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Max Hillebrand on Praxeology, Economics, Human Action, Money, Bitcoin, Privacy, and more!
229 Plays13 days ago
In this thought-provoking episode, we’re joined by Max Hillebrand, an advocate for Bitcoin and Austrian economics. Together, we dive into the foundational principles of Praxeology, examining human action and decision-making. From there, we explore economics as a science, emphasizing the social nature of human beings and their interaction within markets.
The conversation takes a critical turn as we discuss government, taxes, and the concept of theft, providing a unique perspective on state authority and individual sovereignty. Max also shares his insights on psychology and empiricism, bridging the gap between human behavior and logical deduction.
We then tackle the age-old question: What is money? Our deep dive compares fiat currency, gold, and Bitcoin, highlighting the benefits of sound money and the flaws in current monetary systems. Finally, we focus on a topic central to Max’s philosophy: privacy. From financial freedom to private personal property and security, we discuss why privacy matters and how it can be preserved in the digital age.
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Transcript
Introduction to Beyond Rarian Podcast
00:00:01
Speaker
Welcome everybody to another episode of the Beyond Rarian podcast. I'm your host, Leo Dalton. If you're new around here, consider following on the show or subscribing. If you're on YouTube, if you like the show, give us a review, rating, comment, and always sharing. It's one of the best ways to help support us, get the word out. And all of that, of course, would be so much appreciated. We have a great guest on today. ah We're going to talk about a cool topic, something we didn't necessarily dive into too deep yet. Uh, so I'm really looking forward to kind of introducing some of these topics we're discussing today. These are topics that, uh, you know, I've studied extensively kind of more in the personal life. Um, and so I'm really excited to introduce them to the podcast and and kind of dig into them a little bit more cause they're certainly very important, ah especially in this day and age.
Introducing Praxeology with Max Hillbrand
00:00:46
Speaker
So we have great guests. We have Mr. Max Hillbrand today. Uh, Max, thanks you so much for coming on.
00:00:52
Speaker
Yeah, thanks Lee for for the invitation. I'm looking forward to join the podcast and talk about this very exciting topic. Because praxeology is probably something that ah most nobody has ever heard before. um But it really is a topic that is worth ah digging into. It's not just a fascinating way of thought, but but also a pretty interesting, meaningful way of life and that has emerged a lot of cool hacks to Yeah. Live, live a good life, and basically. So Praxeology is a really cool and applicable subject for, for everyone. Great. Yeah. Amazing. So before we get into Praxeology, I want to ask you our introductory question. It's sort of an interesting question. I'm looking forward to hear your answer. It's to kind of get a definition
Defining Health and Personal Will
00:01:37
Speaker
of health. What is health? What does health mean to you? What does it look like? How does it manifest? You could take it any direction you like. Just love to hear your thoughts on this.
00:01:45
Speaker
ah that's That's an interesting question. And then I'd say that health is is something akin to an organism's ability to actually achieve what what he sets out to achieve um ah with ah without biological hindrance, by but yeah um being kind of in in tune with his physical body such that he can do the things that his mind ah would would like to see done. um you know And I guess that's ah When you're in in physical pain, you know, that that kind of rules out all of your plans. If if you're sick, you you don't do the things that you would like to do. You just kind of have to hang out in bed and and try to recover. um So yeah, I would guess health and manifestation of will are quite closely correlated. Yeah, amazing. Beautiful answer. I love that. Yeah, that's ah kind of a, I think one of the best
00:02:39
Speaker
ways to approach that definition too, right? Cause it depends on, you know, the individual depends on what your goals are. It's kind of, um, you know, it gives a really good like general overview of what, what health is, right? Cause it looks different for everybody, right? It it looks looks different based on your, your ability and, uh, your circumstances and your goals. So yeah, great answer. I love that. So I'm sure we could probably tie that into Praxeology a little bit.
What is Praxeology?
00:03:05
Speaker
Uh, but,
00:03:06
Speaker
you know, I'd love to just hear sort of an overview of what, what is this praxeology? What is the praxeological method? Why is it useful? Why should we even care about it? I'll give you the floor and and we'll go from there.
00:03:19
Speaker
I guess let's start with the etymology. right what What does the word mean? Where does it come from? um And ah it's it's Greek, basically meaning that the logic of of human action. And so this is a science which which looks into the the consequences ah of of human action. And and and the And you know this goes back to like the early 1900s, where people were thinking quite quite deeply about a lot of things, obviously, and and including economics. and and And there was a big dispute in how should we think about and analyze the the economic affairs right to to do business and to and to be employed, et cetera. What is money? What what is interest and depth and equity and such? like
00:04:06
Speaker
um all All of these questions kind of need to need to be answered and Praxeology lays out a very interesting approach that's quite foundationally different to to all the the let's say legacy economic ah schools of thought that you've most likely heard about in school or or in in college.
00:04:25
Speaker
um And that is ah ultimately that we shall start by analyzing ah the the human affair based on axioms that we can deduce to be ah like correct, right where we can assume that these these are our starting point truths.
00:04:43
Speaker
And from there on out, we can logically deduce ah certain consequences ah such that if we don't violate the the principles of logic, ah we can actually be sure that the the consequences that that we've ah yeah deduced are valid as well.
00:05:00
Speaker
and and and And so this as a fundamental mode of thinking um ah ah can then be applied to categories of of economics, ah but also categories of of ethics and of strategy, ryan ah so ah or as well, and what which actions ought to be the good good or or bad.
