WiM029 - The Frisby Series | Episode 7 | Bitcoin, Taxation, and Revolution

Summary

Podcast Summary: The "What is Money?" Show
Episode: WiM029 - The Frisby Series | Episode 7 | Bitcoin, Taxation, and Revolution
Release Date: July 2, 2021
Host: Robert Breedlove
Guest: Dominic Frisbee

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Introduction

In this episode of "What is Money?" host Robert Breedlove engages in a profound discussion with Dominic Frisbee, delving into the intricate relationships between Bitcoin, taxation, historical revolutions, and the evolving nature of property rights. The conversation navigates through various themes, including the cognitive benefits of walking, the volatility of Bitcoin, the implications of fiat currencies, and lessons from past political upheavals.

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The Cognitive Benefits of Walking

Dominic Frisbee (01:27) opens the conversation by highlighting Aristotle's peripatetic school, where lessons were conducted while walking. He emphasizes the correlation between physical activity and increased creativity, noting that walking and other automated tasks can free the brain's creative potential.

• Dominic Frisbee: “...the part of the brain that inhibits creativity is focused on the automated function of walking. And as a result, you're more likely to have good ideas.” (02:53)

Robert Breedlove (02:58) echoes this sentiment, sharing his personal experience of having a surge of ideas during exercise, which he meticulously records for later use in his writings.

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Bitcoin's Market Volatility and Future Outlook

The discussion shifts to the recent volatility in Bitcoin's price, where Robert and Dominic analyze the market's fluctuations, referencing a significant drawdown from around $64,000 to low $30,000.

• Dominic Frisbee (05:46): “...we might be going into a little bit of a crypto winter.”

Dominic reflects on historical bull markets and corrections, suggesting that the current downturn might precede a period of consolidation rather than a complete collapse. He mentions the potential for Bitcoin to detach from other tech stocks and notes structural supply shortages in commodities like tin, which could influence inflation and government policies, indirectly impacting Bitcoin.

In contrast, Robert Breedlove (09:07) maintains a bullish stance, confident in Bitcoin's long-term prospects. He references his predictive models to support his optimism, anticipating Bitcoin reaching new all-time highs driven by supply and demand fundamentals.

• Robert Breedlove: “I expect to see a new all time high price in mid quarter four and I think we're going above $300,000.” (16:30)

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Bitcoin vs. National Currencies: Scalability and Sovereignty

A significant portion of the conversation explores Bitcoin's potential as an international reserve currency compared to national currencies. Dominic explains the inherent limitations of national currencies tied to geographic borders, whereas Bitcoin's decentralized and international nature allows it to transcend these constraints.

• Dominic Frisbee: “So that gives something like Bitcoin the potential to be the international reserve currency of the Internet...” (20:19)

Robert Breedlove adds to this by comparing Bitcoin's supply mechanism to historical money systems, emphasizing that Bitcoin’s fixed supply contrasts with the inflationary tendencies of fiat currencies controlled by central banks.

• Robert Breedlove: “...Bitcoin supply, unlike all these other national currencies, does not change at all.” (20:19)

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Historical Revolutions: Taxation and Property Rights

Dominic provides an extensive overview of historical revolutions, particularly focusing on the English Civil War, the American Revolution, and the French Revolution. He illustrates how oppressive taxation and centralized power fueled these uprisings, leading to the establishment of systems that prioritize individual freedoms and property rights.

• Dominic Frisbee: “...they saw it as a place to be taxed. And they imposed...it wasn't so much the levels of tax but the imposition of those taxes.” (46:11)

He recounts Voltaire’s critiques of taxation, highlighting sentiments that resonated during these revolutions, which ultimately shaped modern democratic principles and the emphasis on property rights.

• Dominic Frisbee: “Every privilege is an injustice.” (62:26)

Robert Breedlove connects these historical lessons to contemporary issues, suggesting that technological advancements are driving a shift towards decentralized governance and reinforcing the importance of private property rights.

• Robert Breedlove: “...Bitcoin is the greatest implementation of the idea that property cannot be violated ever because it's the only property right that can live in your mind.” (67:02)

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The Role of Technology in Shaping Society

The conversation underscores technology's role in societal transformation, from the invention of the printing press facilitating the spread of revolutionary ideas to Bitcoin's technological foundation enabling secure and individual-centric property rights.

• Dominic Frisbee: “Technological progress and wealth have a huge impact on the moral goodness of development.” (36:18)

They discuss how digital innovations, such as 3D printing and decentralized networks, could further disrupt traditional power structures, potentially leading to significant societal changes or even revolutions.

• Robert Breedlove: “...you can hold your private keys in your brain... unlike gold, it requires consent to surrender property.” (67:02)

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Critique of Fiat Currency and Inflation

Dominic criticizes fiat currency systems, emphasizing how inflation serves as a stealth tax, eroding individual property rights without direct perception of the tax burden.

• Dominic Frisbee: “...why stealth taxes, why inflation is such an effective form of tax because people don't feel the pain directly.” (43:46)

Robert Breedlove agrees, attributing current inflationary pressures to quantitative easing and direct fiscal measures like PPP loans, and foresees the eventual demise of the US dollar through hyperinflation within 15 years.

• Robert Breedlove: “I think the US dollar is gone in 15 years. I think it's hyper-inflated.” (26:14)

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Property Rights and Individual Sovereignty

The importance of property rights and individual sovereignty is a recurring theme. Dominic argues that Bitcoin embodies the principle that one's property cannot be forcibly taken without consent, contrasting this with historical and modern fiat systems where government impingement is prevalent.

• Robert Breedlove: “Bitcoin is the greatest implementation of the idea that property cannot be violated ever...” (67:02)

They reference Ayn Rand’s philosophy, underscoring that the right to property is foundational to all other rights.

• Ayn Rand Quote: “The man who has no right to the product of his effort has no means to sustain his life. The man who produces while others dispose of his product is a slave.” (66:46)

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Potential for Future Revolutions and Societal Shifts

As they reflect on past revolutions driven by oppressive taxation and centralized power, Dominic and Robert speculate on the potential for future societal upheavals influenced by current economic policies, technological advancements, and growing discontent with centralized authorities.

• Dominic Frisbee: “...you can feel discontent. Maybe it's just my Twitter bubble, but you can feel something's coming.” (72:11)

They consider modern parallels to historical events, such as the replacement of physical labor with mechanization leading to social changes, and how Bitcoin could play a pivotal role in redefining property rights and economic sovereignty in the digital age.

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Conclusion

The episode intricately weaves together historical insights, economic theory, and technological foresight to argue that Bitcoin represents a transformative shift towards individual sovereignty and secure property rights. Through analyzing past revolutions and current economic trends, Robert Breedlove and Dominic Frisbee present a compelling case for Bitcoin’s pivotal role in future societal structures.

Notable Quotes:

• Dominic Frisbee (02:53): “...when you're walking, the part of the brain that inhibits creativity is focused on the automated function of walking. And as a result, you're more likely to have good ideas.”

• Robert Breedlove (09:07): “I expect to see a new all time high price in mid quarter four and I think we're going above $300,000.”

• Dominic Frisbee (20:19): “So that gives something like Bitcoin the potential to be the international reserve currency of the Internet...”

• Ayn Rand (66:46): “The man who has no right to the product of his effort has no means to sustain his life. The man who produces while others dispose of his product is a slave.”

• Dominic Frisbee (62:26): “Every privilege is an injustice.”

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This episode serves as a thought-provoking exploration of how Bitcoin not only functions as a financial asset but also as a catalyst for broader societal and philosophical transformations. By understanding the historical contexts and economic principles discussed, listeners gain a deeper appreciation of Bitcoin's potential impact on the future of money and governance.

Transcript

[Dominic Frisbee]

Foreign.

[Robert Reidlove]

Hey guys, this is Robert Reidlove from the what is Money? Show. And as you've learned by watching this show, Bitcoin is the single most important asset you can own in the 21st century. And one of the most important companies in Bitcoin today is NYDIG. NYDIG's mission is to facilitate financial security for all. They accomplish this by bringing a high level of professionalization and sophistication to the bitcoin marketplace. As a true game changer in the industry, NYDIG is safely unlocking the power of Bitcoin for forward thinking individuals and institutions alike. By using Nydig, you will gain access to an end to end institutional grade platform providing bitcoin OTC transactions, bitcoin collateralized borrowing, secure custody, asset management, derivatives financing, market research and more. And all of these services meet the highest regulatory, governance and audit standards. Led by Robbie Guttman, Yin Zhao and Ross Stevens, NYDIG has absolutely exploded onto the bitcoin scene recently and is leading the way for ongoing institutional adoption in this nascent asset class. So please be sure to check out NYDIG as a single source for all your bitcoin needs. All right, Mr. Dominic Frisbee, welcome back to the show.

