In this episode Saifedean talks to Rahim Taghizadegan, the president of the Free Private Cities Foundation, and one of the few Austrian School economists still operating in Austria. They discuss the history of the Austrian School, the problems of modern fiat academia and why Rahim sees Bitcoin as an essential part of the monetary infrastructure that would support Free Private Cities.
The Raven of Zurich: The Memoirs of Felix Somary: https://www.amazon.co.uk/Raven-Zurich-Memoirs-Felix-Somary/dp/0312664079
Free Private Cities official website: https://www.freeprivatecities.com/en/
Titus Gebel’s book, Free Private Cities: Making Governments Compete for You:
Institut Scholarium website (German Language only): https://scholarium.at/
[00:03:39] Saifedean Ammous: Hello, and welcome to another episode of the Bitcoin standard podcast seminar. Today’s guest is known as the last Austrian economist in Austria. Or as we said last week, we prefer to call him the latest Australia economist in Austria. Hopefully there will be more in the future. Rahim Taghizadegan is joining us live from Austria, where he practices Austrian economics, not a very common thing to be doing in Austria.
And Rahim is also the president of the Free Private Cities Foundation, which I think is a topic that’s quite interesting for us in terms of economics behind free private cities, as well as the implications for Bitcoiners and people who have a Bitcoin and a freedom from central authority kind of mindset.
I think we’ll find the discussion of the three private cities quite interesting. So Rahim, thank you for joining us.
Rahim Taghizadegan: Thank you for having me. Good to see you again.
Saifedean Ammous: Great. So, I wanted to start a little bit with you [00:04:39] giving us a little bit of a background on Austrian economics in Austria. How are things there? Are there many of you and what happened in the history of Australian economics in Austria? Why aren’t there that many Austrian economists anymore?
Rahim Taghizadegan: Yeah, I’m a very odd case. As you may have realized from my name, it’s not a typically Austrian name and my occupation as an Austrian economist neither is very typical. I’m a born Iranian, but I’ve grown up in Austria as an Austrian. I don’t identify a hundred percent with Austrians, but still, I mean, it’s pretty close. It’s my home, my first language is German. And I was oddly surprised when growing up in Austria and studying economics that I never really heard about the Austrian school of economics. It was only in the United States. And I have to tell you, I started out as a natural scientist. So my first career more or less was in nuclear physics. And I worked in space research and I studied economics and [00:05:39] sociology subsequently. And I went to the U S for a while and worked there in the natural sciences.
And somehow, I met people who were into Austrian economics. And that was very surprising as I had grown up in Austria. Never heard about that as a tradition, then I realized I had heard about Hayek, but only as evil neoliberal, and it wasn’t clear that he was really part of a scientific economic tradition, was more those evil guys and maybe sometimes someone would mention he’s an Austrian Nobel Laureate. And, in order to understand how that could completely disappear, how a tradition like that can completely disappear you need to know that the Austria of today is very, very different from the Austria where the Austrian school emerged.
And it’s not only the Austrian school that disappeared in Austria. It’s almost every scientific tradition because old Europe was obliterated in the two World Wars. And not only their World Wars, the World Wars are just symptoms of a [00:06:39] lot of cultural destruction and intellectual destruction that happened before and during the World Wars. And of course the World Wars are a symptom of bad monetary choices, of bad intellectual choices, of a thourough cultural crisis. And I think maybe it’s not such a surprise that both Saifedean and myself have a Middle Eastern background, because interestingly, the Austria of the time when the Austrian school emerged was pretty close to the Middle East in certain respects, even the Habsburg empire was closest, I’d say to the Ottoman empire at the time. Now what’s the similarity? It was of course, a very multi ethnic, multi-religious situation with a lot of political issues and the issues arose to the modernity or modernization. So in Austria, we had a very rapid and belated modernization. It was a very rapid industrialization and rapid modernization.
And with it introduction of modern ideas. And of course, a lot of those modern [00:07:39] ideas turned out to be terribly wrong headed. But once you have this combination of a more traditional high ethnic society and those centralist, modernist, top-down ideas, it’s really like a pulver kick, you can call it. So there was a feeling among the more prophetic and more open-minded people in Austria that you’re on the verge of a big catastrophe. And it was a very interesting place to be, and it was a lot of exchange, but a lot of people realizing that there’s a crisis, that somehow a crisis emerging, cultural crisis, and you really want to understand, and that’s where the Austrian school comes in.
It’s a very down to earth way to understand what’s going on and even understand developments where you feel, or you got the feeling, they go in the wrong direction and they may obliterate and destroy the society you’re living in. But you try to separate yourself from that moral [00:08:39] case and the feeling you have, because in a way you need to be emotionally detached from what’s going on in order to really understand it.
And I think that’s why you have this approach of value neutrality, of really trying to understand first the dynamics and not judge them before you’ve understood them. That I think was crucial in the early Austrian school. So it was a very interesting situation, a lot of bad ideas coming together. You had Hitler at the same coffee shop as Stalin, sorry, Trotsky would go.
So, it always was like, all that evil ideas thought are in an early laboratory of catastrophe. So I think it’s one of the reasons the Austrian school emerged there, and you have a lot of traditions, but of course the catastrophe happened. And it led to an exodus of most scientists in most traditions. So most of the Austrian Nobel laureates, then later lived in the United States or spread all around the world.
Some even got to teach in Turkey and lived in Turkey and basically [00:09:39] all around the globe, but mostly concentrated in the U S as the new empire to be, or the more new center of the world and science to be. And so it wasn’t, I would say complete obliteration of the tradition and we’ve seen it in many cases on myself.
My first occupation was in physics and that’s very, very similar. We had the brightest physicists of the time living and working in Vienna. And then of course, the whole tradition moved to the United States.
Saifedean Ammous: Yeah, absolutely. And I think in the case of economics, the move really happened in the interwar period. It was in the 1930s in particular, when the Nazis came to power, right? That’s when most of the Austrian economists left.
Rahim Taghizadegan: Yeah. They left in stages. One has to say. And, of course for some, it was the tuitions industry, for others it was their opposition to ideology and everyone makes his own judgment. It’s really hard to say when you should leave, because of course you have roots, you have family, it’s a very hard decision to [00:10:39] take so most left in stages and some fairly early. So even before Nazi occupation, there was already a trend of an intellectual exodus I’d say, because of course the interwar Vienna already was very, very different and many expected that it could take a totalitarian socialist turn, even.
So Vienna was very ripe for that kind of socialist experiment. So that happened before. Of course the Nazi was the final nail in the coffin.
Saifedean Ammous: Yeah. And when they left, the tradition really suffered for a while. I mean, there was no internet at that time, so they couldn’t really keep in touch very easily. And they had to basically go and find jobs in American universities by pretending to be modern economists more or less.
And so of course they were pretty bad as modern economists. And so, Mises has never got an appointment as a professor in the U S, he was an adjunct.
Rahim Taghizadegan: Yes. But, I have to add that even in Austria, it’s [00:11:39] misunderstood. It wasn’t really a university tradition. And I think the main value of the Austrian school was outside of university because even in Austria, Misa has never got the full professorship. He was very prestigious and most considered him, even if they didn’t agree with him, that he was the world’s foremost economist on, in particular monetary theory, but still he didn’t get a full professorship. And there are plenty of reasons for that. I think the main reason is that really academia from even its earliest roots, it’s not really what you expect it to be, that it’s mainly giving room and space for bright people. Sometimes you have network effects of people getting there, but after Carl Menger really, it went downhill because usually the people that follow and get the professorship afterwards are not the best students. It’s those students who don’t get an occupation outside of academia and our best representing the mainstream of the time.
So the best students of Carl Menger actually are not really well-known today. Like Felix [00:12:39] Somary who started private banking in Switzerland, I think he had a tremendously important impact on world affairs. But no one really knows him nowadays because he was not an academic. He wasn’t teaching as a professor, a student of Menger was a very important diplomat and you had lots of very, very important people in a business as well, who never got the professorships.
So really with time moving on a long time before the Nazis and the first world war, there was already a drift towards the, I’d say more average people being promoted in academia. And what I like most about the Austrian tradition, I think it has its peak in importance and validity as a scientific tradition is the private seminars. It’s in particular Mises private seminars, also Hayek’s private seminar, and, they are very non-academic, not in the sense that the level is not very high, the level was very high. The [00:13:39] intellectual level was extremely high, but they were interdisciplinary, which means not just economists sitting around the table.
It’s basically a few economists and political philosophers, philosophers of science, but also practical people, entrepreneurs, bankers of the time, artists and so on, that you wouldn’t really have found at university at the time. That you found out those private seminars and that’s where, what for Mises and Hayek were the most fruitful parts of their career and where the influence was tremendous. I mean, if you look at the list of people who participated in Mises seminar, it’s amazing. It’s like the leading thinkers of not just the economics of a whole broad range of sciences who came together and influence each other, not always taking account of their influence of course, because, important intellectuals tend to be, not that humble usually. But you had all these correspondences starting at the time and before the internet it was letters and a lot of [00:14:39] letters between those people that then spread out around the globe, but still stayed in touch for letters. But I think that that was the peak of the Austrian school already, much before, the world war led to the disappearance in the universities.
Saifedean Ammous: Yeah, I think that’s a very good point. And I think it’s still true until today, Austrian economics doesn’t really thrive in universities and it’s just always been that way because it’s more conducive for wanting to think about the world honestly, and rather than wanting to give people grades. Personally, on my website, when I teach courses, I ended up deciding, you know what, I’m just going to put the material out there and you can study it on your own.
And instead of trying to focus on testing, I’m just going to give a lot of readings. And instead of studying for a test, if you think you are not sure whether you know the material well enough, just keep reading more Mises, more Rothbard, there’s always more, just keep reading them.
And I think there’s something about testing material that almost cheapens the quest [00:15:39] for knowledge, in a sense. Like when you try and shoehorn it into a, how do I set it up into a question so that they give me the answer that I want so that I can then give them a grade.
It misses the real essence of what you’re trying to do, which is, think about the world and make better decisions about the world. So I think this has always been the case. I would just want to make a couple of comments about things that you mentioned, the seminar and the Mises’s seminar in an NYU in New York University is still ongoing until today.
So if you are in New York, check out the New York University markets colloquium, and it is run by professor Mario Rizzo. When I lived in New York, I attended that seminar for about a year and a half, I think, or a year or so. It’s a fascinating seminar. And, basically they get Austrian economists from all over the U S and from all over the world. Every week, somebody presents. It’s a quite nice place, but I think it is linked to grading.
And there are some students who are taking it as a course, but most attendees are not really taking it as a course. They joined for the discussion. And I met professor Salerno [00:16:39] there and I met several of the current Austrian economists there. It’s a very nice place. And then you also mentioned, an interesting fact, I didn’t know, I’ve heard about the book, the Raven of Zurich by Felix Somary whom you mentioned. I did not know he was a student of Menger and I have not read the book, but I’ve read some excerpts from it. And then I thought it was interesting. I think that’s worth checking out if anybody wants to. It was actually, yeah, he was an actual banker. Yeah, he was a banker in Switzerland who was watching the world go crazy and writing about it.