00:05:22
Speaker
um and Yeah, the the Austrian School of Economics is a well group of people for who have for the last 100 years continued to express the nuances of this deductive way of thinking about human affairs and and have come to quite marvelous conclusions that but when you read in you know a book from someone like Murray Rothbard, one of the greatest praxeologists ever, um it's it's just obviously true when when when you read it. um
00:05:53
Speaker
ah Because it's it's common sense logic um on un quite applicable and and human matters. So it's it's delightful to read and I think it's quite helpful to shape a a useful understanding of the world and and the human within it. It's amazing. what So I guess maybe even more fundamentally, you know, um maybe we could start with what What is money and what is economics? You know, because you you mentioned that, you know, through praxeological method, it's very easy to answer these questions. So I'm eager to hear what, how how those would be sort of defined.
Human Action and Economic Theory
00:06:35
Speaker
Yeah, so so let's start by by quoting one of the greatest books in the tradition, ah Human Action. and that That's important. That's the name of a title of a book by Ludwig von Mises. Probably the first economic treaties, you know, magnum opus that that unified the entire school of thought in an entire book. So it's quite rigorous. And um it yeah it it it starts out with with the observation that that humans act. and we We have problems.
00:07:02
Speaker
ah you know we We are in a state of uneasiness. right we We can envision a future that is better than our current situation. right We have this imagination to to come up with with a better future scenario for for ourselves and and our loved ones. right um and And then even more crucially, humans can act, and humans can allocate their scarce resources to alleviate the problems ah that they have and and remove that uncertainty from from from their lives. And so ah when when we're hungry, and we can go out and and collect some fruits or or hunt some animals and and eat.
00:07:41
Speaker
And ah but we come up with ingenious solutions to to very complex problems. um And ah depth that is what what makes humans so so special. right ah we We act. we We don't just exist like a rock. right We cannot just be observed that, OK, if you lift a rock up and and and you drop it, it's going to fall down to the ground at this certain velocity and and acceleration.
00:08:06
Speaker
um that That's that study of physics, right? How how do inanimate objects behave when they get acted upon by humans or or other objects? um But that ah that fundamentally cannot explain the the human condition because humans are not rocks, right? they we We don't just get acted upon, but in fact, we react and and we we change our opinions and we change our modes of action such that they reflect the situation and the circumstances that we're currently in. And then and that meaning making capacity and and action ah enforcing capacity ah is is fundamental to to understanding the human condition. ah So yeah, that's that's where we start. Amazing. Yeah. So then obviously tying into the like this idea of economics, right it's economics is kind of like this
00:09:04
Speaker
like this conglomerate of a bunch of human action, like ah a bunch of human act, like acting all together in some sort of unison, in a way, right? yeah Yeah, exactly. right that's That's another observation that humans are not isolated creatures. and we We rarely ever are alone for a prolonged period of time. right and And even you know you could argue that that one individual itself is is not the same thing across time, but different individuals with different experience and different resources at each point in time in in the future. right Like you right now,
00:09:38
Speaker
You're not the same person that you were 10 years ago, obviously. right you've You've changed, you've grown, you've you've improved, and and and ah that you know that's a different situation. So humans are are very collaborative and and and social creatures. We we ah work together with with others. and ah you know they it And also, other people might value the same things that we value. and where're We're quite similar in such things.
00:10:04
Speaker
and And that leads to a let's say ah ah yeah a potential of conflict. ah Because as I said earlier, we have scarce resources. What does that mean? right ah That means that when we have a problem and we want to address that, we always need to apply some capital, some resources in order to solve the problem.
00:10:24
Speaker
but You need to spend the time to go out in the wilderness and collect the berries. and that That's a resource. You can either spend the time picking up berries or hunting or or fishing or spending time with your family or or building a hut. and These are all alternative solutions um or or or ways of action that you could think as as possible future scenarios, but the thing is you can only do any one of them at the time.
00:10:49
Speaker
and and And if you go out hunting then that means you will you will not find any fish right and you will not spend time with your family. There's a large opportunity cost for all of the possible scenarios that you did not choose in in your ultimate action. And the same with physical resources. and if If we have ah this piece of steak of of an animal that that we just hunted, well,
00:11:12
Speaker
Either you eat it or or I eat it. ah that There is simply in no way that both of us can can have the same physical good and consume it at the same time. ah that That's not how reality works. So here we we have a conflict over how are we going to allocate our resources? and Should I eat it now or should I save it for later? and do you do does Do you get the steak or do I get it? and these These are all resource allocation um decisions that need to be made.
00:11:41
Speaker
And that's extremely difficult ah because ultimately if you consume more than you produce, so to say, you die, right? You you you need to ensure that that you continue to address your problems and and and solve them and and not starve ultimately um in order for for your organism and existence to continue to to manifest.
00:12:03
Speaker
um And then the question is, which modes of operandi can we humans choose in order to allocate our scarce resources? Which a principle, like which set of rules could we apply? And there are only a couple options. right um for For example, and like nobody owns the resources. right humans just ah You can only use what you bodily produce. right So you you cannot go out and cut down trees or or you know mine for metal ore or or grow some some wheat, etc. ah Nothing in the world is ownable.