[Dominic Frisbee]

Thank you, Robert. Pleasure to be here.

[Robert Reidlove]

We're just talking about Aristotle.

[Dominic Frisbee]

I think we were, we were talking, I was about to sing the praises of walking. We were talking about writing techniques. And Aristotle used to. His school was called the peripatetic school and he used to hold his lessons while walking. So the students didn't sit down in class and listen to him holding court at the front. They would all go on a walk and he would teach them while he was walking. And a lot of the time the ancient Greeks did stuff and they couldn't necessarily explain it. And we're only just starting to explain it scientifically now. But you look a lot, a lot of great writers, PG Wodehouse, great comic writer, Nassim Taleb, you know, great philosophical writer. They're big advocates of walking. And apparently what happens is it's something like when you're walking, the part of the brain that inhibits creativity is focused on the automated function of walking. And as a result, you're more likely to have good ideas. And I think if you think a lot of people have good ideas when they're doing something automated in the baths, another one in the shower, recycling and walking. So I think, and I actually, when I go and walk the dog, I often listen to podcasts and I find I'm way more responsive to them, listening to them while I walk.

[Robert Reidlove]

Right.

[Dominic Frisbee]

And so yeah, on the benefits of walking is the first theme of today's show.

[Robert Reidlove]

Yeah, I find if it's maybe it's exercise in general because I, when I, I go to the gym actually and I'll listen to podcast and I find myself as I get more warmed up, you know, my, my heart rate's going, I'm sweating. Ideas start to flow too. So I started taking notes pretty feverishly in my phone, just usually in like a notes app categorized by different topics I'm thinking about or writing on. And then I'll grab those ideas later and incorporate those into my writing. But I found it just be a time of day when, I mean, I'm probably having ideas 10 to 1 when I'm exercising versus just sitting around.

[Dominic Frisbee]

There's a comic writer in England called Dominic English. He's not very well, he's not very, he's not very famous. He keeps a low profile, but he writes for some of the most famous comedians in the uk, Jimmy Carr and various others. And he's been in the business 30 or 40 years and it's a difficult business to stay in and earn a living at for that long. And Dominic's writing method, he makes me laugh, is he'll get the brief, you know, whatever the writing brief for the morning is. You know, we want jokes about bitcoin or we want jokes about Joe Biden or whatever the brief is. And he'll do a bit of, you know, he'll watch a couple of bitcoin videos or a couple of Joe Biden videos or read some articles or whatever it is. And then he just, he literally goes to the, he takes his iPad and he goes to the gym and he goes on the cross trainer. You know the one where you do that?

[Robert Reidlove]

Yeah, yeah.

[Dominic Frisbee]

He writes all his material while he's doing the cross trainer and he'll be doing it and he, and he keeps stopping and writing jokes down and does that. And then by the time he's got off his one hour session or whatever it is, you know, he's got his jokes for the day written and then he goes home to his computer and just tidies them all out up and neatens them all up and sends them off.

[Robert Reidlove]

Yeah, it's a great strategy. I mean the creative juices that people always talk about, I think it's real. It seems to be real at least once you get the blood flowing, the sweat moving, the creativity ramps up too. So shifting tact a little bit. I know we're Going to talk about price action. We're recording right now. This is May 22, 2021. Bitcoin just incurred a, I guess almost a 50% drawdown. At one point, I think it was. It peaked at around 64,000 perhaps, and I think it drew down to the low 30 thousands, some say even below 30,000 on some exchanges. So, yeah. How are you thinking about that? How are you handling it? Any words of wisdom for people that may have been shaken up by the volatility?

[Dominic Frisbee]

I'm, I'm handling it with a certain amount of sorrow because obviously you wanted, you want it to go up. And I'm pretty good at reading markets, I think, and looking at price levels. I'm, I'm not so good at trading them. That's much harder. But the. But I tend not to trade crypto that much. Probably I should trade it. I used to trade it more, but there's a, it's a technical reason why I don't do it now. It's just to do with the software I've got. But the, I think according to my apps, it was 64 was the high, or 6,000, 390 or something. And it went to 30. So that's a 50% gross. And then, and then it rallied to maybe 42. And there's a massive line of resistance at 42. It's one of those pivot points. It was support for a long time and I think it's going to be resistance for a while. And as, as when I last looked this morning, it was at 35.

[Robert Reidlove]

Yeah.

[Dominic Frisbee]

So that's where we are now. I, I'm well aware of the sort of, you know, in each bull run it has 8:40 or 35:40 corrections on its way of doing 10 odd multiples. However, you know, let's say the 201617 bull market went from 2 or 300 bucks to eventually 20,000.

[Robert Reidlove]

Yeah.

[Dominic Frisbee]

In that journey, it had 8:40. Correction, something like that.

[Robert Reidlove]

Sounds about right. Yeah.

[Dominic Frisbee]

Yeah. Now this. But this is over 50 already, so I'm inclined to think that we might be going into a little bit of a crypto winter.

[Robert Reidlove]

Interesting.

[Dominic Frisbee]

I don't think it's going to be as extreme as some of the other crypto winters because I don't think the bull market that preceded it. Yeah. But I think a lot more people own bitcoin than we're led to believe. And, you know, it always looks obvious in the rear view mirror. It always does.

[Robert Reidlove]

Yeah.

[Dominic Frisbee]

But, you know, we had an altcoin season. You know, altcoin Season normally marks the end. Wasn't the craziest altcoin season I've ever known, but it was an altcoin season. And you know, the Coinbase, IBO, IPO, those big IPOs, they always mark something, or not always, but they often mark something.

[Robert Reidlove]

Yeah.

[Dominic Frisbee]

And then you know, Elon Musk and there was, you know, so, so there. I just think it maybe gone a little bit too far.

[Robert Reidlove]

Yeah.

[Dominic Frisbee]

And I'm sort of not that worried about it really because you know, bitcoins, it is like I often say, if you were a Marvel comic and you were designing the ultimate bubble asset, you would design it. It would be a new technology that is money and that is bitcoin, basically. So I'm afraid speculative manias accompany it on the upside. And then the corresponding bear markets are equally emotional.

[Robert Reidlove]

Yeah.

[Dominic Frisbee]

And I think it would be typical of bitcoin to go back to 20,000 the old high and kiss it goodbye.

[Robert Reidlove]

Yeah.

[Dominic Frisbee]

So that's, that's my theories. I think we go.

[Robert Reidlove]

Do you, have you mentioned a brief crypto winter? Do you have timelines in mind? Like when do you think it would, when do you think it would break its.

[Dominic Frisbee]

How long did it last year?

[Robert Reidlove]

What's that?

[Dominic Frisbee]

How long do crypto winters typically last? A year, would you say?

[Robert Reidlove]

So we had a blow off top in December 17th. It drew down over 12 months to a low of that was 20,000. It drew down to 3,500. It then had a run up again to 14,000 in mid 19, so that was 18 months. But then it drew down again to Covid of like 3400 or 3800 maybe. Typically I think it's 18 to 24 months before it breaks the prior all time high again. It's about a four year cycle. So it's, you know, two years is roughly prior all time high to breaking it again.

[Dominic Frisbee]

I don't think it'll be that long, but I think, I think we could go and you just don't know. But a realistic prognosis is that we go to 20,000 and then we range trade for a bit. And within that range trade there'll be a bull market that goes on for three or four months and then there'll be a bear market. And as well as extreme emotional euphoria and, and extreme emotional pessimism, there are times when bitcoin experiences extreme emotional boredom.

[Robert Reidlove]

Yeah, that's right. Yeah.

[Dominic Frisbee]

And, and so maybe we need another one of those periods as well. So you know, it's still, it's still the go to asset. The other reason I'm a little less positive than some about bitcoin's chances are that I'm not selling any of my bitcoin, by the way. In fact, I'm hoping to be able to save up more money and that it goes down to 20,000 or even 12,000. There's a, you know, there's a big obvious technical line at 12 or 14,000 so that I can buy more. But the, the, if you look at bitcoins over the last year or so traded very much like a tech stock and it's sort of almost tracked the Nasdaq. If you put the bitcoin chart over the Nasdaq, the patterns are very similar. And the, if you look go back to say the late 1980s. From the late 1980s to about 2000, tech digital dramatically outperformed real stuff. Commodities, mining, farming, this kind of thing. And then from about 2000 and 2000, top of the dot com, bull market through to maybe 2003, bull market, real stuff dramatically outperformed. And then from maybe I'm going to say 2004 to about 2009, the two sort of, they were both going up, but they both, if you compared the two, they were kind of flat with each other or in a range. And then from 2009 through till now, digital tech has just killed real stuff. The outperformance has been huge. And you know, there's very good reason for that. We've talked about it already. Digital is just so much more scalable than real stuff. There's just vastly more growth potential. But you do still need real stuff. And, and I think we've been seeing over the last two or three months a rotation into real stuff. And if you look at the copper price, things like tin, aluminium, zinc, they're oil, they're all in massive bull markets, farming, stocks, grain, lumber. Yeah, and so, you know, I think there's a real rotation going on into real stuff. We might be in a boom in a relative bull market for real stuff for maybe a couple of years. That doesn't mean bitcoin and tech don't go up. Yeah, but it's sort of commodities turn to shine for a couple of years.