And then there’s another book by another banker in Switzerland with I’m always shilling on this podcast, Gold Wars by Ferdinand Lips. I think he will also like that book. Right? Sure. Yeah, absolutely. Okay. So now tell me a little bit more about what has happened in Austria since the Austrian economists left until today.
First of all, what economics are they teaching in the university and what’s going on now, tell us about your institute Scholarium and what are you doing there?
Rahim Taghizadegan: Yeah. Well first about Austria, of course it has to reinvent itself then as a national [00:17:39] state and as a modern national state.
And basically, I mean, for most of Europe, it has become second hand mainstream or the first-hand mainstream is the US. So the US has really then defined intellectual traditions in many fields and in Europe is just being the second handers and picking it up and a bit later and a bit watered down, and the bit lesser quality of it. I wouldn’t say that everything disappeared because of few old people. Of course, so-and-so I had some amazing, very old people I had met not really through university. Sometimes in various traditions, because it was really surprising is that’s a, so many traditions, so many Viennese schools and Austrian schools.
So some of the people remained, so there’s still some high standards, but basically Austria reinvented itself. It became a kind of social democracy and middle of the road, very middle of the road. And it is [00:18:39] defined a bit by the diverse parts of Austrian psychology, which had a reason at the time when it was this multi-ethnic empire, it made a lot of sense to try to be middle of the road and find a consensus and compromise on things.
But that has been pushed to an extreme, I’d say also after the Nazi experience, of course it has all watered down to basically compromise to something that has no alternative. And it’s just a second hand mainstream I’d say political science and then economic science and so on. It’s not really exciting at university.
I’ve been teaching at universities for 15 years now I think and I do something similar like you Saifedean, I was for a long time now taught to self selected people who are really having a strong, personal interest in the Austrian school in, I would say it’s traditional interdisciplinary, realistic sense of really [00:19:39] understanding reality and not following some academic fashion. And the difference is enormous of course, I mean, the quality in this course is enormous. At my university classes I usually, I have like 10% of students who really have an interest in the subject. Some of those are very bright, no question about that, but really that the differences is enormous.
So, there is some, I mean some Austrians of course now realize that there’s an Austrian school and they are happy that there was a Nobel Laureate, but that’s very dangerous in what turned out to be very dangerous for Hayek. Hayek’s worst mistake in his life was to come back to Austria. Because of course they were happy to have the Nobel Laureate teaching in Salzburg again, and to make Australia great again basically. But what happened is he became isolated there and really cut out by his colleagues and it was the worst time of his life. He spent a decade or so, lost decade and then moved on to Germany, at least where he improved a bit because it’s larger. I mean, the Austria of the time, you have this [00:20:39] nationalist conception of the small nation state and social democracy. It’s really very narrow, very narrow and very narrow perspective.
The Austria of today is a bit more open and cosmopolitan, of course. And in Vienna you have a lot of expats and Vienna is still an amazing city from because it’s survived relatively unscathed, the second world war bombings. So it looks like the old Vienna largely to a large extent and it’s an attractive city.
So lots of people and bright people come here. So it feels better than the Vienna of my childhood, which was still very, very narrow and very close to the iron curtain was the last Western city before the iron curtain. So a bit of it improved in a change, just being more open to the global mainstream, but that didn’t really help in making it an exciting place for ideas.
We have some Institute because of lots of money it’s happened to be lucky to be on the Western side of Europe. So it’s wealthy society, but most [00:21:39] of the wealth is just the credit of the government, which is the credit of the taxpayer. So the Austrian government it’s financing itself as basically zero cost in endless amounts. So it seems like it’s very wealthy. So there are lots of well funded institutes and even Austrian school gets funding like there’s a Carl Menger prize and so on. All very mainstreamy, all very, oh we are so happy they were Austrians, but no real serious interest in what they’re doing. I think it gets worse now because of course we import everything.
Second handed and wokeness as well is reimported. And it just plays into this kind of lack of courage of people working in the legacy institutions. They are very afraid to speak their mind, very afraid to be canceled. And that seems to be getting worse at the moment at the same time as a bit of a counter reaction, of course it’s everywhere.
But at the moment I’d say, Austrian academia, but European academia generally is quite hostile ground for anyone who’s really [00:22:39] interested in understanding what’s going on and would like to speak his mind, be clear about what’s going on. And I think that’s one of the crucial importances of the Austrian school.
So, sorry that there was a long answer to your first part of the question and then what I am doing, I mentioned a little bit, so I learned from what I thought were the last representatives of the Austrian school in the direct tradition, Hans Herman Hoppe became my teacher. And Roland Baader. Roland Baader was the last important student of Hayek, in Germany.
It was Hayek then, after the seventies, after going to Austria, then basically worked in Germany. And so Roland Baader was an entrepreneur, very unusual again, but a student of Hayek. Academic, but he had this realistic entrepreneurial experience. And he was an amazing person.
He was very prophetic, he understood the relation between bad money and morality very early. One of the earliest who understood the things that Saifedean [00:23:39] now is writing about, I try to write about and communicate a lot of really the moral ills of our times have a link to an unsound monetary order.
And Roland Baader was very influential in that. And I was happy to have him as my teacher back in Europe. And I’m still happy to have Hans Hoppe as my teacher, he I’m sure, you know, he married a Turkish woman later on, so he’s based in Turkey now. And he has this great conference for 10 years now I think, in Turkey, where he tries to have kind of saloon like experience Mises like experience.
And then I happened to move back to Austria and then live in Austria and started a family in Austria. Oddly enough with a middle Eastern woman from Lebanon as Saifedean. And I started teaching at university, but at the same time, I was very active in trying to revive the tradition.
So in the early beginning I felt like I was the only one, the only crazy odd one out. And then over [00:24:39] time, of course, I reach people and they’re like minded people, and we can get a quite large groups now. We have amazing events in Vienna every now and then, we can reach hundreds of people coming together who really take an active interest in Austrian economics, have been studying it for a long time now. And so I started the Scholarium and always called it as the thing that university should have been, but was never allowed to be. And I think what’s the good thing that we associated with the universities, being a hub where bright people who want to understand what’s going on, come together, have a free exchange, are not afraid to speak their minds and really come together to learn from each other.
And that’s very different from the curriculum organized university that I have happened to know while teaching because one problem with the curricula and the testing, of course, you’re more or less, you have to formulate truths five years before you teach them. And you examine people, which is crazy, is you’re always [00:25:39] behind time in particularly in the dynamic of things of economics.
So it’s always out of date and there is no intellectual exchange.. Now in the 15 years I’ve been teaching at university I think I’ve never had a meaningful debate with a colleague. It’s always just either small talk or administrative bureaucratic stuff, like who gets to teach what, and who gets which hours and which room they’re using and which committee you’re on and all that shit.
And it’s very interesting I think. I still do a little teaching. I’ve reduced it already just to, because every now and then very bright young people are at university and you can have an influence on their life decisions. And it’s fun to see what’s going on and what bright people think when they enter those careers to keep a track what’s happening there.
So the Scholarium has been around for, I think, 12 years now, and it has grown very organically as a small institution for Australia is a pretty large one I’d say, because Austria is very small. I’d say it’s a small, [00:26:39] private educational and research institute trying to preserve and revive that tradition.
And it helps that we are in Vienna because by being there, it’s easy to reimagine what it was like. And it always pushed me into looking more into the roots, the historical roots and understand it as a tradition that you have to pass on.
Saifedean Ammous: Yeah, I think you and I share a very common experiences when it comes to dealing with Fiat academics, what I call Fiat intellectuals.
Yeah. You’re absolutely correct. In the university, there’s very little intellectual output taking place. There’s the bureaucracy and the administrative stuff, which is an enormous waste of time, because today it can all be organized by software very quickly and very easily.
But instead, in universities they end up doing in the least efficient way. And there’s a kind of, it’s almost like a self-important attachment to all the rituals of doing in the way that it’s inefficient, because you know, it kind of substitutes for the lack of content by maintaining the rituals.
You know? So we’re acting like university [00:27:39] professors did 100 years ago. So hopefully people take us seriously like they did 100 years ago, but of course, they weren’t being taken seriously because they had to do the bureaucratic bullshit that they were doing. They were doing the bureaucratic bullshit because they didn’t have internet tools that could allow them to do that.
And the reason people remember them, the reason people have respect for that output was not the bureaucratic bullshit and the rituals and the robes. It was intellectual output and that’s, that’s really the sad thing. A few weeks ago, we had another guest here with Allen Farrington, we were discussing Fiat intellectuals and, in my book, the Fiat standard, I have a chapter on Fiat science and basically how under a Fiat system the argument that I make is that you are assigned… the people that are paying for the research today are government bureaucrats. It’s not the private sector primarily, and it’s not, or at least in the universities, it’s not the private sector, it’s not the students. And it’s not individual [00:28:39] donors who are donating to universities to produce research about things that they want.
The majority of money comes from government. And so if it comes from governments, it has to come from bureaucrats. And if it’s coming from bureaucrats, they need something to go by. They need to make their decisions based on something. And so of course they need metrics and the publication industry basically convinced the universities, took over the function of university promotion, the university criteria for people to get promoted and for people to get their jobs, it was all based upon publication in these journals. And then these journals, that’s a small clique of a few big multinational companies that control them.
And so we have a system which overproduces scholarship in terms of numbers. There’s an enormous number of journals. It’s an absurd amount. There isn’t anybody who could even, if they decided to do absolutely nothing in their life, there’s nobody who could keep up with all the journals in economics.
Like there’s just not enough days [00:29:39] and hours in a year. Even if you don’t sleep, you can’t read everything that’s being written in economics journals just this year, you know, forget about everything that was produced last year. There’s hundreds of journals and they produce buckets of new research.
So, there’s an overproduction of the metrics that matter offering so much, so much is at stake for those metrics. If you produce papers, you get promoted, you get a job. You get tenure. It’s a big deal. And there’s no opportunity cost because it’s not like, you know, the funding is coming from somewhere where somebody has to make an opportunity cost for it.
It’s Fiat. And so the bureaucrats who are writing the checks, you just need to convince them that your thing is better than nothing. And then they’ll give you the check. You don’t have to compete against another use. It’s not like there’s a company that’s having to make a decision: should we give money to this researcher? So he can answer this question or to that research so that they can answer that question? Or, you know, should we just build [00:30:39] a new headquarter for ourselves or get a new power plant or give scholarships for students or whatever. If you have an actual, a private sector entity, they have prices.
They have to perform economic calculation. They need to be responsible with the way that they assign it. But when you have somebody who’s assigning it without any opportunity costs, of course, the tendency is always to say, yes, I have to give more funding. So you see university funding continues to grow. And as a result, of course, publications continues to grow.
