0:13

Hello everyone , you're listening to the Blockchain Searchless

0:16

Podcast . I'm Josh , I'm here

0:18

with my co-host , primavera DeFilippi

0:20

, and we are both

0:22

in Florence at a

0:25

I said a blockchain of sponsored

0:27

crypto events , and we have

0:29

the honor of having Laurence

0:31

Lessig to come join us for the show

0:34

. Laurence Lessig , you're known for , I

0:36

believe , coining . The term code

0:38

is law which has become very prevalent

0:41

in the crypto world and throughout

0:43

its history , and so I

0:46

think it would be nice to start , if you want to just give a

0:48

quick introduction to yourself and like , maybe

0:50

recount the history of this

0:52

term code is law and how it's , you

0:54

know , changed or stayed the same over

0:56

time .

0:58

Sure , so it's great to be here in

1:00

Florence and in this conversation

1:02

, and I've been a law professor

1:05

for hundreds of years now and

1:08

way back at the beginning of my

1:10

legal work I was focused

1:12

on the transition from

1:14

communism in Eastern Europe , and

1:17

so we would go there as naive Americans

1:20

and we would see people offer constitutions

1:22

to these countries , and

1:25

very quickly you realize that

1:27

it wasn't just legal texts

1:30

they needed . They needed

1:32

social norms to support the

1:34

infrastructure of free

1:36

, republican governments that they needed , and

1:38

so the absence of norms made

1:41

the law irrelevant . And

1:44

then , five years into my work

1:46

, I started looking at technology

1:49

, intersection between law and technology , and

1:52

again you had the lawyers who would pass rules

1:54

that they would impose on the network

1:56

. And

1:58

here very quickly you recognize

2:00

it was not just that there was an absence of certain

2:02

norms , there was also

2:04

the absence of an architecture that made

2:07

it possible for those rules

2:09

to have purchased or have a place

2:11

. And as

2:14

you saw that the architecture itself was plastic , it

2:16

could be changed , the code could be rewritten , it

2:18

could be different code you began

2:20

to see that the values that the architecture

2:23

supported really

2:25

overrode the values implicit

2:28

in the law . So the original internet was

2:31

stateless . You

2:33

couldn't know where someone was , what they were doing

2:35

, and so what

2:37

that meant was it protected privacy . It

2:40

protected the freedom to innovate , because

2:43

you couldn't tell that I was using TCP

2:45

to do voiceover , ip or to

2:47

send email , and

2:49

it also protected free speech , because

2:52

I could say what I wanted and you couldn't regulate me . Those

2:54

were features of the original architecture

2:57

, and so what

2:59

I did by original architecture .

3:00

Is this like the internet after

3:03

it was given to the public or after it was ?

3:06

Yeah , this is Internet circa 1994

3:09

and 1995

3:12

. And so , as I originally

3:14

framed it in my book Code

3:16

and Other Laws of Cyberspace , I

3:18

was able to , the

3:21

point was that we should recognize the values

3:23

, the political values implicit in that code

3:25

, and that code was , in that

3:27

sense , law . But

3:30

then , once you see that the values

3:33

were implicit in the architecture and

3:35

you know that the architecture could change , what

3:39

I was worried about was

3:41

that people who had an interest in

3:43

a different legal world

3:46

or a different set of legal values

3:48

would change the architecture

3:50

to perfect their

3:52

control or invasion

3:54

of privacy or restriction of speech

3:56

. And so

3:59

that was the argument of Code and Other

4:02

Laws of Cyberspace that we have an architecture

4:04

that gives us values we celebrate . But

4:06

we can't count on that architecture because

4:09

the very people who made it can remake it or

4:11

we can layer on top of it technologies

4:13

that change those values

4:15

. And I remember

4:17

the review of my book in the New York

4:20

Times . David Pogue

4:22

wrote Lessig writes

4:24

as if the internet will become technology

4:28

of persistent surveillance and constantly

4:30

violate people's privacy . But

4:33

the proof is

4:35

just not there and it's like . Well

4:37

, actually that's because we're sensitive

4:40

enough to what was creating the privacy

4:42

and how easily it could be taken away

4:44

.

4:45

And so when you were saying Code is

4:47

Law , I guess my impression is that

4:49

it almost seems like a recognition

4:51

that the internet was this

4:53

kind of like plastic piece

4:56

of infrastructure that can have

4:58

kind of I would argue perhaps like a politics

5:00

embedded into it . So

5:02

it's also recognizing that the law is

5:04

like a very political field , where

5:07

whoever has the power to change the

5:09

law has the power to change a

5:11

lot of things change norms , change a

5:13

whole bunch of stuff that people

5:15

allow or not allow to do various things

5:17

.

