{ "episodeId": "SLP446", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "alex_gladstein_of_hrf": { "name": "Alex Gladstein of HRF", "role": "guest", "tag": "ALEX" } }, "segments": [ { "speaker": "stephan", "time": "00:09", "start": 8.53, "text": "Hi and welcome to Stephan Livera podcast, show about Bitcoin, brought to you by Swan Bitcoin. Today my guest is Alex Gladstein of HRF. So he's rejoining me on the show, as many of you know, he's the cso of HRF, Human Rights Foundation, and he's been writing recently. He's got a cool article out about structural adjustment. So we chat about that and also his experience attending Africa Bitcoin. Bitcoin conference. Swan Bitcoin is the easy way to buy and learn about Bitcoin, and especially as we're going through this bear cycle, if you wanna engage in a smash buy or check out your DCA and regular cost averaging into Bitcoin, Swan Bitcoin now has a mobile application, so you can use this to buy Sats on the go. It's a really convenient application. You can get it on the Google Play or Apple App Stores, and there is also a range of information. So for those of you who wanna stay up to date on what's going on with Bitcoin, as well as see Awesome content from Swan's blog as well as the Rabbit Hole, the Canons. There is all kinds of educational material that you can find there in the app. So it's on the App Store, search Swan Bitcoin. Now, for the builders out there, I know a lot of builders listen to the show, Build on L2 is a community for Bitcoin builders by Blockstream. So if you are in need of ways to connect with other builders, whether that is through events, whether that's through programs to help fast track your success, whether you need to showcase your work work or your skills to the community, BuildOnL2 can help you here. Now, there are two main tracks, there's one related more to core Lightning and another related to building on Liquid. So if you're interested to sign up, go to the website, it's buildonl2 dot com. Another important need is the need for connection with other Bitcoiners. For those of you, especially in Europe, BTC Prague is an important one. It's coming up June eighth to tenth in Prague, Czech Republic. It's gonna be awesome. There are gonna be ten thousand people there. There'll be Business insiders, developers, fresh newbies, Bitcoin miners, you name it, there are awesome connection opportunities. Whether you are looking for a job, you're looking for content, you're looking for people to meet, friends to make, there's just an awesome opportunity available with more than sixty world-class speakers and a hundred companies. I'm gonna be the host for one of the days on the main stage, and I'm really looking forward to it. Also, for those of you who are looking for a holiday, Prague is a fantastic place. It's a beautiful city with awesome beer and affordable prices, so you Use code LIVERA to get your discounted ticket, and I'm looking forward to seeing you there in Prague. And now onto the show with Alex. Alex, welcome back to the show. Happy to be here. So Alex, I know you were-- obviously you've been doing some great work recently with your writing, and I also wanted to chat about the Africa Bitcoin conference. I know you were just there, and you're obviously, quite vocal about it. I wanna hear a little bit about it. What was your experience there like?" }, { "speaker": "alex_gladstein_of_hrf", "time": "02:54", "start": 173.82, "text": "Yeah, well, I think that the essay that we're gonna And the Africa Bitcoin Conference were actually quite related. I was inspired in part to do the research when I was learning about, what the IMF and World Bank had done in countries like Ghana. And I think what Farida Nabuema and her team accomplished in Accra with hosting the Africa Bitcoin Conference was, really monumental in that, in that aspect, in that it really hit the nail on the head in terms of exposing the fact that, the financial system in, in- Africa and in a, most of the, global south is essentially still a colonial framework, that's what she said in her opening remarks. the lead organizer of the Africa Bitcoin Conference is a basically a civil liberties advocate from Togo, which is a country that fell under French colonialism for many, many years and still is victim of what is known as the French colonial currency, the CFA, where Paris and, and Europe still sort of control a lot of the financial aspects of the way that people live in, in about fifteen African countries. So I was very captivated by her story and how she explained to me once that, like I, I basically knew her before I realized that there was like a Bitcoin connection or like a monetary freedom connection. We met her through her democracy work and her human rights work in Togo, because the country's ruled by a, you know, corrupt dictator, and she's been involved, and her family's been involved for generations in fighting against colonialism and, and now against dictatorship. But essentially, she, she taught me that after colonization And formally ended around 1960, the Togolese people elected a leader who, named Sylvanus Olympio, and he, one of the first things he wanted to do as president was create, like, the country, you know, a currency for the country. You know, to get off of the French colonial system. And, I think just sort of days before he was able to get this done, he was actually assassinated by French troops, French trained troops. So I guess for the Togolese people, you know, in this country in, in West Africa, their human rights struggle has always been about monetary freedom. I always thought that was really interesting. So from there, she learned about Bitcoin and has put it forward as kind of an anti- Colonial currency, and I think that that's, really apt and very, very true. It's very, it's an anti-imperial currency, I think that's, one of the coolest parts about Bitcoin. It provides an escape, and as we'll get into, people in the global south have always kind of lived under the thumb of foreign powers, and until recently, they didn't really have a way out. Like if you were living in a country in Latin America or South Asia or Africa, like in the '80s, you know, you were kind of stuck. Like you had the fiat currency that you were born into, which, which normally would be devalued, either by foreign powers or by your local dictator, and you were largely like kind of I've kept isolated from financial networks, and it was really at the Africa Bitcoin conference, through learning, from the speakers there, that I kind of started to put all the pieces together in my head and realize that, you know, the, one of the reasons why places like Africa are financially isolated and split apart is, is not by sort of destiny or circumstance, it's by design. So actually, you know, when the colonial powers kind of chopped up this part of the world, the banking system Was implemented not to connect people, but to actually to make money off, providing a service between them, right? So instead of being a link, they were in-- they, they were intermediaries, right? So you have like forty-one central banks in Africa, and, Jack Maalers actually spoke about this in his keynote speech down there, and so did Bernard Parra from Bitnom, they talked about how divided Africa was. And again, Farida talked about how the whole system is like a colonial framework, but essentially, I mean, you have forty-one Plus central banks. None of the, none of them are interoperable. So you have all these people with different fiat currencies, and then you have colonial currencies, and none of them are interoperable, and it's very hard to move money from, out the outside world into Africa And it's very hard to move money from each, you know, one African country to another. So even if you have, like, let's say, mPesa value in Kenyan currency, it's very difficult to move money to, Ghanaian cedis or, you know, South African rand or something like that. Like it's, it's very difficult to move money within Africa, and it's even harder to move it kind of from, from without. And one of the facts that I learned, I can't remember the exact percentage, Jack and Bernard both spoke about" }, { "speaker": "alex_gladstein_of_hrf", "time": "07:36", "start": 456.13, "text": "Like, you know, eighty percent of the fees that are taken from moving money within Africa are go to, go to foreign, companies. And that to me is really like the, really true sign of the colonial framework still existing, right? So when Africans are trying to move money to each other, you've got like massive rent seeking by, by essentially, you know, what you could still call, you know, colonialism, like essentially, like financial colonialism, right? Like these Western companies are siphoning off all the- value when like people are just trying to do business with each other or send money to their family. So, so Bitcoin's like a, a reaction to that, and I think that that was, it's very deep and very profound. And the community that gathered there was, really striking and very impressive. I know a good amount about Bitcoin in Africa, I, I would say, like more than the average person probably, and I was like just totally staggered at what I saw and the people I met. I mean, we're talking Bitcoin entrepreneurs and communities in Infamous conflict zones and countries that Americans can't even put on a map or even know exist. I mean, I met people from, Somalia, DR Congo, Cameroon, Somaliland, Libya. I mean, we're talking about, you know, countries that most people would say are the poorest or the most war-torn countries in the world, and there are like thriving Bitcoin communities in these places. So I think it's really neat. I guess to summarize that Bitcoin is being used, not, not just more broadly by people in countries that have been screwed over by the IMF and World Bank historically, that's kind of where the per capita usage is highest in many, in many cases, if you're, you know, actually looking at like the numbers and you look at like countries like, Argentina or