Peter McCormack (5:21)

I'm very good. Thank you for having me, Peter.

Saifedean Ammous (5:23)

Good. Good to have you. So you're going to be teaching me about economics today?

Peter McCormack (5:27)

I hope so.

Saifedean Ammous (5:28)

That's great. Probably quite a good day to do it with everything that's happened recently about the President tweeting about bitcoin and Steven, is it Mnuchin? Is how you pronounce it his press.

Peter McCormack (5:39)

Briefing Noochin or something like that? I don't know. I'm no expert in pronunciation of bureaucrats names.

Saifedean Ammous (5:46)

I think it's a good day to do it. So I think the way we should do this is that you should just teach me. You teach me in this session about economics, what I don't know. And I think that would be a good starting point. Then hopefully we'll get a bunch of people to come and take your course or your courses. There's three I saw. There's three up there.

Peter McCormack (6:04)

Yes, well, there's two being offered right now and there's a third that's going to start being offered soon.

Saifedean Ammous (6:10)

So what's the background to this? How come you went into the courses?

Peter McCormack (6:13)

Well, the background for this is simply that after publishing my book, lots of people all over the world are curious about learning more about economics and Austrian economics because bitcoin has really ignited interest in the school of economics, because Austrian economics is the only version of the universe in which bitcoin works. All the other schools of economics, according to them, bitcoin shouldn't exist. It flies in the face of all of their tenets. We need a government to issue the money. We need the central bank to regulate financial flows across borders and monetary policy. And without government setting up monetary policy, there won't be enough money. And then bad things happen and children die. This is pretty much economic consensus amongst most schools of economics. Other than the Austrians. The Austrians are the only ones who tell you it doesn't matter how much money there is. We could run the entire world's economy on a supply of $1. Provided the dollar can be divided into smaller and smaller units, you could run it on any amount of numbers. It doesn't really matter. In other words, the total number of dollars matters as much as the total number of inches in the universe. The total number of meters in the universe, the length of the meter itself is not what matters. What matters is that it as a unit that compares towards others. And so the total quantity of money itself does not matter. Any quantity of money is sufficient. My favorite example of that is when Turkey got rid of six zeros in its currency. They used to issue the Turkish lira, and then they moved to the new Turkish lira. And the way they did that was that they knocked six zeros out. So one day you had 100 million liras, the next morning it was 100 liras. And so they knocked out their money supply, went down to a millionth of what it was overnight. And yet people didn't become a millionth poorer. The Turkish economy continued to function normally. So the number itself doesn't matter. What matters is the increase in the number. And when number, when the supply of money increases that has negative consequences. That's what the Austrians think, and that's what nobody else thinks. So I think this is ultimately the driver of interest and curiosity in Austrian economics. But once people start looking beyond that, once people start looking beyond the monetary policy in Austrian economics, they start finding a lot of very interesting and fascinating things to think about and talk about. That's what has gotten a lot of people to be more interested in my work. And it's driven me to think that, you know, instead of spending my time teaching at a university where I'm teaching topics that aren't exactly what are interesting, what is interesting to me, there's a lot more demand out there for people who want to learn about this stuff. And that's stuff you can't really learn at universities. Austrian economics is not something that many universities offer. A lot of people around the world are interested in it. And so I thought that the best thing for me to do in this case would be to utilize my time on teaching these courses to people from all over the world. And what I'm doing is effectively disintermediating the university from the professor student relationship. So I'm just dealing directly with the.

Saifedean Ammous (9:23)

Students, the safety in university, basically. All right, so why are the Austrians right? Why should I believe you? Why should I trust you? I studied economics at school, did A level. I heard about this chap Keynesian a lot. It seems like a lot of governments trusted him and follow his economic theories. I've read about Marxism and socialism. I've read of all these different theories, but only till recently have I heard about Austrian economic economics. Why should I trust it?

Peter McCormack (9:51)

Well, because, let's face it, you know, deep down inside, now that stuff made sense, right? I mean, you went to university and school and took those classes. And I know so many people, you know, successful, highly accomplished doctors, engineers, software engineers. People who have really, really, really mastered their fields and are capable of studying very complex topics. They have very intelligent brains and enough discipline to be able to master a topic. And it's quite common. How many of those people would tell you, I took economics at university, I studied it, I got an A, I passed it, but I have no fucking idea what the hell this is talking about. That thing is so weird. The short answer, of course, you shouldn't trust me, you shouldn't believe me. But my opinion of why you should be curious, at least about Austrian economics is that when you try and learn the other kinds of economics, you end up spending, spending a lot of time trying to figure out what those people want and trying to understand what they're trying to say. And you know, it's highly esoteric and complex models that don't really help you any in anything in the real world. They have no application in the real world. If you succeed in studying it and understanding it, you'll be able to understand the paper itself, you'll be able to understand the economist and what the economist is saying, but you won't be able to really, it won't give you any added insight onto the real world that will help you in the real world. And I think Austrian economics is about understanding the real world, understanding how the world functions, understanding human decisions and human behavior. And that's what is I find more practical and more interesting. So beyond the concept of money, the issues that I'd like to get into in depth in the courses that I'm going to be offering, things like time preference, this is something that amongst the Austrians it's a highly, you know, it's a topic that people think of as a very important issue in economics, but amongst mainstream economic schools it's not commonly discussed with the importance that I feel that it deserves. I think if there's anything that economics can teach you, the most important lesson is that you're constantly performing trade offs between yourself and your future self. Every moment of your life you're making decisions that benefit you at the expense of your future self or the other way around. And that's just an enormously powerful concept. We study macroeconomics, we study microeconomics, we look at all of these aspects of economics that have to do with other people. And of course that's important, but very, very little of economics has to do with the trade offs that an individual does with themselves. In reality, as I mentioned in my book, I think that was my favorite chapter in the book. And this is really ultimately the reason I'm extremely interested in the topic of money and Bitcoin. It's that fascinating link between money and time preference. The thing that I find amazing about time preference is that ultimately it's the trades that you perform with yourself are the most important trades in your own life because you'll trade with other people one time, five times, ten times during a single day. You trade with yourself an infinite amount of times every day. When you decide whether you're going to sleep in or wake up early and start getting after your work, that's a decision where you're prioritizing today, over tomorrow, over your career, your long run productivity. So that I think is an enormously important concept and I think that the Austrians are the only ones who have studied it extensively and explained it and that work, you know, it's all available online, people can read it. And I think, you know, in my syllabus I have links to all of my readings available freely online. What I like to do is to just help people as they perform those readings, as they go through those readings, as they study this material. Because I've studied it before and because I have some experience in teaching economics, I'd like to, you know, be their online teacher for this.

Saifedean Ammous (13:54)

And you're sat there in your Liverpool shirt and I think, as you know, we're both Liverpool fans, we've learned about time preference, right?

Peter McCormack (14:01)

Yes, we've had to suffer many, many, many years. You know, every 15 years we get something but makes it worth it, right? I mean, Istanbul, you'd trade all of the last 14 years of misery for another Istanbul, wouldn't you?

Saifedean Ammous (14:14)

Of course, of course. But I also, there is kind of an analogy there with football in the way that clubs spend money, they try and be successful and they end up bankrupt. You know, there is a nice analogy there, don't you think?