5:17

Right , I mean you can . In a general

5:20

sense that's true . But then we

5:22

realize that it's actually harder to change

5:24

some things than to change others . So

5:28

if we think about a government trying

5:31

to regulate cigarettes or

5:33

the consumption of cigarettes , the

5:35

government could tax cigarettes . That's pretty easy

5:37

to do in a well-functioning market because

5:39

you can collect the tax . So that raises the price

5:42

and people are less interested in smoking

5:44

. The government could try to stigmatize

5:46

people who smoke . So California did

5:48

this . It had all sorts of ads on billboards

5:51

that made people who smoke seem like weak people

5:53

or pathetic people . So

5:55

that's trying to change the norms around smoking

5:57

. That's harder . But

5:59

there's a period of time where the federal government was talking

6:01

about regulating the nicotine

6:03

in cigarettes to make them less addictive

6:06

, so changing the code of the cigarette , and

6:09

if that were effective , that would be a pretty cheap way

6:11

to reduce the addictiveness and thereby achieve

6:13

the objective of reducing smoking . Each

6:15

of these is an intervention and

6:19

what the regulator needs to do is step back and say well

6:21

, what's the easiest intervention

6:23

or the least liberty

6:26

restrictive kind of intervention or

6:29

whatever the dimension is that you're trying to maximize

6:31

for what's the right way to intervene

6:33

to achieve the result that you're trying to achieve

6:36

and that's the

6:38

dynamic that I think was

6:40

missing in the context of people

6:42

thinking about how the law interacted

6:44

with technology .

6:46

And so in this concept

6:48

of Cody's Law , it's also the

6:51

thing that anyone that controls the code controls

6:54

the law , and if it is like

6:57

some private actor , then you can

6:59

create some kind of powerful

7:01

private ordering . But the

7:03

private actor is also subject to

7:05

a government and therefore , whatever

7:07

private ordering you're trying to do , eventually

7:10

, if the government is regulating the online

7:12

operator , the government is also operating

7:15

the technological infrastructure . So

7:18

this means that there is limited

7:21

, so there ain't

7:23

in the technological infrastructure

7:26

that is created

7:28

. So do you

7:30

think that blockchain changed the situation

7:32

?

7:34

Well , blockchain changes it to

7:38

the extent it is a

7:40

more entrenched set

7:42

of technical values . So

7:46

you couldn't have built a

7:48

cryptocurrency on top of Web

7:50

1.0 . I mean , it was stateless . You

7:52

had no infrastructure for private

7:57

key encryption Like none of that

7:59

would have been feasible and

8:01

so if you tried to do a cryptocurrency , it

8:03

would not have been effective

8:05

because it would have been so easy to cheat . But

8:08

when you have a blockchain cryptocurrency

8:11

, then the code is

8:13

making it practically impossible to cheat

8:15

, at least on the ledger , not at

8:18

the edge , and so that

8:20

code is

8:23

a much more significant value

8:25

to those who want to build this particular kind of application

8:28

. And it challenges

8:30

the sovereignty of governments

8:32

, because , to the extent , governments enjoyed having

8:35

a monopoly over currency regulation

8:37

. Now there's an effective currency they

8:39

can't regulate , but

8:42

it's always relative , it's never absolute

8:44

. I mean the government does have sovereign

8:47

authority over blockchain in

8:49

the sense that they can start shutting down

8:51

every exchange and everybody who's

8:53

participating and anybody

8:55

who's got high electricity demands

8:58

, because that's probably crypto

9:00

mining going on . The government can always do

9:02

something . It's not clear the government can always do

9:04

it effectively or efficiently

9:07

, because the code can create too

9:09

big of an obstacle .

9:10

So I'm trying to play around with the

9:12

analogy of network states

9:14

and blockchains and in some

9:17

way I'm wondering whether the government really

9:19

has sovereignty over the blockchain

9:21

or does it have sovereignty

9:24

over the interfaces

9:26

and the gateways that are bringing

9:29

the blockchain into its

9:31

own jurisdiction ? So if they

9:33

want to shut down crypto exchanges , it's because the

9:35

crypto exchanges exist in their own jurisdictions

9:37

. They might have a much harder time shutting

9:40

down decentralized exchanges and

9:42

, of course , they might figure out they could sanction

9:44

them . But again , this is only with the interface

9:47

with the people in their own jurisdictions

9:49

. So I'm wondering isn't

9:52

that similar to saying that

9:54

there is a not our nation

9:56

states that has its own currency

9:58

, and then , of course , one country can

10:00

say well , we cannot exchange

10:03

this currency in our jurisdiction

10:05

, we don't accept this currency in our jurisdiction

10:07

, but that doesn't mean that they

10:09

have jurisdiction over

10:12

the issuance of that foreign

10:14

currency .