[Robert Reidlove]

Right, right, right, right.

[Dominic Frisbee]

Well, I'll just a theory, you know.

[Robert Reidlove]

Yeah, yeah, of course. That um, what is the old saying that all models are wrong, some are useful, most are dangerous. So take everything we're saying here with a grain of salt, but just go on you guys. Just to add a little counterbalance to, I guess you would say maybe Your neutral to bearish outlook on crypto short term at least. I actually think this correction is a normal part of the bull market. I think bitcoin's price action is still driven predominantly by its supply and demand fundamentals. So the having is driving these cycles still. I expect to see a new all time high price in mid quarter four and I think we're going above $300,000. That's also. And the reason I did this model years ago, which again all models are wrong. Some. What is it? Some are useful, most are dangerous. And it had Bitcoin at 20,000 by December 2020, which we hit, we hit about 24,000 I think by the end of the month and it had Bitcoin at 244,000 by the end of this year. Now that was before COVID So when I reran the model, just basically putting some inflation in there because all the printing that occurred in quarter one and quarter two of 20, typically the inflationary pressures of that activity hit about 18 months later, which just happened to line up with bitcoin's peak price window. So I think US dollar inflation pressures, which we're already seeing today, but I think they're going to become especially evident in the next six months. And that's going to line up really well with bitcoin's typical peak which comes in about 510 days after the halving. So I'm still extremely bullish. I think this correction that was a little more than 50% I would attribute to a couple of things. One, Bitcoin's been really aggressive to the upside the past five or six months. It was outperforming my model 100% so I expected a pretty strong correction. And two, I would say there's a mature options market built up around it. So if we get a little too levered long when this thing does start to unwind, it's more volatile to the downside. So I don't know, after being in bitcoin this many years and I purely just treating it as a game of accumulation, the price doesn't phase me at all. I don't know, I don't know how to describe it. You get bitcoin Zen, I guess, where you're just trying to increase your stack of sats and you're not so much worried about the price. But yeah, I guess I'm just much more in the bullish camp.

[Dominic Frisbee]

I'll be more worried about the price when I'm ready to sell. And it's not.

[Robert Reidlove]

See, I don't ever want to sell.

[Dominic Frisbee]

At some point, you know, at some point you got to buy yourself a new fridge freezer, Robert.

[Robert Reidlove]

Yeah, I mean, if there's something that. Some passionate item that I really want, then maybe I would trade Bitcoin for it at some point, ideally directly. But on principle, I really don't want to sell Bitcoin into fiat. Ideally, I'm just trying to take territory on this network and we talked about this a little bit before, but that's why I just focus on generating income so I can live and then taking excess and sweeping it into treasury for me, which is Bitcoin.

[Dominic Frisbee]

Yeah. And a more efficient way is to borrow against it rather than sell.

[Robert Reidlove]

More efficient and more dangerous, but yes, yeah, absolutely.

[Dominic Frisbee]

More dangerous. I wish I was one of those guys that could be like. Like state projections about what the market's going to do with total absolutism, as though he's stating fact. You know, you get some of those newsletter writers. Yeah, they state with total certainty in order to sell more and more newsletters. And it's very charismatic and inspiring to watch. And I'm always a bit more. Well, but, you know, and I think actually you get more followers if you state stuff with absolute fact, because people like to know what's going to happen. It makes them feel more secure. But anyway, I'm not worried about Bitcoin in the long term. And I suppose we can segue into one of the first things we wanted to talk about today, which was scalability, which is a subject we've talked about before, and we've talked about the scalability of digital tech versus the scalability of. Of, you know, physical stuff. So, you know, if you invent a brilliant app, you only need to upload it to the App Store once and it can be downloaded a million or a billion times. Whereas if you invent a brilliant widget, you've still got to manufacture a million or a billion of them and distribute them. And it just makes the physical economy much harder to be scalable in. And that's why we've had this extraordinary growth in digital stuff. But with this idea of scalability in mind, I want to talk about Bitcoin versus national currencies, because a national currency, by the way. Okay, we'll just focus on this. I just. I had. Yeah, a national currency is limited by its borders, so there's just a limit to how big that currency can be, how big the market cap of that currency can be. And that even applies to something like the US Dollar, which is limited by its. Even though it's the sort of the global reserve currency. There are still the limitations of the US national borders. And then if China starts and Russia start using alternate currencies, there are just all sorts of limitations on a national currency. Those limitations don't exist on cryptocurrencies which are inherently international. So that gives something like Bitcoin the potential to be the international reserve currency of the Internet, let's call it that, and the vastness of that role, the international reserve currency of the Internet you're talking about, then that doesn't mean that the dollar disappears, but it means that if you just think how big the Internet economy is and Bitcoin becomes its international reserve currency, then you're talking about extraordinary potential long term valuations.

[Robert Reidlove]

It's a great analogy and it's a good way to think about it perhaps that if the Internet were a country, how would you value its currency? You're betting on this country. How effective is this country going to be in the digital age, I guess you would say. And the more commercial activity that takes place there, the more transactions are facilitated there, the more really value is created there. How much of our attention is being allocated into the Internet or through the digital economy? That's a good proxy. Whatever you expect that growth pattern to be, that's a good proxy for the value of the money, because this is a money again with perfect supply and elasticity. So Bitcoin supply, unlike all these other national currencies, as purchasing power increases, the supply does not change at all. So Bitcoin's purely expressing this economic growth on the Internet through its price. Whereas historically, like say in the US Dollar, we've had all this economic growth in the country, but the central bank will actually harvest that economic surplus by violating the supply of money by printing. So I think it's a wonderful analogy to look at it that way and that all the things we've talked about, digital, how much it contributes to productivity and scaling and human cooperation, how would you value the money that serves all of that? Because that is Bitcoin.

[Dominic Frisbee]

And by the way, although we talked about this rotation into real stuff, it doesn't mean that Bitcoin can't rise within that environment. Bitcoin could quite easily detach itself from other tech stocks. I just noticed that they've been traveling in a similar direction. And you know, if real stuff starts going up dramatically in price and you know, for example, I look, I, you know, I've got a mining background and so I look at things like tin and I'm, I'm Massively long tin. There's a huge structural supply shortage in tin. And if that feeds into the real market, then that becomes inflation very quickly. You know, raw materials prices go up and then that puts pressure on governments. Now either they debase currency more or they tighten rates. But even now, even if they just tighten rates half a percent or something, it's going to be so much deflationary pressure, margin call and everything. So that could hold Bitcoin back for a bit. But the longer time goes on, the closer the inflationary cat is to getting out of the bag. And that ultimately is good for Bitcoin.

[Robert Reidlove]

I think this tipping point is the distribution of the latest rounds of QE that were actually engaging in helicopter money. In the us we have all these forgivable loans being given out, these PPP loans. It's rife with fraud, by the way. People just go online, punch in a few numbers and you get a big wire transfer. That's a forgivable loan, or maybe it's a 30 year fixed loan. So I think this is the tipping point with this qe, because once you start, there's no politician that will ever go into office on the platform that he's going to remove the helicopter money that has been provided historically. So it only goes one direction. Just like government revenue, just like government bureaucracies and whatnot, they only tend to go one direction. So I think we're going to see some really, I guess you could say semi cataclysmic things happening in these national currencies over the next 10 to 15 years. I think we're going to have a wave of smaller currencies collapsing and you'll see the relative purchasing power of stronger currencies grow, like the euro, like the dollar, like Chinese yuan. In that time you'll see these currencies collapsing in smaller currencies collapsing into larger currencies. But I also would expect Bitcoin to just radically outperform throughout that time period as well.

[Dominic Frisbee]

Oh, for sure. And I think the timeframe is less than 10 to 15 years. Robert. I'd say five, but my girlfriend is Irish and she's just over. She was in Ireland last week and she said they've got a massive problem in Ireland, which everyone's getting their furlough money, which is the money they were paid while they're not working.