Nigeria or the Philippines or, Indonesia or Turkey or, or even Ukraine, like, you know, basically countries where like foreign powers have come in and messed around. These are Places where, where Bitcoin is really, is really providing a lot of value, and then even more so, like places that are currently being devastated, the value proposition of Bitcoin really, really shines through. So I was like totally staggered by, by what I saw there, deeply inspired. And, yeah, and I've been reflecting a lot about capitalism also, as the second part of this, which is like, you know, I think that, I really like Alan Farrington's piece about this isn't capitalism, and I'm sure- I'm sure most people listening would agree that, like, the system we live in is definitely not capitalism because it's, it's a post-seventy-one fiat or whatever you wanna call it, right? It's centrally planned. Yeah. I mean, the central banking, the control of the credit, but, but at the same time, I think we need to sympathize, or at least I'm trying to sympathize with the fact that, okay, so what are the Marxists criticizing then? You know? So the Marxists are criticizing global capitalism. We need to have a name for it, right? So what they're calling capitalism, meaning these big multinational companies that come into these poor countries and like basically exploit people, like I think it's okay on the one hand, fine, we could say that's not capitalism, but what is it? We need to have a word for it, right? So I" }, { "speaker": "stephan", "time": "10:46", "start": 645.65, "text": "think people might use the term crony capitalism, but I understand, let's say, a Marxist may not, like that or may not, like that characterization." }, { "speaker": "alex_gladstein_of_hrf", "time": "10:54", "start": 654.2, "text": "And it's not just a Marxist, it's just like the people" }, { "speaker": "alex_gladstein_of_hrf", "time": "11:00", "start": 660.34, "text": "Decades where foreign corporations come in on favorable terms and they get, they extract value from these c-countries and they leave, and, you know, that is the legacy of, of what is known as capitalism more broadly to the mainstream, right? Yeah, sure. And I think that's just something interesting to reflect on. And whatever that is, and, and I, it, you know, it's fun to play with because we can say, \"Well, it's not really capitalism,\" but then we're kind of doing the no true Scotsman thing where it's like, \"The commun" }, { "speaker": "stephan", "time": "11:30", "start": 690.4, "text": "And I, I, I'm sympathetic to that, but I think for me, where I draw the line is ultimately, do you have private property rights, right? Do you actually have genuine private property rights, or are, let's say, is there a government or a state somewhere intervening and forcefully, you know, impeding on that? And I think that's where you're getting at with, with, with your article, of course, the whole structural adjustment idea." }, { "speaker": "alex_gladstein_of_hrf", "time": "11:50", "start": 709.61, "text": "Right. So the people in these poor countries don't actually have property rights, right? Like, or in, in this, or they That's what I've reflected a lot on, and what's interesting is, whatever you wanna call the system we have today, the dominant American-led, you know, Western bank-led system that's like implemented by the IMF and World Bank, and, you know, where, where, you know, the most prominent pieces are giant companies like Coca-Cola, Walmart, et cetera. Whatever this thing is, you know, one of the things it does is exploit, and its, its incentive system is structured to gear towards monopolies, like- It basically creates monopolies, and then those monopolies do rent seeking and rent extraction and exploitation. And I, you know, that's what, you know, the left is criticizing, is that. And what I, what I think is really interesting is Bitcoiners are also criticizing that from a different perspective. And I think that's, that's-- when you have two very different groups of people criticizing the same thing, it usually means they're correct, right? I guess is what I wanna say. So in a lot of what I've, my, what I've been working on in the last few months Doing the research for the piece on the IMF and the World Bank, you know, what was so interesting is that you had libertarians and Marxists agreeing that these institutions were awful. And I, I think that's, that's something you're gonna see as well as, as we start to talk more about monetary policy in the third world, in the developing world, is you're gonna have people who are anti-imperial or anti-colonial or like more traditionally on the left, maybe coming over to Bitcoin because they, they, see it as kind of like a third way, like a And just to finish, like what I was most inspiring what I saw there in Accra was that, like, maybe we could have a different incentive mechanism, right? So maybe you could have instead of a system where it's built to extract value as people transact with each other, maybe we could have a cooperative open system where what ends up happening is entrepreneurship maybe drives down prices for people and creates more value. That would be a different system, and, and that was sort of when you think about- What Strike's doing with Bitnob and you, you start to observe how they interact with this open, global, twenty-four-seven liquid protocol. I think you could start to see actually see that happening, and I think that would be really exciting. So, I think what I'm, what you're seeing maybe being born at the Africa Bitcoin Conference are conversations and, and, and companies and theories and concepts that are, I think what we've all been waiting for for like many decades is a some, some sort of third way between Marxism and crony capitalism, and I think that that's kind" }, { "speaker": "stephan", "time": "14:29", "start": 869.35, "text": "Yeah. And so, I mean, bringing it then to your actual article, which is about this concept of, let's call it structural adjustment, or that's the term you have, and basically, as I, as I read it, essentially, it's that some of these kind of intergovernmental or international financial institutions like the World Bank and the IMF have basically, in a way, they've parasitically taken controls in certain ways, or they, they essentially play this game of, \"Oh, we'll give you a loan, but here are the strings attached,\" and that and- ends up really harming the people in those countries that they are purportedly or supposedly trying to help, right? so do you want to maybe set a bit of the scene there, like what are these organizations, like what, what are they doing? What are they, what are they meant to be doing at least?" }, { "speaker": "alex_gladstein_of_hrf", "time": "15:13", "start": 913.32, "text": "Yeah, well, I think there's, a lot to be said for, for just adding some context with traditional colonialism and then the demise of colonialism and then, you know, post nineteen sixty, you didn't have it anymore. And I think if you don't look What the World Bank and IMF like essentially ended up doing, if you're not looking at the legacy of colonialism, and I think that too few people actually look at colonialism care-- carefully enough, and they, they don't allow it to kind of penetrate their thinking enough to the point where, as I was doing a lot of the research over the last few months for this, I found some pretty compelling theories by people from the global south, like who were basically saying, like, for example, like, look at the Great Depression, like, and we, we, we have the traditional kind of Or why did we, why did the Great Depression in the West happen, right? Was it because we left the gold standard or didn't leave it fast enough or whatever, right? So this is the debate, right? there are a bunch of Indian academics who, did a kind of a, you know, database analysis and they were like, \"Well, wait a second, what if part of it was that like this colonial drain that these Western powers had feasted on for, for centuries started to slow down and, and, and, and wane? Like, wouldn't that also cause In the West, like wouldn't that also cause, recessionary and, and, and volatile issues? And so they put forward this thesis in this book called Capital and Imperialism, and I certainly don't agree with the authors on that many things, but I thought that this was kind of interesting, and it helped me start, start to understand, like, what would later happen with the IMF, World Bank, in that, like, the whole point of colonialism in the first place was essentially that foreign powers would go into a peripheral, what they would call the peripheral place, right? And For slavery or, or cheap labor or, or they would just take stuff and then they would like manufacture that stuff at home with industry and then they would sell the finished goods back to these like peripheral places and that would crowd out, any sort of local manufacture. So that was like the traditional sort of, mechanism of colonialism. And then the outcome, or, or I guess the point of it all was essentially that in the West, we faced a crisis of inflation and we ove-- always have had a crisis of Of inflation and to keep inflation reasonable and to keep living standards good, like let's say in the West, required an external output, right? So what colonialism allowed were European, empires to, to like basically subsidize living standards at home by like having an input of really cheap goods and, and, and labor from abroad. And this is sort of, again, like the colonial system and, and really it was about wage deflation. Like you, you, you would, you would get like wage deflation in the periphery, where over time people are working like more and more hours for the same thousand calories of rice, that's kind of what I'm really talking about here. That is how you would, you would subsidize the way of life in the, what they would call the core countries. So, so that was like a huge benefit to, let's say, Germany, France, the United Kingdom, even the United