10:16

So that's exactly the way to

10:18

think about it , that they have relative effect

10:20

, even though they don't have an absolute

10:23

effect over the technology itself

10:25

. There have been many stages in the history of the internet

10:27

where people have talked about open source software in this

10:29

way the open source software is

10:31

out there , the government can't control it once it's

10:33

out there . Sure , in the sense that the government's

10:35

not going to blow up the chips that

10:38

are running the software . But the

10:40

government can make it practically useless

10:42

by taxing anybody

10:45

who engages with the software , or regulating

10:47

exchanges that are facilitating

10:49

the software , or whatever intervention

10:52

makes sense . The government has a lot of power

10:54

to muck about with this

10:56

software , but even

10:58

though they don't have the power to ultimately destroy

11:00

the knowledge that the software represents , and

11:03

so it's always just thinking about what's the relative

11:05

efficiency of different ways of intervening

11:07

and recognize , the government

11:10

now has a wider range of tools

11:12

that it can deploy using these

11:14

different modalities of control

11:16

.

11:17

In some way ? So if we take currency

11:20

as one specific prerogative

11:22

of the state , do you think that blockchain

11:25

technology is also

11:27

enabling additional

11:30

things that usually are associated

11:32

with a particular government , For instance

11:34

, like identification and

11:36

things like this Like are there alternative

11:40

toolkits that the

11:42

blockchain technology provides that were not available

11:44

before that can now somehow

11:47

compete or maybe be

11:49

complementary with those things

11:52

that usually were the monopoly

11:54

of the state functions ?

11:57

Yeah , I mean . So states

11:59

encourage the development of mature

12:02

institutions again in banking

12:04

, but not just in banking and

12:07

those are costly things

12:09

to establish , and

12:11

blockchain allows the establishment

12:14

of the function of that institution

12:16

without the institution itself

12:18

. And that becomes really valuable

12:21

if you're in a relatively

12:23

underdeveloped context where

12:25

the institutions don't exist , but

12:28

the function of the institution now exists

12:30

because we have a computer connected to the internet that

12:32

can then connect to a blockchain technology

12:35

. And so I think

12:37

we should just think about the range of

12:39

functions that we wanna encourage

12:41

or discourage and then

12:43

think about how each of these different modalities

12:45

code or norms or

12:47

law or markets facilitate

12:50

or inhibit each

12:53

of these . And my

12:56

point was always to say we need to think

12:58

about this in a holistic way

13:00

. It was never to suggest that one

13:02

dominated or

13:05

necessarily dominated , which is why I think

13:07

, josh , as you open the interview

13:10

, it's kind of weird for me to hear

13:12

the way people have used the

13:15

meme code as law . I mean , I

13:17

felt really bad , I felt kind of guilty

13:19

listening to some of these defendants

13:21

who are being prosecuted for their

13:23

crypto schemes insist

13:26

, no , this is the loud , because code is law . And

13:28

I'm like , oh my God , am

13:30

I liable here ? I mean because

13:32

, yes , code is law , but it's just

13:34

not the only law . So , okay

13:37

, you could say that the law of the

13:39

code allowed me to do this , but if the law

13:41

of SEC regulation says you can't do

13:43

this , you're stuck . And

13:45

so it's never about like one thing being

13:48

the only thing . It's about recognizing

13:50

how each of these things is part

13:52

of a whole , and any smart

13:54

regulator will have to think about what the trade-off

13:57

among them will be .

13:58

So let's go back to the question of network state

14:00

. I think that there are at least two

14:02

reasons to justification

14:04

why people are thinking or are promoting

14:06

the idea of network state . One

14:08

, which is very clearly

14:11

we don't like the

14:13

jurisdiction of the state in which we

14:15

are in and therefore we want

14:17

to move away and create an

14:19

alternative jurisdiction that

14:21

we are no longer subject to the sovereignty

14:24

of the state . The other one is

14:26

we realize that

14:28

now we do have new affordance

14:31

because of those technologies that enable

14:34

us to , as a community

14:36

, as a network nation doesn't matter how

14:38

, what's the right vocabulary but that

14:40

enable us to have

14:42

our own currency , to have our own identification

14:45

system , to use the

14:47

function of those institutions , which

14:49

is more of an additional

14:51

layer that we can add on

14:53

top of the existing territorial jurisdiction

14:56

that we are not necessarily interested in

14:58

escaping . And

15:00

so , from hearing what you say

15:02

, it sounds to me that you don't believe

15:04

that blockchain technology alone

15:07

enabled to escape from

15:10

the jurisdiction , because , if you're resident

15:12

on the country , they will still find a way to

15:14

criminalize whatever you do with the blockchain

15:16

, but do you believe that it

15:18

nonetheless enabled the creation of those

15:20

additional layer of

15:22

sovereignty , and do you consider this

15:25

additional layer to be a sovereign

15:27

layer , despite the fact that it's an

15:29

overlapping jurisdiction with the national

15:32

territorial jurisdiction .