So professors get jobs. And more funding is being given to universities. So universities get bigger, university administrators make a lot of money while the university professors are slaving away to make peanuts. And then of course the real winner in the whole thing is the publication industry which produces reams and reams and reams of papers that they sell to the universities themselves for enormous amount of money.
So the universities are basically getting screwed over twice. They provide the researchers who do the slave labor for free to publish in those [00:31:39] journals. And they edit them. They review the journals and they produce all of this mountain of scholarship that nobody reads and then they pay for it. Anyway, because if you want your university to be ranked well in the university rankings, you need to have all the journals subscriptions.
And the journal subscriptions come from with the publishers who are at least best friends with, if not the same people as the people issuing the university rankings. So the whole system is geared toward more and more scholarship in terms of papers, more and more scholarship measured by quantity and less and less scholarship by quality.
Less and less concern for quality. So, there’s just simply no room for going into university and doing interesting intellectual things. If you try and do that, or as I mentioned last time, if you try and act as a good teacher, you’re trying to teach interesting stuff, you’re sacrificing your ability to produce journals.
And so everything is so efficient in terms of competition, that the only people who survive are the people who are able to just keep [00:32:39] producing all of this meaning-free, politically and grammatically correct, endless reams of paper, basically that just get published. And it’s very much like honestly, the university feels like a menial job site.
You know, you’re working with people who are really working menial jobs in a sense that they’re just typing a keyboard in order to make more papers. But there’s very little intellectual output that’s actually coming out. The papers are more about really intellectual donkey work, let’s make a hypothesis and then let’s run a bunch of numbers and run a bunch of equations and conclude what we want to conclude.
Keep the data that we like. And don’t look at the data that we don’t like. And then we publish it, you know, so formulaic, it requires very little thinking and it’s just donkey work and you need to keep producing more of these, you need to do three, four, five, six every year in order to keep getting promoted.
So good luck trying to find the interesting intellectual conversation there. It’s an amazing [00:33:39] thing that we have the internet now, because we can do things like this where we can actually have interesting conversations that can actually stimulate you intellectually, which is a fascinating thing.
Rahim Taghizadegan: You have any idea? I mean, maybe something briefly the history of Austria, again, it was this overproduction of scholarship you called it, of course at the time, very much smaller part of the population. But Austrian universities before first world war turned out, basically bureaucrats for the empire and then the empire disappeared.
And you have a lot of academics and teachers with no job opportunities. So what do they do? They turn into fervent national socialists, in order to claim for a big new state that will employ all of them basically you can really lead back some of the intellectual catastrophe is leading her to second world war two.
This overproduction of wrong scholars easily produced for a bureaucracy.
Saifedean Ammous: That’s a very scary thing to think about because we definitely have a massive overproduction [00:34:39] of bureaucrats in the current Fiat regime, in the current Fiat empire there’s an enormous number of people who do intellectual donkey work and have important titles, but don’t really produce anything of value on the market.
And if there is a free market system, if the system becomes more of a free marketplace, these people are going to have a very, very hard time adjusting to the labor market because they’ve basically never really had a real job.
Rahim Taghizadegan: Yeah. That’s why I think you have to take into consideration those kinds of economic interests, even without being a Marxist. And, I came to the conclusion that it really makes no sense to try to argue with those intellectuals would really, you would not allow them to have those job opportunities they think that they deserve. So I turned my attention now, and maybe there could be a bridge to our second subject, to the free private cities project.
I was involved with a very early age. I was involved in party politics even, and I pretty soon learned, what that’s all about. And then over time I realized really it makes no sense to [00:35:39] try to argue. So I really agree with the saying, don’t try to reform, try to build, don’t argue, build. And I think that’s particularly true for institutions.
I realize it makes no sense to stay in university and try to reform university and make it better. No chance. The only chance is with building something better and then getting some traction. And we can see from history, how very tiny minorities could change a part of history, particularly by using technology, but also by being first being role models, being pioneers, because what we believe in part of the tradition of the Austrian school, it is that there’s a reality.
It’s not just wishful thinking. So sooner or later people will want to fulfill their ends and they will look for better means to achieve their ends. It’s amazing how long they can be fooled about means, but still in the long run. So that’s why I’m not totally pessimistic. I’d say I’m optimistic in the long [00:36:39] run, very down to earth in the short to medium run to say that way.
Politics in the sense, living together and which rules we used to live together and how we find each other to cooperate and to interact, that’s all the good side of politics. And that’s what draws people to politics, because they’ve got a feeling that somehow it’s about the rules, how we live together and how they should be improved or can be improved.
And I think if we have a very down to earth economic perception of it, we can look at it as an industry and say, there are really bad providers with very little competition and very little incentive to innovate just as we’ve seen in the financial legacy systems before. And just as we’ve seen with Bitcoin as a technology solution, ridiculed by most, for most of the time and still now, but gaining traction by superiority of being a means to achieve ends. So I think it’s very closely related to that situation. And I think the whole story [00:37:39] of Bitcoin made me more optimistic about this kind of change. And that’s why I turned my focus over the years. And it’s only now just a month that I’ve taken over as president of the free private cities foundation to turn the attention, bringing back a little bit of maybe the learnings we have seen and how the financial sector could have been shaken by innovative solution, which were very hard to predict in the beginning that it would turn out like that. Really making use of the opportunities that the internet offers us and failing of institution pushes people into looking for other and better solutions.
And we’re seeing that in politics, we have a very big hype now in the free private cities field, lots of projects, lots of people. Interesting. A lot of people in Europe, but elsewhere pushing, thinking really hard about immigrating again. And it’s the brightest a lot of German investors, entrepreneurs now thinking about [00:38:39] leaving Germany, even Swiss people thinking about not necessarily leaving their home, but having alternative basis somewhere and contributing to finding like some islands of sanity, if the whole world goes crazy. Because it’s really the feeling that it can be very small projects and initially ridiculed minority things that can have a tremendous impact if they approve a better way of doing things and handling things.
And I think there’s so much lack of innovation and competition in that field, that I’m pretty bullish about that industry as well. And I call it the industry of living together.
Saifedean Ammous: Yeah, I agree entirely. And I think it’s astonishing how debilitating it can be for people to just believe in the idea that this is the system.
This is what we have and therefore you need to be within it. And so, I look at myself in terms of just how much work I used to do for a university system. Now, I really enjoyed the teaching part of it, but the teaching part [00:39:39] became an increasingly insignificant part because you have to be publishing. And that’s just excruciatingly painful and pointless and silly because most of the publications, nobody reads them. And, the publication process takes forever and it’s hugely wasteful. The point of it is to produce papers, not to communicate the information. And as long as you’re stuck in it, you’re constantly thinking of just how much you can get out of it.
And you can’t think of you getting out of it, you know, just you leaving it. Then when you think about it, I think, you know, learning Austrian economics is itself very helpful here for me individually because when you see something as wrong, you realize, as you said, it’s wrong, that means it’s creating a mismatch between consumer and producer.
They’re not giving each other something that they want. There’s something bad there. That means that there’s an opportunity to be able to draw the link is, in today’s world can be a little bit difficult to figure out that, well, this thing is corrupt. You can keep complaining and moaning and trying to reform it.
And, maybe you can spend another [00:40:39] 40 years trying to get to the top of the system and then you can start implementing changes, or you can realize that something being broken means that what it’s supposed to do is under provided for the market. And the market is not able to provide people with what matters.
This is a frame of mind that Bitcoin exemplifies, which is we are done trying to lobby for a gold standard. And we’re done trying to convince Keynesians that you don’t create economic growth with printing money. And that’s it, you know, keep doing it, keep doing whatever you want. We are just going to do something else different.
I think my website is an example of something like that. And I think it’s been massively successful in the sense of I’m able to interact with a lot more people, spend a lot of time interacting and learning and teaching. And it’s far more rewarding when you’re able to serve more people, rather than spending a lot of time doing things that you don’t want.
And of course the free private cities is another example. So tell us a little bit more about how you guys want to break out of the nation States with free private cities.
Rahim Taghizadegan: Yep. Free private [00:41:39] city movement really was started by Titus Gabel who was the German entrepreneur, very successful in the mining industry, not just gold mining resources industry. And what’s similar between this industry is that mining industry is a very long-term capital intense industry. And of course, as being an entrepreneur and really being very successful in that field he realized, with all the political ills that he looked at, that there must be something to learn from how the market works or should work.
And, his idea was to open up a space for even legal innovation, but not do it in a sense of utopian community experiments, but have the right economic incentives. So you want to have entrepreneurs have skin in the game and people risking their own money on more or less taking a bet if their solution and what they provide can be a better solution that people voluntarily accept as customers because it improves what they get for the money.
[00:42:39] So really you want to replace that kind of taxation without a responsibility for what you get in return, because most people think they pay taxes and they get some kind of government services in return, which is a ridiculous packaging of very different things that really boil it down to what are the services that people expect, that are looking for.
What is a reasonable fee they will be willing to pay. And how can you compete in that field? And then he realized, well, it’s the biggest industry of all it’s three times the size of the energy and the health sector, the biggest second or third biggest sector and 90% of providers are losing money. You look at all kinds of governments, 90% are losing money. And, so it’s very odd. And it shows there’s a lot of economic…
Saifedean Ammous: Hang on, where’s the 10%? Is there any government that’s not running the deficit anywhere?
Rahim Taghizadegan: Yes. Yes. There is pretty small governments like Lichtenstein, for example. So you have some very small, but those governments are the most [00:43:39] closest a like what the free private city would be. Now, I’ve been teaching Lichtenstein, for quite a while and then being to Lichtenstein a lot. And I know the Prince personally and he’s very much like an entrepreneurial personality who takes a personal responsibility in the wellbeing of the people living there, not as a patriarch.
But as that, the whole family has been amazingly successful in investing and in increasing the wealth of the family and the country. And it’s very closely aligned links because the wealth of the family very much depends of course, on the wealth and development of the country. So you have that kind of incentive alignment.
Long-term thinking because it’s really a legacy. He wanted to pass on something to his son who has taken over. Now all the operative duties as the Monarch, it’s not a medieval kind of monarchy. So it’s a very modern business men like person who is very highly respected by the population.
He’s not interfering a lot. I would say unfortunately, sometimes because Lichtenstein in politics is as [00:44:39] bad as in other places, it’s just that small that they can do that much harm. But overall it shows you it’s not that they are small, it’s because they are small. It’s possible to have a closer link and better incentives for the institutions and structures because basically everyone, almost everyone knows each other.
So it’s really, it’s so small that it’s almost everyone has shaken the hand of the Prince once. So it’s very close. If you would be an oppressor, the dictator, of course, you can’t protect a person like that. So it’s very much a consensual agreement I’d say. And of course, lots and lots more people would want to live in Lichtenstein then are allowed to live. That’s politics, in Lichtenstein they want to preserve it as a kind of agriculture looking valley like community, with low density. So it’s really hard to settle there. You have lots of Austrians working Lichtenstein’s, but they are not allowed to settle there. So they have to move every day across the border.