Peter McCormack (14:29)

Absolutely, absolutely. If you think about it, you know, a coach like Jurgen Klopp, Liverpool's messiah, probably the real Satoshi Nakamoto, incidentally, although I'm sure he denies it. But Jurgen Klopp, his approach towards team building is a very low time preference approach. He buys young players and he spends time perfecting them and he puts up with short run shortcomings of these players that cost the team points and goals because it's going to pay off in the long run. And so you look at how that's worked out with players like Trent Alexander Arnold or Andrew Robertson, they've improved immensely. Whereas, you know, the high time preference approach is the one that you see at clubs like say, you know, Man United at this point, Real Madrid, to certain extents in various periods like the Galacticos or psg. Today, the teams that have a lot of money and they want to buy success quickly, they go and they buy the superstars and then it's hard to get the superstars to work well together, no matter how much money you pay. And then the problem is that you're buying the superstars at the peak. In a couple of years they're not going to be at their peak and you need to buy another superstar to maintain that level. So that's why Liverpool's Jurgen Klopp's approach paid off. And now we're European champions.

Saifedean Ammous (15:41)

European champions. And hopefully next year, 31 years, we will break the ducks and. Well, anyway, we talk about football another time. Okay, so look, I get it. I do have an interest. You said people should be curious. I am curious. I'm curious because I've read your book. I'm curious because I've hung out with you a bunch of times and you know, I follow you on Twitter. I'm curious because I listen to Stefan Lovera. So I do have a curiosity, but at the same time I have questions like. So, for example, has this been tested in the real world? Has any government ever implemented Austrian economic policies?

Peter McCormack (16:17)

Well, I mean, I think that's not a very helpful way of asking a question because it's not a matter of following one rule book. There's no specific. It's more really about the method of analysis of economics rather than any specific recommendations. But in general, I think that the policy implications that come out of Austrian analysis based on individual analysis, the ideas always come up towards concepts of individual freedom, individual choice and individual responsibility. And in that sense that exists in every society, markets will always exist. As long as human beings exist, people will trade. You put two people on an island, on a desert island, they will find a way to trade and cooperate, and that's an economic decision. And of course, more importantly, as I was mentioning earlier, the individual trades that you do with yourself are economic trades that are taking place at any time, at all place. So these rules and laws of economics happen at all times. And then governments interfere in certain ways and prevent markets from functioning in certain times and certain places. Economics help us understand the consequences of these interventions. So there's no such thing as, you know, the perfect free market utopia, and nor do I think that we'll ever get to that. But, you know, we're also never going to have a human society that doesn't have theft or murder. You know, these things will always exist. And so it doesn't matter if we ever get to that utopia or not. But I think the important thing to understand is what are the implications of different ways in which this utopia goes wrong. So the closest examples we have of free markets or societies that have implemented a free market, and also specifically, I think, most importantly, free market in the capital market, in other words, free market in money. Are examples of countries that were on the gold standard. So we have Switzerland, which was on the gold standard until the 1970s. They don't seem to have done too badly with it. It doesn't seem to have hurt them. If you look at actually the statistics on Switzerland up until the 1970s, both inflation and unemployment were nonexistent. Both never went over 1%. There was no inflation, there was no unemployment. Switzerland was one of the richest countries in the world and it had one of the freest markets in the world. And after they moved towards having a more inflationary monetary policy. Now we see more and more unemployment after the 1970s and particularly after the 1990s there. So it's not about finding one poster child. It's about understanding the breadth of different ways in which governments can intervene and mess up people's lives economically.

Saifedean Ammous (18:56)

It does sound to me a little bit like, and I'm not an expert on economics, but it does sound a little bit like when I say, look, in the UK we've got the Conservative Party and we also have the Labour Party. The Labour Party is traditionally more socialist, especially at the moment with Corbyn, who is pretty much a Marxist. I guess conservative policies seem to be a little bit closer to Austrian economics than, say, the socialist parties. Is that a fair observation?

Peter McCormack (19:25)

Probably, yes, I would argue so. However, I would say it's closer to the rhetoric of the Conservative parties rather than the actual actions, in the same way that Tony Blair's labor is probably closer to socialist rhetoric than conservatives. But really, conservatives and labor are far closer to each other when push comes to shove, in a sense of. I don't pay much attention to politics, but even with Conservative pay lip service to free market ideas, but they still support a very strong role for government in many areas, particularly defense and foreign policy. And ultimately it's the same thing. The damages from those things are mostly concentrated to people abroad. There is, of course, blowback, but conservatives want to expand the state abroad, socialists want to expand the state at home, and then they all compromise and agree to expand the state abroad and at home, and then everybody wins. And that's really, if you look at it in US politics and British politics over the past few decades, this is how it goes. It doesn't matter if it's Blair or Bush or left or right in business. There's always more funding for more war and there's always more funding for more domestic programs, ultimately government. And that's really what you can see from understanding the economic incentives that people at government face. The only thing that benefits them is the expansion of the power of government and the expansion of the lending ability of government. And so they may oppose ideas in principle to get elected, but when push comes to shove, any idea that increases their power will be good for them.

Saifedean Ammous (21:05)

I was listening to a Tom woods show recently, I've become a little bit of an addict too, actually. I really enjoy his approach. I've heard him break down a lot of issues with socialist policies. And there was a recent show about the Socialist Manifesto, a book that a guy read, the Name Slips Me Now. But one of the interesting things in there he brought up as an example, he was talking about having caps for interest rates on credit cards. And he was explaining that caps for interest rates on credit cards don't actually work. And that actually, I think he was saying, like, there's a market at every interest rate for somebody to use a credit card at. And when you start introducing caps, you're actually destroying the free market because you're removing people from having ability to actually get credit at a certain rate. Is that a good example?

Peter McCormack (21:51)

Yeah, because ultimately the interventionist naive mentality just looks at something that they don't like and they say, you know, we pass a law and we make this illegal, and then it stops happening. And once you understand economic incentives, once you study economics from the Austrian perspective, once you understand that, you know, the market for loans or for apples, or for TVs or for cars or for anything else, whatever these things are, they are all created by men and humans who are acting. And it's our valuation in our mind that creates those things and brings them to life. And so the market for interest is no different. We hear that apples are expensive. Government says, well, that's not nice. Children should be able to get apples at a lower price. Let's make it so the price of apples is lower. And then in the Keynesian or Marxist mind, it just seems that this is good intentions, so therefore it will translate into good consequences. But in reality, all that happens is that you've now made it illegal for people to buy an apple at the market price. And so all that happens is the people who are going to be buying apples at that market price are going to become criminals. A lot of people are going to think that the cost of becoming a criminal is going to be worth it. People are going to get into black markets, and then of course, you're going to have the cost of enforcing the black market. So you end up with a massive cost to society for the fact that people are producing fewer apples because they can't sell them at the price that players the fact that people are buying fewer apples because they can't afford it. And then you have the black market, which is wasting all of the time and energy of people on just securing the trade. And so it leads to criminal Activity being directed at providing this. And with the interest rates, if people don't get the high interest rates from their local bank, they're going to get it from their local loan shark, and it's going to be much worse.

Saifedean Ammous (23:44)

So we're really talking about the human action part of what you're teaching then, right? Yeah, yeah. Is there any space for any forms of socialist policies within Austrian economics? So, for example, in the uk, we have the nhs, and you know what? For all its wrongs, there's a lot to like about the NHS as well, especially when you speak to people. Hey, when I'm out in the US talking about healthcare out here, is there any space for any socialist policies, any helping off the worst off in society? Or does Austrian economics, is it all down to human personal responsibility?