15:34

Right ? Yes , because sovereignty

15:36

is always overlapping and

15:40

so we can emphasize the difference with

15:43

times past and emphasize the continuity

15:45

with times past . So the difference would be to say

15:48

this now gives people the opportunity

15:50

to exit to all sorts of different communities

15:52

, like I could have been somebody that was out

15:54

there working in a coal mine

15:56

and now I understand that I

15:58

can become a programmer

16:01

and to stay in my house and have all

16:03

of my economy through my internet

16:05

connection and I can order food

16:07

to be delivered , and so in some sense I've escaped

16:10

from the life I had before

16:12

in that jurisdiction . But I remain in that jurisdiction

16:15

. So if I engage in illegal activities

16:17

on my computer child

16:20

pornography or something like that the doors

16:22

will be broken down and somebody will come in and arrest

16:24

me . So I'm never completely escaping

16:27

. So that makes it

16:29

sound like this is something new . I can escape . But of course

16:31

, historically we've always been

16:33

living in worlds that have overlapping

16:36

jurisdictions . So you

16:38

are a priest in a church in

16:40

a town in a nation . As

16:42

a priest in the church , you

16:46

had a certain sovereignty within the church , and

16:50

many states recognized the power of the church

16:52

to protect those within it

16:55

. But that power was limited , it

16:57

wasn't complete and

16:59

you might , in the community , be okay , but

17:02

the state might be taken over by a different church and

17:05

begin to want to regulate you because you're the wrong church . So

17:09

these overlapping layers have always existed , but

17:12

I think they're more significant now because

17:15

it is easier to move into a

17:17

more complete existence in

17:19

these quote separate spaces , even

17:21

though they're not separate in an absolute

17:24

physical sense , they're just kind of layers

17:26

on top of the physical space that you're living . So

17:28

you're always both online

17:31

and in the real world and You're

17:34

never just online not yet .

17:36

Maybe when we can migrate our intelligence

17:38

to AI Completely

17:41

, then that will be different one of the

17:43

things that I think , sometimes the

17:45

feeling that I get with a lot of , I

17:47

guess , techno to utopian types is that they

17:49

it's almost like they forget that they're humans made

17:51

out of flesh and bone and

17:54

like yeah , I think yeah

17:57

, like as if they already live

17:59

online completely .

18:02

Yeah , and I think another thing that we forget is

18:04

the kind of not

18:07

designed , unintentional Constraints

18:10

of the real world that makes society

18:12

possible . So one of the most important

18:15

in the old days was you

18:17

couldn't really filter out what you didn't want to see

18:19

or know or hear . Like

18:22

you lived in a town , you picked up the newspaper . The

18:24

newspaper covered all the news . You walked

18:26

around , you saw homeless people or you saw buildings

18:28

that were dilapidated . You just had

18:30

to confront that and deal with that . And

18:32

one consequence of that is we had

18:35

relatively well functioning Democratic

18:37

structures because people knew and

18:40

had to deal with the same problems . They lived

18:42

in the same world . One fear

18:44

about the opportunity to move

18:46

into every different world you want is

18:49

that the capacity to filter

18:52

out what you don't want to hear or know

18:54

or deal with anymore grows dramatically

18:56

. This is , this is I think , the paradigm

18:59

Example

19:01

of why the United States's political system

19:03

is falling apart . Because people

19:05

opt into their own news

19:08

Universe and , like we , live in these

19:10

different bubbles and we don't even understand

19:12

the same facts . And that's , that's

19:14

a feature or a bug of this

19:16

increasingly sophisticated , efficient

19:19

technology for deciding . I

19:21

know who you are and I'm gonna feed you what you want

19:23

and I'm not gonna feed you what I know you don't want , because

19:25

you won't watch me as much if I do . And

19:28

you know , nobody created

19:31

the world that we had before . That made Democrat

19:33

deliberation possible . Now

19:35

we have to recreate that world , or

19:37

recreate the conditions for Democratic deliberation

19:40

, if we want something like Democrat Society

19:43

to continue .

19:44

Yeah , I completely agree . I mean I think that Like

19:47

one of the side effects of globalization

19:49

, I feel like has been like alienation

19:52

from your just look local space

19:55

. So , like I mean , most

19:58

people do not know like who their

20:00

local , I don't know like town

20:02

counselors or even neighbor .

20:04

I mean , yeah , or neighbors , yeah , you have these Bedwarden

20:06

communities in America where people like sleep

20:08

and then they Commute into

20:11

the city and they work and they have no

20:13

connection to their local community other than

20:15

they just need water and electricity . Yeah

20:18

, and , and the point is like the different

20:20

, the older world where you had to connect

20:22

Was never designed by

20:24

anybody . It was just like a feature of friction , a

20:27

feature of the way the world was like you just had

20:29

, and and the challenges

20:31

that certain human capabilities

20:34

, affordances , social affordances , depended

20:37

on that contingent reality

20:39

.