[Robert Reidlove]

Yeah.

[Dominic Frisbee]

And so suddenly there's a shortage of workers. Nobody wants to be a shop getting their €350 a week for not working. Why would they go and work in a shop for €400 a week.

[Robert Reidlove]

Government innovation. Yeah, yeah.

[Dominic Frisbee]

And so that's one problem. We have had these things called furlough money and also bounce back loans we had, which is companies where you could get a loan of up to $50,000 to help your company through the crisis. Yeah, loads of people have set up companies in order to get a 50 grand.

[Robert Reidlove]

Yeah, yeah, yeah, yeah, yeah.

[Dominic Frisbee]

It's just rife with fraud and they just, you know, the fraudsters always outwit the, the regulators and the government. And so, you know, and that all that it's, it's all inflationary and it will, you know, it does not end well.

[Robert Reidlove]

That's what. Yeah, I agreed completely. And that's why this particular round is so fundamentally different than say 2008, 2009, where the banks were actually decapitalized. So a lot of that QE went into recapitalizing the banks in those markets. We still had asset inflation as a result, but we didn't see it at the consumer level this time. It's way different. It's an order of magnitude larger and the distribution is direct to consumers. So I think, I think inflation, I put out this prediction recently. I think the US dollar is gone in 15 years. I think it's hyper inflated.

[Dominic Frisbee]

Well, a lot of that depends on China. When China's ready to pull the plug, it's got the gold. It might have the Bitcoin as well. And when it's ready, it depends. Apparently the current leader, you know, there's the whole thing of we must not shine too brightly until the time is right.

[Robert Reidlove]

Right.

[Dominic Frisbee]

Current leader is quite a big egotist, apparently. He might want the, he might, might want it on his watch really unraveling.

[Robert Reidlove]

So how long is his watch, do you know?

[Dominic Frisbee]

Well, as long as he lives.

[Robert Reidlove]

So I mean, like that I think he's reelected.

[Dominic Frisbee]

I'm not that, that sure about Chinese politics, but I think he's got the gig and for as long as he wants it.

[Robert Reidlove]

Yeah, yeah. I'm not too, not too educated on Chinese politics either, but I figured as much. Well, time will tell, I guess. But we do know that it ends badly, right? As we've seen through all the histories we've been looking at, these currency experiments end badly. So maybe if we could pivot back to the book Daylight Robbery and how we're walking through some of that. I mentioned to you before the show that I thought the Glorious Revolution. I'd never even heard of this actually, that with the execution of Charles the First sort of came the triumph of parliament over Monarchy, I suppose, where there were actual the God given rights and sovereignty typically associated with the king, was now decentralizing in a way. It was moving to a parliament. And the parliaments, they created these declarations for free speech, free elections, regularly convening parliaments. And they were also creating greater protections for individual life, liberty and property. They were sowing the seeds for what would later become, you know, the US Constitution. Effectively. Right. The US Constitution was premised on all these ideas.

[Dominic Frisbee]

Well, it was, and we're talking about a fairly long period in English history from about probably the beginning of the 17th century or just after. Right. Well, basically the whole of the 17th century. And it started with James the First and then Charles the First, who were kings by divine right. And in those days, you know, the king was God. He was seen as God. And it started with a war over taxes. Parliament for some reason had control of taxes. And Parliament wasn't crazy. Parliament was mostly Protestant and Charles I was a Catholic. They weren't crazy. And Charles I had ambitions to fight wars in France. And Parliament wouldn't give him the money. And then he started writing, he raised these ship taxes. The tax on shipping was one of the few taxes he could actually raise. And then this guy, John Hamden refused to pay the shipping money. And he was a great parliamentarian, one of the people who've. And it ended with the English Civil War. And in fact, John Hamden's statue is still in the House of Commons today. And the English Civil War was really a series of wars that went on for many decades, fought between Crown and Parliament. And Parliament eventually won. And then we had Oliver Cromwell, who was a great, a great battle, great military strategist. But at one point we had got Charles, the Scots had taken Charles I and we paid £100,000 of silver to get him back off Charles the First off the Scots. So £100,000 of silver was a king's ransom, okay. And then Oliver Cromwell, when he became, I think it was Prince Regent or something, was his title or regent, started paying himself £100,000 of silver annually. So he was paying himself literally a king's ransom. And then he died, and then his son wasn't as competent and then he didn't really know what to do. And so we had this thing called the Restoration where we actually got Charles II back from France and got him to be king. And actually he was a really good king. And that was actually quite a happy time. And he was famous because when the fire of London happened, he went out and you know, his Advisors were all trying to get him away from it, and he went out and fought the fire and he was known as the Merry King. And he, he, he. Despite fathering, I think, 13 children, he, he left no heirs because none of them were legitimate.

[Robert Reidlove]

Wow.

[Dominic Frisbee]

So it was a pretty merry time he had of it. And, and then he apol. I think he died. His final words were, I'm sorry it's taken me so long a dying. So by all accounts, he was a. He was, he was known as the Merry King and he was quite popular. And then his son James II came along and he was less popular, much sterner, again Catholic. And Parliament decided they wanted to get rid of him. And so they. His daughter had married William, King of Holland, William of Orange. And they got William over and William defeated James. And then we got. This was known as the Glorious Revolution, the Bloodless Revolution, because he won without, without barely any loss of life, as it turned out. All the loss of life was in Ireland. There was a thing called the. Many people were murdered in Ireland, but, but in England it was known as the Bloodless Revolution. And then we got this thing, the English Bill of Rights, which was sort of the successor to Magna Carta, which had come about three or four hundred years earlier. And, and again, Magna Carta is probably, its reputation is greater than its actual content. But they were great declarations of freedom. They got rid of the hearth tax. They, they were, they recognized the individual rights and so on, and the Parliament was sovereign now, and the King wasn't sovereign anymore. And Parliament, if the King wanted to spend money, he had to go to Parliament and get their approval. And it made the monarch accountable to Parliament. So it was a decentralization of power. It, the whole process took decades, almost a whole century. But so finally we had this glorious revolution, 1687. Now, it wasn't all that glorious because about 10 years later, in order to fund his spending, the King founded the bank of England. And we got the beginning of central banking. So it wasn't, you know, replacing one evil with another. But the point was, all those messages at the time about the freedom of the individual and the citizens rights were very much embedded in the English mentality. So when the American Civil War came, less than 100 years later, but all the English settlers or the British settlers who've gone out and settled America, when, you know, they rose up against their English overlords, they didn't think they were fighting for new rights. They thought they were fighting for rights that were already enshrined in Magna Carta. And the English Bill of Rights. So they had this mentality, no, we're not fighting for something new, we're fighting for what is ours.

[Robert Reidlove]

Yeah, yeah.

[Dominic Frisbee]

And, yeah, the great sort of successor to the English Bill of Rights was the American Constitution, which is a wonderful constitutional document if you're the sort of person that favors individual liberty and freedom and so on. And in fact, the American states model, where all the states are next to each other and competing with each other, is a wonderful force, that competition to keep. If somehow people could put a rein on federal spending. But the rivalry between states, for example, now everyone leaving New York to go to Florida and Texas, that's a wonderful force of competition to keep government small. But unfortunately, it seems to have lost accountability at the federal level, even though it's remained at the local level.

[Robert Reidlove]

Yeah, it seems to me that these transformations in our conception of sovereignty, they're actually at least partially rooted in our technological realities too. So this was post enlightenment, we're going through the industrial age, so we're becoming more productive, more wealthy, more free. And with that, I think people start to fight over the growing pie. And so you see, instead of having one guy call all the shots, as the population grows and becomes more productive, there's this pressure to move towards a more distributed governance system. But the counter force to that would be something like the central bank or fiat currency, which allows those few to start harvesting that economic surplus, back off the total economy. And I think that's what's happened in the US you had this quote from Thomas Jefferson at some point where he said, jumping forward a little bit, but he's talking about the US is that it may be the pleasure and pride of an American to ask what farmer, what mechanic, what laborer ever sees a tax gatherer in the United States saying there was no income tax, no window tax, there was no plethora of petty taxes. Government was small and local. That's what every other example you've given. It's like when government, small, local, predictable, you know, in terms of taxes and legislation, the economy booms. Right. People have sound rules on which to build a strategy and become wealthy. But it's interesting to me that these ebbs and flows are so rooted in kind of the technological realities of the day.

[Dominic Frisbee]

Yeah, I mean, that's a really interesting point. I think you could say that one of the reasons we were able to end slavery. And I'm not just talking about in the United States, I'm talking about across the world. I know it exists in parts of Africa. And so On. But broadly speaking, we have ended slavery. I mean, I know there are sweatshops and all the rest, but people are not traded in the way that they once were. And what has made what you could argue is the single biggest factor in making that possible was not that human beings suddenly became more humane. It was technological process.

