Stephan Livera on Austrian Economics, Libertarianism and Bitcoin


Stephan Livera: Hey! How are you man?

Peter McCormack: I’m alright man, how are you?

Stephan Livera: Good!

Peter McCormack: We finally get to do this!

Stephan Livera: Podcast worlds collide!

Peter McCormack: We’ve been threatening to do this for what, like six months?

Stephan Livera: Yeah, things just… That’s how it is with podcasting. You try and set something up and things just always move around, that’s how the game goes.

Peter McCormack: Yeah, definitely! Well I wanted to do it in person with you, but for various reasons I can’t, because we keep missing each other. Are you going to Riga?

Stephan Livera: Yes, I will be there.

Peter McCormack: All right, maybe we’ll do it again then. But I think what I’ve realized at these events is that you try and schedule them and you can never really get them in any way.

Stephan Livera: Especially at the conferences, you tend to have a lot of things all coming for your attention at once, because you might be talking to someone and then it’s difficult to arrange. But I’m looking forward to it!

Peter McCormack: And if you’re MCing! So I’m doing Riga and you’re doing Berlin?

Stephan Livera: Yes, that’s right. I will be alongside Des Dickerson from Lightning Labs, I’m MCing the Lightning conference.

Peter McCormack: How are you feeling about it?

Stephan Livera: Oh, it’s fantastic! It’s a great opportunity, I’m really pumped for it and I’m just really excited. It’s got a fantastic line-up so I’m really looking forward to it.

Peter McCormack: Yeah, I’ve definitely got to get to that event, I think the line-up is amazing. It’s very cool that they’re doing a Lightning only event as well.

Stephan Livera: Exactly, I’ve been saying this thing is going to grow and each thing will have it’s own conferences, its own media, its own thing. Lightning will be its own thing. Mining is becoming its own thing. Everything will become its own thing.

Peter McCormack: That’s the problem I find though then, because there’s so much to learn and so much to get your head around. I think that’s one of the things that other people don’t realize when are podcasting, it’s very difficult to just be a niche podcast, right? You’ve got to cover economics, you’ve got to cover mining, you’ve got to cover trading, you’ve got to cover tech, you’ve got to cover Lightning. There’s so much to cover and you do a better job in terms of understanding a lot of it than I do, but trying to just consume all the different knowledge, all the articles, all the podcasts, I don’t know how other people do it. I struggle with it, I don’t know how you find it?

Stephan Livera: No, I’ll tell you what, it’s like you’re on a treadmill that ever increasing in the speed, right?

Peter McCormack: So you’ve just got to get fitter!

Stephan Livera: Yeah! Well look, I think part of it is just people eventually niche down. So the analogy I’ve heard before is like, imagine you were a computer researcher in the 50s or the 60s. You could probably go to every computer conference and read every computer technical journal. But then what happened is each thing became its own.

There was networking, there was hardware, there was software that was open sources, and it just became too much for any one person to be across everything and that’s what’s going to happen with Bitcoin as well. It’s going to get so big that there’ll be mining specific podcasts, there’ll be Lightning specific podcasts and not just podcast, right? It’ll be magazines and journalists and everything. That’s how it’s going to go.

Peter McCormack: As it takes over the world! Well, you know what, it’s funny you should say that as well. I mean, you saw my thread this morning about nodes, right?

Stephan Livera: Of course, yes.

Peter McCormack: So that’s been my guilty secret for a long time is that I’ve never fully set up a node and I kind of feel like a bit of a fraud because of it. Because the way people talk about it, especially someone like Luke, or when I talked about doing my beginner’s guide and people were like, “well, you’ve got to include having a node in it.” I was thinking, “oh shit, I’ve never really admitted that I’ve never set a node up, because I’m intimidated by it.” So I was like, “fuck it. I’ll put it out there. I’ll see what the response is” and then I’m just watching this debate going on. I’m thinking I’m kind of validated now!