20:40

And when we have a different reality , then we have

20:42

to figure out whether it's possible to recreate those

20:44

affordances or at the same time

20:46

Maybe because

20:48

I'm very keen of the internet

20:51

world , but

20:53

at the same time I think that it's also true

20:55

that when we are like

20:57

in a particular country , we

21:00

interact mostly with people that share

21:02

at least the culture of this country , including

21:05

, like , foreigners and

21:07

immigrants . The

21:10

internet is also allowing us to

21:12

interconnect with people all

21:14

around the world which Might

21:17

have , might be aligned like . There is

21:19

like a strong value aligned with this . That's , that's

21:21

the objective with this type of community

21:24

or network nation , which is you're

21:26

quite aligned on a particular degree , but

21:29

that also that doesn't necessarily

21:32

mean that you're sharing the same culture and

21:34

that , like that , you're thinking

21:36

the same way . And so I

21:38

think there is also a benefit

21:40

when we think about those network nation

21:42

which is all of Sudan , you also

21:45

, in addition to the territorial proximity

21:47

that you have with your neighbors , which oftentimes

21:50

you don't really feel

21:52

proximity with them , but by

21:54

by interfacing and or by by identifying

21:57

people across the world that share

21:59

particular affinity and value

22:01

Yet might come for very different

22:03

background , very different culture and stuff

22:06

so far , it's also a way to

22:08

connect with people that have

22:10

diversity of Opinion

22:13

and whatnot , which

22:16

would be much more hard to

22:18

to identify or to to create

22:20

kinship with , if

22:23

you were only to be able to create

22:25

a nation with people that you have territorial

22:28

proximity with yeah , so it's , that's

22:31

true .

22:31

And Janice faced , it goes both ways right

22:33

. So you know , if you think of yourself as a gay

22:35

teen in the

22:38

middle of Iowa , what

22:41

the internet enables you to do Is

22:43

to connect with lots of other similar people

22:45

to you around the world , because there

22:47

probably aren't that many who are Out

22:50

in the middle of Iowa , or at least you know 50

22:52

years , 15 years ago . But

22:55

the flip side to that is , if you are a

22:57

child pornographer , what

22:59

are you you care about ? You know

23:01

child sex . It

23:03

was hard in the old world to

23:06

to feed that , but it's easier

23:08

in the new world to feed that . So these communities

23:11

that you are enabling Can

23:13

be both good and bad , and you

23:15

know , and I think we just have to learn to Celebrate

23:18

the good and and and mitigate the

23:20

bad . I mean , because I'm certainly not against

23:22

any of this , I'm just . I'm just for

23:24

us having a more sophisticated or or

23:27

subtle understanding of what the influences

23:30

in this space are going to be and how we , how

23:32

we respond to them , and I firmly

23:34

reject the Naturalism

23:37

or the ism of the way

23:39

people talk about this . Like when the internet was born

23:41

, my friend John Perry Barlow would

23:43

say the internet just is a Place

23:46

where behavior can't be regulated

23:49

, and that , I think , led people

23:51

not to pay attention To the

23:53

way in which the architecture was evolving

23:55

to make it really easy To

23:58

identify and track and regulate all sorts

24:00

of behavior that they thought the internet was going to protect

24:02

. So that that's the that's

24:04

the point . I I still think we don't have any

24:07

good recognition .

24:09

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24:12

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a digital copy .

25:23

Do you think it is desirable that

25:25

those networked communities

25:28

, which we like to call network

25:30

nation for different reasons

25:32

, do you think that

25:34

that is desirable ? That all of

25:36

Sudan , those communities , get

25:39

to Organize

25:41

themselves in a way that goes

25:43

beyond the way in which traditionally

25:45

online communities organized , but that

25:47

, and where the difference is essentially

25:50

that they can benefit from these

25:52

sovereign type

25:54

of infrastructure , so

25:56

that it's no longer

25:58

just a community with a server in a particular

26:01

country , it's a community that is

26:03

creating its own sovereign currency

26:05

, sovereign identification system . So

26:08

, do you see , do you see this is desirable

26:10

, or do you see this , that is , these are also

26:12

can generate some

26:14

strange competition

26:17

or Strange interfaces

26:19

with existing nation states both

26:21

.

26:22

I think it's desirable , in the sense that

26:24

I think the liberty to create all

26:26

sorts of different communities is a presumptive

26:28

good , but

26:31

I also think that inevitably they're

26:33

going to create real tensions with real

26:36

world existence too , and

26:38

so we need to be capable of balancing

26:41

or restricting or

26:43

creating other affordances to make sure

26:46

that the real world is not destroyed

26:48

by these affordances of

26:50

these different spaces . And again , I think the political

26:52

debate is

26:55

the easiest place to see this . If the consequence

26:57

of everybody living in their own network state is

27:00

that they don't understand the

27:02

basic problems of the physical world

27:04

like they just don't either understand that there

27:06

is global warming or that the water

27:08

is polluted or whatever then acting

27:11

politically in the real world becomes

27:13

impossible or sensibly becomes

27:17

impossible . And so I think there needs

27:19

to be some capacity to assure

27:21

that , yes , you're living in

27:23

your little network state , you have your own little sovereignty

27:25

is going on , but they

27:27

exist with

27:29

a physical world that we also have

27:32

to take account of and recognize

27:34

.