Peter McCormack (24:19)

No, of course, there's a lot about helping others in society, but the key distinction is that you help them yourself. You don't hold a gun to other people's head in order to help others. And that's really the key idea. So, obviously nobody's saying that helping the poor should be bad. And this kind of caricature, I would say, is more accurate for people. I would say maybe like the Ayn Rand objectivists, they would lean more towards these kinds of. And I'm not familiar with her work, so I may be mischaracterizing it, but they talk about the virtues of selfishness and so on. But I think within Austrian economics, there's no value judgment in economics. There's no what is right and what is wrong. It's just analyzing consequences. So the issue in terms of whether you should or shouldn't help the poor people, of course, is a moral issue. That is down to you. The problem Austrian economics has with socialist ideas is that it's not that they're helping the poor, it's that they are a very inefficient way of making these institutions work. Because ultimately everybody knows that the main problem with socialism is the issue of incentives. If nobody can make money, or if everybody makes the same amount of money, then nobody has an incentive to excel. And while there's some truth to that, that really is not the problem with socialism. What the Austrian economists have been saying for a century now, even before socialism failed. Mises wrote a book in 1922, I think, or 1921, called Socialism, and in which he analyzed why socialism cannot work. And what he identified was called the problem of calculation. I think this is an enormously important question that people should study because it is really the only serious Economic treatment of socialism that has been written. And it just analyzes the problem with socialism, aside from the incentive problem. Even assuming that the NHS is staffed by the most intelligent and well meaning angels who cannot do any wrong, any kind of entity that is controlled by the government is by virtue of its being a government monopoly, by virtue of it owning the means of production immediately ends the presence of a free market in the means of production in the capital. And that's ultimately the problem that socialism faces when there's no market in the capital goods. And Mises identifies that as the absence of a stock market. So social society is a society that doesn't have a stock market. A capitalist society is one that has a stock market. That's really the clearest definition we have of those two terms. Because if you have a stock market, that means you and I can buy and sell capital in a free market. If you don't have a stock market, then the capital is owned by one entity that decides where all of the capital goes. So if one entity owns all of the capital and owns all of the resources, how will that entity figure out where to allocate the resources most efficiently? In a market, these resources are allocated based on prices. And so price signals tell us what people are valuing things, how people are valuing them, and what different valuations are attached to them. And it shows us what different production methodologies, methods cost. And then it shows us which one is better, which one fails. But once you prevent a market in capital from emerging, and this is the intellectual error of socialism, it's not because socialists are evil or whatever, this is the intellectual error. And Mises explained it very, very clearly. The intellectual error is to think that just because we own all of the things, we can use them efficiently, when the only way that they can be used efficiently is if prices are allocated. So when you look at the nhs, sure, a lot of sick people walk into the NHS and come out cured. But, you know, medicine in England did exist before the nhs. Medicine in England, most of the hospitals in England and most of the medical schools in England existed long before the nhs. So it's not like the government just came one day and waved its magic wand and there was health care. Healthcare has been developing in England for many hundreds of years and has been improving. And government simply came and took it over, took over its management over the last 50 years. And by destroying the price signals, we end up in this world today. Where you see the real impact of it is that the nhs, they face no real budget constraint. Costs are always Spiraling out of control. Doctors are complaining about not getting paid enough, patients are complaining about it being expensive. And everybody somehow thinks that all of that is because of free markets and if we just had it all owned by the government, then we'd have universal healthcare. But in reality, I think the really sad thing about the NHS is if you really, really, you know, we can get into endless arguments about the kind of treatments they offer, but just look at their diet websites, just look at the recommendations they tell people about what to eat. I remember looking at their website, they tell you that you need to eat yourself 6 to 10 ratios of grain every day. And that is really a very, very effective recipe for developing metabolic syndrome and diabetes. It's truly, truly perverse that they would say something like this, but because it is a government novel, it faces no consequences to its actions. And, you know, it is easy for corporations to co opt it and to, you know, for industrial food manufacturers to continue to shape their guidelines in a way that helps them. And of course, it also drums up business for the nhs. The more sick people you have from eating range, the more people need to go to the NHS and the more funding you would have in the nhs. And of course, a lot of the funding for the NHS goes towards all the publicity and the marketing that they do that makes English people especially so emotionally attached to this institution in a way that is quite unnerving, to be honest.

Saifedean Ammous (30:08)

All right, so what you're basically saying then is because of humans and human actions and the way humans behave, that a free market will end up being the most efficient market.

Peter McCormack (30:19)

I don't like the term efficient, to be honest. I think the term efficient is useful for describing an engine. But a market is not efficient because the engine is efficient compared to a theoretical optimum towards which it can perform. But human society and human ends and human economic activity has no well defined optimum that we seek to go towards. What is an efficient British economy. I mean, the perspective of efficiency is a status centralized vision of looking at society like a farm of cows that we need to milk efficiently. So we have 10,000 cows. How many liters of milk can we make per day? That's kind of how Keynesian economists look at your country. We've got 60 million cows in this country. How do we milk them so that we make the most taxes and the most GDP and the best government statistics that we care about, whatever the hell it is these days. But ultimately economics is about individuals and so it's about you maximizing your own individual freedom. So it's not about efficiency. It's about you being able to act in the way that you want, in the way that you know is best for you. And that necessarily has to follow from you having the freedom to do those things. Because anything that intervenes, that essentially coerces you and can only do that through violence or through the threat of violence.

Saifedean Ammous (31:42)

So tax is theft then, as I keep reading. Okay, so a free market. Does a free market come without regulations?

Peter McCormack (31:52)

I think by definition, yes. A free market is a market which the transaction, a free market transaction is one in which the two people who carry out the transaction do so consensually based on their own rules, and that any person who is not a party in the transaction cannot enforce rules on the others. That's for me what a free market is. And so if you and I exchange $10 for a book, that's a sale, any kind of intervention that says, no, you can't sell this for less than 20, or you can't sell this for more than 5, or you have to take $5 out of the 10 and give them to somebody else, that is by definition, I think that is not a free market.

Saifedean Ammous (32:31)

But then doesn't this open up to abuse? So let's flip to say, the healthcare system in the U.S. can I just.

Peter McCormack (32:38)

Clarify, I should be clear. It's not that it doesn't have regulation, it doesn't have government regulation. Of course there will be all kinds of free market institutions for regulating those things. So in the same sense that you have free market agencies today that go around giving ratings to cars and ratings to different entities or restaurants or whatever, there's no reason why you wouldn't have rating and regulations from free market entities that establish their name in this business. Your business is to go around and check people's online universities for economics and verify it, and then you build credibility for that. So there's no reason why regulation and oversight can't be a market good that is provided by the market. And we see it done in many, many ways.

Saifedean Ammous (33:18)

Yeah, but I'm going to flip the example of the healthcare bring it to the US So one of the things, I notice a huge difference when I come here. So if I'm watching TV and there's advertising, I learn about all new conditions I did not know existed and pills you can take. And I also see a massive problem with oxytocin here. Right There are people massively addicted to oxytocin. So do we not run a risk of a free market leading to the abuse of people for personal Gain.

