on. Do you have any comments to help explain or how artists and creative types should adapt to this new digital age where intellectual property isn't as enforceable by the government as it was in the past?" }, { "speaker": "stephan_kinsella", "time": "29:49", "start": 1788.51, "text": "Well, before I get off track, which I probably will, I have a little pamphlet online on my website, Stephan Kinsella dot com. It's called \"Business Without Intellectual Property,\" and it's, it kind of, it has strategies for, how companies and, and entrepreneurs and businesses can Do business without relying upon IP either if they want to for ideological reasons, like you're a libertarian who just doesn't want to use patent or copyright or trademark if you don't have to Or just because you, you, you have to adapt to what's, what's coming, right? so I would sort of turn a lot of the conventional ways of looking this on its head, though. so for example, a lot of people would say, \"Look, if there's a market for something, it's going to happen.\" Like we use that with drugs or something like, like the drug war is futile. Because people wanna smoke marijuana, and if you outlaw it, it's just gonna go underground and all this kinda stuff. And that is probably true, but the problem with that argument, the, the principal argument against drug laws is just the, the principal libertarian argument, right? That you own your body, you should be able to do whatever you want, as long as you don't harm anyone. And then the other problem with that argument is it would apply to things that we do recognize as crimes, like, I don't know, the assassination market or something like, you know, hey, if we can outlaw They want someone dead, there's gonna be a market for it, and there's gonna be a market for, for hitmen and blah, blah, blah, and that, that really doesn't go anywhere, and that's sort of the argument some libertarians seem to use in grudgingly accepting the gradual erosion of patent and copyright law by the increase in technology. I, I would turn it on its head, I would say, well, first of all, there's a principled case against patenting copyright. It's not this, we have to put up with it because it's coming. And I think they're both-- and I can explain why briefly, but they're both totally evil and unlibertarian, anti-free market, anti-human life, anti-progress Anti-innovation, patent and copyright are two of the worst legal systems and legal regimes that we have in the world today. And in a way, I would argue they're the worst. They're, they're up there with the drug war and, and taxation, but they're even worse in the sense that most libertarians are deluded into thinking that they're legitimate because the word property's in there. Even most libertarians that are anarchists that oppose, you know, they pretty much oppose taxation, they, they would say, \"Well, there's a case for some small amount of taxation because they think it's necessary,\" but there's really just No argument from an anarchist point of view for all these other laws, the central bank, the drug, the drug war. But intellectual property, people think, \"Well, it's a type of property, right?\" So, so I think in a way it's the most insidious. so what I would say is that" }, { "speaker": "stephan_kinsella", "time": "32:43", "start": 1962.64, "text": "I think one of the mistakes made, similar to the mistake made by this Lockean labor idea that, we own, we own our labor because we own our bodies, and therefore we own things that we mix our resources with, and property rights help secure the fruits of our labors and all these things sort of complement each other and go together in a free market. So if I work hard, I can be prosperous and I deserve it. And all those things are roughly true, but they-- because they blend all these ideas together, they start thinking that you have a right to be rewarded if you put labor into something, and that gets dangerously close to the labor theory of value of Marx Which strangely enough followed after John Locke's labor theory of property, and they're kind of like cousins or related ideas, right? So, what I would say is we have to step back and separate these things. If you think about the brilliance of the simple idea of Mises and praxeology, he viewed human action as The, employment of scarce resources or means to achieve an end, but when you employ a resource, you're always employing knowledge, you're guided by knowledge. So there's two key factors to human action. One is the availability and the avail-ability to control and use, exploit Scarce resources. And then the other is the, the, the, the, the availability of knowledge and ideas and information about the world that we have, what Rothbard would call recipes. These two things are separate but both crucial. Every human action has to employ scarce means and has to be guided by knowledge. You can't be a zero-brain idiot Using resources because you wouldn't know what to use, you wouldn't even have any ends in mind, and you can't just have ideas only be-- because you have to have the availability to act, to use scarce means. So both things are important. But in a sense, the, the scarce resources are limited because the universe is limited in the terms of atoms it has, or the world is limited in the resources, but the availability of ideas is always expanding. Every generation we add to the sum total of the public commons of ideas, what Hayek called the fund of experience Right? Basically, the accumulation of scientific laws, laws of cause and effect, causal laws, and engineering knowledge, knowledge we have of ways to make things, and if you combine that with the growing population of the Earth, which expands the division of labor, the number of people, and the overall, over time, growing prosperity of the human race Combined with expanding population and with this ever accumulating body of knowledge, this is the source