So it’s one of those examples. And of course we can learn from the Titus has lived in Monaco for long [00:45:39] time now, and he saw that you can improve upon Monaco, but of course, Monaco is such an improvement to most packages that you have in Europe, and then realizing by living there wow there’s so much room to improve so much potential.
And the economic value attached to it is so large. It’s an industry and someone would better sooner than later, take the risk of trying to be pioneer in that industry. And of course the different ways to go about it. His perception is to really have an operating company with a stake and responsibility and strict contractual relations so that you can’t just change something. You can’t just claim a new danger of which you have to protect all of your citizens. If it’s not in the contract, you don’t have any right to impose anything. Then you’d have arbitration. Then you as a operator, you’ll be before a court or arbitration mediation court and trying to figure out, are you fulfilling or are you breaking your contract?
And if you’re breaking your contract, of course, there’s no binding agreement [00:46:39] anymore. So you have no whatsoever to impose policies on the people. Of course, a lot of it is in the details and there’s been some concrete things realized the free private cities foundation was important in moving the charter city ideas in Honduras onto some concrete, new, innovative, legal arrangements. It’s about Titus origin as a lawyer. So he focused on that. What could it look like? How could you make best use of the legal autonomy that was granted, to the charter city idea of Paul Roma? And of course the charter city idea was a bit problematic in the sense it was perceived by most people as being a colonizing plot, because you have the idea by Paul Roma is that you have other States basically granting the special status.
And he thought they would be like Western States you’d have Germany, because it’s so [00:47:39] great and such a good political order will more or less be the grand tour of a special sewn in Honduras. I think it’s great that he started the debate thinking about alternative ways, in a way, push the Honduran development in the problematic direction that got a lot of backlash by people who were afraid that it’s kind of colonizing, it’s bringing back the banana state, it’s the U S using that autonomy and so on.
And it’s really not about that. Again, one has to say it took more than 10 years. There is a law that provides that. That’s why Titus and free private city just started first in Honduras with developing something on the ground, learning on what you can do, and what’s the possibility there. But now we’ve moved on to new projects, other projects that are in development.
And the general idea is that you first negotiate with the government. And of course there’s a downside, that’s obvious, but again, it comes from the approach of the mining industry. You don’t want to [00:48:39] risk something very capital intensive, very longterm if you don’t clear up the situation in the beginning.
So you want to have concessions which have long-term, which have very, very deep legal anchor, then you’ll start developing something and you use, of course, that interests. In particular, the sorry, the term shithole countries, which have tried and tried, and haven’t been able to attract investors because it’s not just about lowering taxes and building a nice airport. It’s of course, a trust that you don’t have, it’s the stability that it can’t provide because you’re corrupt.
That’s why a shithole country, everyone tries to enrich himself in the short term and that’s where really there’s the potential of a special administrative zone, because we know a special economic zones is a huge industry, thousands and thousands of them. Most are failing.
Most are not attracting kind of investment they expected to, to the Chinese model and so on, but it’s already things that governments know. They know that there’s the [00:49:39] potential getting investment by giving legal stability for particular regions, which are tax exempt, which are customs duty exempt. They already know that concept.
And now we try to build up on that and try them to understand that the need to offer more. Learn a little bit from the Emirates. The Emirates did some of that in their sewns. And of course they’ve been amazingly successful. It’s incredible as well. Some of the wealthiest, most cosmopolitan society are in the Middle East.
Very odd. If you look around, I think those are success stories, of course not perfect success stories. That’s obvious, talking about politicians, but that shows us how much potential is there. How you can go from one generation from a fishing village to a global metropolis and how much economic value can be created just by providing that space, that innovative legal arrangements for investors, for entrepreneurs to just create value.
Saifedean Ammous: Yeah, I think that’s a very [00:50:39] good way of putting it. So I guess, Dubai doesn’t really get mentioned often in this regard, most people still have the idea that Dubai is just a place that’s running on oil wealth, like the rest of the gulf, but I think that’s not at all true.
And in particular, after a Hong Kong returned to Chinese sovereignty, Dubai’s rise was in… and I heard the Titus Gabel from the free private cities foundation. He mentioned, this is essentially what Dubai’s advantage has been is that it is presented itself as an alternative to Hong Kong running the same kind of regulatory and rulebook for investments in particular, that was there in Hong Kong, which is based on the city of London code.
And so some people, when they hear free private city, they think there’s a bunch of pirates that are going to try and fight the government off. But in reality, it’s like a special economic zone, but I guess what the free private cities are doing a little bit more, which is it’s not just give us a little bit of a concession for a low taxes and low custom duties.
It’s let us set the entire regulatory environment and let us set the legal [00:51:39] environment for this one particular zone. And we’ll do it with the formula that has been more or less tried in London, Hong Kong and Dubai. And these are three very different places in the world and Singapore as well. Yeah.
Three very, very different places in the world. Different weather, different climate, different cultures, different language, different religion, everything. And yet, you look at London 100 years ago, you look at Hong Kong 50 years ago, and you look at Dubai today. Essentially this kind of model works.
It works in all those settings. And, it’s been a huge boom for Dubai because it’s established itself as a business center in the world. And little few years ago, it was surprising for people to think that while Dubai is now a global city, like New York and London and Paris, but I think over the last five, 10 years, Dubai is in a league of its own.
You can’t really compare it to New York, London, and Paris in terms of, on the one hand, the legal environment and the regulatory environment and the tax environment. But I think [00:52:39] also related to that, it’s just the quality of life, New York is dirty. It’s filthy and it’s not organized very well.
And Dubai doesn’t have that. Everything is sparkling clean, everything is new, everything works, everything’s organized. And I think that there are a lot of lessons to be learned there about why is it that it’s possible to keep the streets clean in Dubai, but not in New York anymore.
Rahim Taghizadegan: Yeah. And most people have very wrong perception.
They think Singapore and Dubai are clean because they’re authoritarians. I don’t think that’s true at all because in particular where they’re successful is really having not the authoritarian structures imposing legal standards. In Dubai, they have British judges, so it’s not that all the Emirates families are imposing things on you.
It’s created by property developers. And it’s driven by wealthy people who prefer the streets to be clean and they figured out it’s a very easy problem to solve. So let’s have it solved and you have entrepreneurs solving it. It’s not [00:53:39] really that you need a lot of punishment and authority to keep the streets clean.
So there’s a very wrong perception. Of course. I mean, Dubai has its downsides and not the place for everyone the same Singapore. It’s not that we hail a kind of utopia there. It’s just, we want to learn from what has worked for most people, and understand what are the places that people want to get into.
And one of the places that people want to get out of, and what’s the difference, in how you can really bring the kind of improvement through innovation and competition to that what matters most to most people, and that’s their surroundings. It’s a place where they start a family, where you have the children grow up and feel safe and secure and able to prosper and create value for other people.
Saifedean Ammous: Yeah, absolutely. I agree with that entirely. And I think the more that I think about these issues, whether it’s through the influence of Austrian economics and people like Hoppe, or thinking about Bitcoin, on the one hand you could say the form of government itself doesn’t really matter.
So you don’t really care if [00:54:39] it’s a democracy or if it’s a Republic, or if it’s a monarchy, because what you care about is if it’s about protecting property rights and that’s ultimately what it comes down to. So the choice of moving to Dubai means, all right, you don’t get to vote and you don’t get to have the same degree of freedom of speech perhaps that you might have in the West.
Although I know, I would say after the coronavirus crisis and the way that entire doctors were being just black hold out of the internet for recommending the wrong drug. I think the notion that free speech in the West is such a big catch as becoming less and less tenable. But in any case, there are some traditional vestiges of Western democracy that you would think of as being worthwhile, but really how much worthwhile are they and your vote?
When the alternative is you get to have a place with a clean street and the safe streets where your kids can play in the street and you don’t have to have [00:55:39] helicopters hovering over them to secure them. And, you also don’t, you don’t really pay much taxes. You pay, what is it in Dubai 3%? So 5% or something like that,
Rahim Taghizadegan: just a value added tax.
Otherwise it’s zero, zero income tax. Yeah. Yeah. It’s just value added taxes. Zero corporate tax. Yeah. Even for investors and entrepreneurs, let me add something, of course I still live in Austria. I’m very mobile, usually traveling a lot, spend a lot of time in Middle East and Asia throughout the year, unless there’s a crazy pandemic or crazy reactions to a pandemic as we have right now. But of course you can still have a good life in Europe and most Western countries. And what most people assume are the vestiges of a democratic system, really our cultural capital. We just don’t realize where it comes from and how so much was in the taking how long it took to build kind of cultural capital.
And you can’t of course get it from scratch immediately. Even if you have the perfect legal [00:56:39] structure, won’t emerge until other then people moving there and bringing with them, their morals and mentalities and so on. The question is really about the tendency and now most Europeans, and there’s a lot of surveys on that have the unconscious and the more and more conscious understanding that their children will have a worse life than they themselves are having.
And that’s really a bad sign. And it gives you that impression. I mean, there’s no doubt for most people it’s quite safe and aggreable life that you can have now in Europe, unless you really want to be a legacy entrepreneur in certain areas there you’ll be very masochistic instead of remaining here.
But yeah, I think people associated with kind of democracy and free speech and the rule of law and so on is really more cultural, anything is not really institutional. I think it’s abused by institutions. They take that legitimacy, that cultural capital and usurp [00:57:39] it in a way, they usurp it.
And after the media, because media is very, they’re very conflated in their ego and in the U S but in Europe, in particular, they think they are protectors of democracy. Now the fourth column of a democracy. And of course, there’s something to say what the cultural capital is that it’s a culture of people reading newspapers of a small citizenship, of a citizens of people who are informed, who want to be informed, who have people write about difficult subjects, and there is still something to that.
Of course, you have a higher level of debate. In most parts of Europe, you have people that are trying to be informed a very well-read. You have a kind of culture of people meeting in salons still, but. It’s reduced, it’s getting narrower and narrower and the tendencies are important there. And I think it’s really usurpation by journalists who usually have no clue about anything other than they’re journalism degree, which is really nothing at all.
And are so conflated that they think they somehow have to [00:58:39] protect the stupid population from their stupidity and be enlightened by these amazing intellectuals that are mainstream journalists, which is ridiculous. If you look at the menial jobs again, they have really usually jobs in Europe are really bad, barely paid frustrating.
I have got to do a lot with journalists. I’ve had a few best sellers. I’ve written a lot of books and a lot of on TV, radio in Austria. And usually they are really unhappy people, really frustrated people in private. Nice people, but they can’t say what they really think. And stuff like that, and you have the same, of course, with politicians who usurp that what the positive thing of democracy is having an active citizenship, people who in a way, want to live together with other people on the same level, they want to have someone who’s above them, telling them what to do.