Peter McCormack (33:48)

Well, the thing is, the pharmaceutical industry is as a far cry from what the free market is. The pharmaceutical industry is essentially a bunch of lawyers and businessmen prying on sick people and on researchers by continuously finding excuses to put pills into people, people don't need them. But of course, that ultimately goes back to the monopoly position that is granted to that industry, government regulations. So if you think about it, drug development has become a massively profitable industry for companies and for the lawyers in those companies, but not really for scientists to develop the drugs, because ultimately it's entirely regulated. And this is the thing that people miss when they talk about regulation. They think of it as just being the magic wand that you wave. And then we just put some guy in an office and he'll figure out what works and what doesn't and then he'll pass a law. Well, no, we now have an FDA process that takes around 10 years and $1 billion to get a drug on the market. And these numbers are pretty old, so it might be much higher now. So if you and I concoct a drug right now that can cure a disease and we know that it works, we've tried it on ourselves or others, and we can't sell it until we get FDA approval, it could take many, many, many years. So there will be people who would be willing to take it because they are happy to take it, but the FDA wouldn't approve it. And you and I can't get it onto the market unless we spend 10 years and a billion dollars doing that. So of course we can't do that. So it's going to be a pharmaceutical company that does that. And that's why the researchers that work on these things make very little compared to how much money is spent on it. And the entire thing is a monopoly in terms of the entire medical establishment of the government. Oversight and regulation of the medical establishment started with the monopoly granting power to the American Medical association in terms of its deciding and what works and what doesn't work. And all these medical agencies in the government that decide those things, that is the problem. So you can't use that as an example of what happens if you have a free market, because that's very far cry from what a free market will look like.

Saifedean Ammous (36:02)

Next up, I talk to Safe more about Austrian economics and why Man United will have a terrible season. But before that, I do have a message from my amazing sponsors. Okay, firstly, today I'm going to talk to you about BlockFi, my oldest sponsor, my biggest supporter of the show. Big thanks to Zach Prince. I actually hooked up with Zach a couple of weeks ago. I was in the blockfi office with him and Jeremy Welch from CASA where we discussed their recently announced partnership and a whole bunch of really cool bullish bitcoin stuff. You're definitely going to want to check that out. That's out in a couple of weeks. Do you know about the partnership though? I've been talking about it for a couple of weeks now. It's a really cool thing. Two of my favorite companies are working together. So firstly, it gives BlockFi clients access to both market leading financial services and secure self custody solution. Through the partnerships, clients will be able to access CASA's multi sig software for long term savings and security and Blockfly clients. Eligible for $50 off a Castle node with included gold subscription. $200 off your first year Castle Platinum with 3 or 5 key shield multi sig and then $500 off first year of Casa diamond with 3 or 5 Keyshield and full team support. So definitely got to go and check this out. If you're a BlockFi customer, you're a CASA customer. This partnership is amazing. They're doing so much for you. If you want to find out more, head over to blockfi.com which is B, L, O C K F I also today's show is brought to you by Kraken. As you know, they are the best exchange in the world. I'm always telling you this, not just because they're a sponsor. The thing I love most about this company is the focus they have on security. With all the exchanges being hacked all over the history of Bitcoin, this is the one exchange that has security embedded throughout the DNA of the company. And I know this because I recently recorded a show with their chief Security officer Nick Pacoco. I headed over to Chicago. We recorded, I think it was about, about a 90 minute show discussing everything to do with hacking and security. It's a great one and Nick is a great guy to interview so I can't wait to get that out. I think that's coming out on the 22nd of July, so you won't want to meet that. But yeah, it totally reinforced my belief in why Kraken is the only exchange you should be using. And not only do they have embedded through the company, they've also got Kraken Security labs where they look to improve security across the entire industry. So come on, who are you going to use for exchange? Who are you going to trust? For me, it's Kraken. You're going to join me in supporting Kraken. If you are, head over to Kraken.com which is K-R-A K-E-N dot com. Okay, say you and I come up with a cure for the disease of supporting Manchester United. We come up with the cure, right? Yeah, but we don't have to go through a 10 year FDA approval and people start taking this cure and they start dying. Is that just part of the free market? We accept that.

Peter McCormack (38:47)

Well, I mean, you know, there's, there's arsenic on the streets and there's rat poison in the supermarket and you can take that and die. You know, there are knives, drawers, and you could kill yourself. But just because I make something and I put it out for sale doesn't mean that people have to go and ingest it and eat it. And I think this silly notion that government is there to protect us, that that just makes people think that anything that is put on a supermarket shelf, you know, if it's on the supermarket shelf and it's not illegal, then clearly it's good for you. And that's how people end up eating things like, you know, cereal and Pringles and Doritos. And that stuff is not good for you, even though it's perfectly legal. It's very bad for you. There are a lot of very bad things. And of course, what determines the damage that certain things do to you is entirely up to you as an individual. And the dose that you take and what is in it and your conditions or whatever, you can't legislate that, you can't make a law that says these are the good things that are allowed and these are the good things that are not allowed. And this is the disease that works for this. But in a free market, people who are, who don't want to take a risk, who don't need to take a risk, won't take a drug that could kill them. The people who will take it will be the people who can afford to take the risk. And you'll have trials and you have all kinds of, all of the institutions that you would want to build around. This can be provided through free market regulations.

Saifedean Ammous (40:12)

Is there any form of government in a Austrian economic model?

Peter McCormack (40:18)

It depends who you ask. Again, economic analysis, its analysis is not so much prescriptive, but I would say that from the Marty Rothbard, who's my favorite economist, he developed the concept of anarcho capitalism. And the idea is that the purest expression of capitalism is anarchism, and the purest expression of anarchism is capitalism. The Idea of anarchism as being chaos and being people in hoods going around smashing windows. That's not what anarchism is. Anarchism is the absence of rulers. It is not the absence of rules. It is not the absence of society. It is a normal, human, peaceful society where people don't initiate aggression against each other. That's ultimately what it comes down to. And so I think the question ultimately is an individual one. And so the question for you is, what do you view as the correct role for government in your life? And what do you use the correct role for you to govern others? In other words, what aspects of your life do you need others to tell you what to do? Do you need people to tell you what to eat and drink and smoke and buy? Or do you need to be telling people what to eat or drink or smoke or buy? I think it is, in my mind, honestly, I view it as a sign of maturity to be able to understand the concept of anarchism as just being an individual decision of not wanting to control others and not wanting to be controlled by others. That's ultimately what it is about.

Saifedean Ammous (41:46)

Yeah, so that's the bit I like, you know, and that makes me automatically then think to a passion subject of mine, which is the illegal drug industry, the, let's say, the social drug scene. As a former addict, somebody who doesn't take drugs anymore and never would, I would advise people to avoid them. At the same time, I don't have a problem. If anyone wants to, you know, that's your choice, so be it. If you want to put something in your body, you should be able to. And certainly the many years of cannabis being banned is entirely ludicrous, and we're seeing a lot of benefits from that. So that's. That's starting to make me kind of think of that. But at the same time, I struggle to imagine a world under kind of these Austrian economic theories. Like, I think what would happen to schooling. And I guess it's because we're so entrenched in the current structure of society that it's virtually impossible to imagine something different.

Peter McCormack (42:43)

Yeah. When you know, you wonder about schooling because you spent too much time in schooling, being told mainly how important schooling is and how you should go towards the people who are running your schools. That's ultimately what public schooling is about, you know, like any government institution, because it doesn't have to be accountable to the consumer, because the consumer doesn't have a choice in paying or not paying. The people who benefit from it are the people who run it not the people who get receive its services. And so I think public education hopefully is going down the drain. And I think hopefully schooling itself has been very, very significantly influenced and shaped over the last century by the growth in government control over education around the world. And I think, you know, we're going to see that begin to change. I personally, I lean towards moving towards homeschooling myself. I think in the future I'd like to homeschool. I don't think it makes sense to send your children into these industrial facilities for mass production of chemistry and geography and government propaganda lessons.