27:35

I would also like to argue that the opposite

27:37

is also true , meaning that today it

27:39

is difficult for municipality

27:41

, for sure , but even for a nation , to actually

27:44

be able to internationally

27:47

coordinate in order to cope

27:49

with those global challenges , because

27:52

it's just too small of a unit

27:54

. And in an ideal

27:56

implementation of those network state

27:59

system , I can also

28:01

see how , because of the Sudan , you're

28:03

actually creating transnational

28:07

networks of people in

28:09

different countries that choose to coordinate

28:12

with one another because they identify

28:14

as a network nation , all of Sudan

28:16

. They also can enable some form

28:18

of political cross-pollination

28:21

, if you like , in which , because

28:23

I'm coordinating with people all over the world

28:25

which we all live in a particular

28:27

country nonetheless , then there is

28:29

some kind of like backward

28:32

possession in which the

28:34

political agenda

28:36

that we have as a network state inherently

28:39

will have repercussion on each

28:41

individual nation state , which might actually

28:44

facilitate international coordination

28:46

if properly designed .

28:48

I'm sure that's true to some degree

28:50

. I was much more optimistic

28:53

of its force prior to

28:55

the Ukraine war . I mean , I thought what

28:57

would happen with the Ukraine war is

28:59

that all the budding , yuppie

29:02

middle class Russians would

29:04

feel the consequence of them being cut off

29:06

from the rest of their

29:08

community , which was all the Starbucks consuming

29:11

people around the world , and that that

29:13

being cut off would turn them into political

29:15

resistance fighters inside

29:17

their own nation . Right , it didn't

29:19

happen like that . I mean very quickly

29:21

the local dominance identity

29:24

overwhelms this international

29:27

identity . Now it might be just too early . Maybe

29:29

Ukraine war in 20 years

29:32

if we are alive in 20 years would

29:34

be more openly and

29:36

effectively resisted by the internal

29:38

forces within

29:41

a country like Russia . But

29:43

I think it's

29:45

hard to say that we're there right now .

29:50

I really wanted to go into a

29:52

direction , a bit more into

29:54

the specifics of blockchain . So I

29:57

imagine you are aware of

29:59

how people use the

30:01

term code as law in crypto

30:04

world generally as

30:06

a justification

30:08

for why nothing

30:11

should change essentially about the

30:14

Bitcoin code , or

30:16

, for example I'm sure

30:18

you've read about the Dow . I'm

30:22

curious what your thoughts are in those

30:24

types of situations where they use that

30:26

term code as law , in

30:31

this type of context , where it's

30:33

not a nation state but it's a very

30:35

high stakes financial

30:39

game going on , I guess .

30:43

Yeah , I mean that was , I think , a

30:45

classic example of what people like

30:47

Sunstein have called the incompletely

30:49

theorized agreements of life . Like

30:52

everybody in

30:54

the Ethereum space would have uttered

30:56

code as law and believed . I mean

30:58

, people did say expressly that this was a

31:00

unimmutable

31:02

platform , that this

31:04

is why you could trust it , and

31:07

some of the people the Ethereum

31:09

classic people really believe that all

31:11

the way down . I mean , if all

31:13

of a sudden it turned out Ethereum was going to launch nuclear

31:15

weapons on all of Western Europe it

31:17

just turned out the code was going to do that or

31:19

enable that would they still insist

31:22

? We're going to lock it down , we're not going to

31:24

allow it to change ? I don't know , but at least within

31:26

the realm of financial loss

31:28

from something like the Dow hack , they're

31:31

willing to say hell yeah , and then other people

31:33

that was too high a price to pay . Now they didn't have

31:36

to resolve that during

31:38

the early stages of Ethereum because it didn't really

31:40

come up . It didn't really matter . But once it came

31:43

up , once this latent ambiguity surfaced

31:45

, then it seemed the community was not

31:47

as united as it was in its split and

31:51

I think that is always going to be present

31:53

with this code as law framework , because

31:57

nobody is really saying regardless

32:00

of the consequences

32:02

, even the end of civilization

32:05

. Nobody's saying that . They're

32:07

saying something less and , depending on

32:09

the context , I

32:11

would be Ethereum classic . If we're talking about a

32:13

Roblox game or I've talking

32:16

about Minecraft and

32:18

the consequences , I lose my whole community

32:20

. But hell , that's code as law . That's just the

32:22

way it is . But once you

32:25

realize that you're affecting people

32:27

outside of the game for example , you're

32:29

affecting the ability of people to retire

32:31

, you're affecting all sorts of real world things

32:34

I totally

32:36

understand why you shift into a different mode

32:38

and the law would certainly step in and say yeah , it's

32:40

very interesting , you have this little game going on , but

32:42

the consequence of your little game is that we've lost

32:45

$400 million of

32:47

productive assets or something .

32:49

So do you think the decision

32:54

to reverse the blockchain or to go back

32:56

and remove the hack , does

32:59

that

33:01

still fall under code

33:03

being law ?

