Albert Wenger: Union Square Ventures – Towards the Knowledge Age and the World After Capital (#333)

Transcript

this is epicenter episode 333 with guest albert winger hi welcome to epicenter my name is sebastian Cuchillo today our guest is albert winger albert is a partner at Union Square Ventures three new york-based early-stage VC firm and they've invested in companies like Twitter Tumblr Etsy Kickstarter and many others albert is a graduate of Harvard and MIT and holds a PhD in information technology now before he joined us V

Albert founded several companies in the early aughts and he was the president of delicious which I'm sure you'll remember as the great book marketing service in the early 2000s I certainly used it a lot so one of the main motivations for getting Albert on the podcast was his book world after Capital in his book he explores the shift from the industrial era to the knowledge era now I haven't read the book but after listening to Brian and federica's excellent interview and preparing this intro I think I'll spend the rest of the day doing just that so the book explores technological progress throughout civilization and how each era has caused a shift in scarcities so in current times Albert makes the argument that following the

Industrial Revolution capital became scarce but as we shift towards a fully digital society scarcity will move to our attention it anyway I'll stop there and let Albert walk you through the thesis of his book but it's available for free at world after Capitol org so I encourage you to check that out if you want to read it he also blogs at continuations comm and recently posted an article in which he proposes that the economy should go into suspended animation for the duration of the kovat crisis which is something that I'm largely in favor of it so here's what you'll learn in the interview Albert's background and what he did before US v the motivations for writing

world after Capitol how the properties of zero marginal cost and universality specifically in the area of computing are unique to the digital age human attention as the primary scarce resource in the digital age the shift towards the knowledge age and the role of capital in the future kovat 19 as a catalyst for positive societal change and things like universal basic income the potential upsides for crypto in the current economic crisis and the inherent asymmetries between technological progress and privacy so on the topic of covet 19 and the potentials for this

crisis to have hugely positive impacts on the world long term I'm fully on board with the idea that society has the opportunity to hit a massive reset button and that's why we're organizing reset everything it's a virtual event it's taking place on April 29th and we will explore the lasting policy effects that the current crisis will have in the areas of economics health care labor laws border controls personal privacy but also things like post corona collaboration and societal norms we'll be announcing the first speakers to confirm very soon so please go to reset everything dot events to save your seat once again is happening online on the 29th of April and we're

super excited to be organizing this event and looking forward to seeing you there before we go to the interview I'd like to tell you about our sponsor for today's episode status of course the status mobile app launched recently in the Apple App Store in Google Play Store please go there and download it and once you've installed it join the public channel hashtag epicenter come and say hi and we'll even give you some free SNT tokens to get started and register your status ENS name so status is a secure private communication tool that combines a decentralized messenger a web 3 browser and a crypto wallet it strives to be a secure communication tool that upholds human rights and privacy with status your messages and your identity

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and with that here's her interview with Albert Wenger we're here today with Albert Wenger who's a partner at Union Square Ventures a very well-known venture capital fund in New York Albert's written a wonderful book called world after Capitol that we're gonna speak about today a lot of the ideas are super timely and you know a lot of they're kind of economic and global change and pandemic that we're going through at the moment so thanks so much for joining us today Albert great to be here first of all he were a little bit about your background so many people will be familiar with unions go and she's like what did you do before and how did he end up becoming a venture capitalist I always like to say I became a VC because I was a bad operator and

people think I'm joking but it's entirely true I started a company while I was getting my PhD at MIT I started a company because this whole web thing was exploding and I was working on my dissertation and I was like oh my god there's like only three people ever who will read this that's my three thesis advisors and maybe that's even questionable what am i doing and so I started a company late 96 early 97 in at healthcare space ultimately got it funded recruited a management team and so forth it seemed to be going really well for a while but I realized in doing it that I was not really cut out to be an operator but I thought startups were a really amazing aspect of capitalism that you could go start something that

people would give you money for it and so I was like well the other way I could maybe be involved with this that might be a better fit for my personality is to be venture and from that realization which I sort of had in like 98 it took me basically ten years to actually be a GP at Union Square Ventures and I don't want to bore you with the details of that but it's a fairly circuitous route that involved starting my own fund unsuccessfully trying to start another fund also unsuccessfully and doing something else in between also unsuccessfully and then eventually doing something successful which was delicious with Joshua Schecter and then joining Union Square Ventures I think that's super interesting so that

happened in the mid naughties and you've been a managing partner since but as our listeners were note this was way before blockchain actually merged so you did web to investing to start off with when did blockchain come to your attention and to what did you find notable about it because Union spec Square MSHA's was one of the first species that actually started investing in this space I'm trying to recall exactly who first pointed me in the right direction and I actually think it may have been navall who I've known through AngelList we've talked about AngelList on and off for years and I wound up becoming a personal investor in balla G's crypto

mining startup so that was fairly early days and it took me a while to really wrap my head around it but I think relatively early on the conceptualization that I came to in that I think also we at Union Square Ventures really developed was this idea that if you think of a two-by-two where on one axis you have weather controller centralized to decentralized and on the other axis you have weather data is consistent or inconsistent in this 2x2 matrix there was one basically quadrant which is the decentralized control consistent data quadrant that simply didn't exist

there was no solution for it until the Satoshi white paper came along with a Bitcoin paper and so that is how we think of the fundamental breakthrough that blockchain represents is decentralized control and yet consistent data and I think we realized relatively early on that that was a fundamental breakthrough it doesn't matter what your consensus protocol is like some consensus protocol that achieves that um that is a breakthrough and so we wrote early on about Bitcoin as a protocol as opposed to just Bitcoin as money and I think we've stayed fascinated with it since we

want to being quite fortunate to invest early on we let the series a and coinbase I believe that was in 2012 or maybe 13 to us it's a fundamental innovation it's advancing knowledge that lets us do something that we previously weren't able to do now it raises lots and lots of questions about what exactly we're gonna do with that which we can maybe get into later but it's sort of an ability to do something it I think of these abilities like heavier-than-air flight is a great example we couldn't do it couldn't do it couldn't do it and there's something we could do it similarly here it's not that people hadn't been thinking about decentralized consistent data but we couldn't do it it was when Satoshi put these different pieces the hashing and the public key

cryptography and so forth together in just the right kind of way that all the sudden we were able to do it oh yeah we definitely want to get back kind of revisit the equip the topic towards the end after you've spoken a little bit about your book world after Capitol so your book is available online we'll link to it in the show notes of course anybody can read it for free it's also sort of a work in progress nothing here kind of a collaborative product this tell us a little bit how did you decide to write this book what was the motivation behind it so it started probably at this point five plus years ago when I started sort of giving talks about how digital technology is different and I had this sense that a

lot of people were misunderstanding digital technology they were essentially conceptualizing it as computers or machines and we've had machines and so there's nothing new here it's just another turn of the crank of the Industrial Age Trulli and I thought that was fundamentally wrong but I hadn't really wrapped my head fully around why I thought it was wrong and how it was wrong and then as I kept working on it at one moment and I remember this very very well because I was walking down Mission Street in in SF on the way to a meeting I sort of had this epiphany where it all kind of came together and that epiphany also produced the title of