States, Japan, all of these imperial powers for, for centuries. That, this is really Helped us advance. And look, I'm a human rights advocate, and I focus on individual freedoms and liberties. And clearly, I think one of the reasons why Western civilization has been so prosperous and effective are, are because of free speech and property rights and all the things that I fight for. But in doing this research, it's really made me reflect and realize that, like, well, yes, it's a lot of that, a hundred percent, but it's also 'cause we basically stole stuff from poor countries for a long time. Like, and I, I think that if we don't acknowledge History. So that's really what I've been reflecting on a lot. Like when you're in a beautiful city like London or New York City or Tokyo, like, yes, you're looking at the fruits of liberty and freedom, but you're also looking at the fruits of exploitation of, of poor countries far away. Like, that, that, that is absolutely part of what you're looking at when you're looking at this gorgeous architecture and art and culture and all these things. So that's like a deep reflection I had. And I think what, what, what, what you realize then is when you're Breton Woods was initially created, the institutions inside Breton Woods, like the IMF and World Bank, were initially sort of created to like rebuild Europe and Japan, right, after World War II, with the World Bank being the development bank which would come in and pay for infrastructure that private capital, like, you know, wasn't incentivized to fund, and with the IMF being the lender of last resort, that would, that would come in and like, quote unquote, like bail out countries that faced an import-export crisis where their imports were, were just bigger, you know, more than their exports" }, { "speaker": "alex_gladstein_of_hrf", "time": "20:00", "start": 1199.51, "text": "So, so these two institutions were initially designed to just sort of help pull these core countries out of the rubble after Second World War, and of course, on America's terms, right? They were designed to help America like become the, the center of everything as, as we know, I mean, the dollar system, right? But as colonialism sort of really collapsed and faded away, and we use 1960 as kind of the formal end of it, that's really helpful to think about because by 1960, Europe, Japan, America, you know, were really sort of back Industrial powers and, and were like really dominant again in many ways, and their, their societies had really been, let's say, repaired, from the destruction that they had, you know, essentially inflicted on each other. And at that point, the World Bank and IMF conveniently sort of, I guess, they, they sort of, that's when they start to shift their attention to the third world or to developing world, whatever we wanna call it. And I think what ends up happening, and, and I don't, I don't think there was like a meeting where like three guys just like figured" }, { "speaker": "alex_gladstein_of_hrf", "time": "20:59", "start": 1259.07, "text": "Path dependent or structural or whatever, but what ends up happening is that the IMF and World Bank start to replace what traditional colonialism did through their policies. So they, they started to replace what was done once with warships and guns, except the new weapon was with debt, right? So that, that was the idea. So again, traditionally you had foreign powers coming in and just literally stealing and extracting minerals and timber and goods and enslaving people. So what the IMF and World Bank did, is they would do this i-in a disguised way. Like, they would do it in the name of development, they would do it in the name of, like improving the quality of life for, for people, in, in these countries, and that's, that's really, I think the, the most twisted, part about the whole thing, is that, you know, you look at these photos of the World Bank, IMF headquarters in, in, in DC, and there's like a giant sign that says \"End Poverty\" on it, but in reality, they're, they're kind of doing the opposite. They're really exploiting people and, and impoverishing them. And again, like, they're extracting value and, and, and through what, what I'll describe and I'll explain as structural adjustment policies, they're doing wage deflation, right? Traditional colonialism would end up inflicting on these like poorer parts of the world, you sort of get the same effect. You get, you get a subsidized way of life in the core countries, meaning the IMF creditors, the, the five countries that traditionally have been the creditors to the IMF, which are the US, the G5, the US, Germany, Japan, France, and, and England, they're getting this benefit to their societies and to their allies by reducing the quality of life and reducing consumption and reducing industry and productivity. In the poor countries. So unfortunately, that's the reality is that the world is a little bit of a zero sum game, and, and, and these systems have exploited and so many, and that's why I think we need to just have an honest conversation about what they are and what their impact has been, and hopefully we can ab- get rid of them. Yeah. I mean, they've been so awful." }, { "speaker": "stephan", "time": "23:10", "start": 1389.99, "text": "Yeah, of course. I, I mean, certainly, if the message is let's abolish, the IMF and the World Bank, I'm one hundred percent on board. Let me, let me pose one question to you that might be interesting, right? So, sure. If you look at, and I'm sure you're probably familiar with something like ourworldindata dot org, right? And if you look on the stats there, you'll see something like, \"Oh, look how many-- hundreds of millions of people were lifted out of poverty over the last thirty or forty years.\" And so, we could, like, someone could look at, at us and say, \"Well, hang on.\" Is it that, you know, all these people have been raised out of poverty, like, and that's factually true, except for maybe these last two years of lockdown and so on, but aside from, you know, if we looked at the numbers in twenty nineteen, we would have seen, \"Look at all these people coming out of poverty.\" So is the argument we're making here more like, more people would have been raised out of poverty, like they would be even richer than they are today? Is that the way to frame it?" }, { "speaker": "alex_gladstein_of_hrf", "time": "23:59", "start": 1439.19, "text": "Yeah, I think there's, there's two really big factors And in general, productivity. Now that this would, like, like a hundred years ago, life expectancy in many countries was like twenty years old, okay? So you've had scientific medical innovations that have allowed people to just, you know, live longer, and you have had productivity innovations which are technical in nature, which have allowed people to become better farmers, okay? And to, and to sustain and to, to get more calories out of a certain amount of land, right? So these are, the, these are happening. And secondly, you have China, okay? So usually when you look at the our world and data stuff, what's really important is to remove China from the dataset actually, 'cause China accounts for such a huge percentage of like what you see as like countries coming out of poverty or the poverty rate reducing. And China has its, is a completely separate topic. And we could go on and on about this, but, you know, China came out of a super closed communist system where you basically had hyper-central planning leading to people who didn't know how to farm being forced to farm and starving, et cetera, et cetera, and vice versa, cultural revolution stuff, you know, and then you had the like sort of slow introduction of, of personal freedoms and financial freedoms over time, which led to enormous gains in, in productivity and in income and stuff like that. I think that's a very different paradigm than what you saw across the, the, like what would really be called the third world, where, you know, maybe between 1960 and 1990 You saw massive gains in China, you, you didn't see that in, in Latin America and in, in Africa and in parts of South Asia. in fact, you saw, in some cases, a, a decline in countries that were structurally adjusted. You saw actual contractions of GDP despite population going up, you had the total amount of value created in real terms by these countries going down, which is really crazy. So I think that's really important to look at and- To point out. But in general, yes, what we're saying here, or at least what I'm, my thesis would be, is that the, the, the like third world or the developing countries would be much, much, much richer were it not for these IMF and World Bank policies. now would they be as, as rich as England or America? No, of course not, but they'd be a lot richer than they are now. Right. Yeah. And that's as I get into in the article, not just because of what the IMF and World Bank do, but also because of These nations, like, you know, we-- these nations pride themselves as capitalist nations that, that focus on free markets, right, and free trade, and that's like kind of how they project themselves to the world as opposed to the Soviet Union, right, or as opposed to the CCP. and there's a lot of truth in that, of course. Of course, there's a lot of truth in that, of course. There is a lot of truth in saying that America's a capitalist nation, of course. I mean, I'm not gonna argue that. I know we could, we could That being said, since, since World War II, what these nations did is they used centralized planning, and what you would basically call socialized sort of measures to, to protect their economies. Okay? So what I'm talking about here are things like tariffs, and subsidies. So countries like America have subsidized agriculture and have put tariffs against the import of, agricultural goods from places like Africa. So what this has done is essentially it's like, it's like crippled the ability of other countries, to actually be prosperous and to, and to have like a fair, fair, free and