33:05

Well , I would say what it shows is

33:07

that code is law , and

33:09

not the only law . So

33:11

there was a code that created

33:14

the opportunity to perform

33:16

that hack , but

33:20

there was another law on the outside that

33:22

was saying that hack is actually violative

33:24

of certain pretty fundamental principles

33:26

of the economy . And

33:30

so when they decided to reverse

33:32

the hack or to fork so

33:34

that you could reverse the hack , that

33:36

was respecting the external law and

33:40

trying to protect the interests that

33:42

the external law is trying to protect while

33:45

violating the internal

33:47

code is law principle

33:49

. So one code wins

33:52

and the other code loses , and I

33:54

think that conflict is going to be inevitable .

33:57

So , if we bring this back to the network

33:59

state question , it

34:02

feels that , on the one hand , if you want

34:04

to be a network state , you need to have this sovereign

34:07

infrastructure . At the

34:09

same time , the only way in which

34:11

this sovereign infrastructure is really really

34:14

sovereign is that it is as

34:18

much reducing capacity for

34:20

individual intervention , which

34:23

also means that somehow this leads to this

34:25

very paradoxical situation

34:27

in which the only way you can be

34:29

fully self-soverring

34:32

as a network state is to have this

34:34

completely immutable governmental

34:37

structure or institutional scaffolding

34:40

, because the more you

34:42

leave room for human intervention

34:44

, the more you leave room for

34:47

a particular government to regulate

34:49

the humans that can intervene into

34:51

the system and therefore also reducing

34:53

the self-soverignty .

34:56

Which , yes , which is a good reason

34:58

never to imagine you're

35:00

going to have a completely self-sovereign

35:02

network state , because

35:05

, to the extent we all live on

35:07

this planet still , and

35:10

to the extent governments remain powerful

35:12

, they will need to intervene

35:14

at certain places . They will most

35:17

aggressively intervene to protect

35:19

tax revenues or to protect

35:21

vulnerable people like

35:24

children , but I think

35:26

they will more systematically intervene , too

35:28

, to protect other , less

35:31

significant interests , whether it's like labor rights

35:33

or whatever . But all of those are reasons

35:35

why the government will intervene , and

35:37

if you expect you're going to build a state

35:39

that's immune from all of that , I

35:42

don't think you're long for this world .

35:46

Devastating .

35:50

And just perhaps one

35:53

question concerning the

35:55

ontological terminology

35:57

, because

35:59

we've been discussing a lot . Are we talking about

36:02

network states ? Are we talking about

36:04

something that is not a state ? What is it that makes

36:06

a state a state ? And

36:09

one hypothesis which I

36:11

would love to hear your opinion

36:13

on is that it

36:15

does make sense to call

36:18

those networks state a state

36:20

to the extent that they

36:23

actually have at least a partial

36:25

degree of sovereignty . While

36:29

it would be weird to say that a

36:32

digital community that is governing

36:34

itself on a particular server in

36:36

a jurisdiction will be like a network

36:38

state you're just an online community but the

36:40

fact that there is at least this

36:42

desire of creating a

36:44

sovereign institutional framework

36:47

even though it's not the only

36:49

sovereign that can that

36:51

regulates the people having this infrastructure

36:54

that has some degree of sovereignty , do

36:57

you think this is a justification

36:59

to actually move towards the terminology

37:01

of the state as opposed to just online

37:03

community ?

37:04

I don't think there's any harm referring to

37:06

it as a state , as long as you

37:10

recognize that there are competing

37:12

, overlapping , state-like jurisdictions

37:14

. And to assert that it's a state

37:17

is not necessarily to assert its actual

37:19

capacity to regulate everything that goes on

37:21

in the state . At the end

37:23

of Code and other laws of cyberspace , I

37:25

reflected on the experience of going to Vietnam

37:28

in the 1990s and

37:31

that was at that time a

37:34

single , unitary , authoritarian-like

37:38

state . So the state

37:40

had the power to regulate whatever it wanted , but

37:43

the technology of regulation was really poor

37:45

. So , in fact , people had very

37:47

free lives . They could do basically whatever they wanted

37:49

, because the ability of the state to do anything about

37:52

it was very weak . By contrast

37:54

, the United States sets itself up as being

37:56

a free society where you can do whatever you want

37:58

, but the efficiency of regulation

38:00

all the way down into the most minute corners

38:02

of your life is overwhelming . So

38:05

they're both states . The difference

38:07

between them is the technology of regulation

38:10

or the efficiency of the technology of regulation

38:12

, and I don't think we question

38:14

the sovereignty of the United

38:16

States versus the sovereignty of Vietnam

38:19

just because we observe that the United

38:21

States' capacity to regulate is

38:23

wildly greater than Vietnam's capacity

38:26

to regulate .