They want to find an agreement with other adults whom they respect and who they can live peacefully as neighbors together. And there was the great part of the, I say a Renaissance democracy [00:59:39] of the cities of the city States, where they really had the kind of autonomy by a population who perceives them to be autonomous because they set the rules for themselves and that’s what’s conflated with democracy.
So that, of course, there’s something positive in that, in the tradition. And you still have remains of the tradition in the Alpine room. I’ve written a book on the Alpine traditions, there’s a lot of cultural capitalists people getting together and finding peaceful ways to cooperate and they are calling that democracy now.
But basically it’s just farmers finding arrangements, a consensual arrangements, and that survived in parts of Switzerland, parts of Austria as well. Just people getting together on the same level and no coercive relations. That’s what the positive thing of democracy is about. And, but most Europeans really have stopped understanding the history and intellectual traditions and are just copying, basically let’s make the world safe for democracy American line, without really understanding what [01:00:39] democracy is supposed to be.
And basically it’s this game. It’s a con game. I’d say of people trying to hide their vested interests by claiming that they’re part of a democracy and very important for that democracy. Yeah. I think there’s a lot of things that you can improve there and a free private cities in that sense, they are democratic very much more democratic because it’s all about the contractual consent of people living together in a neighborly, peaceful fashion, and having choices, adults in what kind of agreements they enter. And of course, being able to cooperate together and find rules that are fitting their values.
And we think there’ll be a lot more diversity. I think there’s even a room for socialist communes. I have no issue at all. If people want to live in kibbutzim, I just know as an economist, that will be a tiny minority and what the downsides of those are. And I try to teach people to really understand what they’re getting themselves into.
But I [01:01:39] think that kind of thinking about innovation in the field leaves much more room for people to find that what they associate with democracy, that kind of alignment between their values and the people and how they live together. Obviously seeing a lot of hype in those intentional communities of people trying to find like-minded people to live with.
And I think part of the Bitcoin citadel meme is that longing to live in an arrangement, which is much more in alignment with your values, because you have a more long-term approach maybe to life of a lower time preference you want to live with like-minded people. You want to find a refuge out of the short term, craziness around you.
And that’s part of it. It’s a longing for living with other people who are like-minded and then you can have rules that are really aligned with those values. And I think that’s a large part of that. And I think we can answer to that. I think it’s very, very important to answer it this way. Pretty much like the Bitcoin [01:02:39] citadel meme.
I feel that longing myself.
Saifedean Ammous: Yeah, absolutely. I think to go back to your earlier comments, I think it’s quite interesting. I have a similar idea about what it is that when people say democracy and they think that they like democracy, they don’t really mean democracy. And what democracy actually means democracy means, you know, 50% plus one get to do whatever they want.
That’s technically what democracy is about. We have a vote and then right is majority, majority makes right. It’s not might makes right. It’s majority makes right. And then majority makes right. And then right makes might. So then the majority can get to go and do whatever it wants. So democracy itself, doesn’t protect you from a 51% attack. If 51% of people want to kill 49% of the rest of the society, that’s perfectly democratic. The things that people associate with democracy that they actually like are liberal ideas, freedom of speech, property, rights, security, all of those things, which tend to be associated with democratic societies because we see them.
And because we live in a [01:03:39] democratic world with a lot of democratic propaganda, however, I think, to the extent that we see them in countries that have democratic system, my way of thinking of this is that a) these countries didn’t become rich because of their democracy. They got rich because of hundreds of years of capital accumulation, usually under a monarchy and, as you said, it’s the cultural heritage of liberalism that is existing.
And when democracy does a good job, it’s when democracy leads to gridlock in government. If you have a democratic system in which you always end up with, whoever gets, and that’s kind of how democracy works, many cases like in the U S for instance, where it’s pretty hard for a president to be able to get to do much, because there’s a lot of regionalism and a lot of different interests and trying to coordinate everybody into, getting into one president, you know, perhaps in the U S history the one example against this was FDR in the 1930s who managed to really [01:04:39] lead with a strong democratic majority. He controlled both houses and the presidency, and managed to really transform the country with the new deal and with all of these policies. And of course, if you read mainstream economics and mainstream political science, that was what saved the country.
If you look at it from a liberal perspective, from an Austrian perspective, you realize that was one of the worst thing that had happened to the U S the new deal was one of the worst things to happen to the U S. And in fact, the success of the U S is that it didn’t have many Roosevelts, and it didn’t have many new deals, and it didn’t have a lot of politicians able to achieve this kind of a megalomaniac let’s transform society.
And let’s put things differently. That kind of stuff is far more common in democracies, American democracy, it’s saving grace is that it makes this very hard and even with a Roosevelt in American democracy, he wasn’t able to stay in power forever. He wasn’t able to put his kids or to appoint his successor and then end up building a one-party state.
Eventually they lost control after world war [01:05:39] two. And you had a little bit of a return to assemblance of normality. Although of course you could say, there was a huge legacy of the interventions that were done there. But yeah, and I think on another point maybe the question is for you in the free private cities, do you see yourself perhaps working more with monarchies than with democracies as time goes by?
Because with democracies, as Hoppe says the democratic leader is in power for a few years and their incentives are to maximize their take over the next few years. And they’re to maximize the benefits to the country over the next few years, it’s not just, you know, selfish.
That’s just a, if he’s going to invest in something for the people, it has to show up before he leaves office so that the people credit him rather than, he invests something and then it shows up 15 years later when another guy is going to benefit from it. But that doesn’t exist with a monarchy in a monarchy he expects his own grandkids and 500 years from now, he expect his descendants to be in power. And so he’s [01:06:39] likely to want to invest in something that will pay off in 15, 20, 50, maybe a hundred years and maybe free private cities or something like that, that might appeal more to Kings and princes.
What do you think?
Rahim Taghizadegan: No, I disagree. I mean, in the sense, of course I know the argument is from Hans Hermann Hoppe, my teacher, and I think it’s a good argument, but the argument for the longterm orientation of monarchy really is an argument about the importance of the family of the Monarch keeping a check on, because maintaining that, of course you have no guarantee that different arrangements in monarchy can always be the crazy Monarch who is not held in check by the family. And so it’s really about the cultural question. Then what’s the role of the family and that’s very different in different cultural settings, thinking in the middle East you have a little less control a part as it was in the Catholic parts, where there’s that the church intervening for the marriage side.
I think he had a bit more pressure also from how the woman can exit the marriage [01:07:39] and what it means. So very, very differentiated cultural things that then explain differences in the time preference that show in monarchs. I don’t think we’ll have more to do with monarchs because monarchy was losing out.
It’s only a remained that there are a few monarchies, but it’s not clear that they are monarchies in the traditional sense. Of course, Lichtenstein, isn’t really a monarchy in the traditional sense. It’s still what’s the Prince was able to do. And it’s because it’s a very small country and he’s very highly respected because the family made a lot of good business decisions, as well as he got, he offered the choice to the country and he said, okay, let’s leave some room, I understand that you want the kind of modern democracy and vote for your politicians. That’s a trend that I can stop. And it may be right. I don’t know, he didn’t judge it. He just said, okay, I propose to you that we see the princely family as a check, another power, another balance, but you [01:08:39] have a choice. That means of course, that the princely family has a veto power for certain questions, which you really go to the core of the Lichtensteinean identity, and longterm sustainability of Lichtenstein as an entity. And he put the choice to the population. He made a referendum and he told them, okay, if you don’t agree, I’ll move to Vienna, goodbye. If you agree, we’ll have that arrangement.
And the referendum got through. So you have a democratically elected monarchy, more or less that you have at Lichtenstein. And it’s very unusual. Usually it’s a ceremonial role. And of course, of the ceremonial role, you’re very much aligned. You care about your popularity. You care about how people perceive you and how you are perceived by the people as a kind of expensive public employee who is doing ceremonial stuff.
And then of course you have the other situation, partly in the Middle East, where it looks like monarchies, but it’s not clear that the families in control, you have every now and then strong personality who impose [01:09:39] themselves, you have the intrigues within the family. And then they select those that follow them.
That’s a bit autocratic thing, but I want to add, and I opened the chat and Daniel made a very important point about freedom of speech in Singapore. So I want to correct picture that free private cities is about creating new Singapore’s and Dubai’s, it’s about learning from Singapore and Dubai, because of course those are trade offs. And for many people they wouldn’t like that kind of clean surroundings in the sense that they are also cleaning the public. So you have a clean public debate I’d say. But I also have to add, most people have a wrong understanding of what life in Dubai and Singapore is like nowadays.
So I think most Europeans will be surprised to find that as actually in private, if you talk to people, it seems like much more freedom of speech. And I’ve been to Singapore, I’ve been to Dubai many times. I have the impression that there’s a broader spectrum of opinions that you [01:10:39] can talk about, not in public, not out of writing letters to the editor and discuss with princely family and so on or with the party or politics, something like that.
No, you won’t do, but most people don’t care about that. So my wife loves Singapore. She thinks it’s a perfect place to raise kids. And I wouldn’t argue with her because she’s right. I’m not sure for myself, if I’m having grown up there would have been the right trade off for me, but it’s really about diversity.
Most people assume it means diversity in a kind of urban conglomerate. I don’t think so. I think some people really liked it and loved it, and they need the kind of public debates and variety and dirty streets there and dirty people there and just different people with all different kinds of styles and lifestyles showing up the kind of colorful cosmopolitan, creative, surroundings that some associate, I think too closely, with the institutions. It’s really some cultural [01:11:39] capital that it’s possible, but also it’s wealth.
I think it’s mainly to wealth. And that’s why we seeing the same thing. I mean, in Singapore, just the last year I was there the last time. And I haven’t seen such great bars anywhere in Austria that I could go to in Singapore and drink as much booze as I like, of course, much more expensive than in Austria, but the kind of bar culture and cocktail culture that I found there, it’s impressive compared to Vienna, which has a very long history of cocktail bars and is this kind of urban culture which arises to wealth. So I didn’t feel limited. I would feel limited if it’s really important to me to have the kind of public debate with other people and more variety in lifestyles and so impossible.
I wouldn’t want to push some kind of Singapore lifestyle on anyone. I think we need innovation and I think mostly diversity will come from different arrangement. I think we’ve seen a diversity within one settlement or community, and I think there’s always be space for the total [01:12:39] cosmopolitan openness, and it’s great.
I’m a more cosmopolitan myself, but I think that many people really long for a community, which is safe and clean. And you do the voting on things that matter to you. And maybe that’s how high the lawn is. It’s not my kind of lifestyle, but I’m totally fine with people choosing that. And that may seem oppressive to some people at some stages of their life, as it would seem oppressive to me to live in the kibbutz or in a religious society, like the Hutterites and so on. But I’m perfectly fine with people finding more niches and having much more diversity and variety and choosing from, because, we have to admit, we look at Singapore and Dubai because there’s so little diversity is because really we look at the exceptions and already they are very different from each other and very different from Hong Kong and other spaces and other places in history.