the book world after Capitol and the idea is is really quite simple which is that basically every big age of humanity has a defining scarcity and then humanity invents some technology and that technology shifts what that defining scarcity is Homo sapiens emerged roughly 250,000 years ago and for the longest time Homo sapiens were foragers in the forager age the defining constraint was food you try by the fountain of food or it had to migrate or it starved and then roughly ten thousand years ago we created a bunch of knowledge and that included figuring out that he could take seeds and put them in the ground figuring out that he could

irrigate those seeds figuring out that you could domesticate animals a whole bunch of interlocking inventions which together give us the agrarian age and that set of technologies shifted to constraint the constraint no longer was food directly but suddenly became land arable land how much arable land do you have and if you had enough Arab land you could build sort of a flourishing agrarian society and then only a couple hundred years ago we had the Enlightenment and with the Enlightenment we had scientific breakthroughs we figured out chemistry and physics the ability to make steam power and an electric power to do mining to make processed materials and all of that give

us the Industrial Age and the constraint shifted again it shifted from land to capital and when I say capital in this context I mean physical capital who can make factories and produce cars and put railroad infrastructure in plays and direct buildings that became the binding constraint so those were the three big ages and um we're gonna get to the next age in a second the important insight was that each time when we shifted the binding constraint we also radically changed the way Humanity lives so when we went from the furniture age to the agrarian age we went for being migratory to being sedentary we went from living in very

flat tribal societies to living in extremely hierarchical agrarian societies we went from being promiscuous to being monogamous fish we went from having animistic religions where every tree every animal maybe even a rock had a spirit in it we went from that to theistic religions so we really changed just about everything about the fundamentals of what it means to be human we changed that in that transition now fast-forward to the transition from the agrarian age to the Industrial Age we again change pretty much everything we went from living in the country to living in the city from living in large extended families to living in nuclear

families with no families we went from having lots of comments to mostly private property including private intellectual property and we even changed religion again we went from what's called a great chain of being theology where the theology where the religion kind of tells you look you're a farmer I'm gonna tell you how to be the best possible farmer but you'll never be a noble person because you just weren't born that way we went from that to the Protestant work ethic which is like the harder you work the better off you'll be doesn't matter just there's no limit basically that had been the progression and now comes along this thing called digital technology and I think the fundamental misunderstanding is where people think well digital machines are just machines - like those industrial

machines not recognizing that these digital machines and digital technology has two properties that are fundamentally absent from all preceding analog technology and those two properties are zero marginal cost and universality zero marginal cost is quite easy to understand you know on YouTube the marginal stream of a video costs nothing you servers are already up and running the network is already powered up my laptop is already powered up I'm already connected there so there's literally zero discernible cost from watching you in another video in the physical world like the actual laptop on which I'm viewing this which is very much a

physical object if I want another laptop that costs a lot of money to produce so there's something fundamentally different around marginal cost in the visual world and a lot of economic theory was built on the idea that marginal cost was greater than zero and so when you get to marginal cost equals area you have a kind of divide by zero you have sort of an infinity built in and a lot of existing theories break down and then the second aspect of digital technology is what I call universality so universality is this laptop which we're currently using to have this conversation and use zoom with a different piece of software I can run a spreadsheet on it with a different piece of software I could do some deep learning on it and so forth if you take

a toaster a toaster is just a toaster it's gonna toast toast hopefully if it's working it's not also gonna make coffee so universality is again a property that we didn't have until we came to the digital age and now the coolest thing is that these two properties can actually be combined so you can have basically universality add zero marginal cost what does that mean well it means for example if we figure out how to write a diagnostic program that can help diagnose disease we can run it on computers that's the universality part any computer will be able to do that part but we can also then provided at zero marginal cost and so this is fundamentally deeply deeply different from what have come before it it's as

deeply different it's as big a transition as the transition from the furniture H to the agrarian age and from the agrarian age to the Industrial Age what then is the new constraint in the book the argument I make that the new constraint is human attention what is it that we're paying attention to and so my view is that we need to change just about everything about how you manage lives exactly the way we've changed just about everything about how humanity lives two times before and everybody who has been approaching from an incrementalist position which has been almost all the politicians we're all like well let's have a little change of the interest rate here and let's have a little retraining program

over there all these incrementalist approaches are fundamentally flawed because they don't recognize that this is a shift that is of a completely different magnitude and it's more of the magnitude of these big to prior shifts that we've experienced where do you think we are currently in this process of transitioning to the knowledge age so what has already occurred and what we still have to do yeah so I think the thing that's already occurred is that the Industrial Age already has stopped working and I think there's a number of ways we're seeing that I would say the election of somebody like Trump or brexit are powered by the fact that the Industrial Age already stopped working maybe a

decade maybe as far as two decades ago for a lot of people what I mean by stopped working is that people were all of a sudden no longer seeing why they were doing all this it seemed like a very small group was reaping all the benefits and a rather large group was stagnant and in the u.s. we can see that very clearly you know with even like the wealth and income distribution but also just when you look at how fulfilled people think their life is so I think there was a whole generation or several generations where it was very clear that your purpose was you know you were gonna get this go to school go to college get

a job have a long-standing career and one company have a nice place much nicer than your parents did have all the amenities of consumer life you know a microwave a television air conditioning and so forth and that was all very very clear and all of that started breaking down I say somewhere between 10 and 20 years ago maybe even early signs a little longer than that and so where we are is we are in the transition but the problem that we're having is we're lacking a narrative of where we should be going there's no narrative of what the future could or should be and because that narrative is lacking I call it a narrative vacuum that's why

we've got all these people coming in and saying well I've got the answer the answers would go back to the past Trump's program is one of make America great again which is this idea that you can somehow go back to a past where the Industrial Age was working beautifully for everybody and you know Germany is not that different whenever I go to Germany let's talk about in the stevia company and it's just this idea that we just need another turn of the Industrial Age and everything will be fine again and even if you take somebody like Isis this may sound like an extreme comparison but again I think they're able to recruit a lot of people because a lot of people don't have purpose in their life and for them they don't want

to go back 40 years they want to go back 400 years but it's still roughly the same idea right it's just like there was a past the past was glorious you don't have a purpose in life re-establishing this glorious past is now your purpose and it's easy to recruit people to that because people want a purpose in their life so by having created this narrative vacuum we've made it possible for all sorts of awful people to collect forces in the world and a big thrust for writing world after capitalist to try and put out a possible positive narrative about the future that we can get to what I call the knowledge age so I believe we need a positive view of a place in the future

that we can get to so that people's purpose can be to build this future world as opposed to going back to an imagined old world you mentioned that in this future world attention is gonna be discarding why is that and what does that look like attention is a very fundamental scarcity in the sense that for all of us no matter how wealthy or even the Bill Gates for example can't go back and change what they paid attention to yesterday or for the last decade right however much attention they pay to their own purpose in life to their friends and family two big topics of the world we can't change that and we're

seeing that in a extraordinarily tangible way right now all the attention that we collectively as humanity didn't pay to infectious disease is now catching up with us dramatically right and it's not like we didn't have warnings SARS was roughly 20 years ago that was a corona virus MERS was roughly 10 years ago that was a cruel noise we had two major major warnings and yet the collective amount of attention human attention across the world that was focused on preparedness for this event was de minimis which is why we're now caught completely unprepared so it's that fundamental scarcity none of us right now no amount