Stephan Livera: Yeah absolutely. So the way to think about that, is you’ve got to understand, firstly, why is it important to run a node? What is that node doing? A lot of people, when they’re new to Bitcoin, they don’t understand this. So here’s a typical progression; firstly you might buy Bitcoins and leave them on the exchange. Obviously leaving yourself at risk of getting wrecked, a big no-no, bad practice. Second level is, “okay, maybe get a hardware wallet.”

Now okay, that’s a little bit better because now as Andreas says, “not your keys, not your coins”, you’re holding your own keys. So that’s the next kind of step. Then the next step typically after that is someone might run a node, but not really understand why it’s important. So they might just be running a node thinking they’re supporting the network, but they’re not actually using it to validate incoming transactions.

Then the next level is running your own node, typically something like Electrum Personal Server, like using it, something like that and then pairing that back and using that to connect with your own hardware wallet or your own set up, in such a way that you are now using Bitcoin in the way it was meant to be used. You are using it to verify incoming transactions and in doing so, you are in some sense defending “the rule set” of Bitcoin.

So that’s kind of the key justification. But a lot of people don’t understand that, so they just think, “oh, I’m just running a node to “support the network.” But actually correctly understood, it’s more like you’re using it to verify that you truly hold Bitcoins, because theoretically if you got it on, say a Trezor or a Ledger, Trezor or Ledger, if you’re just using their web wallet service, they could theoretically be lying to you.

So that’s understanding… And part of this is the journey. I think that as hardcore Bitcoiners, it’s our job to teach people to move up that progression ladder, so to speak. Part of it is that journey because at the start you’re just like, “what is this? Why do I even want Bitcoin?” Then you start slowly to understand a little bit more about what makes Bitcoin so special and that’s why if you talk to the hardcore Bitcoiners, they’ll give you basically a similar answer to what I’m just giving you now.

Peter McCormack: You did though, manage to articulate that in a single tweet earlier. You got that in 280 characters!

Stephan Livera: True! But not with the same detail. Someone could look at that tweet and think, “why? Why would I do that?”

Peter McCormack: Well that’s the funny thing about our podcasts as well, because I kind of think it’s the same. I think of mine as the beginners podcast and I think of yours as more of like the intermediate, advanced topics. Even when we’ve had the same guests, I think you can compare the two shows. Almost like the one with Raoul or the one we both did, Wasabi wallet?

You can actually hear the shows, you could almost put them back to back and go, “okay, do Pete’s because that’s like the beginner, dumb questions and then when you want to get a bit more advanced you can go off to Stephan’s.” Who’s going to be the super advanced one? Is that going to be you as well?

Stephan Livera: Who knows? Maybe that’s Noded, or maybe someone else is going to come in and they’re going to be like the really super technical podcast. Whereas I’m sort of intermediate and like the bottom end of advanced.

Peter McCormack: But you’re now full time! So how’s that going?

Stephan Livera: Yes, I am! I’m definitely finding it very liberating. It’s my passion, I love doing this stuff. I love the process of just constantly trying to improve as well. I’m constantly trying to improve my technical knowledge, but at the same, obviously trying to get good guests on and trying to craft a good discussion in terms of, what are some good topics that I’m going to ask them and what are some areas that I might have to push back or challenge them a little bit versus other areas where I might think, “okay, here’s a certain thing to promote that I want to help promote.”

So for example, I did the BTC pay server series recently and now I’m doing a hardware wallet series. So I’ve got kind of different ideas on what I can do to keep improving and making the content better and better, whilst at the same time trying to do what I think the Bitcoin ecosystem needs.

Peter McCormack: So have you managed to quit a full-time job, but completely fill all your time?

Stephan Livera: Oh yeah absolutely! I think it’s one of those things, what’s that saying? It’s like saying, the work expands to fit the time given. So you give yourself more time, but then you just take on more tasks and then you’ll just start doing more episodes for example or I might take on other things and other little projects as well. So I mean I’ve got this Ministry of Nodes thing, which is like an education thing as well. You have your to do list.