So what we really need is that kind of diversity of communities of arrangements. [01:13:39] And I don’t think that longing of the Bitcoin Citadel if you try to imagine that would look too much like Singapore, probably would have more of a cypherpunk aesthetics to it. And of course, aesthetic preferences are also a kind of values that you share with other people or don’t share with other people.
I think it’s better to be upfront about that. Realize what are your preferences, what you really care about the most and not do so much backstabbing politics because you don’t like the aesthetic someplace and you think it needs to throw over the government, because they’re all evil people. I really don’t get into fights, which are not productive and don’t have a realistic outcome. It’s really: build new options, try out things, and hopefully we’ll have more arrangements to better fit our very diverse preferences.
But then also don’t overestimate the diversity of preferences. I think the real issues most people care about are fairly basic [01:14:39] issues and not that hard to solve. And I think it’s really other kind of feeling of safety and not for everyone in every lifetime, but for people who have families, it does have something, some long-term interest in the location.
I think it’s a lot about problems that are not that difficult to fix. And then of course, once you have enough wealth and you feel safe enough, then you would get all these difference in preferences, and different restaurants and variety in diversity that still would cater of course, to add to your changing and different preferences.
But that for most people is a luxury. So I don’t think you can improve Venezuela by bringing urban diversity to Venezuela, or have more freedom of speech in the sense there’s just more journalists doing debates, which don’t make sense. I think this whole idea of a public debate, done through journalists expressed for journalists doesn’t make sense.
It’s not how people work. I’ve never experienced that to be very fruitful. [01:15:39] It seemed to work at the time, in the early 20th century or late 19th century, Vienna maybe. Where we have tiny elite of very well-read, highly educated people who met in the coffee shops and read five journals at the time and basically had leisure because of a very wealthy people for the time.
But it was an elite of business people mostly, who engaged, who had engaging debates. But it’s not this idea of everyone participating in a public forum. And every opinion is alike that you have to kind of relativism, which I think is overrated.
Saifedean Ammous: Yeah. And also, let’s be fair here. You said it yourself. It’s not like it worked out great for the Austrians to have all these people sitting there and philosophizing and being intellectuals in the coffee shops. And 20 years later, all of these people were socialists or Nazis or some variant there. So, maybe, maybe these things are in fact overrated and, Dubai might not have as much political freedom of speech, but look at [01:16:39] what people do and not what people say, and a lot of people still will choose if given the choice you go to Dubai, you get 20, 30, 40% pay rise because you’re not paying taxes anymore. And you get safe streets and your kids can play in the streets with their friends. Do you really have to give your opinions about what the Royal family is doing? How important is it?
Like there comes a point at which you weigh that against, me just making my opinion heard versus my kids being able to play in the street. And there comes a point of pragmatism where you start thinking about it. Generally, of course, I agree with you entirely, to borrow a horrible phrase from a horrible communist, you let the thousand flowers bloom and, we’ll see like, there’s no need to kind of get committed to any kind of mental model in this kind of setting where you can go to the city that is say highly conservative in terms of its say social norms and it’s highly conservative, highly tightly knit, but if you and other people want to do that, you go there. And [01:17:39] then other people who want to live in a much more liberal place where people are far more accepting of other people doing whatever they want, people can try and do that.
And we’ll see 100 years later, we’ll see which Citadel is thriving and which Citadel is up in flames. And, that’s the only way the world will learn. The world’s not going to learn what’s the right way from sitting there and reading mountains of newspapers and discussing it in Viennese coffee shops.
They’re going to learn by looking at real experience. And this is the exciting thing about the free private cities project. And yeah, I think the idea that you can choose to dissociate from people and associate with people that you like is extremely powerful. And I think it’s amazing and Bitcoiners have a lot of it, but having said that, as you said, I think, if you just fix the money, if there’s no inflation, then pretty much everything else sorts itself out.
You’re only left with like rules about how loud can you get at what hour of the night. Pretty much the people who want to live in loud neighborhoods [01:18:39] will segregate. There’s a lot of neighborhoods and people that don’t will not. And then, as long as there’s no inflation, that means the government can’t be played by one special interest for another.
And so, alcohol stops being an issue. If there’s no government policy on alcohol where the government wants to ban alcohol or the government wants to force people to drink alcohol, the government wants to subsidize alcohol. As long as you get that out, then most people don’t really care. They’ll drink or they won’t drink and they will care if you drink or if you don’t drink.
And that’s just one random example, but I think in most cases, people are able to get along without having to have very complex institutions to resolve their disagreements and differences. And I think the examples of people not getting along are massively exacerbated by Fiat money and by essentially turning the production of money into something that is in the hands of whoever is in power. And then it means that everybody has to fight for power because not being in [01:19:39] power means that you’re essentially being expropriated in order to finance others, whether it’s for things that you’re ideologically opposed to, or religiously opposed to… you just find yourself being taken advantage of in order to subsidize others. And that’s, I think the main driver of conflict, and that brings us to Bitcoin. What role do you see Bitcoin playing in your free private cities initiative?
Rahim Taghizadegan: I think without Bitcoin, that wouldn’t be free private cities. I think is a crucial infrastructure thing. Money is underrated in its importance for living together for cooperating, for creating wealth. And that’s what cities are about. Its nodes of cooperation of interaction. And if they are between foreigners and most people prefer to have the upside of wealth. That the division of labor, even foreigners brings them. Some people, of course, like the small autarky, kind of community and don’t need money. I think that’s overrated. I think it’s great to have more diversity there, but generally I think [01:20:39] it’s underrated how important money is and Bitcoin not only shows us a potential way of institutional change, but also it gives us an infrastructure for financing, for investing, for interacting between people.
So I don’t think it will be realistic, we wouldn’t be talking about three private cities now, if there wasn’t Bitcoin. So I think big, crucial, free private cities of course, I don’t think they’ll ever have national banks, even if they are very large, because it’s really hard to get there by just trying to solve problems and finding contractual agreements.
And somehow you happen off of the central bank with that kind of, free and really manipulating layer, the most important layer of human interactions. It’s this crazy. I don’t think you’ll ever get there. I think in very large markets you’d have something like clearing houses maybe and things like that, but then it’s much more likely there’ll be on a Bitcoin standard than some dollar which obviously it’s fading. I mean, it’s very unrealistic [01:21:39] to assume that the dollar will remain the world currency for the next hundred years, because in history it’s never been the case that you have world currency forever. And I think we’re going into a more multi-polar geopolitical order.
We can already see that everywhere. So I think there’s some kind of more neutral money, will play a more important role and thus feature very prominently in both new markets that will emerge in the new cities that will emerge in the future in the next hundred years. So you see I’m very fond of Bitcoin. I was very early attracted to Bitcoin, and I think it’s crucial. And I think it’s also free private cities is the only realistic way of achieving that longing for Bitcoin Citadel, it’s a meme. So it’s a longing, I’d say, but really turning that into something realistic, something that you can build in an entrepreneurial way and then create an entrepreneurial way.
It’s not because you know it all, it’s because you want to improve something. I think that’s one of the most promising ways to go about that. [01:22:39] So I think there’s a lot of synergies between those two ecosystem, let’s call it. And we are seeing that. We’re seeing a lot of interest from people in both with Bitcoin just shows how large this ecosystem goes about.
I think over time we learn which approaches will work out best. I’m pretty confident that this down to earth entrepreneurial setting legal or getting legal concessions, for really offering a kind of legal stability for innovation is the most important part, but as the foundation is a free private cities foundation, we want to be really neutral about ways.
So we get contacted a lot by people who want to create the eco communities, ecological communities, esoteric communities, that’s all fine. I wouldn’t overrate their economic importance. I think it’s very important for people to find ways to express that longing for community and not doing it in politics. You need these walls for utopian ideas and [01:23:39] longing for like-mindedness. And I think it’s great if people leave that zero sum political game and enter there, but I think it’s particularly important for people who don’t see markets as enemies, but as a way of interacting, who are not afraid of money, don’t hate money. Not talking about current money, but money as the institution, as the problem it solves. I think they’ll find the greatest value in that approach and that industry as it’s emerging. I think it’s a natural alliance and I don’t think it’s a surprise that I’m very fond of Bitcoin and free private cities.
And I try to be early in both industries. And I think it’s very similar in the sense of what we can expect how large that industry could be if the premise is correct, that if you open up a very large industry, which has been protected and wrongly legitimized and you have some innovation and space for technologically superior solutions, then just economic value is [01:24:39] immense that can be there in the size of the industry could be mentioned. The potential thus is immense, and it may pay off to be early, but of course, a very long-term thing. So I expect it over decades to develop somewhere where people will realize and see, wow, cities had been started at the time. And now we realize that they the city and we see the value created there and it’s ripens into more mature industry just to stage the Bitcoin is entering maybe now, then you get the institutional people entering it. And, you’re not ridiculed anymore or not that much by taking that or following that decisions.
And most people are followers. And in particular, in politics, most people are followers, they follow trends, and there is really very, a tiny amount of tiny minorities trying out something new.
Saifedean Ammous: Yeah, absolutely. Daniel, you had a question.
Daniel Prince: Yeah, sure. Right. Great. Great to meet you and brilliant to have you talking about all of this.
I’m sure [01:25:39] like myself, many listeners are thinking, Oh my God, I want to get on a plane and go to one of these citadels. Is there any free private cities up and running at the moment? Or could you give us, could you dangle the carrot as to like where we should be looking and putting more time and effort?
Rahim Taghizadegan: With the approach that we’ve chosen that’s really hard, because the first part is the hardest part and that’s negotiations with politicians and we all dislike the politicians and for the good reasons, because they tend to be corrupt, paranoid people. So you need secrecy at that stage. And it’s not because it’s some evil take over or something.
It’s no people assume if you have the secrets, it’s just, you want to protect it from politization of political enemies, of people. And you want to prevent increase of bribes and corruption and so on because of then of course people realize, Oh, there’s a lot of money to be made, I got to take a share of that. So we try to build trust with local populations and [01:26:39] local governments first, and really a personal relationship with people wanting to improve, and understanding that it doesn’t make sense to improve a shithole country on the national level, but wanting to have more role models that then can spread out. Spread the wealth and of course we can all improve that for history, how even Hong Kong, how much it has spread on us, how it spreads out. Only the hints of that. It’s not most people assume it’s zero sum. You have to free private city and it takes all the tax payers there because this is not at all true in history. We always see once your value creation spreads out and it’s like concentric circles around that. We find people all around the globe understanding that vision. That’s why we have this ambassador network of people who are really anchored somewhere locally, understand the society, the needs and how the politicians work there and figure out what’s a way which is not corrupt, which is not just things I’m finding a common ground where some politicians understand that there’s a hope, not just opening up a new special [01:27:39] economic zone because it’s boring now.
And it doesn’t really work that well, but hoping that leaving. Now, the projects that have reached the stage that they are public are in Honduras because the kind of political process has happened. But we’ve already learned from that how dangerous that political process can be because later on then some people realize, well, my God, I wasn’t asked.