fair sort of open trading ground. So you have countries like the United States You know, paying an enormous amount of money to keep peanut farmers profitable, like literally just paying them to do this, and, and that, that makes it really, really difficult for poor countries to grow, to grow peanuts in a profitable way, and leads to like horrendous labor exploitation, et cetera. Now, this is, this is all done in the name of food security. So for the United States and Europe, everything's been about fu-food security. So, and that's becoming really clear now, like post-Russian invasion of Ukraine, we're starting to see why that's" }, { "speaker": "alex_gladstein_of_hrf", "time": "28:25", "start": 1705.49, "text": "concepts which weren't really that popular to talk about, like even in the Bitcoin circles, like previous to this year, really, to be honest, people didn't really talk about energy sovereignty or food security that much. But these two things have really become, it's very much, you know, now they're part of our discourse, and now it's sort of, in the hindsight, obvious that these two things are so critical. but with, but, but, you know, food security and energy sovereignty are really what it's all about. I use a quote in my piece by, a friend of mine. I wanna read it because I thought it's, really, pithy. It's by a friend of mine named Murtaza Hussain. He's a journalist, and he says, \"If you turned off the electricity for a few months in any developed Western society, five hundred years of supposed philosophical progress about human rights and individualism would quickly evaporate like they never happened.\" And, you know, it's a little bit of an exaggeration, but it, the point stands that, like, it," }, { "speaker": "stephan", "time": "29:19", "start": 1758.78, "text": "Oh, yeah. I mean, you see riots. I mean, even, even to me as, as someone born in Sri Lanka, right, just recently, right, there was crazy protesting and rioting, and a big part of that was the country, the island was not getting fuel. People couldn't drive. Totally. So, you know," }, { "speaker": "alex_gladstein_of_hrf", "time": "29:33", "start": 1773.17, "text": "it's-- So the, the point is that these supposedly capitalist nations had used centrally planned, and enforced by violence actually, but, but centrally planned structures to sort of artificially increase their own food security and energy sovereignty at the expense of others, right? That's what you've had. So it's, it's a whole system of double standards. So, you know, we, meaning like, like America, Britain, France, we, we subsidize our societies, meaning we pay farmers and we protect them and we protect our steel industries and we give free healthcare to people, quote unquote, free healthcare. And All this stuff and fr- cheaper energy and this has all been like, these have been like key reasons why like standards of living have been so high in, in Western countries for so long. And this is being done over here, but on the other hand, we go to these poor countries, like Sri Lanka is a great example. So like in the '60s, Sri Lanka gave like some free rice to its people, like some certain amount of basic free rice. So you could compare that to like minimum wage in America or something like that, right? what's ironic though is that like the to their people and who, who give, who massively protect their industries at home, they would go to a country like Sri Lanka and say, \"Oh, you guys have a balance of payments crisis, oh no, so like you're going, you're gonna, you're gonna go bankrupt. Okay, well we'll, we'll give you this loan, but only if you stop giving free rice to your people, right? That, that was like the idea. And, of course, like giving free rice is probably a bad economic idea, but the point is when you, when you have Well, a lot of people are gonna starve, right? So, you know, that, that's kind of the, the callousness that, that these policies were imposed on by the World Bank and IMF over the years. And it's really important to understand that, like, the double standard piece of it. Like, all of the things, and, and we can now get into structural adjustment and what it is, but like, all the things that were asked of these poor countries when they would have to structurally adjust in order to get a loan, those, those, those things were never asked" }, { "speaker": "alex_gladstein_of_hrf", "time": "31:39", "start": 1898.94, "text": "More or less. And what's crazy is America's the biggest debt empire of all, and I mean, in my previous writing and work, I've written about the fact that America's the biggest debtor nation, it's, it's literally the world runs on American debt. But we've never had to structurally adjust, right? We, we've never had to structurally adjust. And, you know, I just think those double standards are, are really, at the heart of why the world is so unequal in many ways. Yeah. But anyway, so structural adjustment is the title of What it really meant is that from inception, the IMF, and then later after 1980, especially the World Bank would do this as well. But like they would basically make a loan, and again, these are loans, these aren't gifts, so these loans are profit-making for the IMF or the World Bank. they make money, largely through the global Cantillon effect. We often talk about the Cantillon effect, like in our own societies in Bitcoin, like whether it's in the United States or Australia or whatever, we talk about how Wall Street benefits from being close You know, fiat creation, et cetera, et cetera. Well, there's also a global cantillon effect, right? So, Western capital banks, they can get cheaper loans, they can get cheaper money than, Ghana, let's say, or, or Sri Lanka, much cheaper. So what the World Bank or IMF would do is they would make money off that spread. So they would like sort of borrow from creditors at, back in the day, let's say, five, six percent, and then, and then they would loan it out to poor countries" }, { "speaker": "alex_gladstein_of_hrf", "time": "33:09", "start": 1988.92, "text": "In that sense, and, you know, in general, like we have to-- People forget in development economics, but when loans are made, the borrower pays back more than the, what they borrowed to the, to the creditor. I mean, to the, to the tune of like, for example, like, let's say a country borrows a billion dollars, like, when all's said and done, they probably have paid back a billion and a half at the end of the day, something like that, because the interest keeps compounding and all that, yeah? Oh, yeah, Club, which is an institution where like debt would get kind of rescheduled and, and rescheduled and rescheduled and rescheduled. So sometimes these loans, and IMF loans were meant to be sort of relatively short term, couple year loans, while bank loans were longer, but a lot of these loans would just get rescheduled and rescheduled and rescheduled. So the point is, not only were the IMF and World Bank kind of benefiting, and the creditors of the IMF and World Bank benefiting by \"quote unquote\" development, like the, like the idea, the, the very word aid and assistance and development Poor countries. But like the basic fact is we're making money off them, right? Like through the loans. So you have that piece, and then even beyond that, beyond the fact that we're making money off them They would have to structurally adjust. So what, what, what that would mean is that they would need to follow, a rule, like, like a bunch of like, essentially like rules or, or like a playbook that, that the IMF would, would, would impose. And these would include things like currency devaluation, shrinking domestic bank credit, They would include favorable rules for foreign companies, they would include raising taxes, they would include getting rid of any subsidies on food or energy, they would in-- they would include, kind of, getting rid of any sort of like wage Wage subsidy and also like putting a, actually a ceiling on wages. They would include selling off state-owned enterprises, et cetera. So probably like a mix of policies that Bitcoiners would, would be aghast at, and others where they'd probably be like, \"Oh, that sounds like a good idea.\" Right. But in any event, like, like it's sort of a mixed bag. But this is what you'd really be describing as like, quote-unquote, liberalization, right? So countries like Sri Lanka or Ghana, you know, they would not only they would There would be on the hook for PNI, right, over time, but they'd also have to do all these things, which would lead to short term, like impoverishment and reduction in quality of life for the population. And you could argue, well, maybe, you know, twenty, thirty years later, you'd see upside, but like in the immediate, in the immediate sense, like five to ten year period of time, like you're, you're, you're gonna have a rough time when you have what these are essentially austerity measures, right? And I think what was interesting is when you zoom policies that were imposed across, the third world for decades and decades is that what they really were doing is they were forcing countries to reduce consumption and industry in favor of export. So like the productive energy of the country would be diverted from feeding itself and from developing and from creating like unique industries, and it would be diverted towards making stuff for us. So, so making- Stuff for the, the rich West or whatever, or the global North or whatever you wanna say. Gotcha. And," }, { "speaker": "stephan", "time": "36:32", "start": 2191.57, "text": "and this is what you're referring to, the cash crops instead of food crops as one example in the article." }, { "speaker": "alex_gladstein_of_hrf", "time": "36:37", "start": 2196.87, "text": "Yeah. There's a, there's a clip going around Bitcoin Twitter recently, a guy named Michael Hudson, who, who I've written about in the past, and he's in the clip explaining why, like, why African debt is different from American debt, and he's talking about food policy, and he's talking about