of human progress, in my opinion. The source of human progress isn't the abund-- the resources we have available, because those are more or less the same It's the expansion of human knowledge, and those two things are both key ingredients to human action and to human progress. And we have to have property rights for the hu-- for the scarce resources because they're scarce, because we could have conflict over them. But you don't have to have property rights for knowledge. In fact, it makes no sense to have property rights in knowledge. You want knowledge to expand, you want it to be emulated and copied and learned and transmitted and stored and preserved and handed down from one generation to the next. And built upon by the next generation, and you also want people to use it right away to copy other people, to emulate them, to imitate them, and to compete with them on the free market. The entire idea of the free market is this idea of observing price signals or successful human behavior on the part of others and emulating them, and that always drives the profit rate down and forces people to, to innovate and to, to work hard all the time. So th-this whole idea that we would have property rights to slow down, to impede the spread of knowledge, to slow down competition or emulation is counter to the entire, arc of human progress in history and to the idea of the free market So this is, this is the ultimate problem with IP. So I would say that, the, these laws are the relics of the past. Copyright law is a relic of the Attempt of the government and the church to control the spread of ideas by controlling the printing press and then, you know, the spread of communication like that And the patent system is a relic of the grant of anti-competitive monopolies by the state during the mercantilist, type of era, and they're both horrible, impediments to human progress So I view it as a good thing, not a, not a bad thing that we have to begrudgingly tolerate, that the internet has made copying of information so much easier. So the internet has basically ruined forever the notion of copyright And I believe that 3D printing may do something similar over time to patents, because, you know, if you can have a machine in your basement that can print any physical device If you download an encrypted copyrighted file over the internet, that programs your machine, it's practically unregulatable except by a totalitarian regime, and even then, I don't think it would be, be able to be stopped. So I view 3D printers and, and the Internet basically as two great innovations that are gonna start eroding the ability of the state to, impose patent and copyright laws on the economy. It's not something I grudgingly tolerate, like some libertarians. Now, having said that, it does mean that there, there will be have to be a change in the business model of entrepreneurs that depend to a large degree in their business model on information technology that's easily copied. A-as an Austrian, as a, as a pro-commerce person, as a libertarian, I don't see a fundamental difference between any entrepreneurs in this regard. Every entrepreneur Is trying to find the elusive way to make a profit in the future, which is hard to do, and remember the economy is always tending towards some kind of equilibrium which drives the- Profit rate down to the natural rate of interest or something like that. So every time you make a profit in any industry, you're sending a signal out to the market saying, \"Hey, hey, everyone, look here.\" This is how I did it. This is what you should do to satisfy consumer needs to make a profit, and people will start emulating what you do. That's called a free market process, is competition, right? So everyone always faces competition, and that's what keeps the economy growing, and that's what, makes it difficult to make a profit because you're always facing the prospect of competition. What? Intellectual property advocates argue, and what they don't like, is the fact that in some industries, it's easier for people to compete with you because they don't, they can't, they can't-- it's not as easy to, you know, if I have a pizza chain like Domino's Pizza or something like that, it's not so easy to just set up a second competing pizza chain right away. It takes capital and physical stores and all that kind of stuff. So there is competition, but it might take a while. So you can sit back on your laurels and you can make an above But then eventually you're gonna get competition. But if your product is printing a book," }, { "speaker": "stephan_kinsella", "time": "40:08", "start": 2408.32, "text": "now two hundred years ago, again, it's, it's hard to print a book So you can, you can have a comfortable profit margin for quite a while, especially if the government is giving you a monopoly on it. but now you can print a book on a laser printer for, for ten cents, right? And So some types of activities are heavily, more heavily weighted towards information type technologies, like an invention, you know, like the shape of the iPhone, for example, with rounded corners, something that other people can more easily emulate All this means is that your competitors can more quickly and more easily ramp up to compete with you. So it means that competition is easier, and this is what bothers these so-called free market advocates, is that competition is too easy, and therefore they want to slow it down with copyright and patent law to make the original innovator have an easier time of charging a monopoly price to recoup his investment, so he'll have an incentive to keep investing and blah, blah, blah. So it's just micromanaging of the economy, but- Really what they're opposed to is the increase in competition. But as free market advocates, we should, if anything, praise the increase in competition. I mean, think of Amazon and the way the fluidity of the market works now and the way that, you