Peter McCormack: Yes! This is like my get back off holiday to do lists. I’ve got my “urgent” and then “super urgent” and then “fuck I really need to get this done stuff”. There’s so many things, because you have ideas of things you want to do, you fill up the time with stuff. But it’s cool to see you going full time on it man.

It’s been really fun to watch the progression of everyone’s show actually, because there’s like a whole bunch of shows. I think some people seem to think of us all as competing and they probably don’t even realize that we all chat in the background and support and help each other. But I feel like as a group of people, we do kind of all complement each other well and there aren’t too many overlaps.

Stephan Livera: Yeah, well I think people just naturally find their own little niche and their own little angle. So I think that’s a key thing, I mean even for anyone who’s thinking about how they want to contribute, I think a key thing is, find a gap. Find something that’s not being done well. Find something that you could really improve. A good example might be now, okay look, there’s a fair bunch of English podcast. What about podcasts in other languages for Bitcoin? That’s probably a big gap right now. So yeah, there’s a big need for that.

That’s just an example, but I think ultimately, you’re right, people sort of find their own niche and we’ve all got our own slightly different styles. I think you and I are somewhat stylistically similar, but there might be slight differences in the way that we would interview people. Slight differences in that maybe some people or some material is more like entertainment and some is more like education, so there’s that too.

Peter McCormack: Yeah, I definitely think I put my side more on the entertainment side. I like finding the fun interviews. The one I did with Jack Mallers and his family, where I got stoned during the interview, I thought that was a lot of fun!

Stephan Livera: That was great!

Peter McCormack: I’m not an educator. The people I interview are educators. I couldn’t do a solo show like you did. That’s still my favourite one of your shows. I absolutely love that show. It’s the only one of yours I’ve listened to twice. I don’t tend to listen to any podcast more than once. But you can educate, I can’t. I think the only way I can educate is by asking questions that people are probably nervous to ask or just don’t know where to ask.

Again, that node Tweet is a perfect example, because a bunch of people have come forward and said, “yeah, I don’t get this.” So I think that’s probably where I think I tend to fit in. Are there any like things that you’ve learned along the way? Any things that surprised you in podcasting? Anything you’ve found yourself focusing on?

Stephan Livera: Yeah, well for me it’s ultimately whenever I’ve interviewed somebody, I’ve gone and done research on them. So then that’s made me learn a little bit more about the topic, just so that I can have a nicer conversation and obviously make it more fruitful and high signal for my listeners. So that’s a big thing that I’ve done. I think it’s forced me to then go and learn certain topics more deeply and understand them at least at a conversational level, even if I’m not an expert. 

Again, as you were saying, there’s so much and it’s just so difficult for any one person to really keep running on that treadmill that’s ever, ever increasing in the speed. But yeah, I’ve been going for a little over a year now, in terms of my podcast and I would say I’ve deepened my knowledge of a lot of topics like Bitcoin privacy, Lightning network, even some of the economics of it as well, I’ve deepened some of that knowledge as well.

I think it’s just a constant journey of learning and for me, in some sense I’m taking my listeners along with me on that journey of learning, but at the same time I’m trying to think of the beginner as well and try to relay back some info for them, where maybe there’s a lot of technical jargon and it’s difficult for them. I try to relate it back and say, “okay, let me just try and summarize that in non-technical terms”, just for you to be able to follow along.

Peter McCormack: Have you done any cold interviews where you’ve had no questions or prep in front of you, you’ve just gone in and done it?

Stephan Livera: Some of them were, I would say with light preparation, maybe because I knew the person, I kind of already knew what we were going to get into. But I would say most of mine, I’ve done at least a fair… There’s probably one or two that I’ve done. So probably my interview with Aleks Svetski, which was a bit lighter in the preparation and that one was a little bit more of a chilled back discussion about mindsets of Bitcoin and not like, “let’s talk about technical components of Bitcoin, Lightning network or economics.” So some of them, yeah, but I think I’ve tended to be a bit more premeditated in my approach.