how, like, you know, in a Prints the reserve currency, so we can just file paperwork and buy oil or food or whatever we need if we had to. And we tend to try and make sure we don't have to do that, like, but, but like, we can, right? Ghana can't do that, so the Ghanaian Cedi isn't convertible on world markets, so Ghana can't just like print a bunch of money, neither can Sri Lanka, et cetera. They, they can't just like, you know, press the fiat button, money printer go ber, and go buy stuff. No," }, { "speaker": "alex_gladstein_of_hrf", "time": "37:28", "start": 2247.9, "text": "In any cases, wheat. they actually have to like, provide a service to the outside world and then, and then, or, you know, export things, goods, minerals, timber, whatever. And then with the-- And then they earn foreign hard currency. And then with those receipts, they, then, then they can go and buy the wheat or the, or the tractor or whatever. So what ends up happening with a lot of these poor countries is that, like, they're-- First of all, they're paying like forty to fifty percent, in some cases, of" }, { "speaker": "alex_gladstein_of_hrf", "time": "37:58", "start": 2277.92, "text": "Occurred over the years. This is dollar-denominated debt to the World Bank and IMF, right? so like a huge percentage of their producti-productivity as a nation, is, is going to pay off debt and interest. And then with whatever's left over, you know, y-you would often have the, the corrupt rule, you know, these countries were usually ruled by dictators or unaccountable rulers, like, you know, they would take off another twenty, thirty percent for, you know, their cronies, their palaces, their wine collection, their car, cars Their palaces in France, whatever. And like what would be left over for the population was like really, really small. So you, you would not only have like essentially the engineering of these economies away from growing subsistence food, whether it be beef or rice or whatever, you'd not only have it be diverted so that those farmers were now growing things, inedible things typically like coffee or cocoa or cotton or rubber or palm oil or whatever. Not only were they like growing things- They couldn't eat, but they weren't-- they were only seeing a, like, a tiny fraction of the profits. And so what ends up happening, like, over time, is that you have these poor countries where people were very poor in the past, but they could feed themselves, okay? And with, you know, people call it globalization, like, one of the big effects, as I've been describing, is that you now have poor countries where people are still very poor, but they can't feed themselves. They have to go buy stuff in the, in the, in the market from abroad." }, { "speaker": "alex_gladstein_of_hrf", "time": "39:28", "start": 2367.96, "text": "sums this up is that today Africa imports eighty-five percent of its food, and that to me is just like so awful and obviously so anti-free market. Like, Africa should be producing food for the world, it's like a breadbasket, right? So if we lived in this like neat little free market utopia, that's what would be happening. Like, Africa has a comparative advantage in this area, and they would be providing food for the world, and they certainly wouldn't need to import any food for themselves. But because of the legacy of colonialism And now of the World Bank and IMF, a handful of countries that, that were dominant, structured the world so that African countries were forced to buy food from them and instead divert their agricultural, energies towards making other stuff that we wanted. And it's, it's just sort of a grim, a grim situation, if that makes sense." }, { "speaker": "stephan", "time": "40:16", "start": 2416.42, "text": "Back to the show in a moment. Coincard dot com are making Bitcoin hardware. So for many Bitcoiners, there's a time in your journey when you start out with a phone wallet, but over time, it's time to use hardware. 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It's so unjust, and because one way to think of it as well is that there's a big problem of debt and people taking on too much debt, and really what's going on here is it's not just individuals in those countries, it's some dictator or some government, and they've gone on taking on all this debt, and now all these people are Paying it off, and in your article as well, you mentioned this concept of odious debt. So, yeah, do you mind explaining a bit about that concept and the injustice of" }, { "speaker": "alex_gladstein_of_hrf", "time": "43:06", "start": 2585.99, "text": "it? Sure. Well, con-context is, is what we-- what is the world's largest Ponzi scheme? And I'm always looking at TV and people are talking about FTX and, oh, the world-- no, this isn't the world's largest Ponzi scheme. The world's largest Ponzi scheme isn't, wasn't the dot com bubble, it wasn't the subprime bubble, it wasn't Mad It's the sovereign debt bubble, and, this is a, this bubbles trillions and trillions of dollars, and what ends up happening is that a lot of the sovereign debt is, is incurred by countries that are ruled by either dictators, autocrats, or unaccountable rulers, or in the past, even colonialists, right? So the concept of odious debt dates back to the end of the nineteenth century, from the Spanish American War, when American policymakers, courts basically said that, once the Spanish were defeated, the Cuban people didn't owe that. Didn't owe the debts that the Spanish had incurred because the Spanish were subjugating the Cubans, so that made sense, right? So they called that odious debt and that was sort of like written off. The thing is, the IMF and World Bank have never followed that sort of legal precedent, right? So even though you had literal colonialists like the Portuguese and the British, I mean, they were taking-- they, they were borrowing money in places like Rhodesia or Mozambique or whatever, and then, like, even after they left, those nations were still saddled with that debt. The Dutch in the, in Indonesia, et cetera, et cetera. And then later it was dictators, right? So whether it was Suharto in Indonesia or Marcos in the Philippines or Pootio in Mexico, et cetera, et cetera, you know, these dictators would borrow billions of dollars, Mobutu in Zaire, a good example, and like, they would get overthrown or they would leave power, and the people of the country still had to pay the debt back, which to me is like crazy. So, so much of the massive sovereign Is basically what we would call odious debt, and, I don't know how that ends up being wound down in the future, you know, I think that we start to see that happen as we transition more towards a Bitcoin standard maybe in the future. But like the point is that, that so much of what's owed today was, was borrowed, w-well, we would, you know, in a way, it would le- illegally essentially, and that has led to the, you know, maldevelopment of so many countries and populations, like the fact that, like, as an example, Was tossed out of the Philippines in, '86. For the following few years after that, like the Philippine, Filipino people were like paying forty-- something like forty percent of their, revenue as a nation was going, w-was being directed towards debt service on that. So you can think about how, how crippling that is to a country that's trying to grow, and that, that is growing in terms of humans, like, is it like the, the, you know, in terms of birth rate, that the country's actually growing, but a huge percentage of its, Lifeblood of its, of its income is being directed towards paying interest and, and debt back on stuff borrowed by some dictator who was totally not elected. Yeah. so this is, this is the issue of odious debt, and, if you just look at the external debt of poor countries since, since seventy, since seventy-one really, you know, the WTF happened in seventy-one dot com, but really since the late sixties, early seventies, it's astonishing. I mean, again, these countries are poor, but they didn't have a whole lot of debt, and then today Their debt is so astounding. Like, I looked at this one country, Bangladesh, like, which had a couple hundred million dollars in foreign debt in the early seventies, and today it has a hundred billion dollars in foreign debt. So, so the IMF and World Bank, like, the, the, the mechanism was like the bailout, right? It was like the moral hazard that we often talk about, that, that Satoshi was actually criticizing when they actually created Bitcoin, right? Was, so you see that on the global level, right? So what's happening is that the IMF and World Bank make the impossible Four countries to borrow so much that they can never, ever pay back. And that, that's because what's happening at the heart of the system is that these dictators would, in the seventies and eighties and nineties, they would, they would essentially, borrow this money and then the World Bank or the IMF would say, \"Hey, you know, it's time to pay.\" And Mabucho would say, \"I don't have, I don't have the money, I'm sorry.\" And instead of taking, like, basically instead of writing down that," }, { "speaker": "alex_gladstein_of_hrf", "time": "47:25", "start": 2844.99, "text": "That would result in the bank or the fund's creditors having to, like, reduce their balance sheet, right? that would result in an asset on their balance sheet, right? 