of money in the world can go back and fix that like a preparedness we have to now scramble and try and make it up and we will scramble and we will try and make it up but at huge cost human cost that was utterly avoidable attentions already in that way that you just described scarce today why is that scarcity gonna become kind of the one of dominant importance as opposed some other one yeah that's a great question it becomes the dominant one because capital is no longer scarce so ain't this idea of the shifting of scarcity is it's when you overcome one scarcity that's when the new one really asserts

itself right so when we went from the agrarian age to the Industrial Age it's not like we stopped the need for food we still needed food it's just that we were able to produce sufficient food I am NOT arguing that food is abundant by the way it's a very precise definitions of that in the book but food is sufficient we can feed everybody and in fact we can do it with shockingly little relative percentage of resources in terms of human attention for example so you go back to the 1780 let's say nearly 80% of human attention in the US was dedicated just to feeding ourselves and that left about 20 percent for everything else today

that's like sub 5 percent basically so that didn't go away we still need to feed ourselves same thing for capital it's not like we no longer need to build houses and cars and so forth it's just that we can build sufficient housing in cars for everybody and there's no better way to see that than to look at China I mean China can literally like stamp entire cities of the ground in the space of a couple of years during this coronavirus crisis they built entire hospitals in the span of days so our ability to provide housing and transportation and so forth is not the binding constraint anymore we have sufficient capital and sufficient

means of producing capital so that's why I'm saying the really big issue now is attention and the reason it's such a big issue is because the system that we've created in the industrial age which is the market-based capital allocation system it does an amazing job at turning financial capital into physical capital which is why we have all these extraordinary capabilities and which is why actually we will now ramp the production of mass and so forth quite quickly sadly very much too late but we have that ability and we will crank out a lot of that stuff now the point though is that that market-based system is not at all adequate in fact it is

detrimental to the allocation of attention and I can explain why that is maybe but I should see where you want to take this with questions I have a tendency to go on for too long so you should feel free to interrupt me at all times okay and let's talk about this in a bit so for now I want to stay on the abundance of capital not abundance sufficient we have sufficient capital it's not abundant abundant would mean that I can snap my fingers and you know the replicator produces my next cup of coffee that will be abundant capital we're not there sufficient capital and so I agree that if you zoom out enough that is certainly true but if you actually zoom in on particular people the reality for most people today feels very different so there's a lot of

people who are in debt who are struggling to pay bills you know people who start companies struggle to find funding so where's the disconnect between these experience and you know the sufficient present of capital in itself so when I say sufficient I mean sufficient in aggregate there are lots of distributional issues Amartya Sen who was a famous development economist was one of the first to early recognize for example that when people were starving in the world that this was not a problem of there not being enough food it was a problem of distribution prop in many of these big starvation crises fortunately we haven't had one in some time but in most of those big

starvation crises it was just lots of food here no food here and often they difficulty getting from here to there often sometimes logistical but often corruption based sometimes the food would literally be sitting rotting in the harbor while people were starving just outside the harbor so absolutely same goes for capital we have distribution issues overrun capital I want to point out though that I think it's important to disconnect our views of financial capital from physical capital to a certain degree financial capital is an important intermediate product on the way to physical capital but we don't eat dollar bills we don't drive around in gold bars so it's true that there are big income and wealth

distribution issues but they don't necessarily impact terribly impact our aggregate availability of capital that doesn't mean we shouldn't work on fixing those problems but I think how we work on fixing them should be informed by understanding where we want to go not where we are today so there are different solutions to the income and wealth distribution problem depending on whether you believe you should try and stay in the industrial age or whether you believe you should go to the knowledge age so for example in the US you know Bernie Sanders was running under a program of saying the government should provide a job for everybody that's very much a being caught in the industrial age type thought where it's

the thought of saying hey the government should pay everybody a basic income and let them do whatever they please is very much a thought of how do we get past the industrial age into the knowledge age one thing I'm curious about here is let's say we get to this knowledge age what is then the role of capital does he still have a role and how does it change from the role it has a day no absolutely it's similar to we still have agriculture we still need food we still are going to need to allocate capital to financial capital we still will need to allocate it to the production of physical capital the best analog I have is what I was talking about a little earlier when I mentioned

that in like 1780 80 percent of the human attention was focused on agriculture so that 20 percent of human attention could be focused on other things I think today you know 80 plus percent of human attention is focused on what I would call economic activity so you know having a job getting paid for that job if we get the transition into the knowledge aid right then 50 200 years from now we'll be looking back and seeing oh my god we were all caught up 80 plus percent of all human attention was caught up in economic activity it's now shrunk to whatever 10 percent or 20 percent or some small number that doesn't mean that it will go away entirely it just means it will shrink and what will take place instead is it'll open up a huge amount of human

attention for non-economic activity so what are examples of non-economic activity a lot of research fundamental research is non-economic activity taking self care is non-economic activity taking care of family children friends is not economic activity fixing much of the environment is not academic activity so this one of these sort of silly things that people always say is like oh will will never run out of jobs the much better way of thinking this is will never run out of interesting things to do it's just that many of those really interesting things are non-economic things and when I say non-economic what I mean is that they're not governed by the price system and in fact they cannot

be governed by the price system because there are things for which prices cannot exist and so that's what I mean by non-economic activity we have to free a lot of human attention to be able to participate in a tivities to allocate attention towards things that do not have a price attached to them today we use markets to determine what kind of activities are worth doing how are you going to determine what's worth doing in the knowledge age the beauty is that if we take some of the steps that I described in the book for getting to the knowledge age so I may talk about economic freedom informational freedom and psychological freedom and we can go into depth on

those but if we do this then I think people will be quite free to figure out which of these many interesting challenges they want to pay attention to and I have no doubt that properly freed up these challenges are so interesting and fascinating I mean let's give some examples like working on infectious disease working on space travel working on restoring the environment I mean many of these are like absolutely fascinating challenges I think we'll have absolutely no shortage of people to work on this and sometimes people say Albert you're naive this will not happen I'll give one very good example mathematics is a field in which you

basically have you can't get patents you can't copyright it you can't really get wealthy I mean yes a few people peel out of mathematics and go into finance but for the most part people will do mathematics for a love of mathematics and also there are some prize mechanisms there's some recognition mechanisms which can be quite important and yet we've had an extraordinary flourishing of mathematics over many many years now when you go today to high school even to college the math you learn is all the math that have been invented by like 1850 or so all the math that we've invented since which is just huge realms of mathematical thought you don't even get to until you get to graduate school

so math is a perfect example of an activity that's largely a non-economic activity and yet we have no shortage of people who are working on mathematics so these freedoms that you think are kind of prerequisites for us to really making that possible so that people can kind of function in this way one of the things I talked about is is where is a lot of our attention today trap it's trapped in what I call the job loop and right now we're seeing a huge disruption to this job loop because of the corona virus and because of lockdowns but the job loop for most people is you know you wake up you go to work you do that so you can earn a wage you need to earn the wage because the only way you can live

it's how you pay for your rent that's how you pay for food and you have very little time left for other things very little time to take care of yourself to take care of your children very little time for any of these non-economic things that we just talked about and most of the money that you earn you spend again on things that are being produced by other people who are also in the job load so most human attention today is trapped inside of this job loop and so a lot of the freedoms that I talked about relate to freeing the attention out of that job loop and the first one of those is economic freedom which is some form of universal basic income and that's the idea that government simply pays everybody some amount of money and we can talk about