Saifedean Ammous (43:47)

Yeah, it's funny you should say that. I had a conversation with my son recently, recently about this because, you know, he doesn't enjoy sciences, he's not very good at them. And it was a friend of mine, I think, I think it was my friend Rich Roll has a podcast and he said, we send people to school to learn facts when they carry around a supercomputer in their pocket and facts are things that aren't useful to them. So I came to, I came to my son, I did a deal with him. It's like, you know, what subjects do you like? He likes religious education because religious education in school isn't just learning about the different religions, it actually covers a lot of philosophy and just quite interesting moral subjects. He loves art, he loves drama, he loves anything creative. I said, you know what, boy, if you, you don't have to do well in these subjects you don't like, you don't have to. I don't care as long as you don't, as you don't waste your talent in your creative subjects. So if you don't want to kind of got in trouble. But I said, look, if you don't want to do your biology homework, don't, but don't then use that time just to sit on your PlayStation, do some of your creative work. And I looked at homeschooling, but he loves the social aspect of school. So I kind of look for alternative schools and there are private alternative schools starting to pop up that focus maybe more on creativity and less on these academic subjects that teach people to work in a factory in Victorian times.

Peter McCormack (45:06)

Yeah, yeah, absolutely. I think, I think the key idea is that state education and the traditional model of education is top down and it's driven from above. So there's a schedule where at 9am you're going to do math and then at 45 minutes the bell is going to ring and then you're going to move towards chemistry and then it's going to be French or whatever it is. And you know, you move from one class to the other or the teacher comes to your class and it's just a complete interruption of any kind of flow or being able to build any kind of long term ability to focus on a subject for long. Because if you actually start studying something and you get into it and you start liking it, you're liking the math problems, you could spend three, four hours and make enormous progress in that. But because you keep splitting it, because it's not run by the schedule, the internal schedule if you want of the person who's learning, but it's run by the need to organize everybody's schedule so that everybody comes and goes home at the same time. It ends up basically not being about what the student wants. And I think the key is for it to be self driven, for it to be about the child figuring out what they want, what they care about and then wanting to learn about it. And in a sense that is kind of what I'm doing with my online courses. People are interested in Bitcoin and in order to understand Bitcoin, they're realizing that Austrian economics is helping them. And so therefore that drives the curiosity towards learning more about Austrian economics. So I think this is really the approach that education should be taking in the future. And with the Internet it's absurd not to do so. I think that what I would urge you to do is just let the child explore and do the things they want and then let that drive what they want to learn when they figure out what interests them. They like cars, want to build cars. Well, if you like to build cars, if you want to work in cars, it would help you to learn math and here's why. So then they're going to have a real motivation for learning math.

Saifedean Ammous (46:58)

That's interesting you should say that. Okay, so I've got two examples. There's a school in England where my friend's son recently got. And it's a great story actually. He loves cars. Just like you said, he's an absolute car mad. He's, I think he's 10 or 11. And there's a specialist school where you can go and learn to be about cars, how to build cars, be a car mechanic. And what they do is every subject, they apply it to cars. So if you're doing math, it's about the math of the engineering of the car. If it's physics, it's about the physics of the car. And every, I think it's like every year they, they fully build A car, as a team. The great story about it is, though, he got rejected from his application, so he ended up himself writing to them and they received the letter and they allowed him in, which itself was brilliant. The other example, there's a school here in la and I think it's run by a James Cameron's wife, the film director, or it's James Cameron and his wife. And the way they're set up as a school is every term you pick a subject and that's all you do. And if you come in and you say, I want to learn about Italian cooking, that's all you do. All term you focus on Italian cooking. If you want to learn about Austrian economics, that's all you would do. And you just do that for the whole term. But you still have the social interaction of being in a school, surrounded by other kids and making friends, which to me sounds like. Like a really nice balance.

Peter McCormack (48:16)

Yeah, I think, you know, the common misconception is the idea that if kids don't go to school, then they won't have a social life. And I think it's the exact opposite. If kids are not stuck in a cage with 40 other or 25 other kids for 12 years, five days a week, they would have a much more of a social life. I mean, if you think back at your childhood, you know, the vast majority of the interesting things used to happen in the summer because that's when you actually got to live your childhood. I think there's plenty of time with homeschooling or with small schooling groups or with self directed learning. There's plenty of time for children to meet many different groups of children, many different activities, sports activities, the hobbies, the nature, all sorts of activities they would have time for if they weren't stuck in the conveyor belt of industrial assembly line education.

Saifedean Ammous (49:03)

All right, man, well, listen, look, the other thing we have in common alongside Liverpool as bitcoin, you know, this all comes back to bitcoin. The show's about bitcoin. You've dedicated your life to the economics of bitcoin. So let's get into that, let's talk a bit about, like, teach me about money. Like, I think of money as what I get out of the bank, what I earn each month, it goes into my bank account and then I use that to spend and that's all I think about, money. But there's so many different views or opinions on what money is. Like, sometimes people say bitcoin is money. Sometimes, sometimes they say it isn't money. Like what do people get wrong about money.

Peter McCormack (49:37)

So, I mean, there are a lot of ways of looking at any animal and identifying it and talking about it. So, you know, we could say an eagle is a bird, but an eagle is also a carnivore, but an eagle has also got feathers. And so we can focus on many different aspects of it and we can run definitions in many different ways. I don't like to spend much time on definitions because, you know, most the discussions on definitions end up in just semantics. I think I like to think of things functionally. I did engineering as an undergraduate. It helps me think practically about things. So for me, what I, and not just for me, but the Austrian view as well, is what defines money is that it is a medium, exchange. That's the function of money. Money is something that you own not for its own sake, but for the sake of exchanging it for something else later on. So this is why anything can be money. If you buy a T shirt with the aim of selling it on next year as a store of value, you did a job and somebody gave you a T shirt in return, and you said, okay, I'll sell this and eat one day, you've used that T shirt as a medium of exchange. And you know what? It's not illegal. Nobody can stop you. You can barter things all the time. So anything can be used as money. The point that I like to make in my book is that putting aside what should or shouldn't or what your favorite color of money is or what you think is the best kind of money, the key point about what I think makes something money is what I call. Well, not what I call, but what is called the stock to flow ratio. The ratio of the existing stockpile of a good to the annual production of that good. And when that ratio is high, that means that the total supply of the good on the market, the total amount of liquidity in the market that is being bought and sold every day is much larger than the new production that is being added every day. So the new production in the market is tiny compared to the liquidity that's actually changing hands. That, in my opinion, is what makes for good money. And that's why I think gold became money. And I think anybody who doesn't like this theory needs to explain to me why it was gold that was the money of the world by the end of the 19th century. And that is because gold has the highest stock to flow ratio of anything that the world had ever seen until bitcoin in a couple of years. Not yet. It's still higher than bitcoin. So let's not start the victory lapse yet over gold. Gold supply is much larger than its annual production because of the fact that gold doesn't ruin, doesn't rust. So for thousands of years we've been piling up gold and it's sitting around somewhere. The gold that was worn by Nefertiti thousands of years ago might today be in your iPhone or whatever. So gold is always continuing to pile up. New gold is always insignificant compared to the old gold. And therefore the market for gold is ultimately a market for gold, as money and new supply barely affects that. That means that as the price of gold continues to go up because people are using it more as a medium of exchange, in other words, they're storing more value in it, then the price of it goes up. It's not really easy for miners to flood the quantity and bring the price down. That's the key concept. So that is true in the case of gold, and I think it's also true in the case of bitcoin. And that's what really drew me to bitcoin, because it had this property that means that no matter how many people want to use bitcoin, we're not going to make more than 21 million. Deal with it.