know, Apple has risen and, and, and, and, and IBM's monopoly has gone down and Google has eclipsed- Previous search engines, it's very dynamic now, you know, Facebook got r-replaced MySpace or whatever it was, and who knows what's coming next? All these things are happening faster and faster now because of the internet and global commerce And because competition isn't a sense easier, barriers to commerce, to competition have been reduced with the increasing free trade in the world and increasing technology, and libertarians and free market advocates should be in favor of this. And the IP system or information dependent technologies are in a way a model of what we should hope that the world economy goes towards abundance of goods, the accumulation of, of, of, of useful resources that everyone can use, cheaper, cheaper and cheaper prices, these are all good things, and the fact that someone can compete with me really easily, yeah, it does make it hard for me to make a profit, but it's not the job of the law and justice to make it easier for me to make a profit. It's not the job of the law to make it Harder for people to compete with me because to do that, they have to restrict the free market." }, { "speaker": "stephan", "time": "42:36", "start": 2556.38, "text": "Yeah, yeah, agreed, agreed. now, one area that I wanted to go into a little bit further, and this relates to Bitcoin and open source development, so I assume you'd be familiar with, Terrence Kelly's book, The Economic Laws of Scientific Research. Yes. Yep. Yeah, and one point, I'm sort of loosely paraphrasing, but he basically argues that one reason science would still be provided privately even without, you know, public support or government support rather, is that companies need scientists or developers who are recent and in the detail. so I'm particularly interested in how this might apply to Bitcoin and Bitcoin companies who might sometimes sponsor an open source protocol developer or- Other companies that have been set up specifically to provide open source protocol developers. So yeah, I suppose, what I'm asking is, do you agree, and would you make a similar argument or comment?" }, { "speaker": "stephan_kinsella", "time": "43:34", "start": 2614.42, "text": "Well, so Keeley's one of these interesting guys, his, his other book on, I think it's called Sex, Science, and Profits, they're both great. he's one of these guys who's not like a hardcore principled libertarian, but he sort of stumbles into mostly the right positions anyway, sort of like Bouldrin and Levine did in their book, against intellectual monopoly, sort of from a utilitarian or pragmatic point of view. Yeah. he gets it surprisingly right in almost every way. and of course, I would first argue that the whole, the whole sort of, question is posed, it, it, it presupposes that That government advances science right now with its various activities. first of all, its funding of science distorts it heavily. I mean, just take the nuclear industry, you know, we probably would have, the thorium reactors, if the defense department in the US in the fifties hadn't shifted to the other system so they could make materials for, for, for weapons, you know, we'd have nuclear waste-free, totally safe Nuclear power powering the whole world now, if not for that. So government funding distorts research for sure, and, and it also has to take tax dollars away from private industry and from private consumers to, to do anything. So it's always reducing some other kind of useful activity. so I think there's just no way you can say that on net, the government, government does stimulate, R&D, scientific research and development in a good way, so we, we shouldn't assume that without government doing it, it would be worse, because it's-- I think they're already making it worse." }, { "speaker": "stephan_kinsella", "time": "45:23", "start": 2722.63, "text": "a-and of course, I think Keely's right in his practical examples that, with-without the government doing this, you would have-- I mean, you already have a parallel system. You have already private industry supporting in various ways R&D, you know, Google has their Skunk Works, and companies do this for various reasons. They do it to attract the best people, they do it for the reputation, you know, they do it to, be a leader and standard bearing in, in various industries. Now, the way they do it now, I suspect, is highly distorted from the way it would be in a free market because Corporations, they respond to intellectual property laws, they res-tr- they respond to tax incentives and tax penalties, they respond to, you know, government possibility of government grants or government contracts for certain types of work. They, they wanna be good citizens, they wanna comply with the law So I think that if you lift the government off of this, the way corporations and, you know, private companies would, would act would maybe be surprisingly different, but I still think they would, of course, support, A certain amount of, some amount of R&D. Again, if you don't have patent protection for your work or copyright protection in the case of, of Bitcoin software, which is already open source and not really that protected by copyright, All these companies would have to stay on top of the innovative curve because there would be nothing protecting them from competition in the first place, so they would want to be on the cutting edge and I just see no conflict between spending some of your budget on hiring the best people, you know, it's sort of like universities, some of them, give scholarships to the brightest students so as to attract The mediocre or normal students who pay the tuition 'cause they wanna be around some bright students who attract better teachers and the whole deal. So I just, I see no reason why private industry wouldn't, wouldn't sponsor even more useful R&D than the state does right