whether it has to be government there's some interesting crypto projects where people are trying to construct cryptocurrency systems that don't rely on government that would provide a basic income but there's some mechanism by which you receive a recurring income stream and that income stream is enough for you to take care of basic necessities I proposed in the book that in the US this should be something like $800 a month and people Wisco well $800 a month it's nothing like what are you even talking about like nobody could live in Manhattan for $100 a month and the answer is absolutely you can't live in Manhattan for $800 a month but you also don't need to live in Manhattan one of my sort of favorite charts to critique is this chart that shows that by 2050 everybody will live in cities

it's just taking a current trend and extrapolating it without asking why that's happening well it's happening because for most people you cannot earn a living anywhere other than the cities now some of us are fortunate we can work remotely if you're a designer or coder you can live almost anywhere and make but a lot of people need to live in a center of economic activity to be able to live the second year of universal basic income people could move to places where it's extremely cheap to live and then people say but people won't do that and I say no we absolutely know that people do this and we know it because we have some people receiving a basic income today and they call pensioners and what do pensioners do they move to a place where it's cheap to live absolutely we have to see this as a

fundamentally liberating construct it liberates you to walk away from a bad job walk away from a bad living situation like a bad spouse walk away from a bad city I'm walking away from cities all together so it's fundamentally deeply profoundly liberating economically the second big freedom I talk about is informational freedom and that has to do with the fact that we all walk around with a supercomputer in our pockets each of our supercomputers can speak to all the other supercomputers that each of us is carrying anywhere around the world it's an extraordinary capability completely mind-blowing and yet there's something very strange that happens which is you know when I activate my phone and I go

to its home screen and I tap on any of these app icons at that moment that app completely takes over the supercomputer I'm reduced to my thumbs or whatever you use for tipping on that glass screen and my eyes and the wetware between my ears and that supercomputer now it just works for Facebook Twitter Google who have you it's just a bizarre situation and it's one that we fundamentally need to change we need to make it so that this computer works first and foremost for me and represents me and I can use its compute power to whatever way I see fit and I can use it to inter mediate my interactions with all these services there's a lot more ideas to

informational freedom there's also ideas around rolling back the extent of copyright rolling back the patent system to a degree and so forth and there's also some very controversial thoughts in there by privacy that we can maybe get to later but but very fundamentally it's about who controls computation and then the final freedom I talk about is psychological freedom and that's just a recognition that our brain did not evolve in an environment of this information overload our brain evolved in an environment where when you saw a cat there was an actual cat and now I can show you an infinity of cat pictures we all need to develop some kind of practice some kind of mindfulness practice that lets us stay in control of our own brains so that in this area of information in this era of

information overload we aren't just slave to whatever stimuli are thrown at us through the screen but we can literally have the ability to look at it and go okay I'm gonna take a breath and I think I'm gonna engage my rational thinking faculties and my rational thinking faculties might tell me that right now it's actually time to go outside and take a walk and just put the computer down so that's very important these three freedoms also interact with each other in very important ways and I believe if we work on developing those freedoms that would let us somehow move into the knowledge age so in the book I'm not saying the knowledge age is people doing exactly this I'm saying let's work on these freedoms so that

individuals and then communities which are made up of individuals can find their own path and figure out how to navigate this transition I think anybody who says I know exactly what the knowledge age will look like it'll be flying cars of whatnot it just it's sort of like you know asking peasant farmer to imagine what you know the Industrial Age would look like or even asking people in the Industrial Age like if you had told people we would all have these they would have said it's crazy can't be done so I'm not trying to speculate much about what the knowledge age will look like once we're 50 or hundred years into it I think it's incredibly hard to even imagine what it would be I'm just talking about how do we make it so that we can adjust into it so speaking about like adjusting into

this new age one of the things he mentioned was that both you know the transitions we had before each time was accompanied with you know war violence and those you know is very maybe painful process even if what came afterwards was positive so what we do here like how how do you see this transition play out you also think we have to expect more on violence are there things we can do to prevent that Mark Twain has this great quote which is history doesn't repeat but it rhymes and so I do think the prior transitions were extremely violent so when we went to the agrarian age the agrarian societies basically wiped out

all the fortune societies I mean there are hardly any left around the world and it this happened quite rapidly so once agriculture was invented the fort just got wiped out very very quickly and then of course going from the agrarian age to the industrial age that transition involved multiple revolutions very violent revolutions French Revolution for example it ultimately required two world wars and even after two world wars we weren't entirely done because we still tried the experiment of communism we still killed lots of people in Russia and in China before getting to kind of into the Industrial Age I believe that we are going to repeat were on track to repeat the same mistake it's going to take a different form we're seeing one example

of that form right now well you know it is entirely possible in a way we're lucky with the coronavirus it could be much much worse I mean it's bad but it could be much much worse this thing could have a 20% fatality rate or 30% fatality rate right so the threat that I'm mostly focused on our race the climate crisis we're very very far behind on the climate crisis and I think that the transition to the knowledge age the the sort of violent portion right now my best candidate for where that will come from with what the motor of that will be is the climate crisis now in the book I talked a little bit about why this happens I think it happens

because when you get to the end of an age the people who are in power are the people who control the previous scarce resource and because they control the previous scarce resource they see everything that the new age can do through that lens so when we got to the end of the agrarian age the pea were in power were the people controlled land it was the aristocracy it was the church and when they saw what the Industrial Age could do when they saw what industry could do they didn't think oh here comes the Industrial Age oh the constraint has shifted oh it's about capital they thought oh my god I can have tanks and battleships so I can have more land and I think we're making that very same mistake in just a

slightly different pattern which is the market system has worked so well and the people who are in charge politically who hold power real power are people who either control capital directly or indirectly and we think about everything through the lens of capital and so when we see computers and the digital technology we don't think oh here comes the knowledge age we're like oh how can I have more market cap how can I have more financial wealth how can I take the existing system and have even more time and attention and allocated to it as opposed to less time and I think we see this you know even if we look at the current discussion of the the

various bailout measures most of them are squarely aimed at retaining the existing system and and cropping up markets and propping up financial acids thankfully there's some discussion now this time around they also around implementing a ubi which I think would be a very forward-looking measure but so I think the reason these transitions happen so violently in a way is because we're just focused on the wrong thing and right now we're we we have the sort of dominance of markets and we think all problems can and should be solved by markets now silver linings in the corner of Irish crisis first silver lining discussion some discussion of ubi as a measure during the lockdown I think

second silver lining maybe a recognition that markets ability to deal with problems is limited that there are problems primarily problems of the allocation of attention where markets don't work if we were to recognize this then maybe silver lining we can recognize that the biggest problem that we're not allocating enough attention to is the climate crisis so if coming out of this crisis we realized hey there's this other huge crisis much more slowly moving but much more inexorable and much more dangerous ultimately than we're not paying enough attention to that would be a pretty awesome thing high price to pay but it would be a good thing let's move on to