Saifedean Ammous (53:05)

Yeah. You know what, though? The thing is, I'll get down the pub on a Friday night, I'll be there with my mates and I'll be saying to them, you know, the school system is wrong. It's a waste of time. We're teaching bad concepts we shouldn't have. A government tax is bad. We need to be a world based on bitcoin. And they just think I'm a fucking weirdo. Safe. They think I'm so weird. I struggle to get these concepts across. Like, what's the starting point? How do we even make progress?

Peter McCormack (53:29)

Can we.

Saifedean Ammous (53:30)

This is way out of people's normal life. This is so. Such a. These are such alien concepts to people.

Peter McCormack (53:38)

Well, I think the way we make progress is you introduce me to your friends and then they'll think you're normal in comparison.

Saifedean Ammous (53:43)

Yeah, but you're an intellect. You can explain it in a much more articulate way than I can.

Peter McCormack (53:48)

Yeah, but also much more weird, I think. I mean, honestly, I genuinely don't have much of a missionary zone or an evangelical zeal about those things. I write about this stuff because people read my stuff and pay me to write about it. It's just. It's a productive job. I don't call myself a bitcoin Evangelist. I don't want to spread those ideas around. I'm not using my Twitter as a propaganda outlet. I use it because it's fun. I've learned all these things and I like things that I like, all of the things that I've learned from in the community that I interact with. And it's a job for me. Ultimately, it's up to people to make their own choices. And if people are happy with their current choices, that's their lot. If your current lot is not working out for you very well, then you start asking questions and maybe that is the answer. So I think I try and stay away from evangelism and telling people and it just makes life much easier. Keep them easy.

Saifedean Ammous (54:43)

Yeah. So we have the options with bitcoin now. Like you can use it, I can use it, I can hold it and keep it. If I wanted to buy 100 copies of your book, I could turn around, you go safe. Can I pay in bitcoin? You'd probably accept it. So do we have the ability right now to benefit from certain parts of Austrian economic theory even though the governments of the world aren't using it? Do we have to rely on the government to change their policies to have the benefits?

Peter McCormack (55:08)

That's the whole point that it's really not a matter of government policy. I think ultimately, individually, it's about understanding how these things affect you and making your own choice. That's really what it comes down to. For me, I don't find it to be particularly productive use of one's time to obsess about politics or what's going to happen with politics because you very little control of it. Very few people have any control on that. It's an insane system that nobody is really in charge of. And try and understand how it affects you and make your own decisions. That's ultimately what it comes down to. I think Austrian economics is individual in its methodology and it's also individual in its conclusions. I think in terms of what you come at for me is sort your own house out and stop worrying about politics and all that nonsense.

Saifedean Ammous (55:54)

Yeah, I guess so. Because some of your key concepts, for example scarcity, understanding scarcity. I understand that now with regards to bitcoin and before where I've spent bitcoin. Now I'm really considerable about when I do, I do very occasionally. But I'm really considerant because I think about the future. You know, you talk about time preferences and, you know, opportunity costs. I spend less these days, which I know isn't great for the government, but I spend less these days and, you know, the time preference is about what I want in life and the decisions I make. So I guess I'm already benefiting from some of these concepts anyway.

Peter McCormack (56:27)

Yeah. It's amazing how many people have told me the same thing on bitcoin. Even before I wrote my book, I'd heard so many people who would say the same thing that once they started having bitcoin and having the ability to put their money in a reliable store of value that begins to appreciate over time, they started finally understanding this meaning of saving. I think most people my age have not. I don't know most, but a lot of people my age, maybe more than any generation recently, have no conception of saving. You go through your childhood, you don't save a penny. You spend every that your parents give you, and then you go to college, you get into debt, you get out of college, and then you get into more debt for a house and a car and a wedding. And, you know, maybe you pay it off before you die, or maybe your kids are burdened with it and life goes on. And if you make more money, you just take on more debt. It's amazing. And, you know, if you think about it, that's just part of the reason many people are so miserable, because they're constantly with that worry of debt. What if I miss this payment? What if I miss that payment?

Saifedean Ammous (57:30)

All right, so let's get in a bit more on the bitcoin stuff. Okay, so we've talked about this before, but let's talk about bitcoin central banking, fractional reserve banking. It's from your syllabus. Could fractional reserve banking happen with bitcoin?

Peter McCormack (57:44)

I think if it would happen, it would cause the people who try it to go bankrupt very quickly.

Saifedean Ammous (57:51)

Good, so that's a good thing then.

Peter McCormack (57:52)

Yeah, yeah. I think it's just very, very hard to be able to do it with bitcoin because bitcoin is so liquid, and the ability to move a bitcoin around the world is so cheap that effectively the bitcoin system has far more full nodes than a gold system. Under the gold system, you think about it, ultimately, because gold is so expensive to transport, to move around, you end up with gold being centralized in vaults, one central bank per country, and then one central bank for the whole world. And that just means that that central bank's ability to issue credit backed by its gold becomes money rather than the gold itself, because that central bank can stop you from getting the gold that you think is yours because they have guns Bitcoin is much harder. If you try and pass off bitcoin substitutes or credit or fiduciary, as it's called, backing bitcoin, it's very easy for people to take the bitcoin that is underlying, and it's very easy for people to speculate against you. And I think it would not be sustainable unless you're able to offer people some kind of value for why they would accept a discount on their bitcoins. Perhaps, for instance, say, let's imagine hypothetically that Facebook uses bitcoin as their reserve currency for Libra. And so now if you buy a Facebook bitcoin, then you have bitcoin that you don't own, you don't have the private key for it, but you're able to pay bitcoin to anybody else on the Facebook, you might be effectively willing to pay a premium for that. You might be willing to pay a premium for the bitcoins that you get, because that has much higher liquidity. I think that kind of power is what allowed central banks to issue fiat money based on gold, because gold is very hard to clear. But I think somebody like Facebook would have a much harder time for offering much bigger premium effectively or much bigger discount on the gold. So I don't think so.

Saifedean Ammous (59:51)

What do you think of Libra coin?

Peter McCormack (59:54)

I think it's interesting. It's a very interesting question. I'm really excited about seeing how it unfolds because it has put the issue of money and money control front and center into everybody's mind. Because everybody's always obsessed with Facebook for whatever reason, either they like it or hate it. And suddenly, there you go, the biggest, evilest, baddest, behemoth corporate creep of them all wants to be in charge of all of your money. And I think it's amazing watching all of these things unfold. I think it's going to drive people closer towards the realization of the importance of bitcoin's value proposition. Because we're going to see. All right, well, Facebook can do it. Well, maybe Google can do it. Well, maybe all these companies will have their own shitcoin. And then wouldn't it be great if I could pay somebody from my Facebook account to their Apple or Google account or whatever it is? Wouldn't it be great if these things were all interoperable? Wouldn't it be great if all of these companies could agree on a neutral protocol for transfer of value? But we don't need the company's degree, we don't need government's degree. We already have the protocol, and then they would all individually prefer to have their own protocol. Obviously, Facebook would like to issue the world's reserve currency, as with the US government, as with the Chinese government, as with Google, as with you and I, who wouldn't? But the second best option for you is that you go towards a reserve currency that nobody controls rather than something that somebody else controls. And that's, I think, bitcoin's value proposition and Libra is helping drive that forward.

Saifedean Ammous (61:26)

Isn't Libra though, like a free market for money? The creation of Libra is essentially the privatization of money. In some ways it could be, but.