38:28

I just wanted to check . Do we have to be

38:30

done by a Maybe

38:33

for ? Thanks so much for spending

38:35

the time to talk to us . One

38:37

last question that I had to

38:40

be a little bit provocative to ask you , although

38:42

maybe we have answered that partially through

38:44

our conversation . But is code

38:47

still law for you now

38:49

, so many years after writing

38:52

the original book and piece

38:54

on that , or

38:56

as well , if you were to do it again , would

38:59

you have rephrased it or

39:01

added some

39:03

nuance to the meme ?

39:05

I didn't know , I would have rephrased it from the standpoint

39:08

of all publicity is good publicity

39:10

, so even the misunderstandings lead

39:13

to understandings . But no

39:15

, I think code is more law today than

39:17

it was then . And think about privacy

39:19

. We had an effective privacy

39:22

way back in the day because

39:24

of the inefficiency of surveillance . Now

39:27

the technology of the internet is an extremely

39:29

efficient technology for surveillance . It's

39:31

really hard to hide , like you

39:33

know . I know there are , I know , people who could

39:35

effectively hide , but for mere

39:38

mortals you are persistently

39:40

effectively surveilled

39:42

in absolutely everything you do . That's

39:44

because of the code . It's a business

39:46

model that drove that code , so I don't think

39:48

we should miss the economic incentive

39:51

here .

39:51

Privatization played a big part in this , yeah absolutely

39:54

.

39:56

And computer capacity . So the fact that you had

39:58

computers that could begin to run AI

40:00

models that would target advertising

40:02

based on people's preferences , drove

40:05

the technology of surveillance capitalism

40:07

, Like . That's what made it possible , and

40:10

so the code is more significant today than

40:12

it was back then , for sure , and

40:14

so I don't think there's any less reason to be sensitive

40:17

and critical of

40:19

values implicit in the code

40:22

. In fact , I think there's more reason to and

40:24

like , to the extent you can point out , the code

40:26

embeds values that are inconsistent with what

40:28

we say our values are . That

40:30

at least tees up the question well , what are we

40:32

going to do about that ? Are we just going to accept it ? So

40:35

when you say that the code

40:37

of surveillance capitalism , plus

40:40

the incentives of the platforms

40:42

, produces a political

40:44

marketplace of ideas that

40:47

has an incentive to keep people

40:49

ignorant and angry at people

40:51

on the other side and that defeats

40:53

the possibility of democracy , when you recognize

40:55

that , then you've got to then say what am I going to

40:57

do about it ? You know nothing . I'm

40:59

just going to sit there and let democracy collapse

41:01

because of this interaction ? And

41:04

I think the answer should be no . But the point

41:06

is , pointing out the connections

41:08

makes it easier to think about

41:10

how I can intervene , Like , what can I do

41:12

? And in that particular case , I

41:14

don't think you're going to do anything about the technology . You're not

41:17

going to blow up AI , You're not going to blow up processors

41:19

, general processing

41:23

units but you can

41:25

begin to think about , you know , taxing

41:27

the business model , taxing the

41:29

attention economy . You know quadratic

41:32

tax on the amount of time that Facebook gets

41:34

you , so you know the more hours

41:36

it spends as a quadratic price increase

41:39

for that . I mean , there are lots of ways to intervene to

41:42

address this problem , but

41:44

I think you know we've got to tee up the fact we need

41:46

to intervene Nice .

41:49

So I also like the way in which you

41:52

have been , I guess

41:54

, adding to this motto

41:56

of like code is low , but it's not the only low

41:58

and in some way I think it's

42:00

a nice reflection

42:03

on the different way

42:05

in which we think about network state , where

42:07

I will say that Balaji

42:09

is more , the code is

42:11

low , or my network state is

42:13

my network state . Yeah

42:15

, it's like there's one low , and that's

42:18

either code or

42:20

sovereign state , as opposed

42:22

to the way in which we perceive the

42:25

notion of network state , which is more

42:27

this additional layer of sovereignty

42:29

, which is you can create your own

42:31

low , which is made by

42:33

code or whatever infrastructure

42:36

you manage to

42:38

construct . But it's also not the

42:40

only one and there are ideally

42:42

many other network

42:44

state that you can also

42:47

belong to , plus the underlying

42:49

nation state that also will always have like

42:51

the real or whatever system

42:53

to have . So it's kind of like the

42:57

evolution , I think , of the motto that you're

43:00

trying to promote now . I think is a

43:02

very compatible

43:05

vision of the way in which we

43:07

try to promote network state as opposed

43:09

to the absolute

43:12

type of Balaji .

43:13

Yes , I'm glad it's helpful

43:15

because it seems some

43:18

change in the understanding is

43:20

necessary , if only for those poor

43:22

SAPs that are going to jail now because they thought

43:24

God was law in the absolute sense .

43:29

All right , well , thank you so much for taking time again . Is

43:32

there , would you like to share with the audience anything

43:34

like any plugs , any social

43:36

media or ?

43:37

no , no plugs , no advertising

43:39

. Stay off the internet , kids .