'Cause that loan's an asset on their balance sheet, right? Getting written down, yeah. Instead of taking the zero on that, they would say, \"No, just give them another loan,\" right? Yeah. So because- Exactly, because it's a fiat system, which is not possible in a Bitcoin standard, but because it's a fiat standard system, they could continue to just do this over and over and over The IMF and World Bank are essentially dollar creatures. The dollar system was able to continue to just bail out these countries, and a lot of that was like Cold War politics, right? At the beginning, right? Like Mobutu, we like, you know, the US needed him to like fight the, communist, uprisings in Central Africa or whatever, which, you know, it is what it is. So, but we would just continue to bail him out over and over and over again. So there was no economic sense here. There was just an enormous amount of moral hazard. Fix our crisis or build this dam, like we don't have it. So they would just get another loan. And this was not done in a free market sense, this was not done with any sort of economic, wisdom in mind. This was a pure political decision, it was a fiat decision. So this is why you have this absolute explosion of, of foreign debt in, in poor countries. And really they're stuck, it's called the debt trap because they're stuck. I mean, there's nothing they can do. I mean, you talk to people who live in these countries and, you It's tough to tell them to their face, \"You shouldn't take this loan, \" right? 'Cause like, the loan, in an immediate sense, gives capital to the country which might be starving, right? Now, of course, we all know that, again, you have to pay back more than you're given, and it, it puts you further into debt bondage, et cetera. But for people who are starving today, it's very difficult for them to say no to the money, right? So it's kind of like, I, I, I use the parable or the Is the drug, and these dictators and unaccountable rulers in the developing world are addicts, and, you know, nobody wants to go to rehab. Like, there's no, like, there's no incentive for that. There's no therapist being like, \"Hey, maybe you should like not take that loan, maybe you should like figure out a different way.\" There's no one saying that today. So, so there's no one going to rehab, and you just have people getting deeper and deeper into debt, and eventually you die. And that's what ended up happening. So like the conclusion," }, { "speaker": "alex_gladstein_of_hrf", "time": "49:55", "start": 2994.85, "text": "That due to structural adjustment and due to just borrowing and borrowing and borrowing and borrowing, you know, over decades, their, GDP or GDP per capita was, was decreasing in real terms, even though their population was growing. and there's, there's some studies I, I, I show, but in general, you can think of like a coun- you know, a country like Mexico was, where one study was done, where with every two percent reduction in, in, in GDP per capita, you'd have like a one percent, increase in mortality Okay. So for example, like, okay, so that would mean a two percent contraction, right, of GDP per, GDP per capita in a hundred million person country like Mexico would mean, would mean a million people die, right? So in a lot of these countries around the world, you had a fifteen, twenty, thirty percent contraction of GDP over time. So we're, we're talking tens of millions of people were killed by these policies, which is just really crazy, and no one's ever done an accounting of it, and we just, we'll never know. And here's the thing IMF officials will ever go to prison, like there, there's not gonna be, certainly not, like they're, you know, they're, they're partying right now, you know, they're, they're living in their wonderful estates in Virginia or wherever, and, They're getting feted, at dinners and stuff, and I just think it's so grotesque. I don't know." }, { "speaker": "stephan", "time": "51:12", "start": 3072.27, "text": "Yeah, of course. And there's some real structural issues that come up in the different countries. And, you know, I, even when I talk to people in Sri Lanka, they, you know, with the recent crisis there, they'd be like, they'd sort of be mentioning, \"Oh, look, I heard there's another IMF loan coming,\" and as, as if like it's gonna save them, right? Right. Yeah. And so it's-- It's quite confronting, obviously. Yeah." }, { "speaker": "alex_gladstein_of_hrf", "time": "51:38", "start": 3098.39, "text": "We should also very briefly mention China. What ended up-- and I think this chapter's sort of closing, but what you had here also was like China as this rising power. China looking at what the world-- the US did with the World Bank and IMF and being like, \"Oh my god, we should do that too.\" And like between like, like basically two thousand and seven and maybe twenty twenty-one, China through the Belt and Road had a similar kind of-- similar more to the World Bank, but they had essentially a development bank through, like, I think by twenty, twenty eighteen, twenty nineteen, they may have been, even been given more money out per, per, per year than the World Bank at, at particular time. But here's the thing, China doesn't have the reserve currency, so they would be giving these loans out, and like, and they don't have any like structural adjustment conditions, they just like give the loans out. So a lot of countries would flock to China, and then if the, and then when the countries would go bankrupt, like Sri Lanka is right now, like China's, like Sri Lanka owes, Currency to bail out Sri Lanka again, like it doesn't have the ability to print dollars. So what it, what it can do is it can seize, national assets. Yeah, exactly. But you know what? Like, here's the thing, does China really want the like Sri Lankan telecom? Like, is that-- So, in, in, I'm serious, like, what, what's ended up happening across Africa and a lot of the, the, world is like, you've got China who's like, okay, so we could come in and like take this" }, { "speaker": "alex_gladstein_of_hrf", "time": "53:07", "start": 3186.79, "text": "And hire security guards and like deal with it, and like, what's happening is they're actually retreating from a lot of these places, right now, as they have their own currency crisis and they're about to have this real estate collapse and all these things. So, like, you know, and I'm, China's even worse in, in my view than the IMF and World Bank in many ways, 'cause look, this is a country committing act of genocide, et cetera, et cetera. But what's interesting is that they weren't-- they could Copy the system and, and certainly that I, I think, you know, their loans are-- they ended up backing all kinds of dictators as well. So, certainly, certainly not any better, and in many ways worse. Yeah. but that, that may be winding down, and, and in the meantime, the IMF and World Bank are bigger than ever. I mean, dude, like, the IMF is now a trillion dollar institution, and the World Bank's got two hundred fifty, three hundred plus billion dollars of loans out there, and a lot of people like think that longer relevant and that all, we had all this debate in the eighties and nineties about these institutions and then, well, they're not that relevant anymore. I mean, they continue to be the most important global financial institutions." }, { "speaker": "stephan", "time": "54:17", "start": 3256.85, "text": "Yeah, it's a shame. And I think what happens is the countries get stuck in this debt trap and then they just don't have a way out. And what it takes is to really go independent from that. And I think you also mentioned this in the article as well, but there's resistance even inside the country because some people inside the country are benefiting from that system and Very much not, or others don't, don't understand the problem, or they, you know, it's like, or as you said, like they don't wanna go to rehab, right? Because it's, it's gonna be a lot of short term pain even for that long term gain. And so how do you see a way out of this?" }, { "speaker": "alex_gladstein_of_hrf", "time": "54:52", "start": 3291.68, "text": "Yeah. Well, I did the piece and I, I tried to reflect all on this. In many ways, just, just, just, just to get the info out there, like I didn't know these things, or at least I All these texts from twenty, thirty, forty years ago, fifty years ago, I think the lessons in them are so important, and we should just educate ourselves about the legacy of the IMF and World Bank, and that's like a first step, like knowledge is power, and we should be knowledgeable about what happened, and I think that's, that's an important first step, because we seem to have lost the pub-public collective knowledge about what the IMF and World Bank were. Like, we may have had that maybe thirty years ago, but anyone younger than like forty years old probably knows very little about the World Bank And there's a little bit of a banality of evil thing here going on, but like most people who work at these institutions aren't bad people. Like they don't really know what's kind of mega going on. They, they, they, they see their job as extending, capital and, and credit to countries that couldn't otherwise get it, and they, they really think that they're doing a good job, right? So it's only when you really zoom out and you see like the multi-decade impact of, of these things, where you start to see the massive human and environmental damage" }, { "speaker": "alex_gladstein_of_hrf", "time": "56:07", "start": 3366.77, "text": "A future. Well, you know, and I talked to Jeff Booth and Safedine and a few others quite a bit about this to try and sculpt my thinking here, but I mean, if we have a Bitcoin standard, IMF, World Bank can't like do what they do. Like they, like they, they wouldn't be able to do infinite bailouts. Like if, if Brazil wants thirty billion dollars, like, you know, it's sort of like, \"You and whose bitcoins? \" You know, is sort of the what Safedine said, and it's, it's true. It But in a world where no country can print the reserve currency, I think that the World Bank and IMF, if they are to continue to exist, have to be much more careful organizations and have to be much more kind of more like traditional banks, where they assess risk and then make decisions based on that, as opposed to ignoring risk, right? And knowing that no matter what, these can be bailed out and, and creating that, that, that global moral hazard for the whole financial system where you have banks making loans Now and doing business in countries that they would never do normally because, because they know they'll get bailed out and, and the all the moral hazard that