[Robert Reidlove]

Absolutely.

[Dominic Frisbee]

With the increased product, you know, we had machines to work the fields so we didn't need slaves to work them anymore so we could afford to end slavery.

[Robert Reidlove]

That's right.

[Dominic Frisbee]

I mean, and so, yeah, technological progress and wealth have a huge impact on the moral. What's the word? The moral goodness of development.

[Robert Reidlove]

Yeah, yeah, yeah. There's the book the Rational Optimist by Ridley. Yeah, yeah, Ridley. He makes the point that I think the numbers were the average American. Today, the amount of energy we consume in a year is equivalent to having 660 energy slaves. Where we'd have like 660 humans pedaling a bike 24 by 7. 365 to generate the amount of energy we consume in our day to day lives. But of course we don't have 660 people doing that. We have hydrocarbons. We found a way to harness this energy from ancient sunlight effectively and to energize our world. And in doing so, you know, we electrified the grid and we just eliminate all these drudgeries of life. So as people will become more free, you know, and in actuality there's more productivity that, that, you know, percolates up into our morality.

[Dominic Frisbee]

I was watching a film last night, the man who Would Be King, which is set in India in the late 19th century, in the late 1800s. And there's a scene where you've got the English local vip. I don't know what his role was. He would, let's say he was the local minister or something. Parliament minister. And there's a, there's an Indian guy who's got a, a string tied around his big toe and he spends his whole day going back and forth with his foot so that the fan operates to keep the English minister cool. They didn't have electric fans so they had to get, you know, and this would have been across the, the hot world. The poor will have been obliged to man the fans for the rich.

[Robert Reidlove]

Yeah.

[Dominic Frisbee]

You know, thank goodness for electric fans.

[Robert Reidlove]

Yeah. And so that.

[Dominic Frisbee]

Oh, we put those poor electric fan workers out of work. Well, do you know what? Probably it's good that they lost work because the increased wealth as a result of mechanized fans, you know, created more prosperity and opportunity for them. To go and do other stuff that was less, you know, less gruesome and demeanor.

[Robert Reidlove]

Yeah, exactly. And then I'm sure at that time that was probably a socially accepted thing. You know, you walk in to see the local minister and he's got his guy running the fan. No one. You don't even think twice about it. But today, if we saw that, we'd be horrified, you know. Yeah, really interesting that, that scene in the Jungle Book.

[Dominic Frisbee]

If you ever watch the Jungle Book when you were a kid or you watch it with your kids, and there's the scene with King Louis of the Apes and he's got all his, all his, you know, his lackeys and they're all holding banana leaves. Fanning him with the banana leaves.

[Robert Reidlove]

Right. Yeah, that's right. So, yeah, I think it's an important way to look at it. And it reframes history in a way too, where. And you make this point later about the Civil War where it's. It was more of a practical, pragmatic battle versus this moral crusade that we're taught about in school. I don't want to jump ahead, but just getting to the point that you start to look at history through the lens of necessity more so than, I don't know, some type of. It's bottom up. It's from wealth up to morality. It's not morality down to wealth.

[Dominic Frisbee]

Energy consumption is an indicator of the sophistication of this, of the. Of the civilization.

[Robert Reidlove]

Yes.

[Dominic Frisbee]

You could do a chart of how sophisticated a civilization is and how much power it uses, and the two would correspond. And, you know, you just look at, you know, once upon a time we had to rely on burning fire. And then we discovered, you know, I don't know, whales and various other things we could burn. And, and gasoline, and not gasoline. Oh God, what's the coal and paraffin and so on. And then, you know, we started burning fossil fuels and now we're slowly starting to discover solar power and other greener forms of energy. I'm actually slightly cynical about how green they are because of the amount of copper and tin they require to function. But that's another matter. And you know, so in fact, you know, this criticism of Bitcoin that, you know, uses too much elect. Uses too much power. Well, you know, we need money to have a cost of production to it. If money doesn't have a cost of production to it, it's got no value. And, and they forget that the, the. The. It's that power that makes the network so strong. And God, it frustrates. Me. You know, you can. I know the woman who wrote. There was an article in the FT last week and I know the woman who wrote it, Katie Martin. I've sat on bitcoin panels and, you know, debated bitcoin with her and she's just ideologically opposed and she hates it and she's always hated it. And you know, she hates it because she, because people email her and, you know, trying to get her to cover their coin or something and she just thinks the whole thing is a scam and she can't recognize how enormously transformative the technology is.

[Robert Reidlove]

Yeah, yeah. Even the term energy consumption, I just, it doesn't ring true because it's. To your point, we need to harness more energy to become more civilized, to eliminate all these drudgeries and become more wealthy. It's about the cleanliness of that energy production process or energy conversion process. And really, in a world where private property rights. Rothbard wrote about this a lot. If we preserve the integrity of private property rights such that if you're dumping pollution in my river, you're pumping smog into my air that I can then litigate, then that would actually increase the cost of dirty energy production and drive us towards more clean methods of production. So that's how the market figures it out. Legislation's not going to work.

[Dominic Frisbee]

It's not like the world doesn't realize that we need to get our air cleaner and that fossil fuels are highly polluting. You know, we learned that and we've recognized that and our cities are getting cleaner as a result. But you don't need to start attacking bitcoin because it consumes a lot of energy. You know, if you totted up the amount of energy that washing machines use worldwide, then suddenly there'd be a load of people clamoring to ban washing machines.

[Robert Reidlove]

Exactly.

[Dominic Frisbee]

Just it's, it's making people feel guilty. You know, I'm not encouraging waste and you know, a lot of the time everyone could run their household more efficiently than they currently do. And if energy prices were higher, then they probably would. But the fact that bitcoin uses a lot of energy, I just do not think it's a problem. And the fact that some of it is coal fired already, that's being addressed more and more of it is not coal fired. I think China did a ban this week on coal fired bitcoin mining.

[Robert Reidlove]

Yeah, to your point, it's a necessity of money. We have. There has to be. Has to be rooted in economic sacrifice. Otherwise the system gets corrupt. That's what Proof of work is that's what gold was, that's what Bitcoin is now becoming. So that we had the glorious revolution sowing the seeds, I guess you would say, for what would become America or the U.S. constitution. And then the battle cry for the American battle for independence was this taxation without representation is tyranny. Right. But in your book you make a great point that we actually it wasn't that bad. The taxes weren't even that bad. It was more about, I guess the way it was implemented and the principles behind it.

[Dominic Frisbee]

That's one of the great quote about taxation is from the French finance minister to Louis the. Oh, I'm going to say Louis the 15th, maybe Louis XVI was the art of taxation considers consists of so plucking the goose as to obtain the most feathers with the least possible hissing. And it's a wonderful quote. And you know, it's why income tax today is such an effective tax because it's deducted at source. People never actually hand the money over. They don't feel the pain of paying the tax. And that's why stealth taxes, why inflation is such an effective form of tax because people don't feel the pain directly. And you know, while America, the American settlers might have had these very high opinions of themselves in the late 18th century that they had the same rights as Englishmen, to the English, America was just another colony.

[Robert Reidlove]

Yeah.

[Dominic Frisbee]

Treated the same as, you know, I don't know, the Caribbean or India or whatever. And so and they saw it, you know, as much as anything as a place to be taxed. And they imposed, it wasn't so much the levels of tax but it was the imposition of those taxes. There was taxes stamp duty, so every time anything was stamped somebody had to pay a tax. I think there was taxes on playing cards and pamphlets and then of course all the row about tea and the tea taxes. And it was, it was, it was the, it was as much as a case of how people were taxed as it was the extent to which they were taxed. And you know, I think to leave Britain and go sail across the Atlantic and settle in another country denotes a certain amount of get up and go in a person, particularly in those days. It was not an easy trip and it involved a considerable amount of bravery. So I think it's fair to say that the American settlers were had get up and go. They were brave, they weren't scared to have a fight. They were entrepreneurial and all those things. And so, you know, if they wanted something, they were going to fight for it, and, and eventually, you know, they probably thought, do you know what? We're better off out.

[Robert Reidlove]

Yeah.

[Dominic Frisbee]

And so, and, and many of them, you know, went to war over it. I mean, it was a terribly bloody war.

[Robert Reidlove]

Yeah, yeah. I thought the stamp tax was especially interesting in that I believe the British required stamps on all documentation of any kind to legitimize it. So they were almost taxing information flows. Right. If you wanted to, it was anything. Right. It was a title, a document, an agreement, a contract. There had to have this official stamp, otherwise it wouldn't even be acknowledged by the legal system.