00:12:42
Speaker
I mean that sounds kind of nonsensical because we would die instantly, right? We we need to express ourselves in in the real world and and occupy a space and time and and get nourishment and and ah live life. so So therefore nobody owning anything isn't isn't really an option i um but everyone owning everything is is also not really an option because what does that mean right like am am i only allowed to eat the steak if if everyone agrees that this is mine and and i can consume it, ah what how are we all gonna agree right we're we're like a lot of billion people on the on this planet,
00:13:21
Speaker
um So finding a ah consensus or agreement on on who exactly will eat the steak if everyone has has a voice and an an opinion to make is just computational overload. right we We simply cannot manage that either.
00:13:35
Speaker
um ah a Another proposal would be that that some group of people gets to to choose how other people get ah to allocate these resources, and or who gets to, you know, one priest class, so
Resource Allocation and Government Critique
00:13:49
Speaker
to say, gets to say that, yeah, Liev gets one stake, but Max gets the entire cow, ah for example. um ah Which doesn't really sound that fair because all of a sudden we've created a different class of of people. right Some who who can rule over others and and and you know choose for them ah how ah how would they have to allocate their own resource. right that's That's basically slavery. ah If you can force someone to do a certain type of work.
00:14:17
Speaker
without the consent of that if that person. i that that's That's simply not all right. you know it It doesn't feel correct. um And it doesn't lead to prosperity in the long run either, which which can be explained with with economics. But more more interestingly then is is a solution where you know the person who creates something is is the owner of it,
00:14:38
Speaker
and the original homesteading principle, if you build a cabin out in the bush, and or then um you've you've started something out out of what was before just nature. You've you've you've created something and and you've therefore it is yours. right You can choose what to do with it, you know how to extend the building of it or or who can live in it and and who cannot come into this place.
00:15:01
Speaker
and um and And simultaneously, you can also choose that someone else has this privilege of of owning this resource. um So you can give it away for free. right You can gift your resources to others. When you build a cabin in the woods, then you own it. and you can You can choose who comes into it and and who has to stay out.
00:15:22
Speaker
And importantly, you can also transfer this ownership, that this right to someone else ah by gifting it to them, and just because you would like that other person to have it. ah Or other under some other ah conditions, and you you get to make up the conditions and under which you give away the the ownership of the house. ah That could be to sell it for for you know pot of gold or or ah for a couple cows or or for some promise of future money.
00:15:49
Speaker
um ah you and All of these things are optional, but the critical thing ah is that it is consensual. and that There is one person, one individual who actually can can make up his mind mind on, do i do I want this or or not? um And then that ah yeah that ultimately is an economic society. and A a a ah place where economics prevails is is where there are individuals who who own the resources,
00:16:17
Speaker
ah that they use to to alleviate their problems and that they can make the decision on where to allocate the resources and how to allocate them for which problem ah is is up to them ah because they own it and and not someone else. And so this is a a private property society or a a free society.
00:16:37
Speaker
Arguably because if private property is is violated and that that means someone gets stolen from and in in some shape or form that might be theft of of physical resources ah but that of course might be theft of life and in the form of of murdering someone.
00:16:54
Speaker
um ah or or trespassing of violating some some yeah border rules. um Of course, rape, right physical assault and in a sexual manner. All of these aspects of of of mode of operandi are are wrong. theyre They're not the right thing to do because they violate the rights of ah to the property of the individual. and So as long as an act does not harm the property of of someone else,
00:17:22
Speaker
ah It is therefore a right action to do. Yeah. Yeah, we could probably throw taxation in there, right? As a little example, too.
00:17:33
Speaker
Yeah, absolutely. um This is is what Rothbard, so Rothbard basically defined that there are three ah modes of of interfering with a a private free market economy. ah So there there is the autistic intervention. And this basically means that that I dictate you that that you cannot put these certain substances into your body, right? You're not allowed to eat meat anymore, because Well, the babies are dying and and and that's why. um And ah that would be an autistic intervention, right? I prevent you from from doing with your own resources what what you see fit. um The second option would be a binary intervention, ah where where I tell you, hey, give give me all your money, ah basically. yeah And ah you now have to ah give me resources so that that you no longer own them, but that I own them.
00:18:27
Speaker
and and And then third is a triangular intervention, where I tell you know you and and your friend that you are not allowed to do that business in between each other. if you You wanted to give him sell him the piece of steak, and and I tell you, no, that's that's not allowed. ah So these are three different ways that ah humans can can act in such a way that it does violate the property of others. Yeah. To me, like,
00:18:54
Speaker
What really stands out to me about this is it seems like very, ah very natural sort of premises and conclusions that are being drawn. ah You know, nothing seems to stand out as being absurd or, you know, like when it comes to what you're saying, you know, should be able to go and, you know, enter like, go in and do commerce with anybody, right? Like I should be able to go to a farm and buy milk and the Canadian government shouldn't tell me that that's illegal, right? Like my farmer has to worry about selling a product that, that, you know, he very much owns and ah works very hard at producing. So, um, I think that we could definitely benefit, you know, obviously from a more, um, top down, you know, way of implementing this stuff. Uh, but of course, um,
00:19:49
Speaker
It becomes very difficult, right? Because for, for a government to implement these types of principles, because you know, then they got to have their hands out of our pockets. And of course they, they don't want them. Um, that's cool.
00:20:04
Speaker
I really love that. That is one of the you know crucial, ah just foundational criticisms that Praxeology leads you to very very quickly, right? is Is that the state, the the government as an organization is is one founded on the premise of theft and of of taking away from individuals something that the individuals would like to keep um and and not signing up for a contract, but being subject to it by by birth, right?