Peter McCormack: Right I see. So one in five of mine now, about one in five I do without any prep, any questions. That was one of the things I wanted to improve as a interviewer, because I don’t know if you’ve ever had this, but I found sometimes with some of my interviews that I got through my questions, maybe in like 35 minutes and I was thinking, “crap, I need an hour” and then just trying to stretch out. It kind of threw me. So when I interviewed Pomp, we talked about this. He doesn’t do any prep, almost no prep for any interview.

Also, what I’ve done is I started listening to other people’s podcasts to try and learn from it, non-crypto ones. So I’ve listened to a lot of Rogan, I’ve listened to Sam Harris. So I set myself a challenge, I think it was Mark Weinstein I did it the first time, the guy from the Fyre Festival. But now I’m trying to do like about one in five without any questions in front of me, just to try and develop that conversational flow. So when I do have one of these ones where I’ve run out of questions, I know how to carry it on. It’s definitely a challenge worth trying!

Stephan Livera: Yeah, no you’re right. There have definitely been times for me personally, I can share, there’ve been times where I’ve gotten through the questions really quickly as well, and then I’ve been thinking similar to you. But typically, I think part of what we do is we’re just naturally curious and that’s what makes us podcasters!

So we tend to just be able to come up with stuff and prod a little bit and think about, “okay, well what about if he did it in this way?” And you can sort of try to put yourself into that mindset of thinking, “okay, this would be an interesting question to ask. I think a lot of listeners would want to know about X, Y, and Z, let’s hear that.” So yeah, that’s definitely a learning for me as well.

Peter McCormack: Have you gone back and listened to your first show again?

Stephan Livera: Oh no, not in a long time! But I’ll tell you what, there are some times where I have gone back and listened to some older episodes, because I was doing some editing and stuff and it’s like, “whoa, my audio was terrible!” I really feel sorry and I don’t know how some of my listeners put up with that back in the early days, but I mean they did. I guess back then there just wasn’t as much stuff out there and so they were just happy to have anything!

Peter McCormack: Yeah, you’ve got no excuse now, you’re like a pro, you’re full time. You’ve got to have all the gear, you’ve got to have the pro sound, you’ve got to have the pro website. You’ve got no excuse now man!

Stephan Livera: That’s right! I mean, I’ve obviously very quickly progressed up in terms of audio quality, production value, that sort of thing. Recently I did a bit of a rebranding as well, so I’m happy with that.

Peter McCormack: It looks so good, that rebrand work.

Stephan Livera: Thank you! I got it from [Inaudible] so definitely hit him up.

Peter McCormack: Have you met him?

Stephan Livera: Yeah, at Bitcoin 2019.

Peter McCormack: Of course, he’s such a cool guy. But it’s also one of those funny things is like, I think a lot of people underestimate what goes into doing a podcast. They see someone doing a podcast, they think, “oh, I’m going to give it a go”, but they don’t realize that, not only are you a researcher and interviewer, you’re also a marketeer, you’re a sales person, you might have to be a coder. There’s so many different things you have to do in the background. When I was doing it all, I think for every hour of interview, there was 10 hours of work, no maybe 20 hours of work in the background.

Stephan Livera: Oh, absolutely! I think that’s definitely something that is very underappreciated, because from the outside looking in, you just think, “oh, just get them on a call or meet them in person. Then just press record and off you go. Isn’t that all you have to do Peter?”

Peter McCormack: That’s just it, yeah and we’re live and now we’re rich!

Stephan Livera: So for me, when I started it, and even now, when I was working a full-time job before, it basically took up all my spare time. I had no spare time. I was just spending all my time doing research, all my time trying to hustle and get guests on, then doing audio production, then putting it on a website and trying to make it all work. Now, yes, there are certain tools that help you make it a little bit more efficient, but it’s kind of like that treadmill idea again, the more you sort of start doing the work, it expands to fit the time given, and then you start thinking, “oh, I’ll do more episodes” or I’ll do more of this, then I’ll do more of that and then very quickly your time is gone.