current affairs in a bit I just have one more thing that I would like to clear up before we do so you said basically we need to take care of three basic freedoms before we can actually get this knowledge aid right so basically economic freedom I understand so basically implementing a ubi or something similar to actually allow every person to have their basic needs met then the psychological freedom I think I also understand it's basically I take that to mean knowing what your values are and what's good for you and understanding yourself but I have questions as to informational freedoms so you said um the moment I actually open an app on my phone it's no longer my phone by basically Facebook or Google or whatever whoever the app is built by controls my phone and I think I know

what you're getting to namely that human beings are extremely easy to manipulate and value is being extracted out of me or out of of whatever I'm looking to do how do you propose we combat that how you propose we get to an age of informational freedom well let me first say very briefly why I think informational freedom is so central so I believe that the job loop where we work and spend our wages on stuff that other people who work make needs to be replaced with the knowledge loop the knowledge loop is always has been operating but I think we need to just have way more attention on the knowledge the knowledge loop works where you learn something use that to create something

new you share that new thing that new thing that you shared other people can use to learn and so forth and pretty much all human progress is premise on the knowledge loop and I believe that in order for the knowledge loop to really be able to flourish in the digital age we need this to have this informational freedom and so for example it's wonderful that we have the Creative Commons movement it's wonderful that we've had open source licenses right so open source licenses are a great example where we've made intellectual breakthrough on how to kind of roll back some of the traditional thinking around intellectual property through a new licensing scheme and all the sudden I can take code I can learn how this code works I can modify that

code and I can re share it right same for creative comments I can find a Creative Commons image for example I can maybe it's an image may be explaining a physical process or Pythagorean theorem I can go and prove that image I can reshare my improved image so those are very clear examples of how more informational freedom can help fuel the knowledge loop now how does that relate to these devices well these devices are are a portal to the work world of information and right now what's happening on these devices is that other people primarily control which information is surfaced to me so let me give a good example when I'm intimately

familiar with because we were investors in the company let's Twitter right so I follow quite a few people on Twitter and right now really my only option is to use the Twitter client and have the Twitter client decide what my timeline looks like and Twitter makes a lot of interesting decisions for example the other day during this Corona crisis I was harding a tweet now I'm very old-school for me the hardest or the star it's just like I want to remember this tweet this tweet is somehow important it's not for me I like this tweet and I was Harding something about chloroquine it's a potential treatment and then I get a DM from somebody else saying hey you're spreading

misinformation on Twitter I'm like I'm spreading miss it first didn't even register and then I realized oh my liking something was added to other people's timeline by Twitter's algorithm so this is a perfect example of where everybody has a supercomputer but our timelines are centrally controlled why do we worry so much about Twitter's algorithm well it's because there's only one algorithm and we're just recipients of that algorithm we can run our own algorithms easily I should very easily be able to download a piece of open source software that somebody else's program that I can tweak parameters off that gives me my preferred Twitter there should be thousands potentially millions of Twitter algorithms and then

of course we immediately realized that would dramatically reduce the power of Twitter and it's interesting little historical tidbit here Twitter of course started out as an API only it was just a service in the cloud Twitter didn't have any official clients there were lots of third-party clients and it was only when the company was called uber media and who were media was started by Bill Gross and Idealab and it was buying up a bunch of Twitter clients and it was kind of threatening to work the network and at that moment Twitter kind of blinked and was like oh my god we can't have that happen and so we're gonna have all these official clients and we're gonna just completely clamp down what anybody else

can do programmatically and at that moment we lost Twitter as the programmable Network and we went to Twitter the programmed Network by Twitter so I believe the answer to your question is api's everything needs to have an API anything that's out there I ought to be able to program and that includes Facebook Twitter etc and that's not such a crazy idea um if you look at the open banking initiative in Europe every bank account needs to have an API and it's very clear that when my bank account has an API I have more power than my bank because I can now authorize third parties to monitor my bank account on my behalf or I can sort of say hey I want to use this financial product

that's offered by a third party and I don't need to ask my bank for permission and just the same I shouldn't have to ask Facebook or Twitter for permission to program Facebook or Twitter I should just be able to do it yeah that's definitely one of my favorite ideas that you know I've seen a few times maybe also Fred Wilson write about and I think it's it is a very cool idea in terms of like how do you actually deal with these massive tech monopolies like Facebook and Twitter and how can you actually go in a positive direction and since this is a crypto podcast one of the amazing things about the blockchain world that many of us are trying to build is that everything has an API everything is programmable everything is composable so I don't need

to ask anybody for permission in the kind of blockchain world the non permission world that I think we at Union Square Ventures think is the interesting part of the world if there's a smart contract out there I can interact in that with that smart contract I can program that I can wrap it in any which way I don't need to ask anybody for permission to do so and that is a fundamental break from Facebook where in the absence of legislation requiring Facebook to open up its API I can't fully program Facebook in fact we're living in a world where there are multiple laws that if I try to fully program Facebook would make that illegal right so if I took my device and I took Facebook's apk and I extracted Facebook's keys so that I could now

write my own client I would be breaking three different laws in the u.s. two of those laws have mandatory federal prison sentences right so we have created laws that completely protect that power of those huge centralized digital players which is why it's exciting to think that in addition to maybe changing those laws we might also be creating a separate new world where those laws don't matter because everything is programmable to begin with in a digital age that kind of lives of network effects to a certain age corporations kind of tend to grow more or less without bounds because it's really difficult to actually create a

competitor product it's Metcalfe's law right the value of the network is goes with the ends web if you actually think that further I mean what what we used to do is we we have antitrust laws and they see if you have one page look and it becomes too powerful you just split it up and save three Facebook's and you have Facebook one two and three because of network effects that if that's inherently an unstable situation one of those Facebook's is probably going to grow again and the other two are probably going to shrink again what these permission does systems also let you do is they they let you turn the users into shareholders Facebook Inc as a company doesn't really exist anymore where there'd be a dowel or something else it's kind of something

a platform that's shared between the users how do you feel about that the way I've thought about it is there's Network effects which are a very positive thing we like the fact that we can reach everybody on a network that's a good thing right we don't want to partition those networks so the question then is who gets to capture that network effect and who gets to control it and in the traditional world so far we have captured by a central for-profit player in the blockchain world we potentially simply have a network that just exists there are definitely lots of difficult

questions around governance I don't necessarily like the idea of shareholders per se because it could just be that the network is just out there without the economic benefit it might be so thinly distributed the economic benefit that think of shareholders might be the wrong analogy it's really more about the capture of the network effect which is also why mandatory API sirs are powerful if you have mandatory API is again Facebook would still be Facebook but it would be able to capture much less of the power of the network effect and so I very much believe personally that we will need both we will need to invent this new world that we're all working on but we also will need to regulate the existing centralized players by applying

mandatory api's to them and the reason I believe that is that I think so much activity and so much attention is captured in those networks today that it will not migrate the new systems we're building would be sort of a small thing off to the side and its ability to really grow and really have more activity live in it would be severely constrained as long as those other systems don't have mandatory api's a good example of that is let's you know lots of people are building decentralized micro blogging platforms and decentralize social networks and so forth but at the end of the day if I can't program this device and these other networks so that I can sort of

easily access it and I can I don't want to have to keep track in my mind am i you know connected to brine on this network and free to Ricky on this other network like I have a machine that can take care of that for me but only that machine can program all those networks and so I do think it's not an either/or I don't think it's let's just build crypto and it all will be good the existing systems are very large they're here to stay and we need to properly regulate them also so one thing in it I guess that's sort of at the intersection of what you talked about now and you know in terms of crypto and T sanitize networks but then also you know maybe the ubi topic a little bit so to me it seems like the one of the things that's