00:20:32
Speaker
um ah where where humans are not yet able to to actually act and and and sign contractual obligations for for a good reason. right Because we first need to grow up before we can actually make up our mind on on what what we want, um but ultimately the government as an institution besides on the fact ah that it has the the monopoly on on force and and violence to to threaten people, to behave in a certain way, ah that most likely without this threat of punishment and coercive force, ah peoples would have acted quite differently.
00:21:06
Speaker
um And of course, this you know is is just a very basic and and obvious conclusion. um And with praxeological rigor, we we can deduce out the the actual extents of the horror that that collectivism or or an anti-private property ah society but would lead to. Yeah, yeah i I can hear sort of this, you know there the government in a way is sort of guiding the actions you know of of the people.
00:21:36
Speaker
Right. By, by in like having these punishments, if you do this, you know, if you do that, obviously there are, you know, some fundamental, um, laws that, you know, we're not going to disagree with like anything that inhibits another human from, you know, acting on their values and, um, in their most purposeful manner, right? Stuff like that. Um, yeah, very interesting, very interesting stuff. I, I think this idea that human act, human beings act.
00:22:05
Speaker
on you know their their highest values, right? Like they act in accordance to their value systems. um I find that really fascinating. And I find it very easy to kind of tie this stuff into health as well, right? Because, um you know, needing needing to act in accordance with your value systems can can certainly be a way that we can look at where people are um acting in an unhealthy manner in a way, right?
00:22:34
Speaker
um maybe their value systems it are, are skewed in a way that's, that's, um, you know, in accordance with, with unhealthier, with unhealthier actions. Um, so I kind of liked that, like this way of exploring human action. And I find it a really good way to study psychology in general. You know, like I find that, but especially with, with, um, psychology, I find it's very, very difficult to study empirically.
00:23:05
Speaker
Uh, and you know, there's no doubt that, you know, it's the, one of the largest scientific crises, crises is, is that we cannot reproduce. Psychological studies, you know, like upwards of 90% of psychological studies cannot be reproduced. And I find that so interesting, um, that we're trying to study psychology from this empirical point of view. And, you know, all of the best psychological research out there.
00:23:35
Speaker
And the best psychological texts were all, you know, non-empirical works. Like you think of the people like Young and Freud and Adler and, you know, all these, these great minds, you know, and, um, I, I think this praxeological method is kind of, it's kind of getting at the root of obviously it's human action, right? That's, and and this is kind of guided by, you know, our thoughts and our values in a way. So do you have any thoughts on, on that there?
00:24:04
Speaker
Yeah, there is really a a difference in in the myology methodological approach of of how we um approach these topics. And, you know, ah interesting is that that Jung ah was quite involved ah in the Austrian Vienna café houses where Mises and Menger and Birnberwerk were simultaneously talking about abmer and ah the economic affairs. If I remember correctly, the brother of Ludwig von Mises was a student of Jung ah directly. um So there there was a big overlap between specifically these two modes of thinking, and and they both kind of clashed against other schools of thought, like historicism in in the economics case.
00:24:49
Speaker
ah which eventually ended up at at the Frankfurt School of Economics, etc. um and as well as you know the ah yeah so Both of these or are somewhat related, but they do cover different topics. I somewhat like to think of it in the way that ah the psychology aspect tries to answer the question of of why do people act the way that they do.
00:25:14
Speaker
While the economic question is, what are the consequences of the action of a given person? And and and can we make a qualitative judgment or of of of which ah like yeah a which action um ah might be preferable over over another?
00:25:33
Speaker
and um and ah yeah so both I guess the insight of Jung but was ah that ah there there was the the individual right and and the individual subconscious that ah that is critical, and and for Menger and Mises the insight was that the economy is not just this collective machine.
00:25:55
Speaker
But it is actually you know a eight a a bunch of small individual actors ah who who for themselves try to improve their situation and alleviate their problems. And yeah the ah this this market emerges, ah this this quite complex system of of trade ah and contracts ah that that then you know becomes incredibly large and and humans enables humans to solve ever more complex problems.
00:26:25
Speaker
Yeah, absolutely. Wow. So how do we tie, you know, currency into this conversation?
Understanding Money and Uncertainties
00:26:34
Speaker
You know, things like fiat currency versus gold versus Bitcoin. How do we, how do we bring that into the conversation here?
00:26:46
Speaker
Yeah, so the the question is, what is money? right what What is that thing even? And and and almost nobody actually and in the and the classical world really has a grip on um on how to put it. But again, Austrians and praxeologists have it spot on. and Menger defined money as the most saleable medium of exchange. And that's that's such a prevalent definition because what's a medium of exchange?
00:27:11
Speaker
That's a good right of of a resource, a scarce asset, um which you're you're not holding because you want to consume it, and like like yeah you know some some food. and And you're not holding it to produce something with it, like you know a lump of iron or some wood that you could build a house with. right um You're holding this asset as a medium of exchange right with the intent to trade that asset away for something else in in the future. right So it's not a consumption good, it's not a production good, it's ah a good which you trade in order to acquire consumption and production goods in the future.
00:27:49
Speaker
and um And that's that's a medium of exchange. and And money is the most liquid medium of exchange. right So it's the tradable good that basically every entrepreneur wants. right Every entrepreneur is happy and and will provide you whatever good or service that you want as long as you pay enough of of this particular good.
00:28:08
Speaker
And that is the definition of money. It's it's the thing that everyone is willing ah to accept in a trade. right So that that means that, um for example, if like you might not know exactly what you want to eat in in a week from now. and and like What do you want to eat next Friday evening? When do you want to eat? And and and where do you want to eat?