[Dominic Frisbee]

That's absolutely right. And, and the, But I, I, the. It's about three years since I've read, written the chapter, Robert, so my memory is a little bit sketchy, but I, I still think, you know, they were really, really objected to. And there was sugar taxes as well. But the, the, it was, there was a. Let me grab my book because there's a wonderful passage. Benjamin Franklin, what a guy Benjamin Franklin was. And he wrote this wonderful. They actually sent Benjamin Franklin as an envoy to come and negotiate with the English to try and talk some sense into them. But they, the English, of course, ignored him. But he wrote this wonderful satirical column in, I think it was somewhere in, in, in Boston. And it was, it was. He called it the rules by which a great empire may be reduced to a small one.

[Robert Reidlove]

Oh, yeah.

[Dominic Frisbee]

And he wrote all these satirical rules. These are the things you need to do if you want to mess things up for yourself.

[Robert Reidlove]

Yeah.

[Dominic Frisbee]

And he wrote this to make your taxes more odious and more likely to procure resistance. Send from the Capitol a board of officers to superintend the collection composed of the most indiscreet, ill bred and insolent you can find. If any revenue officers are accused of the least tenderness for the people, discard them. If others are justly complained of, promote them. And then he wrote another law. Convert the brave honest soldiers of your navy into pimping tide waiters and colony officers of the customs scour with armed boats every bay, harbour, river, creek, cove and nook throughout the coast of your colonies. Stop and detain every coaster, every wooden boat, every fisherman. Tumble their cargoes and even their ballast inside out and upside down. And if a pennyworth of pins is found unentered, let the whole boat be seized and confiscated. Yeah, that gives you an idea of the kind of stuff that the English were doing to the Americans at the time. And no wonder they just said no, enough already.

[Robert Reidlove]

Yeah, and he's not embellishing, actually you, you talked about that where they would inspect vessels for I guess, contraband or untaxed or undeclared items. And if they found one infraction on the entire ship, they'd seize the whole vessel.

[Dominic Frisbee]

Yeah. And a lot of the time it wouldn't have been a dip, it would have just been an accidental non compliance. It wouldn't have box or something. It wouldn't have necessarily been deliberate.

[Robert Reidlove]

Right. And it degenerated. This level of authoritarianism degenerated into a lot of paid informants. Right. Where people were, I think they were rewarding people to rat out other people on infractions too. They'd give them whatever, a third of the booty maybe. And that reminded me of what we saw in the kind of late stage USSR where the state, it was so corrupt and so bad that no, it completely dissolves trust. People were ratting on each other. If you were even, you know, disclosing to someone your sadness or your, your unfulfillment with whatever the state was doing, they could arrest you for that in the USSR because that would imply that the state wasn't doing its utopian job effectively. So it's just, it's a great, great vignette on how state intervention and authoritarianism dissolves trust even like it breaks down social cohesion at a really fundamental level.

[Dominic Frisbee]

Nazi Germany did the same. They had kids reporting on their parents for things they'd said. You know, cynical amount. If I had my kids reporting on me for stuff I've said in my house.

[Robert Reidlove]

So I guess the punchline here was that it was bad tax legislation on the part of the English that ultimately caused the birth of this low tax nation which was the US and that the low taxation and the distributed sovereignty I guess in our governance model is what allowed us to become. It laid the groundwork for us to become a world superpower.

[Dominic Frisbee]

100%.

[Robert Reidlove]

Yeah.

[Dominic Frisbee]

And it was ill considered taxation on behalf of the British who at the time faced extraordinary outgoings because they were just going, you know, there was, I don't think we'd quite gone to war with Napoleon yet. That was about probably 10 or 20 years later. But even so, government spending was spiraling and William Pitt would shortly become the Prime Minister of the uk and he was notorious for his plethora of petty taxes. I think somebody said about William Pitt, if an object moves, he will tax it.

[Robert Reidlove]

Yeah.

[Dominic Frisbee]

So yeah, yeah, I read the list.

[Robert Reidlove]

In your book and it was. They were literally trying to tax every item, right. Every. Everything that you use in life. Right. Like your Chapstick, your computer monitor, your books, your windows, your locks, your keys. The equivalent today would be that. I'm saying everything that you see and touch was being taxed.

[Dominic Frisbee]

Yeah, well, it is today, except by the. We don't notice it because we. We don't. We don't actually pay out the tax. Yeah, even tax. There was a. There's a good. He. William Pitt's taxes even affected fashion because he started to tax wig powder, and everyone in those days wore wigs. And then when we went to war with Napoleon, there was quite a few people who disagreed. You know, they were conscientious objectors. They didn't think we should be going to war with Napoleon. And so in order to denote their disagreement with the war, they stopped wearing wigs. And then. And then. And this became. They started to become quite fashionable. And then, of course, the increasing cost of wig powder, because Pitt was taxing it meant that more and more people stopped wearing their wigs. And then wig wearing just died of death altogether.

[Robert Reidlove]

Wow.

[Dominic Frisbee]

The business into oblivion.

[Robert Reidlove]

Reminds me of the beards that you said. Was it the Russian guy that taxed the beards? Yeah. Well, so that's a good. Good pivot, then, into France, because there was a lot of this, you know, weird taxation going on in France as well, during roughly the same period. So the first thing I thought was really interesting, you said smuggling was really hard to prevent because France had so much coastline, so they couldn't stop these smuggled goods from getting into the mainland. But what they ended up doing instead was building a second wall inside of the wall guarding Paris, specifically for tax collecting. So these were the literal gatekeepers, right?

[Dominic Frisbee]

Yeah, they were. And in fact, a lot of the great walls, we think, were built to keep intruders out. But a lot of the time, you know, Hadrian's Wall, that marked the border between England and Scotland, and the Great Wall of China. A lot of the time, they were built simply to make tax collection easier because they forced everyone through the gate.

[Robert Reidlove]

Right.

[Dominic Frisbee]

And then when they come through the gate, you can get your taxes off them. And so. But, yeah, they built these little walls. France just had, I think at one point, France, you know, you think French in the wine, but at one point, France had five different taxes on wine, from harvesting of the grape through to the processing of the wine, so that by time they drank the wine they had, they paid five different taxes on the way. And to the extent that the peasants couldn't afford to drink wine, so they drank cider instead.

[Robert Reidlove]

Wow.

[Dominic Frisbee]

Yeah. The French Revolution was Perhaps the most classic case of. Of, you know, the most explicit revolution. I know American Revolution was the most explicit against taxes with no taxation, without representation. But, you know, it was. It was taxes that caused the French Revolution as well, and all those revolutions, the English Civil War, then the American Revolution and then the French Revolution, they all formed. You know, what followed was the nation states that we know today.

[Robert Reidlove]

Yeah, that was the tax farming that got really big in France. Right. Where I guess, to collect the taxes, the king or the sovereign was employing these tax farmers who. What are they? Debt collectors, essentially, but brutal and clearly kind of cunning in their ways. But the problem with it, of course, became that they started taking such a heavy skim. You know, they were skimming so much of this wealth that they were collecting that only a trickle of it got back to the treasury.

[Dominic Frisbee]

Yeah. There was one point where the king was sat at the table and he was trying to have it explained to him why revenue was so low. And they. The. Somebody took out a block of ice and put it on the table and got everyone around the table to pass the block of ice, one person to the next person to the next person. And then by the time it got to the king, it had melted. And. And then he was explained to. That's why you haven't got any taxes.

[Robert Reidlove]

Yeah.

[Dominic Frisbee]

Everyone had their hand. And it was. So it was more lucrative to be a tax farmer than it was to go and do something productive.

[Robert Reidlove]

Yeah, you said, yeah, oh, sorry, go ahead.

[Dominic Frisbee]

You. So you just get you and a couple of musly people to go and, you know, collect salt taxes or whatever it was, and. And the, you know, the ordinary citizen, you know, they were, you know, it was collected by force, and the tax farmers collect it, and they kept some of it from self, and they passed the rest up the hierarchy. And there was several different levels of the hierarchy before he got to the king. And everyone was in on it, and it was basically crony capitalism gone mad.

[Robert Reidlove]

Yeah. You said one of the tax farmers became so rich that he was. He purchased the Louisiana. All of. All of French Louisiana. Right. He became one of the wealthiest guys in the world at the time.

[Dominic Frisbee]

That's absolutely right. I've forgotten that. I had forgotten that. Yeah. What was his name, that guy? He had. He owned all of French Louisiana.

[Robert Reidlove]

Yeah, he was Antoine Crozat.

[Dominic Frisbee]

Oh, yeah.