that creates. So I think as we transition to a Bitcoin standard over the next few decades, like we'll probably have an unwi-- well, we'll certainly have an unwinding of these institutions. They'll have to either refocus or just be abolished, and that's not gonna be pretty. I mean, I don't think that any of this is gonna be pretty, I mean, I hope it's a winding down and not I mean, any, any-- sort of the parable of, of structural adjustment is that, like, again, when you're, when you're, when you're being subsidized, even if that's a bad decision economically, we'd probably all agree, but when you-- when your subsidy goes to zero, that's bad. Like, that's unequivocally bad for the majority of people who live in that particular country is being subsidized. So it's sort of the same thing. So, so all these countries are essentially being like subsidized by the World Bank and IMF at their Go to zero overnight, like bad things are gonna happen, right? So my hope is that there's an unwinding that happens and that bank, and that countries basically start to like default. And in many cases, like if you have defaults, like who actually gets hurt, you know? I mean, it's, it's, in many cases, it's gonna be the creditor who made the bad decision in the first place, right? And that would be like free market capitalism at work, right? Like that's why bankruptcies are an important part of capitalism, right? Oh, oh, you made a" }, { "speaker": "alex_gladstein_of_hrf", "time": "58:37", "start": 3516.81, "text": "Engineered so that, like, the people making the loans aren't facing any risk. I mean, it's not a free market, like they're getting bailed out by the IMF, right? In the same way that the US government has like a put on whether it be stocks or credit or whatever, like you have like the nationalization of these things. Well, this is like the super-nation-supranationalization of, of sovereign debt and foreign investment. so if that goes away, I think, I think there's an unwinding, right, of total amount of credit in the system I think these institutions either become a lot more careful or, or disappear. And I think there is still a place in a Bitcoin standard for powerful countries to have a lender of last resort type thing, like, like, like the IMF, World Bank were originally drawn up to be, before they kind of mutated into this grotesque colonial apparatus. Like, like there is a place for, I think, a World Bank type thing that would be funded by deposits from wealthy countries to fund import- Sustainable projects in poor countries that, that private markets maybe can't fund. I think that is absolutely an important thing, but it can't be funded by like fiat bailout money. Like, it's gotta be funded by like actual capital. So, I think those institutions will be much wiser, much more conservative, much more careful, and much more like prudent in terms of like the amount of capital they're giving. It'll be like a lot more careful, basically. Like, these projects that were funded by the bank and the fund simply because they had a quota They, they like, these bureaucrats were like, they had to lend out a hundred billion every year to this part of Africa. That was like in their job. Like, that, that's, that's literally their job is find projects to fund targets, yeah. And like they, if they, if there was no targets, they had to make them up. So you had all this massive waste, right? And it would just go into the line, line the pockets of government officials and stuff like that and fund projects in the middle of nowhere that didn't do anything. So if you no longer have these like" }, { "speaker": "alex_gladstein_of_hrf", "time": "01:00:35", "start": 3635.87, "text": "Like, well, like, how can we really improve the quality of life for people in this country? I think things are gonna be very different. So, I, I'm hopeful about the far future or about at least the medium to far future, but I don't think there's any way that the next decade isn't really rough as we, as some of these countries essentially, essentially go to rehab and they, they get off the fiat system, it's gonna be really tough. I don't, I think we should have no illusions about that. It's gonna be really, So, it'll be long term healthy for the nation, for these nations and these groups of people, as they transition more to a standard where they are independent and sovereign, I think it'll be much healthier for them. But the, the, the, the system is gonna be painful to wean off of, for sure. I mean, the other interesting part is the, is the, is the mining piece, and I, some people are less bullish about this, but I just find it fascinating that, like, in the future, any country, no matter how small Reserve currency by transforming its latent, you know, energy resources in, directly into that through Bitcoin mining without permission. So like today, you can't just like Malawi can't, again, can't just like create dollars, like it has to go out and get them, et cetera, it has to do things that the world wants. Well, what if Malawi instead can just turn its flowing rivers and sunlight or whatever into Bitcoin? Now, it may not be a lot of Bitcoin, but hey, that's gonna be the premium collateral of all financial- Financial markets in the world, like Bitcoin, will be very valuable. So I think it's really cool that maybe in the future you can have even these poorer countries be able to permis- permissionlessly generate, the reserve currency. I think that'll, that'll really level the playing field a little bit. that's something I think about a lot too." }, { "speaker": "stephan", "time": "01:02:21", "start": 3741.38, "text": "Yeah, that's an interesting idea. Although I think at one level we could say, \"Look, mining is a business like any other,\" and, you know, we've seen in the recent cycle a lot of" }, { "speaker": "stephan", "time": "01:02:35", "start": 3755.91, "text": "Say, a conservative in the, in the business sense of not getting wrecked in a bull cycle kind of thing or extending, you know, but I think, I think your point about some of these countries going into default, I think that's sadly the way some of these things will go, and then maybe the IMF and World Bank creditors will have to actually take a loss, they'll have to take a loss on that loan that they lent out in some cases, and we may see, and that'll shrink" }, { "speaker": "alex_gladstein_of_hrf", "time": "01:02:58", "start": 3778.01, "text": "the amount of credit in the world, right? Yeah. And that'll I just think we're headed towards a system at the both the micro and the macro level that is just much more cooperative. Like, Jeff called it, Jeff Booth called it forced cooperation. Like basically, when you even think about the wage disparities and the way that the fiat system and the colonial system created these like, wage disparities. Like, like if you're living in this world, this new world where everybody's on the same monetary standard and there's no like barriers between commerce in the same way, and we're all just like on the same currency system, like the arbitrage on wages is Tighter. Like, it's not gonna be, it's not gonna go away. Like, there's still gonna be benefits to having your com- your company based in America versus Nigeria. All kinds of benefits, security, et cetera, et cetera, whatever, language, who knows? Like, all kinds. But if you have talented software developers there, like, that wage thing's gonna like close a little bit, right? So I think one of the, one of the, again, one of the ways that the world is still so divided and still so unequal in many ways Fiat's and you have a hundred plus fiats and forty plus central banks on one continent alone, and none of them are interoperable, and everybody's like kept in a system where if they want to do commerce or move from one system A to system B, they have to pay rent to some foreign power. Like that is currently the system. And the answer, as, as I'm so glad people at the Africa Bitcoin Conference were saying, is not to replace that system with an indigenous system. I think that, that's, that's been the problem in post-colonial Africa, right? That, I write about a lot. Like basically, the, the colonial systems were just like replaced by dictator systems, where the, the colonialist was just living down the road instead of in Britain, and they, they were like rinsing and repeating the same thing. So the answer's not to like nationalize Western Union's fiat rails in Zimbabwe or whatever and replace them with Zimbabwean fiat rails. No, that's actually probably gonna be even worse. The answer's to switch to Bitcoin, right? So I think it's really cool and, and I think I think it does have a little bit of that forced cooperation thing that, that, that Jeff's talking about. So, yeah, I mean, I'm, I'm more optimistic about the future for sure, but I don't think people should be under any illusions about How tough it's gonna be for, for the next few years, but at least individuals will have an escape, right? I think that's the key. We don't really know how this is all gonna shake out at the macro global level, like what the Bitcoin transformation ends up doing to the world, like again, I'm optimistic, but what we do know is that as opposed to the 1980s, people in countries like Ghana and Sri Lanka actually have, on a micro level, they can opt out, and that, that's very, very" }, { "speaker": "stephan", "time": "01:05:41", "start": 3941.06, "text": "valuable. Yeah, especially in this And if you can do an online skill or job or business, earn Bitcoin for that, it's, it's, it's making a difference, right? And I think whether you're in Africa or Asia or South America, like there are, there are opportunities there, and I think that is gonna start rebalancing things, and we'll see, it may be some combination of things, as, as we were talking about, some defaults in the poorer country, it may be over, like a longer term, maybe if it's devaluation of fiat and bit-in favor of Bitcoin, well, that And I guess one other area, I think you touched on this in the