00:28:29
Speaker
All of these things are kind of uncertain because, well, anything could happen over the course of the next week. And so if you would have to book a restaurant and the location and and the menu, the food today, for the week from now,
00:28:45
Speaker
you you might make a mistake, right? You might book something that that you don't like or at the time that isn't fitting or even a location where you won't even be at. um and And so locking in your your your desire basically for future things is somewhat risky. and And the cool thing with money is that you don't actually have to to book the restaurant today, right? And make the appointment and and do the payment upfront and order everything.
00:29:11
Speaker
when When you have a bunch of money in your hand, then you can be much more spontaneous. right Regardless of where you are, regardless when you are, as long as there's someone willing to sell you food, you're going to get it with with this money. um and Therefore, money is a tool to remove the uneasiness of the future.
00:29:29
Speaker
And if if you have a liquid medium of exchange in your pocket, then you can sleep well at night because knowing that whatever type of problem you're going to get in the future, you have something that other people will want to trade for. And then that means other people will be able to solve the problems that you have for you. Wow. So is there is there a problem with fiat currency?
00:29:58
Speaker
Aside from obviously the infinite printing side of things, because I guess in essence, you know, if it were scarce, it would be fine. But I guess that's just not what fiat currency is. And that's why we need something like a gold or a Bitcoin, different stuff like that.
00:30:17
Speaker
Yeah, so the the question is, what what are the consequences for individuals when they utilize a money system with different characteristics, with different attributes? And so you can use many things as money, right? And and humans have used many things as money in the past.
00:30:33
Speaker
Sea shells, tobacco, um like glass stones, etc. All of these are art times in the past where humans did basically anything if you gave them these goods. um and that ah yeah the The question is though, ah for example, what happens if ah like basically what's the cost of producing a new unit of of this thing?
00:31:00
Speaker
and um Because ah if if it's very cheap for someone to produce a new unit of of the money by himself, right then he he can just go ahead and and spend a little amount of capital of of time and effort to produce a large amount of these monetary units.
00:31:21
Speaker
and And then he can trade them and and get all of the goods and services, right the the actual valuable thing, right the human attention, the human problem ingenuity, solving tasks. right He gets all of this um for a very cheap price of of just extracting some raw materials and and turning them into um into this money system as such that that all the people who who end up providing you know a a lot of these services will have the the money unit as as a representation of of of the value that they that they procured, ah so to say.
00:31:55
Speaker
But all of a sudden, the supply of of money units in circulation of the economy is much larger than it used to be before. and um where Whereas at you know at the beginning, we have like 100 units of of money and in circulation, and and it was really hard for someone to to produce them. So so the supply stayed somewhat the same. Then you know if you if you get 10 units of the money, that that's like 10% of the money supply. right That's a substantially big amount payment. um But if all of a sudden the new guy comes with 10 million additional units, then your 10 units of money are proportionally speaking at a tiny percentage of the money supply. So and what what used to be a substantial amount of money turns out to be now really negligible.
00:32:45
Speaker
and and and And again, money is a good where where where we don't consume it. right ah if If money were a consumption good, then it would be great if we can produce more money, right because we can consume it. right if If humans produce more meat and vegetables, then more humans can can eat and and not starve anymore. That's great.
00:33:06
Speaker
But if you produce more money, you don't really add any real value to the economy because money is not something that we like for the consumption or or production thereof. And we we we use money more as as a medium. right um and And so an inflow of new quantity of of money, right ah an increase in the money supply, so to say, sends out ripple effects that lead to a resource ah like misallocation. right we We move capital and resources.
00:33:36
Speaker
away from the people who hold and earn this money and towards the people that can print the money, that produce the money. and so have that That means if you're if you're early in in the process of receiving newly created money,
00:33:52
Speaker
um you win right because you can adjust your prices accordingly and ah you you can then spend the money ahead and and people will do stuff for you, and but but you were first in the chain and the person who who later on receives this newly created money after it already passed, you know many many hands, all the other people had the time to adjust their prices upwards to to reflect the increase in supply of of the monetary asset.
00:34:17
Speaker
Um, ah but, but you didn't yet. Right. So you still received the old salary of just, you know, 0.5 money units from a couple of years ago. Um, but, but everyone else already got their salary upgraded to, to thousands of units. and Yeah. There's like no consistency, no consistency over time. It seems to hurt sort of the, the little man versus obviously those that are sack in the country.
00:34:46
Speaker
Yeah, well, I mean, I guess it depends, right? There there could be in and a monetary system that creates new money and gives it to the poorest people of society, right? That that is a theoretical possibility, and we've we usually haven't seen this.
00:35:02
Speaker
umm a Usually the people who receive newly created money are the politicians or the priest class or large corporations. It's it's rarely the the the little guy. um And the the the really you know nasty thing with with inflation is is not just that it it takes away capital from from those who receive the money later and and gives it to those who receive the newly created money first, but even more so, it it tricks humans into solving the wrong problems.
00:35:33
Speaker
and big um Because all of a sudden, ah the the people who received a bunch of new money, well but they think they're rich. right So they're going to go out and and spend it. and ah you know the ah Menger came up with this beautiful inside of of diminishing marginal returns. right So think of it as you you know the you're you're starving on the street right and and now you get a ah dollar, so to say, one money.