gonna happen with this Korona crisis is that we're just on track of a a massive expansion of government and you know in all kinds of ways right whether it's bailouts that might go from you know it used to be the banks in 2008 to you know now it's gonna be like Airlines and maybe their hotels industry and maybe small businesses right like a complete bailout of of everyone - you know fiscal expansion - massive central stimulus - maybe central bank's buying directly shares and corporate bonds - surveillance right maybe to like spread the you know track virus spreads so you know at the same

time I think what you're well you know you're almost at this knowledge age that you're kind of painting is an age where there's much more maybe self-determination and okay there is this ubi but it's not it feels very different from kind of the current trajectory even though ubi is now being this just I definitely think I'm a believer in smaller government personally and certainly I think we're doing way too many things at too high a level of aggregation right I mean I think there's lots of things that where we're not paying attention to this fundamental principle of subsidiarity right so subsidiarity sort of that you know decisions ought to be made at the level where where they can and need to be made

for this particular issue right so if we're talking about like the global atmosphere for example we actually are lacking bodies that could make those decisions at a global scale and saying look this type of emission for example will be taxed to Kalou Blee so we're missing that but then if you come one layer down you know existing federal governments have way too much power like we saw this in the corona crisis here in the US the federal government was claiming the right basically to do all testing is completely absurd like lots and lots of labs that the ability to conduct this test and they were basically saying you can't do that I mean it's a great example of way too much power in the federal center like why would an academic lab why shouldn't

they be able to run kovat 19 tests but what's the path towards actually going there well I think the path towards making government smaller again it's difficult people don't give up power all that easily right once they have it and federal governments won't give up power quite that easily let me talk about the European Union for a second then we talk about how we might get there I mean you know I grew up in Germany and I was very Pro the European Union project and I still think the project makes sense but again I think from a subsidiarity principle I think the EU got involved in regulating a lot of things that don't actually make sense to be regulated EU level and I think some of the resistance

that brexit was able to catalyze against the EU and that I think is not going to go away was a reaction to do you regulating certain things that are just unclear that they need to be at all regulated at the EU level how do we get there well so I do think that one of the big underestimated powers of ubi is that it will free people up for one very important economic activity and that's organizing right so right now a lot of people don't have time to be politically engaged they don't have time to be educated about issues they don't have time to protest they don't have time to write to legislators to run from being a legislator so my theory of change here

is that if we can get something like ubi it will actually unleash a lot of political change and that change will over time reduce the power of central governments but it's a long road I don't think there's any shortcut there and in sort of one more question on this topic so what's it take on what the impact would be so to use the some of the terms that I use before I mean in terms to talking about a digital age but you have this idea of a zero knowledge marginal cost thing to me it almost feels like the way central banks are treating money is like a zero marginal cost thing right

you can just create more of it well yeah let's start by a couple of things so the first thing is that I do think we're making a lot of mistakes right now on how we're dealing with this crisis I wrote a blog post on Saturday where I sort of say look what a lockdown is it's basically a forced tossing of markets right and so when you have that we should also pause basically we should put the economy and kind of suspended animation and so I think we should just basically for some very well-defined duration because we're seeing in China we're already seeing an uptick of economic activity again once you have the right testing infrastructure in place you can start letting people go back to work you just need to be able to

test frequently and test lots of people so in that short interval between the virus hits you kind of get on top of it and then you have testing while we sort of lock down the economy I think we should simply suspend things like rent payments and mortgage payments and interest payments and all these other things and we should allow small companies to suspend wage payments and then we should instead of wage payments have a ubi if you think about most small businesses right like you think about your corner deli or a restaurant if they didn't have to pay rent and they didn't have to pay their employees they would be totally fine and just you know you do this for two months and two months later everything restarts and everything just

gets shifted back by two months so if your lease was up you know whatever next June it'll be up next August instead right so there won't be a catch up it's just as if those two months we were all like in suspended animation we just all wake up in here and it's just you know a lost time period I think that would be a much better approach than what we're currently trying where we're sort of saying gee we're gonna keep running everything everybody's gonna owe every payment and we're just gonna supply money okay so that's that's one thing when it comes to central bank's my favorite way of creating ubi is in fact to print money we've printed lots of money since the 2008 financial crisis in the US alone the Fed has created four trillion dollars of new money it's just that the way we've chosen for that money

to enter the economy is through the fractional reserve banking system so the Fed essentially creates the money and it creates that in the account of banks and then banks get to decide where to put the money so I believe that the easiest path to ubi is just everybody has an account with the Fed and then that when the Fed creates money it creates it in our accounts and it enters the economy through us instead of entering the economy through the banks now of course there's a limit to how much money you can print and I do think I've been buying Bitcoin the reason I've been buying Bitcoin is because I think we're gonna relearn the lesson that there's a limit to how much money you can print the hard way which is we're gonna print too much and then we're gonna have a big inflationary shock I think there's a lot

of money one could print the world has become fundamentally deflationary technology is a deflationary thrust it makes everything cheaper and so we live in a world where technology provides a deflationary force that allows us to print a lot of money but there's a limit to how much money we can print and so to get the proper ubi system we probably need to be printing money by giving it to people but then we also need to find large pools of money and start sucking the money back out and that can happen through taxation that can happen through potentially negative interest rates or de Mirage or some mechanism by which we Hoover up excess money so that's all doable I think we're gonna learn the lesson again the hard way because we're

going like well gee we've printed a lot of money already and there's been no inflation we printed four trillion dollars in no inflation so let's print another four trillion dollars but at some point that breaks you can't print unlimited amounts of money because the value of money is as we all know it's a it's like an equilibrium point offer that exists in our minds and that equilibrium point if we all decide that too much money has been printed that equilibrium point can shift very dramatically yeah I mean in terms of there's been no inflation I mean you could say there has been very much inflation source of asset prices doesn't maybe not having as much inflation of consumer prices yes absolutely I think that's totally correct we've certainly seen that all around the world yeah but then I think what's happening right now

I just don't see any way that this is not gonna lead to inflation right because now I think it's it's become politically so you know so impossible to only bail out the bankers right so now they have to basically distribute this much more widely and then in addition if you have a globalization which is also gonna have inflationary pressures I don't think anybody knows when that equilibrium shift occurs right so you've got this very strong deflationary force if you had asked me I mean frankly let's just go back to the 2008 financial crisis I was very concerned that putting a trillion dollars into the economy would lead to inflation as were lots of other people I mean there were lots of some of the smartest fund managers were

like inflation is coming they were going long and things like gold etc they were inflation hedges and it didn't show up and it wasn't what really I must fort relate in the US alone nevermind the ECB never mind China right so I just don't think anybody knows we could double it and we could still be not seeing inflation I don't know what I do know is when you don't know you want to be anti fragile right and so everybody should have some amount of crypto and I would say in particular Bitcoin in their portfolio because that's how you construct an anti fragile portfolio for inflation to recur maybe a long tail event but when it happens be quite brutal and it might destroy a