Peter McCormack (61:36)

There'S a reason why we've not had these things before. We didn't need bitcoin's technology for companies to be able to do something like this. A centralized currency like Libra doesn't need a blockchain, doesn't need bitcoin. It was bitcoin and the altcoin explosion really that made it thinkable for people to do something like this. But I think if a company, and we have examples, E Gold tried to do something like this in the 90s and it was closed down. So I think bitcoin really pushed the limits of the overtone window when it comes to private money. But ultimately I can't see Facebook succeeding in this because governments are just not going to. Maybe some governments won't have a choice, but ultimately the US government ain't going to give up on its senior edge because of Mark Zuckerberg.

Saifedean Ammous (62:25)

But the way I'm thinking about it, safe is that the shitcoins are a free market for money. And what they've done for me over a period, like a transitional period of time, which you've watched and witnessed and finally followed me on Twitter after I went bitcoin, only it kind of improved my understanding of bitcoin. And so when you talk about free markets, I kind of think the existence of shitcoins for me has been a good thing. I know people have got scammed and all that, but they've been good for me to help me better understand bitcoin. Does that make sense? For sure.

Peter McCormack (62:57)

I agree. And I think Pierre Rochard said that overall, many people complain that shitcoins take demand from bitcoin, but I think Pierre makes a very good point that each shitcoin has a massive marketing army for itself and they bring a lot of people into the space who otherwise wouldn't they have active pr. Bitcoin doesn't have active pr. It has a bunch of stake eaters posting memes on the Internet. But these bitcoins have professional PR armies and they're attracting people towards this stuff. And most people come, all right, they hear about Ethereum or Ripple or whatever, but then they stick around and they see, oh, wait, well, maybe not most, but some people for sure end up sticking around and seeing that, oh, okay, well, maybe there's something in bitcoin there.

Saifedean Ammous (63:37)

Yeah, some of them can't change their minds, though. Some of them are still stuck with Ethereum and SV and cash, hoping and waiting and whatever. Okay, another thing you've talked about is you talk about why central banks won't adopt bitcoin, but do you think they should?

Peter McCormack (63:56)

I think ultimately it comes down to a question of what is it that central banks serve. Are central banks there to serve their people, or are central banks there as a mechanism for having the people serve the people in power, the governments? And I happen to lean towards the second scenario, and that's why I think they would not lean towards Bitcoin. I think if they. Bitcoin takes from them the ability to conduct monetary policy, takes from them the ability to take away wealth from their people and finance their operations. And I think governments are just going to be afraid of that. But I could be wrong.

Saifedean Ammous (64:30)

It's the lack of control, the inability to print new money to fight wars.

Peter McCormack (64:35)

Exactly. Having said that, I have no special insight on this. I am not a central banker, never worked at a central bank, and I don't get invited to central banker parties. So I have no idea what they talk about or how they think, but my guess is it's not happening.

Saifedean Ammous (64:50)

All right, well, last couple of concepts I want to go through or ask you about. Where do you think we are in the growth of Bitcoin, in the development of bitcoin? You've talked, talked before about bitcoin becoming global money and how it can become a global money kind of, where are we at and what are the steps that need to come next?

Peter McCormack (65:10)

I think we're still very, very early. I think people who are very excited about it happening over the next couple of years are probably getting ahead of themselves. I think it's not a failure of bitcoin. It's not a limitation of bitcoin. I think it's just. And it's not a technical limitation. Bitcoin is scaling technically, I think, in quite successfully. The main issue, the way that I see it, is a matter of liquidity. Bitcoin needs to build up liquidity, and that's just not something that can happen overnight because the way that it's going to happen is that first people need to hear about bitcoin. Then people need to be, need to get to understand why it is, then they need to learn how it functions. Then they need to find a way to buy. And that's just not easy. So I remember 2013, lots of people heard about bitcoin, were trying to buy bitcoin and couldn't. I couldn't buy bitcoin, I couldn't find a way to buy bitcoin back then when I was in Lebanon. And it takes a lot of time for people to find somebody who has a bitcoin, to be able to connect with them and to buy from them. So then that process needs to take time for people to spread and for bitcoin to continue to operate successfully and for its value to go up to attract more people, to bring in more people. So we're now at a point where we have maybe maximum 1% of the world's population on bitcoin, I would say, and there's still a lot of people and a lot of money to go. And it can't just happen overnight also because people are not just going to go and dump everything and put it into bitcoin. That would be foolish. Although I'm sure many of your listeners have done it. So sorry guys. But you know, it depends on the time. You know, it's probably worked out well for you, but it might have been catastrophic. But generally I wouldn't recommend it. So people are not just gonna put all their money all at once. They're going to put a small amount and then when it goes up in value, they're going to have to sell because it's going to become life changing money at some point and they're going to be selling. So we're going to go through all of those phases of early adopters selling off and then new adopters taking it up until the liquidity is spread out all over the world. So that would take enormous amount of time. And it's not something that bitcoin core engineers can hasten. It's not something that if we had kept Roger Ver or whatever, then he would have done it for us. It's about 7 billion people individually finding, not necessarily individually, but about a critical mass of wealth migrating to bitcoin. It's going to be a while.

Saifedean Ammous (67:34)

All right, so last thing on this, can bitcoin be killed? I know you've written about this, you've talked about three scenarios. Software web bugs, government bans, and the failure of fees to generate enough security. How do you feel about all these now? Can it be killed? I mean, it's under the spotlight now of the US government, I think.

Peter McCormack (67:52)

You know, I'm not going to say yes or no decisively, definitively. I would say the. I don't know if it's going to be killed. I mean, but I would say that after researching it, since writing my book, my opinion of the likelihood of its survival have declined a little bit in that there is more of a possibility that I think that it could be killed than I did before. And that is mainly because not because of any kind of technical attack. So I think the kind of scenarios that are usually offered by no coiners about let's kill bitcoin by turning off the electricity and then the bitcoiners won't know what to do or some stupid shit like that, that stuff ain't going to happen, though. We can use radio, we can use satellites, we use mesh networks, antennas, whatever. We're going to figure out how to make a new block every 10 minutes. I think if people want to do bitcoin, they're going to figure out how to make a new block every 10 minutes and to reach consensus on it. So that I don't think would kill it. However, I think the thing that would really kill it would be the improvement in monetary policy. If monetary policy improves, if we go towards a gold standard, if we have more of a better monetary policy around the world, that just doesn't mean the US and Europe. It also means Venezuela and all of these places, then fewer and fewer people want to move to bitcoin. And then that, I think would undermine demand for bitcoin. And I think one, I didn't mention this in the bulletin, but it occurred to me after I wrote it, and this might make many bitcoiners nervous. I hope you guys don't hate me. But if you think about it, BitTorrent, it wasn't killed. It still operates. You can still use BitTorrent today, and I still use it. However, it's nowhere near as popular as it was, at least for piracy purposes, as it was about 10 years ago. And the reason is, back in the 90s, the record label industry was absolutely horrific in how they manufactured and sold things. And they made it really expensive for people to listen to music. And piracy offered an enormously cheaper, much better technology for doing that. And BitTorrent allowed people to get all of that music for free. So when that existed, when you had to pay an exorbitant amount of money for an album or just download it in a few seconds. BitTorrent was massively popular, but then the movie and music industry had to basically reform. Artists put most of their music on SoundCloud and YouTube for free. And things like Netflix and all of these subscription models, they become enormously cheaper than what it used to be before, and now it's far more reasonable for people. So now very few people or far fewer people will pirate today as opposed to a few years ago, because you just buy a Netflix subscription, you buy a Spotify subscription, and so on. So I think the bad news here for bitcoin is that bitcoin is optimized for avoiding state control. Bitcoin is optimized for avoiding controlled by government. And so the more government tries to control bitcoin, the more government starts to restrict bitcoin, the more incentive people have to run bitcoin, the more bitcoin thrives. That's kind of good news if you're in a situation where people are hostile to bitcoin. But if bitcoin continues to grow to the point where it massively undermines monetary policy and causes monetary policy to become much better, well, then maybe bitcoin undermines the reason for its own existence, just like BitTorrent. BitTorrent didn't end up taking up the world, but it did destroy the record label industry and forced them to reshape their business model. Maybe this is what bitcoin will end up doing to central banks. It'll be the competition that gets them in shape and brings them back to a sound monetary system.