00:35:58
Speaker
um And you what are you going to do? Well, most likely you're going to solve your most pressing problem. You're you're going to get something to drink. and um Because if if you don't drink, you're you're going to starve. So that's the most valuable thing that you're going to do with with the first amount of of money that you're going to get.
00:36:14
Speaker
um So what's the second most valuable thing? right If you had another dollar to spend, where would you spend it? you know Maybe it's even more water, um and and then the third money would be some food. And and and eventually, like if you have 100 money units, you could buy yourself a shower or something like this. you know Something that's no longer as critical to your survival, but would be nice to have.
00:36:38
Speaker
um and And so this basically means ah the the the richer you are, the the the more you're going to invest in marginally less valuable things. and Because obviously, you've already invested in the more valuable things before but when when you had less money. So now that you have more money, you you're you're going to spend on on something that you would not have spent the money otherwise.
00:37:01
Speaker
um them and and And that's especially the case if if you're spending someone else's money on someone else's problems, and but which is the case with today's political tech class. ah they They steal a lot of money via taxation and and then somehow decide on on where this money gets allocated.
00:37:20
Speaker
um But, you know, officially, of course, it it should go back to the people, so to say, but almost likely, if you're spending someone else's money on someone else's problem, then you're just going to take a bit of of the money for yourself as well and in in numerous ways. And and absolutely that that means that we um build worse projects over time, we we build project, we start building projects that we probably should not even have started in the first place.
00:37:45
Speaker
And um but we because you know the the the person who who actually needed to solve a problem ah ah are are poor because they they got taxed, while the person who actually decides on on how to spend the money ah keeps getting richer. and And so he's not really going to care um on how exactly to apply these resources. So ultimately, inflation just leads to male investment and and overconsumption.
00:38:12
Speaker
Amazing. answer So beautifully, honestly, like I just, I, I love the approach of, you know, the, the foundation really of the Austrian point of view, um, when it comes to economics, just the way that it's answered is, is makes so much sense to me.
Privacy in Human Interactions
00:38:30
Speaker
Um, I'm curious maybe to, to finish off our conversation on, on this topic, we could tie sort of this, uh, conversation into privacy. Cause I think this is something that we really, um,
00:38:46
Speaker
We really need to consider moving forward in this technological age. I'm curious about your thoughts on privacy, how we tie that into money, and what sort of the Austrian view is on it.
00:38:58
Speaker
So I'll give it a floor. Hi, I guess let's start again with with definitions of of privacy. And here to to pull from a somewhat different school of thought, ah the the cypherpunk um ah theory um from from the cypherpunk manifesto, privacy is the ability to selectively reveal yourself to the world.
00:39:18
Speaker
And so privacy is a choice, right a a action that that humans take ah where they they choose what to say to and and to whom they speak. And the um the the words that that I'm saying to you now, I i can choose yeah which words I pick. um And well you can be a bit careful with with that choice or or just blabber whatever comes to your mind.
00:39:45
Speaker
ah but But ultimately, i I could have chosen not not to speak to you in the first place, right or or to not ah broadcast this conversation to and know in in the form of a podcast to to everyone.
00:39:58
Speaker
and ah This is an ability ah where we humans so to say allocate the resources of of their own body and and mind and and mouth to ensure that if they don't want to say something, they have the ability not to do so. and if If you prefer not the entire world to know, for example, how much money you earn, and Well, then then you can choose simply not not to tell it to people. And and and yeah if if you don't reveal information, then it's oftentimes not possible for others to guess it. And as so ah and and the thing is, then though, as as soon as you do reveal some information,
00:40:40
Speaker
ah That other person, now having access or and or knowledge to this information, can can choose to pass it on. and So other people can talk about you, so to say, behind your back, and but without you knowing, um gossiping on the information that you shared with with one person in the past.
00:40:57
Speaker
um And as ah a lot of our our lives is is especially in relation to to companies and and large institutions, ah whom by interacting with with these companies and and and services, we are necessarily revealing a lot of information about ourselves to these companies and and to a lot of middlemen and and service providers to these companies.
00:41:21
Speaker
um And, ah well, knowledge is power to some extent. If you do know the deepest secrets of of somebody, then this can be used to, again, put your position like more favorable. like You can, for example, manipulate people ah to do the bidding that that you like. right You could trick them into selling their products cheaper, and or or trick them into paying you a larger price for something.
00:41:50
Speaker
um and there's There's a lot of ways that you could subtly try to reallocate resources from other people to you if if you know a lot of information about those people. um And in fact, one of the cheapest ways to defend yourself from an adversary is to be anonymous. And if the adversary does not know that you even exist, and let alone what what your name is or or or what exact actions you are doing,
00:42:20
Speaker
ah but But if someone cannot even observe you, then he cannot orient himself in relation to you or or decide how to act further on. And so to to choose not to share information publicly to to anyone and and especially to your adversaries um is a very effective and very powerful um mode of defense. ah and And humans have have used different forms of of protecting their privacy ah um throughout the existence of of humankind. And arguably, the stronger our protection or privacy protections have gotten, ah the more liberated the individual has become. And I i think that's to a large extent but what we're seeing now in in the age, not just of the Internet,
00:43:08
Speaker
but ah of Bitcoin and Noster and other um yeah cypherpunk technologies that give the individual to the power to actually selectively reveal himself to the world while still being ah interconnected and active and and in collaboration with others.