[Robert Reidlove]

He grew so rich. So rich. He would count French Louisiana, all of it, among his assets.

[Dominic Frisbee]

And French Louisiana was basically everything from. It wasn't just Louisiana. It would be Louisiana. It would be pretty much all of the Mississippi Delta.

[Robert Reidlove]

Wow. It's incredible.

[Dominic Frisbee]

Yeah, I think so. The. So this is Voltaire, great philosopher writing, and he's describing how the, the tax collectors came to one of his estates one day, the gendarme of the tax farmers, the gendarme would be the, the military, the policeman basically marched about in groups of about 50, stopped all. Excuse me, stopped all vehicles, searched all the pockets, forced their way into all the houses and made every kind of damage there in the name of the king and made the peasants buy them off with money. So that was what was going on.

[Robert Reidlove]

Taxation is extortion.

[Dominic Frisbee]

It I'll say certainly was then.

[Robert Reidlove]

Yeah. Wow. And this, I love that you brought up Voltaire too, because this is another really interesting part I found in the book is that this was right around, you know, the printing press had been around for, I guess a couple hundred years by this point. The distribution of information was much cheaper. And we had things like this. There was the 27 volume encyclopedia, I guess you maybe say it in French. And it was issued with this express purpose to change the way people think. And the philosophers of the time, including Voltaire, they started becoming very instrumental in changing people's perceptions of the world. Right. So again they had the Declaration of the Rights of Man and of the Citizen, which were liberty, equality, inviolability of property and the right to resist oppression.

[Dominic Frisbee]

That's absolutely right. And they spread them. They were written in the vernacular. And you know, the parallels between the encyclopedia and the Internet today and the spreading of free thought and the spreading of subversive, anti authoritarian thought, you know, it, you know, that was a huge factor in the intellectual, you know, revolutions. You got to have an intellectual. You've got to win the intellectual war as the physical as well as the physical war.

[Robert Reidlove]

That's right.

[Dominic Frisbee]

And I guess often the intellectual war is won by one side and the physical war is one by another. But you know, in the case of the French Revolution, the revolutionaries won the. And you know, in order to get France to the point of revolution, they had to convince the French, particularly the bourgeoisie, the middle classes of, you know, a bit like the arguments that are going on about free speech today. I think that the free speech advocates are winning those, those war. But there's some great quotes. Volt in this was in the encyclopedia. In the matter of taxation, every privilege is an injustice. Now that's Voltaire and I presume he means by every tax break, every subsidy, every time when one person plays. That was one of the things about the French tax system. People weren't taxed equally. Different people paid different rates, and that pissed people off.

[Robert Reidlove]

Interesting.

[Dominic Frisbee]

And then Russo said, he who only has the bare necessities of life should pay nothing. And the. And. And then this was. Raynal said of the poor man. Francis. Francis. Tax system makes them a beggar of the workman, an idler, of an unfortunate, a rogue. And you can sort of. We were talking about, you know, all the government incentives to do with COVID and all the fraud and so on that's going on. You know, it's. It's turning. It's made the poor man a beggar, it's made the workman an idler, and it's made the unfortunate a rogue. I mean, again, there's just so many parallels.

[Robert Reidlove]

Yeah, no, I see. This is so salient to me because I. I see it as the liquidity of ideas dissolving traditional power structures. In a way, it's like people were starting to think differently again because of a change in technological realities. Right. We had the printing press and pamphlets and all these other. The encyclopedia. Encyclopedia. I don't know how you say that.

[Dominic Frisbee]

Word that's encyclopedia, but I'm not sure.

[Robert Reidlove]

Encyclopedia. And this, you know, I love that. Specifically the Declaration of the Rights of Man and of the Citizen, the inviolability of property.

[Dominic Frisbee]

Right.

[Robert Reidlove]

That became something seeded here in the American consciousness, like that the right to life, liberty and property is something that we take historically proclaim very seriously.

[Dominic Frisbee]

I think there's a genuine feeling in the authoritarian left that they have a right to your property.

[Robert Reidlove]

Of course.

[Dominic Frisbee]

And we seem to have lost sight of how essential to a good functioning society property rights are. It's like right at the basis, one of the essential building blocks. And, you know, we seem to have lost sight of that.

[Robert Reidlove]

Yes. Yeah.

[Dominic Frisbee]

You know, that man earns too much. We. We have to confiscate some of his wealth. No.

[Robert Reidlove]

It'S crazy. Honestly, it's crazy to try and justify compulsion or theft. And if you consider that property. It's really the whole game. We say life, liberty and property, but you are your own property too. Your time, your body, your attention. So that it's really just property. It's like whatever yourself and whatever you spend your time and energy adding value to, you should have exclusive rights to.

[Dominic Frisbee]

Basically, I use taxation. I think I've said this already, but I'll say it again. I use taxation to describe that, because in an anarchy where there's no taxes. This is theoretical, of course, because one of my other arguments is there's no civil. You can't have a civilization without taxation of some form. But you can have volunteer taxes. But anyway, in an anarchy where there is no tax, the. The worker owns all of his own body and all of his own labor. And at the other extreme, you have. You have. At one extreme, you have a totalitarian state, North Korea or Soviet Russia or something, where the worker owns pretty much none of his own labor.

[Robert Reidlove]

Right.

[Dominic Frisbee]

Kind of owns his own body. And then one stage on from that, you have slavery, where he owns neither his own body nor his own labor. That's like 100% the opposite of an anarchy.

[Robert Reidlove]

Right.

[Dominic Frisbee]

And we, we're, you know, we're 40, 50, 60% of labor is owned in the social democracies of the west. At the moment. We're sort of somewhere in between those two extreme extremes.

[Robert Reidlove]

Yeah. And there's some tipping point where it breaks down. People have just had enough. Right. Like, you're taking too much of my property or time. And it incites revolution. There's this one quote by Ayn Rand I'll read in regard to property. I love it. She says the right to life is the source of all rights, and the right to property is their only implementation. Without property rights, no other rights are possible. Since man has to sustain his life by his own effort. The man who has no right to the product of his effort has no means to sustain his life. The man who produces while others dispose of his product is a slave.

[Dominic Frisbee]

Powerful it is. She's like. I find her books quite hard to read, but I could spend my whole day reading her quotes.

[Robert Reidlove]

I am as ashamed to say I haven't read any of thing of hers yet. But people are really pushing me to. So I'm gonna. I'm gonna start.

[Dominic Frisbee]

Yeah. I mean, she's one of the great philosophers.

[Robert Reidlove]

Yeah.

[Dominic Frisbee]

And she took no prisoners. Like I'm, you know, I have a go at myself sometimes because I'm a bit too compromising. And, you know, I don't like to get into fights with people. So I'll. I'll try and compromise. But she didn't compromise. Michael Saylor doesn't compromise. Dominic Frisbee compromise. And he does too often.

[Robert Reidlove]

But that one that I keep zeroing in on the inviolability of property. I like this so much because it was just an idea. But I would argue that idea was not possible to implement prior to Bitcoin. Bitcoin is the greatest implementation of the idea that property cannot be violated ever because it's the only property right that can live in your mind. You can actually hold your private keys in your brain to the point where the only way to take it is for you to voluntarily surrender it. Now, you could argue that someone could torture you until you gave up your private key or whatever. Sure, I guess that's a valid argument. It ignores the different ways you can custody Bitcoin. That could prevent that. But the point is that at the end of the day, to surrender that property, it has to be voluntarily surrendered by you, versus if you have a chest of gold coins in your house, someone can come in and involuntarily take that away from you. They don't need your consent. But to surrender your Bitcoin private key requires consent due to its informational nature. So I think it's. Yes, it's very powerful. Maybe the Bitcoin is this realization of this ancient, older idea.

[Dominic Frisbee]

Yeah, I mean, certainly digitally it is. I mean, it can be forced out of you by, you know, you put. I put you through an incredible amount of pain, and you, You. I force you to give me your keys.

[Robert Reidlove]

Yes. But at that point of surrender, even it's consensual. Right. Someone is. Even if you've tortured them, they have to be like, they've had to reach a point that they said, okay, I'm now going to surrender this key. You can't come and take your hand and pull it out of my head is what I'm trying to say.

[Dominic Frisbee]

I. I accept that, and I would add to it. You know, we talked about this in the last program. It's the first time we've had a money that governments can't print. You could say that gold was a money that governments can't print, and they couldn't. But, you know, governments and kings and so on would occupy the gold resources. When they conquered someone new, they would loot the gold resources and they'd remit the money with their own image on it. And part of conquering a country would be conquering the gold supplies, you know, the mines and so on, so rulers could take control of it. It's very different with Bitcoin.

[Robert Reidlove]

Yeah.