I wasn’t proud of that. And of course you have governments of shithole countries, which means they are not transparent. They tend to be corrupt, but it’s never done in the way that we pay bribes. And so we try to be even more neutral. Now we have a foundation does not do that at all anymore.
There’s an enterprise arm . And Titus Gebel has assumed as president throughout the city’s foundation. I’m not taking part in that kind of political negotiations. So we’re very neutral. We’re based in Switzerland. It’ll be just about the concept and making it a reality and develop the industry early on.
And every one can take part in that, who feels he can [01:28:39] play a role. In Honduras now there are various early stage free private cities. The city is not a utopia. It’s not a perfect thing. It’s a local arrangement based on the possibilities of the Honduran law. It was the furthest developed one, so that I think so far best resolve in what the law could look like.
But even there, the politicians managed to enter something terrible in it. At the end, that’s just a common statist principle. How do you call it? It’s just the eminent domain. Which every state uses more or less and all mainstream academics, of course argue that it’s necessary for economic reasons that you have eminent domain, but they claimed that.
And now that’s taken as an attack point by the opposition blaming, Oh my God, those free private cities want to dissappropriate the native population because they have eminent domain in the law, not even granting a free private city, the rights, but the government has derived in order to set up a new, special [01:29:39] economic special administrative zone eminent domain in case it’s necessary.
Of course, no one from the site of the charter cities of the private cities ever wanted that, or wants to use that. But it’s politicians entering their statist poison everywhere, which you can avoid. In Honduras there’s on raw Tandy Island that was chosen for already two projects. Because it’s the best part of Honduras.
So of course, some politicians already claimed that, Oh, they take the best part of our country away, which is crazy. It’s the best part because it’s a holiday destination. It has its own cultural development, autonomous a bit different from the mainland countries, the safest part of Honduras. Of course, we want to start with the easiest part and not solve all the hard problems at once on the Honduras has a very, very high crime rate, murder rate, but concentrated in some cities, of course, which are dysfunctional, as most Latin American countries.
So that the Island is safe. It’s beautiful. It’s a Caribbean [01:30:39] paradise. And there are some sewns you read about Prospero, or you can read about Maurasom, which is on the mainland. It’s a development I find very inspiring and they are very different. So it’s not in the chosen. The diversity Prospera is more, I would say it’s a kind of tourist resort development, rather for wealthy expats, maybe, because that’s what the Island is. And of course the land there is relatively expensive and so on. And the Morrison development is a light manufacturing development for local Hondurans mainly. And this is a very different style of housing there. And Morrison is about building cheap houses for the local population or a company style like the pot Pata will, coach Kiki mentioned.
So I know those, and of course we have a long history of company towns and for some things they are good solutions. I don’t think they are utopias in any sense, but it’s amazing what has been built, philanthropy in a part in Europe. So there are still some amazing [01:31:39] aesthetically pleasing communities that remain from that short history of company towns. And, yeah, that’s more along those lines. And, then of course there are ongoing negotiations with other places and there are other initiatives I’d say a bit like-minded, but you’d never know how they go. There’s a lot of initiatives coming up and there’s a very broad range from the intentional community, to the smart city, big high-tech hyper modern scale developments, every kind of project.
We’ll see a lot of African projects, because of course, Africa is one of the places where you wonder about the problem of development and how developing aid has failed and so on. So I think that’s a promising crown that they expect to hear some of those places. Other parts of Latin America. We also had considered options closer to Europe, but it’s always, you can’t really talk about, then there are always issues and you can always play a geopolitical thing [01:32:39] out of it. So that’s the downside. It looks like secrecy, but it’s not because of the secret plot. It’s because politics is as it is. And most public debate is really just orchestrating mobs to get your interest through.
Then we’ve seen that in social proceeded in social media and so on. And we don’t want to play that game. So we also don’t care that much about mainstream media discussions. They really get it wrong. I mean, it’s a lot of journalists have written about free private city projects. And it’s incredible how badly research, how totally mistaken already.
I mean, they write conspiracy theories and they claim they have to protect us all from the bad conspiracy theorists, but it’s really just badly written conspiracy theories about us evil guys, have plots to rule the world, which is crazy. I mean, if you look at the details and the people involved and you just look at the spins and you, okay, there’s someone spinning something to play [01:33:39] games for attraction or political games. We try not to care that much about it, but of course it’s hard to no, it’s the first time I’ve been teaching for 15 years writing public. I’m very outspoken. I’ve never been afraid to speak my mind. Now it’s the first time that I get associated with right-wing some kind of fascist things. No one ever thought about that because from my whole personality, from my style, from my preferences, it’s so odd.
It’s so crazy to assume that I have something in common with a fascist or totalitarian, but now it’s the first time to the free private city foundation and the projects they are that people bring up those stupid political labels and try to play their games. So that’s the challenge that we face here.
I hope that answers a bit the question. So, you’ll see some projects that are public, not all the projects that are public, of course, can be recommended in the same. Sometimes it’s really bad plot to have early publicity and you can have, of course also you want to have publicity [01:34:39] to the rich people.
But I think on our approach is better to really have something to show for, have really local people are engaged and not because then it looks like clueless people, who have a lot of time and money and just go to Africa and want to take over a country to play Prince or King and so on. And it’s not really not at all what we’re into. Nothing about those short term games, support long-term institution building.
Attendee: Yeah. Hi, Rahim and everyone. So I think, Rahim has answered part of my question, but, I was asking like, how would you prevent such people that are now harder to negotiate with from taking over the free private city after it being successful or something like reinstating their laws or rules on the same cities?
Rahim Taghizadegan: Thank you. Yeah. In the short and medium term, it doesn’t make sense at all. The things that as a security question, somehow can you withstand the military sovereign power as it is. So we don’t [01:35:39] think about that this way. And of course, history proves that the case. I mean, Lichtenstein could be overrun by Germany volunteer firefighting force, but it didn’t happen.
And the reason is mostly incentives and we hope that it’s really about not having an incentive. Of course, politics is not rational, maybe short-term oriented. So we really take into account being quite sure that the incentives match for the local population that incentives also match for the politicians and that what we build on in the longterm.
I think just the value creation. We’ve seen it with Singapore amazingly. Their wealth has led to making the Switzerland the same. It has become very expensive to innovate them. So you really think about the price and if it’s worth it, war is destruction and war without fear of money, of course you wouldn’t have that much destruction.
And so I don’t think that those shithole countries, has made that a neutral way. Nothing against the people living [01:36:39] there, but don’t have the kind of credit that, so usually the Wars you have there are two political ploys or a kind of civil unrest, which is to the dysfunctional institutions and trying to nationalize, which was imposed some ethnicity from above.
And we don’t think we’d have those kinds of problems. So we hope that mainly it’s economics, that answers for that. I think that history provides us with some ground for optimism there because we’ve seen in particular in Europe an immense variety of places which mainly held out to the trade off, which was always is how costly is it to destroy it and what to do you get from destroying it?
So we think at the locations we are looking for, we always hope that the weight of creative will really prove itself to be the best incentive, not to just destroy it because there’s not that much you can win. And of course, but we are very down to earth. So we assume that most people who would go there [01:37:39] and invest there are mobile people.
So I think there’s even a much higher incentive not to destroy it. So there’s a different thing from a rooted local community, which you can easily eradicate because people have lived there. They want to live there. And even if the Holocaust is coming, they’re still remaining there. But here we are talking about people who go somewhere where he wouldn’t have gone without the circumstances.
And of course can go elsewhere. If they are not treated well, they’ll go elsewhere. And they take their investments with them. And with the kind of economy and in particular, of course the financial infrastructure of Bitcoin, we are reaching a time where we’ll have more mobility and being less linked and captured in these legacy structures.
I’m optimistic that we’ll have technological solutions and and we’ll have the right incentive not to wage war. So it’s not about waging Wars. If governments, I think worse don’t come through [01:38:39] debt. It’s not really because it’s economic to pillage. It’s not because you can rob the wealth that’s there because most of modern wealth is you can’t just rob it.
It’s hidden, it’s in the minds, it’s in the culture capital, it’s in the financial infrastructure, which is more and more global in the cloud if you like. So that makes me optimistic that I don’t think that’s the likeliest development. Well, of course we can’t guarantee anything. So it’s always be high-risk things.
But also that your political scenario, I think it’s very, very probable that we’ll go into a multi-polar order and a multi-polar order always has need for neutral space. And I think there’s a big chance for free private cities. That it’s not in the interest of the cheap little powers that one of the powers assumes it’s sovereignty over those neutral things, because they need those neutral spaces like Switzerland survived the second world war more or less it’s because they needed it as a place to just shift financial assets, [01:39:39] state need to finance the Wars and so on. And maybe even keep their children and family safe while looting some other places.
I think there’s a lot of economic incentives that hopefully will answer to that.
Saifedean Ammous: Fantastic. Well, we’ve got one more question. And this is a bit of a pet peeve of us here. What happens when there’s a global hysteria about a virus and you have the world health organization telling you, you need to lock up your entire country for a year or two, just to be sure.
And people’s lives start getting ruined. What do you think are the, I know obviously it’s a complicated question. It’s a bit of an unfair thing to expect you to, I had hoped to avoid, well, I try to answer that.
Rahim Taghizadegan: Of course. Yeah. I think, I mean, it is situation now we would have had last year, I don’t think any contract would have specified that in case of a COVID pandemic, you can force people to not leave their homes. No contract in any free private city will have that in it. I don’t [01:40:39] see where they would have come from, unless they’d really be a community of people, very scared of pandemics, very prophetic in the sense that the next pandemic is just about to happen and we really need to lock up people to prevent it.
Of course people are different. And with this pandemic, I mean, we see a lot of conflict, which is only just a symptom of the deeper conflicts. I don’t think that the pandemic creates this kind of disunity. The disunity is there in this, how we react very differently to developments and every of different trade offs and we follow different people and their apparent or implicit expertise.
And we take their judgment and so on. I think in the long run, it’s more alike to the epistemological position that Hayek had the kind of division of knowledge and need to try to figure out and have you kind of evolutionary stains. So I would expect that we may see some communities that have contracts [01:41:39] specifically focused on avoiding pandemic risk.
Okay. And trying to learn from the apparent best practice examples of Taiwan and New Zealand. But once you try to really start following them, the mainstream narrative here and I’m not, trying to judge it, just saying some people honestly believe that there are some best case ways of dealing with a pandemic situation.
But I think in the case of where you really want to learn it and want to prepare yourself to be the next Taiwan in the next pandemic, it’s not about the political stuff anymore. It’s not about who’s panicking first or not is really about understanding the problem and the trade offs. And then you may realize, are we an Island like Taiwan?
What does it mean? What kind of digital infrastructure was too important? How about our people? Do we have a lot of people moving over the border because they work here or not? Or are we more an isolated [01:42:39] Island where people take longer flights to get there? You have a lot of details and then you realize, okay, the cultural situation of how people behave may play a role as well.