Bitcoin Transactions and Privacy Enhancements
00:43:31
Speaker
I'm curious with when it comes to Bitcoin, you know, everything is public, right? You can look at the transactions, you can look at, you know, all the records. Is this at all a threat to privacy or I guess, you know, there'd have to be some sort of interaction again, uh, to make that, to make that known, right? So to have a transaction on the chain, stuff like that. And so I guess again, it's about selectively revealing, I guess, what, what's going on, but I think, you know,
00:44:01
Speaker
That might like it kind of just popped in my head as a potential argument a again. So do you have any thoughts on that? Yeah, privacy has has been the the main criticism or a lack of privacy has been the main criticism to to the Bitcoin system basically from day one. And the arguments where this this doesn't scale because it isn't private. um So maybe let's walk a bit through the the history of of of digital money systems because humans have been trying to do this since the early 1980s to create a a money in cyberspace, a way to make payments online. um And the the first variants thereof ah were based on on cryptography that ah it was known as ah blind signatures. And it enabled extremely fast and a very private transaction system um with the one caveat that there was one server, one computer who defined the rules of this money system. And this server had the the ability to create new tokens
00:44:59
Speaker
um and ah to give them to whoever he wants. um ah But that person did not have the ability to trace ah you know how many tokens one user has, or or which which person he's sending money to. all All of these aspects were were privately hidden, but the the existence of the system depended on on that one computer running the software correctly.
00:45:23
Speaker
um which you know sooner or later got shut down because the ability for you know if free free people to create their own money system is ah something not allowed by by the tyrants of this world. um And so for ah many years, there were numerous different attempts to create this money system without relying on a single third party to basically ensure that the time stamping of which transaction was spent first. and Because ultimately, the the problem here is in in the digital realm,
00:45:54
Speaker
we We are living in a non-scarce environment. um Information is not scarce. Information ah ah cannot be or in information is not exclusive. right The words that I speak to you now, I still retain them after I give them to you.
00:46:11
Speaker
It's not like when I hand you over a piece of steak that then I can still eat the same piece of steak. right ah yeah with I can send you and a thousand people a copy of a PDF document and still my original did not get worse one bit.
00:46:26
Speaker
um um and And this means ah that ah yeah we we don't need to allocate, or that that but the problem with money is that specifically it is a scarce asset, right? We use it to trade, and and trade only works if if both people give up you know the ownership of of of the thing, so to say in favor of the other.
00:46:48
Speaker
um and therefore and and not ah The main problem here is is that of double spending. right If I have a token, and I can first send it to Alice, and and she gives me a pizza, and then I turn around and send the same token to Bob, and and he gives me a piece of steak, and I turn around and send the same token to to Charlie, ah if I keep getting goods, if if I keep spending the same coin multiple times, then again, for all intents and purposes, we have inflation.
00:47:17
Speaker
and Anyone can just spend as much as he wants as long as he has one coin. He he can copy them many times. um and And that wouldn't work. So we need a way that Bob knows that the token was already spent to Alice in in the past. right So ah we we need a way to enforce that a token can only be spent once. And and in the old system, this was done via a single central server that that kept the time, basically.
00:47:42
Speaker
and to say no, this transaction already happened in the past, it it cannot be replayed. um And ah the idea of Bitcoin is that in instead of us all trusting this one server, this one computer to do the double spending protection, we simply all do it. right we we and Everyone tells every transaction that he makes to everyone else. And and we have this this way of ah of creating a ah list of all of the transactions
00:48:13
Speaker
such that we know when a coin was created and and when a coin was destroyed, so to say, for the first time. um But without the system relying on any single ah server, so anyone can ah leave the system at will and the system continues to operate. It's it's quite a genius system, but the the problem, of course, is that everyone needs to know about every transaction of everyone else in order to ensure ah that no new money is is created, ultimately.
00:48:41
Speaker
um and And that is quite inefficient and and of course quite privacy violating, because now if you want to make a payment in the Bitcoin system, you need to tell everyone about the transaction that that you're making.
00:48:55
Speaker
um Meaning you cannot use the Bitcoin system while still not revealing this transaction to to the larger world. and so on On a philosophical level, did the the privacy of Bitcoin ah is is is not really there.
00:49:10
Speaker
um how However, there are numerous ways that you can ah improve the privacy but while using Bitcoin. So in other words, ah you can make Bitcoin payments while revealing still very little information about you. It might just be a bit more difficult and and expensive, but it is possible. Interesting. Very cool. Very cool.
00:49:39
Speaker
All right, well, it might be a good time to kind of wrap things up here. I'm eager to hear any final thoughts on the episode. Do you want to add anything, anything you might have missed? Now's the time to kind of do that.
Recommended Resources on Praxeology
00:49:51
Speaker
Yeah, Praxeology is really a a a fascinating topic and I'd encourage anyone to to start reading up on on a couple books on on the topic. It's useful not just for business and and and stuff like this, but I think it's quite useful for a general, any human collaboration.
00:50:11
Speaker
album So don't mistake in Praxeology to be dry and and boring like your economics courses in in school. um it's It's actually quite fun to read, especially Murray Rothbard is a very humorous writer and and very witty and and sharp. ah So maybe ah a quick recommendation of of a couple books, ah which are all available for free as as PDFs and and audiobooks, usually on Mises.org.
00:50:38
Speaker
ah which is a great website. um ah So, ah it let's start with the the big ones first. um Human Action by Ludwig van Mises and Man, Economy and State by Mary Rossbart are the two like definitive books on economics, so to say. if if If you need to read,
00:50:57
Speaker
one book about economics, and then do this and and you have covered basically the entire science. ah So a great collection of of ideas. um Then ah maybe if you want to read more about the ah theory of praxeology itself, ah then theory and history by Ludwig von Nises is a great um book on on on the way of thinking about these topics.