[Dominic Frisbee]

I think it changes the nature of rule.

[Robert Reidlove]

Yes.

[Dominic Frisbee]

You know, we talked already about how on. Well, I, I did, anyway. About how technology is our new ruler.

[Robert Reidlove]

Yes.

[Dominic Frisbee]

Certainly in the digital world. So Bitcoin is extraordinarily transformative for that reason.

[Robert Reidlove]

Extraordinarily, yes, absolutely. It's important to realize, I think here, too, that fiat currency inflation is a violation of private property rights. Oh, my God.

[Dominic Frisbee]

Isn't it?

[Robert Reidlove]

So that's all it is.

[Dominic Frisbee]

It's nothing Else, actually, my left wing mates and I have way too many. I should know better. They don't see anything wrong with it. They think money printing is fine. They've all got their houses and the house prices go up, so it suits them on a personal level. And I think they think that it's the only way to deal with the situation we're in. And they don't trust individuals to be left alone and negotiate their own. I happen to think, for example, a voluntarist approach might have resulted in better outcomes in Covid than a.

[Robert Reidlove]

Than a. Yeah, I agree. I agree completely.

[Dominic Frisbee]

But. But, you know, we'll never know. But the they that's just beyond their ken. You have to have some kind of government directive, government ruling this.

[Robert Reidlove]

It's a. I mean, I think your book is proven that technological realities are percolating up through individuals. Right? To change morality, to change our conception of freedom, whatever. Now, it takes a long time. I'm not saying you just switch out attack and then change people instantly. It's intergenerational. But to not trust the sovereignty of the individual, I think is just a deep ideological fallacy of some kind. Like the individual is the acting agent in the world to try and say anything else, to try to say no. The individual needs to be subordinate to any group, whether it's government, you know, anything, any other group. It just doesn't make logical or moral sense.

[Dominic Frisbee]

If you look at the revolutions of the 17th and 18th centuries and then you look at the world today, there are so many parallels, so many excess taxation, inequitable taxation, the rise of a new form of media, the, the, the debasement of currency, the excess government activity, meddling in ideas they shouldn't, the crony capitalism, the leeching classes. There are just so many parallels. And, you know, you can just feel discontent. Maybe it's just my Twitter bubble, but you can feel discontent. You know, something's coming. But the question I ask myself is whatever's coming, you know, the difference in how armed an ordinary citizen was compared to the military in the 17th and 18th century was not that different. Sorry. You know, the military would have had better weapons, but they weren't that much better. Whereas today, you know, in Europe, we don't have guns and the army does, and in America, the army has better guns. So I don't, I don't know if it ends with violence, but there's definitely some kind of revolution happening. Maybe it's just we, we lead these. It's going to be a bit like Avatar or something where we're sort of stuck in the physical world, in reality, and we lead these sort of second digital lives of, of total freedom.

[Robert Reidlove]

Yeah, the, the 3D printing is an interesting wild card too. And talking about the asymmetry of weaponry that could, you know, depending which way that goes, that could largely balance the playing field. I don't know if you've seen some of these 3D printed weapons, but they are. You can print anything you want.

[Dominic Frisbee]

What, like a bazooka or something?

[Robert Reidlove]

Anything. Like. I don't know about bazooka per se. I was thinking automatic weaponry. Like you can print A, like a 50 caliber type machine gun that you'd see on the back of a Humvee. You can print those now. Now, I'm not 100% clear on how, you know, you can source the ammunition if you can print the ammunition. I'm no expert, but if you just look at a few of these videos online, the guns that are being printed, they're indistinguishable from, you know, guns we thought we didn't know you could print, let's say.

[Dominic Frisbee]

Yeah, I, I, I, I, I. I hope it doesn't end with violence.

[Robert Reidlove]

I hope not too. But you just glance at history and.

[Dominic Frisbee]

We get an English revolution and a bloodless revolution.

[Robert Reidlove]

Yeah.

[Dominic Frisbee]

As opposed to an American or a French one. Another revolution took 50 years of civil war to achieve. Wasn't that bloodless?

[Robert Reidlove]

So then there was a. Getting back to this, the French arc here that eventually they had the revolution. Right. So the people got sick of it. They brought out the guillotines, the heads rolled. But then there were bills to pay after the fact. And that was the assignment episode. Right. Where they actually started.

[Dominic Frisbee]

Yeah, yeah.

[Robert Reidlove]

How do you say it?

[Dominic Frisbee]

They started Asinia. Asinia, yeah, the, the gn, A signet. In French, the GN is nice. And so, yeah, they, they issued, they stole a load of money. They stole a lot of land off the Catholic Church. That was another thing. The church was very corrupt. And that was sort of the end of the Catholic Church in France as a huge power thing. They confiscated a lot of land off the Catholic Church and then issued paper money based on representing some of that land. And of course, the paper money did very well. And so they started issuing more of the paper money without backing it with land, and it very quickly erupted in hyperinflation.

[Robert Reidlove]

Yeah, I just actually finished a book on this called Fiat Currency Inflation in France.

[Dominic Frisbee]

Oh, yeah, I know that book.

[Robert Reidlove]

The walks through the whole episode. It's a short book, but such an elegant description of the corrosive influence of inflation. It talks about people, social morality going down the tubes, people becoming more intent on gambling. They ultimately burned. They broke and burned the printing press, I think, on public display, to finally put an end to the inflation. But it was a long, drawn out, miserable affair. And from those ashes, from the ashes of that hyperinflation, came Napoleon.

[Dominic Frisbee]

Yeah. And when he walked. When he walked through Paris, the streets of Paris, the people shouted out, plus d'impau a bas des riche a bas la republique. Vive l'empereur. Which means no more taxes. Down with the rich. Down with the republic. Long live the emperor.

[Robert Reidlove]

Wow.

[Dominic Frisbee]

But no more taxes. The first thing they said.

[Robert Reidlove]

Yeah.

[Dominic Frisbee]

And by this point, France was so bankrupt that it did what must be the worst real estate deal in all history. It is extraordinary. It sold. It was. And the beneficiary of this was the United States. But it was in 1803. It sold all its land in the United States, 800,000 square miles for $15 million. Okay. Which works out at 3 cents an acre.

[Robert Reidlove]

And this was the.

[Dominic Frisbee]

It was the whole. All of. There was basically the entire Mississippi Delta.

[Robert Reidlove]

Right. I think we call this Louisiana Purchase in the us.

[Dominic Frisbee]

Louisiana Purchase, yeah. And what a deal that was by your American former leaders.

[Robert Reidlove]

And this was the same dynamic that would cause the rise of Hitler over a century later. Right. It's hyperinflation. People get so sick of the ruling classes, the taxes, the inflation, that they just want to vest powers into the most seemingly capable guy.

[Dominic Frisbee]

Yeah, absolutely.

[Robert Reidlove]

And then clearly the absolute power imparted corrupts. Absolutely. And you get these disastrous outcomes.

[Dominic Frisbee]

Yeah, absolutely. Right.

[Robert Reidlove]

But for a while there under Napoleon, and you said in your book, taxes were lower, fairer, and more efficient, and France thrived. So he actually does. And Hitler did the same. They come into this economic message with an iron fist. They lay down some solid rules, and the economy flourishes for a short time.

[Dominic Frisbee]

Yeah. I mean, Hitler, the. The Nazis, they were quite naughty with their taxes. They. They like. I mean, what. What Napoleon did is he just imposed extraordinarily punitive taxes on northern Italy. There's five for the French, but the northern Italians were paying the tax. And Hitler did the same with the Jews. He just, you know, before he murdered them, he taxed them to death, pretty much. So. Yeah. I can't remember the exact thing, but it's in the book. But I think something like one third of entire Nazi spending came from looting Jews in the. In the entire world, you know, from 1932. Through to 45 or whatever it was, looted Jewish wealth. So they didn't tax their. They taxed their enemies. They taxed their conquered lands.

[Robert Reidlove]

Yeah.

[Dominic Frisbee]

They didn't tax their own citizens.

[Robert Reidlove]

Right. Yeah. You made this. The same point with Napoleon, that that was actually his vulnerability is that he needed to conquer new lands to sustain revenue. Otherwise he couldn't keep going to war.

[Dominic Frisbee]

Same problem that Rome had.

[Robert Reidlove]

Yeah. Yeah. Interesting.

[Dominic Frisbee]

Yeah. The United States has done two amazing real estate deals. There's a Louisiana purchase in Alaska, as well as a good, good real estate deal. Maybe should stick to real estate, start dealing with whoever owns Greenland and maybe chunks of Canada and lay off the war and everything else you get up to.

[Robert Reidlove]

Yeah. Yeah. That's a great point.