lot of value in a lot of other assets and so having a portfolio that's anti fragile will require having some things in it that would perform well in a high inflation environment and I believe bitcoin is one of those things anti fragile is often taken to mean uncorrelated right so Basie and basically this has been the narrative for Bitcoin for a long time but for the first time in as long as I remember basically two weeks ago on you know Black Thursday we actually saw a crypto prices tumble along with the Nasdaq and the Dow Jones by like 40% does this kind of impact your narrative or does it still hold not at all I don't think anti fragile and uncorrelated

or at all the same thing correlations especially in these asset prices over short periods of time are driven by all sorts of endogenous factors built into the system so you know people were speculating with hot money they were speculating across multiple assets they got caught they had to liquidate whatever they could liquidate I think those correlations are driven by things that are endogenous to the overall financial system anti fragility to me exists around certain long tail events what happens to your portfolio when those events occur is your entire portfolio decimated or are parts of your portfolio actually improving and so any one event in the short term

having correlation to me is not all that informative about that so especially because the event against which I think this provides anti fragility isn't the event that occurred thank you let's go to the final topic that we want to talk about before crypto so I don't know whether you saw it but you are noir how re published an article in The Financial Times this weekend on life after the corona epidemic and you have gone on record saying you're angry privacy I mean you can basically this is this very crude portrayal of what you have said so basically please correct me

how Ari questions that we must sacrifice privacy for control but students that appear to individuals reasons the reason why he actually wrote this was because in Israel and also in the European Union by now mobile company or cell phone companies have actually given over the movement data of the people who owned the cell phones to the government in order for them to kind of see where people are moving and how the krona epidemic could be constricted if at all possible so I see how it's totally useful being able to track movement patterns of people but do you think we are crossing a red line here we won't be able to go back after the state of emergency has ended there's lots of

stuff wrong with her Ari's FTPS let's start with the one thing that's right it's definitely right that whenever we grant emergency powers to government we want to be thoughtful about it in the US you know we infamously created the Patriot Act in the wake of 9/11 and that has a lot of really bad things in it and Harare is right to point out that some of those things tend to if not initially conceived right tend to stick around I believe that this crisis is quite different and also would lend itself to doing things that are very time bound so for example an easy thing to do is to say these measures are in

place for as long as the World Health Organization Association declares as a global pandemic right so I mean you could sort of put hard demarcations on it with the Patriot Act which like as long as terrorism was the problem well who's gonna declare the terrorists was no longer a problem right so we didn't even from the get-go we didn't create a mechanism for how to undo things you know certain other acts take better care of this like you know lots of nations have some law that allows government to command resources during a time of war and there's usually a fairly precise way to say this is where we're at war in this one we're no longer it work so first of all I think that yes we should be careful when giving government emergency powers but I think we also have examples of how to do it right and

how to actually time bound it properly second thing is this virus is actually a perfect example for why price see and technological progress are incompatible so the fundamental argument that I make is that there's a fundamental deep incompatibility between privacy and technological progress and so if you go back to us living in the forge age right basically foragers you know tribes might not come in contact with other tribes for a long period at a time and so what one tribe was doing was kind of not known to other tribes and at that level

that was they may not have been privacy between individuals in a tribe but between tribes there was in the way a lot of privacy right but they also wasn't a lot of technological power of transmission right today I can get on a plane and fly to China and pick up a virus and bring it back there's a huge amount of power to for a single individual and the acts of a single individual to dramatically change what's happening around this individual for the worse and there's unfortunately a fundamental asymmetry built into the universe in the form of entropy right so very few arrangements of atoms make my body as a functioning body for Albert Mayer and very many of them make nothing

and it took 53 years to create this body and it will take you know if I get exposed to the virus and they have a bad case it will take a few days to destroy all of it that is a fundamental asymmetry very few things have structure and are animated and are alive and carry knowledge and very many things don't and so as our technological ability grows unfortunately our power to destroy grows faster than our power to construct and that is a fundamental asymmetry and so if you think more about a virus as an example my wife and I we are invested in a company in New York City that makes synthetic viruses you can do this today with basically off-the-shelf technology you can make synthetic viruses why are

we invested in this company well because synthetic viruses are a great way to target cancer we think it's probably the best shot to cure cancer but it also means that kind of what those people are doing society should have a pretty good window into it make sure the pretty good window into our the people are making synthetic virus is making synthetic viruses to cure cancer or are they making synthetic viruses to make a more higher fatality rate version of the corona virus right so in sci-fi there's this notion of an ender right the Ender's Game is literally named after that with enough technological capability a single individual could end all human life and

so as technological power grows ex post enforcement isn't that useful and so privacy which then requires exposed enforcement is detrimental to our ability to have technological progress and coming back to you Vols piece I think it's just an idiotic piece because how are we gonna get back to work the only way we're gonna get back to work is by massive testing if you look at what happened with the Spanish flu the Spanish flu came in two waves the second wave came well first of all there was obviously a lull in the summer but the second wave came when people were trying to get back to economic activity and the same is gonna happen here we're not all

gonna be affected when this lockdown comes done when we go back to work if we don't have a massive testing infrastructure in place and if we don't actually give the government the power to say you've been tested and you have to stay home we're gonna just reinfect everybody and this whole thing will have been for nothing I mean obviously we can't be in fact people who've got who became immune during the first go-around but you kind of see how this is the perfect example at every level of virus is the perfect example at every level for why there's a fundamental disconnect between privacy and technological progress and so to me and I gave a big talk about this at blocks back for Lent it's not that privacy didn't serve an important purpose we have to understand

what is the purpose that privacy is served and how can we achieve those things and largely it was a freedom preserving thing and I believe that economic freedom informational freedom and psychological freedom together can amount to way more freedom then privacy was able to provide you I know many people who think their private to but who are terribly obsessed with what other people think about them and their self censorship of what they say what they do isn't because government is surveilling them for most people it's because they give a about what their neighbors think and they came way too much about what the neighbors think when we started homeschooling our kids lots of people said it sounds amazing

and when we said well why don't you do it they're like I don't know it's just weird and is it gonna come off weird and what are other people gonna think if we tell the Americans don't go to school that's what helped people that so I just think when we think about that one of the central reasons why we have privacy it had a lot to do with freedom I think there's lots and lots of ways to be very free but not have privacy and I know that's very much an outlier opinion by the way one other thing about U of L har R is peace at the end the whole piece is about how we have to come together as humanity and fight this as one from the guy who wrote an entire book basically saying how all narratives are equally valid and trash and humanism what what a

hack he's a hell he's a hack who writes incredibly well them used to say it's got great turns of phrase very smooth writing but the ideas are basically third-rate inconsistent ideas yeah I've already tweeted it difference between different kinds of privacy so basically say I like most other people don't own an invisibility cloak so basically when I go out my neighbors can see that I go out when I go grocery shopping across the street the cashiers at the grocery shop they all know what I usually buy and they know my name and they know my kids names and that's not the sort of privacy that I'm worried

about the sort of privacy that I and I think also many other people are all read about is the one that creates an enormous difference in power so basically say if the state knows everything about you I've googled or Twitter or Facebook knows everything about you you become incredibly easy to manipulate humans are very simple beings I mean so basic basically even if I just know like 20 things about you I can probably come up with buttons that I would have to push in order to act get you to orient yourself in a certain way right and do you think that's not a danger no I absolutely that's a danger everything I'm writing about is how to shift more power back to the individual it's all about we want to take power away from government I talked about