00:51:22
Speaker
um ah there is and ah What has government done to our money by Mary Rothbard? A great short introduction to um yeah the the topics of money and and how fiat money specifically is is quite a devastating affair.
00:51:38
Speaker
um The ethics of money production by Jörg Guido-Hilsmann, also quite excellent on on the question of what are the consequences of of money printing and and can we in good heart and conscience continue doing this? I think the answer is no.
00:51:53
Speaker
um ah we We have oh ah men ah no i already mentioned this economic science and the Austrian method by Hans-Hermann Hoppe, where he introduces yet another axiom, not the arium the axiom of of action, which Mises introduced, but the axiom of argumentation.
00:52:12
Speaker
ah which is an additional ah logical foundation which, if applied, leads us to deduce a a consistent ethics in the praxeological realm. um So he has basically solved the problem that you cannot derive an ought from an is. um ah you You can, in fact, if if you assume that that humans act and humans argue.
00:52:36
Speaker
ah So, yeah, quite an important achievement. And in the sense of Bitcoin, ah the the best book, I think by far, ah is cryptoeconomics on the fundamental principles of Bitcoin ah by Eric Woskule, which adds yet another axiom to to this mix, which is the axiom of resistance.
00:52:57
Speaker
ah Meaning that security technologies like Bitcoin can can only be successfully applied if the victim resists the attacker, so to say. So resistance is required for any system to be secure. um And this, I think, is is essential to to understand Bitcoin. and People keep keep telling, oh, what if the government bans Bitcoin? Well, the answer to that is we don't care. We simply do it without permission.
00:53:28
Speaker
Amazing. Amazing. We love to hear that. How can the listener learn more from you? How can they support you? Where they find you? Well, I am basically exclusively nowadays posting on on on free open protocols, but specifically podcasts like the one I'm i'm attending here right now. So you search for my name and you'll probably find a couple of interesting podcasts. ah But my most active ah posting nowadays is on Noster, ah which is a new set of protocols ah designed ah to and enable a secure and authenticated and and open and censorship resistant way of of spreading messages.
00:54:06
Speaker
um basically a reimagination of of of the internet, but with good cypherpunk principles at heart. So you can find my public key at max.towardsliberty.com and find me on any Noster client. Check out, for example, snort.social on the web browser, or Amethyst on on Android, or maybe Primal on iOS.
00:54:31
Speaker
There's numerous different applications that allow you access to this new cryptographically signed and and authenticated protocol ah where nobody can be ah censored anymore. and And we finally have a protocol for free speech on the internet that has a chance of of actually working out in the long run ah to make all of these walled gardens like X and Facebook and Instagram and and TikTok and all of these obsolete so that we no longer have to reveal ourselves to a company or corporation in order to create an identity system and we can without asking for permission simply create a private key and and use that as the definitive authority on on which messages have I.
00:55:16
Speaker
signed and agreed upon to.
Conclusion and Contact Details
00:55:18
Speaker
ah So yeah, Noster is a fascinating protocol worth worth a look. um Check out noster dot.net with a list of probably well over 100 or 200 client software implementations for using this protocol. Really cool. Thank you for sharing that, brother. That's that's amazing. Well, we really appreciate your time. ah Thank you so much for all the valuable insight. This has been a great episode. I love this topic so much.
00:55:44
Speaker
Yes, thanks Leah for inviting me to the part and keep up the good work. Health is is quite important. um And i yeah maybe ah as a closing thought, like um a a society based on private property is is a healthy society.
00:56:00
Speaker
a society based on on theft and and deception turns ah ah unhealthy very quick. ah So maybe the most substantial improvement to to and individual health we can do ah is is to ensure that that humans can can keep the money that they've earned and and not be inflated away and under their feet.
00:56:23
Speaker
ah Because once you are wealthier and and protected and secure, you can actually think much more in the long term um and and ah show a a decrease of time preference when when you care about your future self and and want to make the your your body as as well ah well the best house possible for for the future entities that that will inhabit it. I appreciate that so much. Mr. Hilbrand, thank you so much. I appreciate it.
00:56:53
Speaker
Thank you, Liev. Bye-bye. I want to thank you all for listening. You should all know that this is not medical advice or financial advice, I guess, at this case. It's for informational purposes only. Also remember, we're all responsible sovereign beings, capable of thinking, criticizing, and understanding absolutely anything. We people in the greater force are together, self-healer self-governable self self-governable, self-teachers, and so much more. Make sure to reach out with any questions, criticisms, comments, concerns. I love discussing this topic. You can hear your thoughts on it. ah You know what? Find me over there on Instagram. It's probably the best way to reach me.
00:57:23
Speaker
Maybe I got to get on one of these decentralized platforms really up the end here. Speaking of this, check out fountain dot.fm. um It's an interesting way where you can hook up your podcast to your Bitcoin wallet yeah and people can send you some Bitcoin while they're listening to the show. ah Quite interesting. Super cool, man. Awesome. I love that. We might have to get that set up. Right on. Appreciate you guys for taking the time to listen to this podcast. Fan informative in any way. Give us a like, share, comment.
00:57:53
Speaker
review rating, all that would be much appreciated. And just remember, there are two types of people in the world. Those believe they can, those believe they can't, and they are both correct. Thanks for listening. Take care.