Saifedean Ammous (71:33)

That's very interesting. I've never even heard that as an example. Okay, great. All right, listen. Safe. Last thing we've got to finish on. One thing we've got to got to talk about football, man.

Peter McCormack (71:43)

Yes.

Saifedean Ammous (71:44)

Come on, give me your prediction for next season. Oh, by the way, we haven't really signed anyone and I know we have a good squad and I know we've got the ox coming back and we've got a couple of young lads coming through. But, like, how are you feeling about next season?

Peter McCormack (71:57)

You know, until preseason, I was thinking we should maybe sign a few players, but I think there's so many. There are so many good young players and they're getting a full preseason with Klopp because so many of the senior players are away on international beauty that I think so many of them are going to be making a step up and they look really promising. We definitely need a backup left back. And ideally, I think we should probably get rid of Lanana and get another attacking player in his place. I think possibly Coutinho coming back might not be a bad idea.

Saifedean Ammous (72:26)

Make your shirt relevant again. You're wearing now.

Peter McCormack (72:29)

Yeah, well, I was hoping you wouldn't.

Saifedean Ammous (72:30)

Notice, but, yeah, I mean, I'd like Coutinho, you know. The other one I thought we should have gone for is Wolf Sahar. I thought he would offer us something different, you know, someone a bit of flair. Yeah, someone with a bit of flair. I really. Look, I'd love us to win the League. I think it's going to be down to us and City again. It is.

Peter McCormack (72:48)

I think. I think the rest are pretty far behind. I can't see any of them catching up. The good news is the City squad is older. A lot of their players are not going to be the same level. David Silva and Fernandinho were extremely important for them last season. And when they were injured and when they had their dip in form, that's when the team was performing very badly. So I can't see them putting in a season as good as the one that they put in last year. I'm quite hopeful.

Saifedean Ammous (73:12)

Yeah, fingers crossed. All right, man. Well, listen, always.

Peter McCormack (73:14)

Also, Klopp has gotten to Guardiola. Klopp has gotten to Guardiola.

Saifedean Ammous (73:17)

Guardiola, Yeah, I think so.

Peter McCormack (73:19)

Rattled by Klopp. He's done to Guardiola what Guardiola did to Mourinho, I think, and Klopp did to Mourinho.

Saifedean Ammous (73:24)

Yeah. I'm actually quite interested to see what Lampard does with Chelsea, because I like Lampard, you know, I think he's a good guy, very dedicated to Chelsea. I'll be interested, but they can't sign anyone, so maybe they've got some problems there. Arsenal just. I think they're going to have a terrible season. Tottenham could be a threat again.

Peter McCormack (73:42)

I doubt it. I think. I think they're probably still going to sell some players and they still have a thin squad. I can't see them competing.

Saifedean Ammous (73:50)

Yeah, we'll see.

Peter McCormack (73:52)

We'll see.

Saifedean Ammous (73:53)

Fingers crossed. We'll win a title, man. It's been too. I don't know how old you are. I'm 40, so. I was nine when we last won the league.

Peter McCormack (73:59)

Yeah. I'm 38.

Saifedean Ammous (74:00)

Yeah. So you know what it's like. It's a long time. Do you even remember when we last won the League?

Peter McCormack (74:05)

Not really, no. I wasn't even that closely back then.

Saifedean Ammous (74:09)

All right, shave. Look, it's always good to talk to you and it was good to See you recently out in Germany and I'm sure I'll bump into you soon. And good luck with the course before we go tell people about it, how they find out more.

Peter McCormack (74:20)

Yeah, well, the course is on my website, seyfedeen.com and currently I'm offering one course on my book where I'm giving lectures based on my book, 10 lectures, one hour a week for 10 weeks. And then I'm also offering a course on the research bulletins, which are the papers that I've written since publishing my book, which I'm going to work into another book eventually. And I'm also going to soon start offering an Economics 101 course, introduction to Austrian Economics. These will be offered as live lectures as well as seminars where you can join a discussion seminar to discuss these in small groups of students. So go to safydean.com and sign up.

Saifedean Ammous (74:59)

Awesome, man. All right, Safe, take care. See you soon, man.

Peter McCormack (75:01)

Cheers. Thanks a lot, Peter.

Saifedean Ammous (75:07)

All right, so what did you make of that? Did you enjoy that? I think I say that at the start of every showdown has become a bit of a catchphrase, but yeah, it's always great to catch up with Safe, not only to talk about economics, but also to talk about Liverpool. So what are your thoughts on Austrian economics? Is it new for you? Is it new for you like it is for me? I didn't learn about it at school. I was taught about the Keynesian side of things, but this is all kind of new to me. Are you ready to ditch schooling? Are you ready to ditch healthcare? Socialize healthcare like we have in the UK that we're massive fans of? You know, some of this stuff, it does take a bit of adjustment to get your head around. I think I'm ready for the free markets. I've been listening to the Tom woods show a lot as well and learning a lot more about libertarianism. So, yeah, I'm interested in it. I'm not 100% there, but yeah, some of the ideas we discussed were, you know, very interesting to me. I don't always agree with Save as well. We had a big debate when we're in Munich about global warming. You know, we have different views, but yeah, it's always great to chat to him. And Bitcoin and Austrian economic economics definitely seem to fit together quite nicely. So I was really happy to go down the rabbit hole with Safe and probably will spend a bit more time looking at this myself. I also think I'm going to get Stefan Levera on at some point to talk to him. About it as well. Anyway, big thanks to Safe for coming on. Appreciate his time. I hope you did enjoy it. Like I said, if you want to reach out to me, you got any questions about it, you can reach out to me on hello@whatbitcoindid.com also listen if you want to support the show. So many people have been supporting me since I started this nearly two years ago. I think November's my anniversary. So firstly, thank you to everyone who's ever supported the show. Whether you've left a review, whether you've sent a donation, when you've become a patron, whatever the reason, I can do this and travel around and do these really great interviews is because of you. If you do want to support the show, I'm not going to go through all the stuff now. It's all up on my website. If you go to whatbitcoindid.com, you click on the support section, you'll find it out there. Even a review review on itunes is super helpful. Also, make sure you check out the advertisers. They're the ones who really make this happen. They're the ones who sponsor me, allow me to waste all the money I earn on jumping on flights and staying in hotels so I can go in person and meet all these great people. Anyway, I'm in LA at the moment. I'm going to be heading out to San Francisco on the weekend where I've got a bunch more interviews planned, Both for what, bitcoindid.com but also my launch show for Defiance, which is pretty cool. Then I'm going to be heading back to New York and then home to England. I'm going to be back in England for about four days, but then I'm taking my kids on holiday. I'm going to be offline, kind of offline for about three weeks. My kids have been super patient with me traveling, but I have recorded so many shows to get out while I'm away. All right, any questions, you know you can reach out to me. My email address is hello@whatbitcoindid.com.