So I think already that kind of thinking about potential situations, how you would cater for that and the kind of institutions that you build and have and the enterprises that, but they have to cater to your fears, which may be legitimate, but then also see the cost expressed of catering for those fears.
I think we have a much more down to earth discussion and sometimes that discussion really ends in “we agree to disagree”, but not in the real relativistic sense. It’s not because nothing is true. It’s because I say, Oh, I’m sorry. I take a different trade off for my family. I think our risk is very low for myself and my lifestyle.
And I’m not prohibiting you from taking extra preventive measures, and also the opposite as well. And I think a lot of the problems that there’s condemning history [01:43:39] can be solved, but just by boiling it down, which kind of rules, what do you want to have in place?
And what we see the free private city foundation is many more people, very odd because it seems like the mainstream is very much caught by the fear of the pandemic. Most people who contact us are really worried about, they want to have explicitly in the contract stating not that a free private city will protect them, but in any case of pandemic, they want to have ruled out that there’s any leeway for locking up people in their homes and preventing them from leaving them or forcing people to wear masks in settings where they choose not to and stuff like that. So I think interestingly, the majority, I mean, I have not, we have not received a single request to specify a contract that could save you from a pandemic risk, but I would be open to people thinking about that and figuring out what kind of preparations you would want to [01:44:39] take.
And what’s the cost of it. And what’s then of course always the most important thing, the skin in the game part it’s finding out realistically, did it work out or not? And we are discussing, I mean, we’ve seen whatever narrative you take about the current pandemic. Most governments have failed terribly. I mean me, myself, even though I’m not very scared.
I have been better equipped with masks and all kinds of protective gears, then my government and my hospital at the place, because I just came from Asia. And so as a precaution, of course, I wanted to get in time the protective gear that may be necessary to protect me and my family. And so when everyone was really cooling it, there was at the time in Austria, you were called a right-wing conspiracy theorist if you thought it may become dangerous to us. Or there may be a risk because I was like, Oh, no, only right-wing people are scared about things like that. Now not judging it, just showing, [01:45:39] look at the institutions, try to judge their behavior, try to see if they broke the promises or not. Is it true that the government was better prepared than you and the pandemic?
Okay. There’s something to learn from you. What kind of government was that? Why are you so ill prepared for your perception for your risk perception? And I think most people would come to very, very different conclusions and realize that really most of the harm was created by governments of this pandemic and it’s crazy to think that you can rule out every risk by intervention is my thing. It’s another sign of the intervention spiral. But I think it’s very important for the free private cities approach that we, I’m not sure if I have the truth and I’m not sure if I took the right decisions and the right trade offs.
And it changed over time as well. I try to keep updated as much as I can. And as everyone I’ve turned into a hobby epidemiologist and, studied everything I could about the situation, but from the down to earth question, how [01:46:39] should I, and how can I protect my family and myself. And now it turns off course in the more pragmatic questions how can I get with my freedom back to travel and so on? And that’s a trade off that’s. I mean, there’s no true answer. Should you get a vaccine or not? I can’t tell you that I know for a hundred percent, what’s the right tradeoff for you personally, I don’t know your health history. I don’t know how important the freedom to travel is.
I don’t know how you expect the political situation to evolve and so on, but I hope that we’ll have, once we have this kind of competition by people thinking about what are the rules and how do we judge if someone has performed well or not. And does he take consequences or not? And what are the consequences.
Then we can’t really trip out of those bubble discussions that we have where everyone’s just making fun of the other side. And then, and it’s in most countries, like all the everyone who’s critical of interventions is almost a Nazi and the denier and stuff [01:47:39] like that. And of course the other side, of course, and then you react in an angry fashion towards that.
I think that’s the really wrong politicized public debate. But it’s mostly about people taking different trade-offs trusting different sources, taking time to make up their minds following heuristics or not and so on. And I think we need to learn again to take personal responsibility also for kind of arrangements we enter ourselves and to hold them accountable. Those people who are offering apparently those rules and promises and so on, hold them accountable for what they’re doing and not just by voting for a different guy next time. That’s not the kind of accountability we know from markets and contracts. And so on.
Accountability has to be specified, and then you need to judge if the outcome was achieved or not. We don’t have it all in that seemingly democratic voting someone out of office because he has failed. This is much too packaged.
[01:48:39] Saifedean Ammous: Yeah, I think, if I set up a private city of the business, I agree with you that the answer is that everybody should try whatever they want and then we’ll see, and then people will decide that.
But, I know what I’m going to try if I had one, or if there was a choice between cities, I’d impose a 1000% tax on all processed foods and sugars and everything that is harmful to your health, that causes obesity and diabetes. All of that stuff gets a 1000% tax and then mandatory every person gets one pound of beef every day.
Every citizen of the country gets one pound of beef every day. And everybody has to do three sessions of lifting in the sun every week. And you have all the local gyms organized with this and it sounds terrible, but put the tax to pay for the meat and for the lifting, the lessons.
And I promise you, I am 100% certain that the country that tries this, the city that tries this will have the absolute [01:49:39] lowest problems as numbers of cases and deaths of anything. That’s how many thing it’s actually, we’ve seen. Like the evidence is very clear that the virus catching the virus is almost itself does nothing only if you’re extremely old, that you are very weak, have a very weak immune system, or if you’re extremely unhealthy as it become a problem.
And so the answer of course, if you are sane is how do we make people more healthy? And how do we stop people being so unhealthy…
Rahim Taghizadegan: But that assumes that health is really the main value to optimize for. And I think most people show in their life decision that’s not how they work. That’s not how they function.
So even, I mean, without disrespect, the Saif health commune that you’re offering, I think it’s great. I wouldn’t expect a lot of people to want to have the kind of contractual obligation to follow your health dictate here. I think mostly we agree. So, so I mean, there’s a lot of thing that’s probably we eat very much alike and it will be interesting to delve [01:50:39] into that.
How come that, that’s the case. And it could, I even think that for a Bitcoin Citadel, for some parts, grass fed beef would be very important part of the package. So if I were interested in a side project, that give access to that kind of nutritional value…
Saifedean Ammous: I’m generally, I’m always against the taxes, but I think if you are going to have any kind of fees collected by the people who manage the free private city, I’d rather have exorbitant fees on the things that I don’t like.
And, obviously you don’t have to stay here. You can go somewhere else where they don’t put that in 1000% tax on your Doritos. But I think, I think, you know, if we tried out a city where we had a thousand percent tax on the Doritos and then you went and visited for one day, I think you’re going to want to stay.
I think people just massively underestimate how different human society would be. If everybody wasn’t eating poison all day in [01:51:39] particular children, you’re running around with crazy children. We normalize the idea that children are supposed to be just a big, giant mess of emotions running around and shouting and crying and kicking everything.
And that’s just sugar. And I think it’s also true with adults..
Rahim Taghizadegan: I know you’re a father as me do you really managed to separate your kids from all kinds of sugar? Is that feasible?
Saifedean Ammous: Basically all the stuff that comes in plastic wrappers that we don’t do.
Rahim Taghizadegan: Yeah, of course you don’t buy it in the supermarkets, but see, I mean, yeah, if we don’t bring it home, we go to the supermarket, they see if she sees it, she asks about it.
Saifedean Ammous: Oh, well only recently that she realized that that stuff is edible because before we just walked past it and we never stopped, it was like with the cleaning supplies, all of the processed food, but now, you know, she’s growing old enough that she’s seeing people around they’re eating it.
So, it’s um, okay. I’m happy to hear that. Yeah, we [01:52:39] don’t, we don’t, Oh, she’ll have it when she’s visiting and she’s out with friends, but we try and minimize it as much as possible, but like, if you don’t bring it home, you don’t normalize it. It’s a huge part of the battle won.
Rahim Taghizadegan: Yeah. I think most people over time become a bit more pragmatic.
Of course, before I had children, I was very sure at no zero sugar, but over time you tend to choose your battles. I’d say, and of course you’re happy if you can reduce. And I think it’s the same in political issues. I think there’s a space for health communes, which optimize for really wanting to live with like-minded people optimize the longevity, maybe even who really want to live long and healthy lives.
But I think most people would want to have some vice in their life and not. There’s a role model that they follow because they respect you and say, okay, I should compare myself to him and really try to eat better. But wouldn’t choose that as a kind of contractual obligation with punishments and fees and taxes.
But I think you’re free to offer that. And I’d be very [01:53:39] happy if there’s a Saif Citadel offering coming up and I gladly cooperate with you in any way possible and help you in any way possible and realizing if you think there’s a space. And I think there are lots of niches to specify rules per se, on what kind of society you want to live in and how, what, how you identify the ills.
And what do you think are the causes behind the ills. And for some things, of course, it will be wrong-headed, but I think we need to dare take the courage as you yourself, speak your mind and really venture some proposals and how we could change those ears on. I totally agree with you. It’s mostly about lifestyle decisions that you yourself can take.
And there’s a lot linked to that. So most people want to change the world and reform the world. Basically you should just start, try to change your habits, and then you’ll see how difficult it is and you’ll stop all that political scaremongering and so on. And I think you’ll become more pragmatic over time.
So I think the sweet spot, the larger spot, the most developments will [01:54:39] be more pragmatic arrangements, where you leave adults do mostly as they please, but not have wrong role models and not have wrong incentives and not have this whole botch general financial and societal political structure, giving the wrong incentives for the wrong choices as well.
Like somehow subsidizing wrong choices and so on. And I think there’s a lot to be won already there in just leveling out that field. And then having people take assumed responsibility, bearing the cost for own decisions and being free to learn from choices and from others. But I think there’s a niche as well for very, very aligned communities. Because of course there’s one of the reasons for communities you want to have the obligation of people, you see how the people behave. You want to really be tricked by those. And that can be a trade-off for some people. And some people would really prefer maybe to live in societies or communities where you don’t have to send a freedom of expression that you always come up with every crazy idea, because it’s in no way [01:55:39] based on a consensus.
And that’s it. And of course, we want to learn, but we won’t want to question everything every day. We want to build on a foundation on the consensus. So I think they’re very, very different trade-offs that you can take there. You’d have some transhumanist optimizing people who want to track everything the body does.
You want to have some people with some very traditional following the restrict principles, maybe, maybe religious principles of eating and you’ll have people optimize for different things, but I think largest economies of scale are of course at the pragmatic level of more or less, we don’t have one lifestyle set for everyone. Follow the rules as they are fit for the arrangement that we’re seeking.
Saifedean Ammous: Yeah, no, I agree. Absolutely entirely. I think this is pretty much it. I don’t think we have any more questions left. We ran a little bit over time, but this was a lot of fun. So thank you very much Rahim for joining us.
Hopefully we’ll have you over again and we’ll keep this discussion going. And one day we’ll have it in [01:56:39] person in one of our citadels. Definitely. Definitely. Maybe the same one. We’ll see. Yeah, we’ll take you for joining and we’ll see you next time. Take care. Thank you.