now." }, { "speaker": "stephan", "time": "47:25", "start": 2845.03, "text": "Yeah, yeah. Yeah, great points. Okay, I wanted to switch gears to internet censorship, quote unquote internet censorship as it relates to intellectual property. Now some of this sort of ties back to some of the points earlier that you were making about the incorrect conclusions that people draw from Analogy, such as mixing your labor. but yeah, so, you know, a week or two ago, we had the whole Facebook, YouTube owned by Google obviously, and Apple all abruptly banning and removing Alex Jones from their platforms. Now, while these are privately owned platforms, there has been some argumentation back and forward on whether there can be a right to keep using a platform after having put in work to, quote unquote, you know, build a following or build a profile, and some people have tried to make a sort of almost a- The quasi-libertarian argument for a Lockean theory of digital property rights, you know, grounded in this idea that after using the product of platform in a certain way for a certain number of years, that there is some sort of, quote-unquote, prescriptive easement, and the parallel here might be, you know, like squatting rights How, how would you sort of respond back to that sort of argument?" }, { "speaker": "stephan_kinsella", "time": "48:35", "start": 2914.85, "text": "Yeah, I, I think there was a particular piece, I forgot the name, you might have, you may, you may have sent it to me or someone did. I think Elaine wrote it, yeah. Yeah, I, I think again, it's based upon the Lockean labor theory, so I think it's, the whole thing is flawed. and if you think about it in, in, in, in, in concrete terms you know, you don't own, no one owns a Facebook page. A Facebook page is just a way of organizing information that's, that's served up by Facebook's servers. Facebook owns those servers, their hardware. They, I wouldn't say they own the, the data on their servers because no one owns it, but they own their servers and they can control what information gets served up, which means they can-- they have the right to control their property, which is their hardware, and therefore they have the right to put up whatever page they want. You could, you could look at it as a contract between the user and, and Facebook, but I don't even think that's necessary. It's more like if you invite someone to your home or to your restaurant They're just using your property with your permission or what we call license, but you can revoke that permission at any time. It's not like some kind of long term contract. if someone makes a, a long term contract, like say with Amazon for their, you know, for their data or web services, that might be a different thing, right? So if they kick you off early, they're, they're vi-- they're violating your contractual rights and they might owe you some kind of monetary damages. I don't think you could even argue that in the case of Facebook, because they probably have disclaimers in their terms of service saying they don't, and they have the discretion to kick you off at any time. Now, so, so I, I think the argument makes no sense because if you argue that I put labor into this site and it has value to me and therefore I have a property right, what you're ultimately claiming is a property right in the servers owned by Facebook, and I just think the law ought to be clear on that in the libertarian world that Facebook owns those servers. so that, that would be the end of, the end of that inquiry, okay? I, it's similar to the reputation rights argument, which again, a lot of libertarians unfortunately are still confused on, maybe because their inheritance of Ein Rand believed in defamation law, but the idea is that if you build up your reputation It has a value in the market, so you have a property right in it. And so this is the confusion that you own, you have a property right in the value of things, again, that you create. So it's all mixed together with this Lockean idea that you have a right to your labor, you have a right to the fruits of your labor, you have a property right in things you create, and one of the things that you create is a value on the market, which might be your reputation. And therefore, we have things like trademark law and defamation law, which all protect your reputation rights But again, as Rothbard pointed out in The Ethics of Liberty, to own a reputation would mean you own the brains of other people, and you don't own their brains, they own their brains, because you don't own what they think about you. And you don't own, you, you can't decide whether they take false statements or unreliable information about you into account in their opinion about you, which is ultimately what you would have to say if you own a reputation. And by the same-- So libertarians ought to be clear that defamation law and trademark law, reputation rights are totally invalid And by the same token, you can't own a website, domain name, you can't, 'cause that's assigned by the domain name system, you can't own a Facebook page. You don't have any right in that, because that would mean owning other people basically. And we libertarians are supposed to be against slavery. Now, that is the kind of hardcore, humline, nails on the chalkboard, hardcore libertarian approach But as some people have pointed out, we shouldn't be so cavalier about this because, you know, we should favor free speech and open dialogue. That's all fine. I, I'll let other people talk about these thick libertarian or soft libertarian side values, but I would say that, that we should acknowledge that the system in place now, which looks nominally private, you know, Google and Yahoo and Facebook and Twitter and YouTube, all these things, they seem to be nominally private, and they m-- they are to a large degree, but I do believe that a large degree of their policies Or enforced because of the existence