article as well, is this idea that maybe people should start pushing against this whole notion of foreign aid, or at least government foreign aid, right? And I think that was something you were mentioning, as well, I noticed, because the idea is there are some people who are aware about this kind of thing and saying, actually, some of this foreign aid is part of the problem because it's going to the dictator, it's going to the-- We need to get off the teat." }, { "speaker": "alex_gladstein_of_hrf", "time": "01:06:41", "start": 4001.5, "text": "Yeah, well, I, I want Remember, most assistance are loans, and these are, these are not really assistance. I mean, they're making money off of that. They're, they're framed as, yeah, yeah, yeah. But I, I didn't wanna deride all-- I mean, I think that like private aid can be very important, like if a country has an earthquake or something, like of course, I think it's quite charitable and admirable to donate, like, let's say in the wake of the, the two thousand, was it two thousand and four tsunami in Asia, in, in, in the In the, in, in circumstances like that, private aid is, is noble, and of course it's, it's, it's ineffective, in, in many ways, it's, it's inefficient because you have all these fiat rails and third parties in the middle, like bureaucracies like the Red Cross, et cetera. But the general concept of like making a no strings attached gift to, people who have just been like devastated by an earthquake or, by a famine, like I think is really noble and important. The problem is when the, Right? And that's almost like a separate issue, but yeah, it creates, it creates dependence, and, and it, it creates dependence in the same way that this \"quote-unquote\" assistance that I've been analyzing creates dependence, where like local industry gets wiped out, like you have aid in the form of like clothing, used clothing being dropped into these countries, and it wipes out the local textile manufacturers, and it wipes out, the ability of local business to produce, right? So a lot of the aid is, is, even these countries are victims of both- Aid and assistance, ironically, you know, in, in the assistance has been, indebting them and, and structuring their economies in ways to help us instead of help them, as, as I've detailed in my article, but separately aid, in some cases, you know, again, a lot of it, as you say, go, goes to the government officials, you know, and doesn't actually reach, reach all the way down to the people who need it, but it can also create dependency, and people like Dembisa Moiyo have written Aid, aid can be quite dangerous and, you know, but, but it's a separate-- I think it's important to, to be, to distinguish that from assistance. again, aid is only a small percentage. But the one thing I would say is that, that we didn't mention that is important is whether it's aid or assistance, what, what is always interesting is that Western countries consider this, They call it Official Development Assistance, ODA, like any sort of aid or assistance. A-and, and that, that's, they, they're all like comparing, oh, who gave the most ODA this year? But what's crazy is in the ODA, which would be like maybe, let's say, like whatever milli- whatever amount of billions of dollars France gives in ODA every year, the crazy part is like, oftentimes, as I mentioned in my article, like, and this goes for the World Bank or IMF too, any sort of large assistance, pro- like But immediately comes back to the West. This is called like the double loan phenomenon, right? So, for example, I, I talked about this issue, an example in Ghana, like there was a huge dam built in the '60s in Ghana on Lake Volta, created this huge lake you can see from outer space, Lake Volta on the Volta River, the Akosombo Dam. So, money was lent by the World Bank and other, like in a World Bank like, like round, and it was lent out to, the Ghanaian government. Who then immediately hired an Italian company to build the dam. So the money, the, the money was entirely spent in the West, but the Ghanaian taxpayers had to pay the whole thing back plus interest. And then the project itself was going towards an American aluminum company getting really cheap electricity, and nobody in Ghana was actually sort of benefiting from this for, for like many years. So, so this is, I thought, there was a great kind of metaphor for what development really is. In many cases, it's, it continues to be foreign exploitation. But that double loan phenomenon is very- Minister and, and happens all the time. Like the money gets written off or designated as assistance, but in reality, you know, sixty to eighty percent of it comes right back into the pocket of the donor country or the, or the lending country. So, I think that's, that's been," }, { "speaker": "stephan", "time": "01:10:54", "start": 4254.71, "text": "yeah," }, { "speaker": "alex_gladstein_of_hrf", "time": "01:10:55", "start": 4255.05, "text": "that's so brutal, an understudied phenomenon." }, { "speaker": "stephan", "time": "01:10:57", "start": 4257.48, "text": "Yeah. Well, yeah. So, I mean, as we were saying, I think the way out is, yeah, some countries will have to default, other countries or at least individuals will have their way of, you Yeah, I guess that's really the best we can hope for, is that people are waking up to Bitcoin as the alternative. Yeah, brick by brick. Yeah. That's right. Also, one other thing, I know you recently had a bunch of, grants going out from HRF, so do you wanna just tell us a little bit about, some of the HRF grants, that have gone out recently?" }, { "speaker": "alex_gladstein_of_hrf", "time": "01:11:28", "start": 4288.55, "text": "Sure. So we're happy to be able to give out about two billion satoshis, Which I suspect in ten years will be probably a, a very large amount, but we're fortunate to have supporters who, who are interested in, in seeing us do this, so we have a program where we give away, Ten to twelve grants every quarter, our next one will be in February, our Q1 grants. This was, about ten projects around the world focused on core development, scaling, Bitcoin communities, education, and privacy. So Some of the recipients included, individual core developers, individual Lightning developers, educational groups in places like Sub-Saharan Africa, or India actually, and also like projects working on privacy, like the Tor project, as well as, a conference that was recently held in Mexico that was focused on Unchained Privacy. So travel grants for students and activists, projects to help men and women, girls and boys of different- different ages and, and backgrounds to learn about Bitcoin. So, yeah, it's kind of like a, a full stack approach, I think, but we're excited to do it. I think it's somewhat unique in, in the space, and, we'll, we're excited to, to, to keep doing it because right now You know, in many ways, we want to acknowledge that, I think in the, in the, in the breakdown of how much we give, that core development, will always be important to an extent, but in many ways, I think you can, you, you can, you can argue that Bitcoin is good enough as is, like, like it works today, like, it, it can do a lot more, like it's, it's, but, like, it could just ossify today and not change at all and still really change the world over the next forty years, right" }, { "speaker": "alex_gladstein_of_hrf", "time": "01:13:18", "start": 4398.36, "text": "To expand the number of users of Bitcoin, so communities and education and UX improvements, so I think that's where we are particularly suited to helping, and, and a lot of these are gonna, you know, this is all gonna be in line with our mission. So these developers are mostly or entirely based, in authoritarian countries or emerging market countries, and that's where these initiatives are, like, you know, Cameroon is a great example, or countries that have, that are facing, you know, crises of human rights, like India even today. has a lot of issues, so we're very, very proud to support the, the Indian Bitcoin community. I think they're gonna be, very important for Bitcoin in the next decade." }, { "speaker": "stephan", "time": "01:13:56", "start": 4436.88, "text": "Yeah, very important, country in terms of the size, right? Just, you know, the number of people and- Biggest country in the world." }, { "speaker": "alex_gladstein_of_hrf", "time": "01:14:02", "start": 4442.89, "text": "Yeah. They don't trust the government, they love cash and they love Bitcoin, they love gold, so I think they're gonna be huge Bitcoiners and an easy sell. Well, I mean, they have to get past all the," }, { "speaker": "alex_gladstein_of_hrf", "time": "01:14:18", "start": 4458.4, "text": "Yeah." }, { "speaker": "stephan", "time": "01:14:19", "start": 4459.02, "text": "Alright, well, fantastic. I think, I think that's, I think that's a good spot to finish up there. But, yeah, I think it's great, the, the, the grants and the programs there in terms of building the community and the education. So, yeah, any, any closing thoughts or anything else you wanna leave the listeners with?" }, { "speaker": "alex_gladstein_of_hrf", "time": "01:14:33", "start": 4473.13, "text": "Well, it's all connected. I mean, again, as I said at the beginning, the Africa Bitcoin Conference is one of the things we've supported, and it's kind of this third way" }, { "speaker": "alex_gladstein_of_hrf", "time": "01:14:48", "start": 4488.46, "text": "authoritarians and corrupt local leaders, as well as like the IMF and World Bank, right? So Bitcoin is, is both anti-authoritarian and anti-imperial, and I think that in many ways, hopefully our grants can reflect that and, and we'll continue to try and support, as many, Bitcoin projects in the global south as we can. And, and again, thanks, thanks so much for having me on today to talk about these issues." }, { "speaker": "stephan", "time": "01:15:10", "start": 4510.13, "text": "Fantastic, thanks, Alex. Chat soon. I hope you enjoyed the show. Get the show notes at stephanlivera dot com" } ] }