smaller government earlier we want to take power away from large corporations we want to give that power back to individuals we want to give that power back to individuals and the community is made up of those individuals economic freedom informational freedom psychological freedom are all about empowering the individual so I think that's absolutely crucial it just turns out that actually privacy in many ways right now if anything is being used to deeply enshrine and deeply ingrained and solidify the existing power imbalance so what are we doing in the name of privacy in the name of privacy for example Apple says you can't install any software on

your device has to go through the Apple Store that's how we make sure you stay private so we're using privacy and then we're putting secure elements on all these phones nobody knows what goes on inside secure element you just have to trust it of course we're using all those secure elements to make sure that I can't program my phone so we're actually making it harder rather than easier to modify the code that's running on a phone or to inspect it or to see what it's doing so let me give you another example face recognition and cameras do we really want to go down the path where we regulate what I can do with my camera on my phone what I can do with cameras that I deploy it's only going to ingrain the power of the state more deeply yes the state can deploy surveillance

cameras but we can also deploy these Commerce this whole concept of surveillance and transparency I think that obviously we need to work extremely hard on preserving restoring democracy democratic processes we've already given the government way too much power but much of what's being done in the name of privacy today has detrimental effects would add GDP are due GDP are made Facebook and Google more powerful it consolidated the power we predicted this lots of people predicted this it's exactly how it happened the California Privacy Act is gonna do the same thing when you see the large players not protesting something you

should wonder why they don't protest it because they know it is good for them if they didn't think it was good for them they would protest it in the US we passed this terrible law called FASTA we used trafficking which who's gonna say something against trafficking against measures trafficking I mean trafficking terrible so who would say something we used that to blow a hole in to section 230 everybody predicted that it would hit a lot of people who need access to information online that access is gone away as predicted again Facebook did not protest why Facebook knew it would be able to comply so and we're going exactly the wrong direction why are the

big companies not worried about antitrust law because they realize that it's gonna be some milquetoast antitrust decree and they'll be just fine if we said hey facebook you gotta have an api for everybody you bet they would protest oh yeah severely constrain their power yeah and yes does it create a privacy problem I mean look at it they said oh the reason we can't have the API is because it creates a privacy problem so what we're doing right now it's it's like it's the perfect example of the path to hell is paved with good intentions I a hundred twenty percent believe that the people are fighting for privacy have good intentions the net outcome so far has been the consolidation of power in the hands of Facebook and Google and the heads of the government for that matter

okay cool so we want to go to sort of a last topic which it comes a little bit back to the larger question of you know where this knowledge change is going into role of capital so you're you know venture capitalist and you wrote a book about you know the world after capitalism which is of course slightly ironic no no the world after capital not after cup of the capital after capital yeah so first of all how does this kind of framework that you have in thinking about where the future is going how does that in inform you know Europe investing in companies today yeah a lot of the things that we have invested in that unions ventures are thinks that I

believe help move us towards the knowledge age one aspect of the knowledge late age I described early as the knowledge loop is where you can learn things create things share things we've invested in a lot of things that make learning easier for example duolingo code CAD amis Skillshare Quizlet sharing we've invested a lot of things that make sharing easier twitter does make sharing easier than ever before creating we've invested in a number of tools that let people create new things and like splice is a very good example that you can create a new music just download sounds and instruments and create new music so I believe a lot of the things that we have invested in we'll continue to invest in are things that will help move us to the

knowledge aid it's very important just like agriculture and food didn't go away innovation and capital and building new things and needing to finance those none of those things are gonna go away I'm looking for a world where those things are take up less of our attention than they do today but I'm not looking for a world where let's go away once you've transitioned into knowledge age what's what see job didn't look like well I think my drop can still be around finding people who need to raise money to finance something that otherwise wouldn't exist and that I believe when it does exist will be a good thing for the world so I don't think my job is gonna change I'm very lucky that way

mm-hmm so Union Square Ventures is invested in a number of blockchain project so you are pretty badly to the space so you invested in coinbase protocol lab staff a labs at Grand Isle leave block SiC number I and probably also others that I'm forgetting are we've a leaf oh yeah and so what are your selection criteria what do you look for in blockchain projects we tend to have fairly specific ideas around things so we invested in Elgar and because you know we were looking for a proof of stake system and one that would have fast finality and and one that would we believe maintain a high degree of

decentralisation over time so we tend to have very specific things that we look for are we've we had been looking for this idea of permanent storage again we think that's kind of a almost integral building block we invested block stock because we had been thinking a lot about identity and end-user self sovereign identity so our approach tends to be to have specific ideas we often then write and talk about those ideas and then find projects that are a match to those you also invest in crypto funds which I found unusual so you invested in poly chain metastable my key coin and place order so why do you choose to do that

well we did that at a time when custody really was an unsolved problem and we didn't want to develop a lot of custody capabilities at Union Square Ventures ourselves it was also at a time when it was very hard there was a lot of things of explosive innovation and it would have been very difficult for us to get on top of as many projects as we were able to with this more decentralized more networked approach I don't anticipate that we will invest in more crypto funds going forward I mean Never Say Never but it's now that custody is becoming essentially easy for somebody like us where we can use coinbase

custody and we don't need to self custody I think it'll become a lot easier for us to invest directly in tokin projects and not need to worry about how we're gonna take care of those tokens so one final question here when you look at the crypto space and people building startups and decentralized networks you know what's the thing that I think people tend to really miss or you know see the wrong way or you wish they would maybe pay more attention or approach differently I don't know that there's any one thing I do think we're very much in the early stages of this you know I I do think that when we are in the early stages of

something there's often a tendency for the literal translation and it's sort of like I had this thing in the pre blockchain world and I want to have exactly this thing in the blockchain world as opposed to thinking okay what problem that this thing solved and what's the native new way of solving this and also what is the serve native new set of capabilities and what are the new things that I wasn't able to build at all in the old world that I could build with anything so I think it's early days I think there's a lot of promising stuff happening and as far as Union Square Ventures is concerned I do think we are going to shift our attention more to finding things that are at the application layer of

blockchain I think our infrastructure portfolio is pretty broad and pretty full at this point so I think it's an exciting time for people who want to work on applications of blockchain I think infrastructure really is feels like it's coming into place I should say that when the dust settles I don't think there's gonna be a lot of foundational chains so I think there's going to be a big shakeout there's lots of people trying to build foundational chains and I think that there will be a ton of foundational chains there'll be more than one but I think there'll be fewer than a dozen what do you think will be the winners yeah well we've made some investments accordingly but talk to me again in like five years okay cool well Albert thanks so much for coming on is a

huge pleasure to speak with you I really enjoyed the conversation Thank You Frederick a thank you Brian thank you for joining us on this week's episode we released new episodes every week you can find and subscribe to the show on iTunes Spotify YouTube SoundCloud or wherever you listen to podcasts and if you have a Google home or Alexa device you can tell it to listen to the latest episode of the epicenter podcast goto epicenter TV slash subscribe for a full list of places where you can watch and listen while you there be sure to sign up for the newsletter so you get new episodes in your inbox as they're released if you want to interact with us guests or other podcast listeners you can follow us on Twitter and please leave us a review on iTunes it helps to

be behind the show and we're always happy to read them well thanks so much and we look forward to being back next week [Music]