of various illiberal, unlibertarian state laws. So one example is the takedown system on YouTube, which, you know, we've all seen this many times. You look for a video, it's taken down. It's taken down by YouTube because they are taking advantage of the Digital Millennium Copyright Safe Harbor Law passed 1998 by Bill Clinton, I believe, which saved the Internet, but it only saved it because there was copyright. It saved it from the effects of copyright. It, it tells a publisher Or an internet service provider, it says you would normally potentially be liable for the copyright violations of your users because of what we call secondary liability or vicarious liability, contributory copyright liability. You would normally- Face a threat to your existence because you let someone comment on a blog post on your website that you host, so you're responsible for the copyright, violations or the defamation of your users, but we're gonna give you a safe harbor, we're gonna say you're not liable if you take this, if you adopt this takedown policy. So the entire reason for this takedown policy that YouTube adopts isn't because they're being assholes, it's because they're trying to stay in alive. They're trying to avoid being shut down by a trillion dollar-- and I'm not exaggerating, like a trillion dollar copyright lawsuit. So likewise, I believe that, you know, a lot of these companies adopt very politically correct anti-hate, hate speech stuff because of the predominant- push in that direction by various government laws and policies, which, you know, make them wary of supporting a white nationalist or a racist or anyone who doesn't toe the modern democratic line. So I do think that the government involvement has some role in this censorship effect that the private corporations are engaging in, it probably would be far less severe. In fact, I know it'd be less severe because in a free market, you wouldn't have copyright law and anyone could just copy the entire Facebook model tomorrow and make a competitor without any threat of copyright or trademark, you know, liability if, if Facebook started- Entering ten percent of its customers, and then they would get those extra customers, and so there'd be a competitive pressure to be open, to be, to respect free speech and to stay out of people's private business." }, { "speaker": "stephan", "time": "55:27", "start": 3327.35, "text": "Yeah, agreed. Yeah, I, I like the way you sort of help thread that needle in terms of saying, you know, you don't have a right to be hosted, so to speak, on Twitter and Facebook and YouTube, but at the same time, there is a political interference here, and this can invite politicians, regulators, pol-political activists, anyone else who wants to try And their own form of, you know, quote-unquote, hate speech regulation or equal access to the platform, say, yeah. So I suppose they're, they're the key questions. Well," }, { "speaker": "stephan_kinsella", "time": "55:57", "start": 3356.76, "text": "let, let me, let me mention one other thing too, What's a little bit perverse is that, you know, you will hear all these, i-i-in the U- I'm giving a US-centered perspective, and I apologize for that because I, I sort of hate that in the libertarian movement, but That is dominating sort of news right now. but, you know, the main anti-Trump, sentiment, even among the, the leftist libertarians, is that, you know, Trump is a fascist We have a, a fascist future coming down upon us, et cetera. And these are the same people that are cheering about these private companies basically censoring Alex Jones But, you know, as I said, they're doing it in response to government nudges, and fascism really is about you have a nominally private property system Where it looks like it's private property, doesn't look like it's communized, like an, a socialist system, but the government directs what they do, and that is what we have Now in a softer form. So we do have a version of fascism, I would say, in the West where government policies, you know, anti-discrimination laws, affirmative action laws Tax penalties, government contracts being awarded or taken away, all these kinds of things, they nudge companies in a certain direction, which is like a soft form of fascism. So you have the people that allegedly or pretend to be anti-Trump because they're anti-fascist Who really are supporting a soft type of fascism." }, { "speaker": "stephan", "time": "57:31", "start": 3451.34, "text": "Yeah, yeah, no, that, I, I agree with that. yeah. Okay, well, I think we're getting sort of to the, closer to the end of the hour. Did you have any final comments that you wanted to make? Any last, points you wanted to, point out?" }, { "speaker": "stephan_kinsella", "time": "57:46", "start": 3466.19, "text": "Well, I think you got us to a lot of, to a lot of diverse topics, all centered around, you know, technology, the Internet, Bitcoin, cryptocurrency. IP, so, so no." }, { "speaker": "stephan", "time": "57:58", "start": 3477.71, "text": "Okay, excellent, excellent. Well, guys, my guest today, Stephan Kinsella, he can be found, you can find him on Twitter at n s kinsella and look up his web website, stephanakinsella dot com. And also look up the website, Center for the Study of Innovative Freedom, so that's c4sif dot org. Also check out Stephan's podcast, Kinsella on Liberty. I, I've, I had a fasci- this has been really fascinating discussion for me, Stephan, so thank you very much for coming on the show today. Really appreciate it. Thank, thank you, Stephan. That was my conversation with Stephan Livera. If you're interested in the show notes for this episode, go to my website stephanlivera.com and look up SLP15. Please don't forget to subscribe to the show and share it with your friends. And if you've got any feedback, come and find me on Twitter at stephanlivera. Thanks guys, that's it from me, and I'll speak to you next time." } ] }