So I think another thing that’s maybe underappreciated is being skilled and knowledgeable about Bitcoin, is not the same skill as making content. So I think a lot of people don’t understand that, so they just think, “oh you have a lot of followers or whatever and you should be super knowledgeable about Bitcoin”, but the reality is you’re spending a lot of your time doing audio production or all these other tasks that are required and so you don’t have as much time to actually deeply understand some of these things.

Now obviously there’s still no excuse, from my point of view, I do what I can to try and learn. It’s a constant learning journey. But yeah, there are definitely times where I would have liked to been able to try that person’s product or service out a little bit more, before I interviewed them, so that way I can speak to it and I’m more conversed into it, but in reality I only got a chance to do a little bit of trying that because I was busy researching something else or doing some other organization work. So that’s kind of how it’s played for me.

Peter McCormack: But I think that’s also useful for listeners. I obviously have a group of people who aren’t particularly fond of my podcasts, because I think I’m technically illiterate and a bit of a moron. But actually there’s so many people I think that are in my shoes, so by having that experience, I’m kind of living it in parallel to them. So actually I think that’s useful to people. I think you can get some people out there, hugely knowledgeable in terms of Bitcoin, but they might not necessarily make a great podcast. I don’t know, we tend to find what we’re good at. I think some coders will code, some people will make a podcast. I think as long as everyone’s contributing to the pie and not being too much of an ass about things, I think we can all help each other.

Stephan Livera: Oh absolutely and I think people just find their own niche. I think people just naturally sort of see, “oh okay, this person’s already doing that. I can either help them with it or I can work on something else.” People just naturally divide themselves in some ways.

Peter McCormack: All right, well listen, we can talk about podcasting for ages. It might be boring for everyone, but we really should talk about Austrian economics, because that’s the thing I’ve been threatening to do a show with you about for quite some time. So I did a little bit of Austrian economics, libertarianism with Saifedean recently, but I kind of want to go into with you. You don’t need to do your background, people will know your background. They’ll know that you’ve got a strong background in Austrian economics.

I’ll definitely forward them to your show that you did about it because they should have a listen, but I still don’t fully get it. Also I’ve been kind of throwing some questions out on Twitter, going down the rabbit hole a bit, trying to understand where the crossover between Austrian economics is, with people who are anti-state, who want a complete kind of anarchy, the people who are all about self-sovereignty and guns. There’s lots of things that kind of align, but then also contradict. So I’m going to do a bunch of interviews like this and speak to different people to get their perspectives.

But let’s go into detail with you, because some people might not have heard your show. I almost want to do a, explain Austrian economics like I’m five. Let’s go really super simple and start with what it is, the background and why people should care about it. The reason I think that’s an important part, is I actually studied economics at school. So we have GCSEs and A-levels. I did economics at A level, did macro and micro, part of that we studied Keynesian theory. At not one point in my life had I heard of Austrian economics until Bitcoin.

Stephan Livera: And that’s a shame!

Peter McCormack: Yeah it is a shame and there’s probably different reasons for why it isn’t taught, but let’s start with what is the background to it? Why do you care about it and why should other people care?

Stephan Livera: Great question! So I think the fundamental difference between the Austrian school, one key difference to think about is, it’s fundamentally about this idea of spontaneous organization and it’s fundamentally about this idea, if you think of it like the ability of things to organize in a bottom up way. So imagine that we are organizing in a bottom up organizational way, rather than this kind of top down government or King method. So rather than taking that view, think of it like a bottom up view and we think of it like, if we focus on the role of the individual and the choices made by an individual. So that’s probably at a very… If I was trying to explain it without any technical terms, that’s probably what I would say.

Now if you want to dive the next level down, we would say it’s a particular economic approach that is using deductive reasoning in some sense and that is why we reason in a different way using Austrian economics as opposed to other schools of economics. That’s something that’s very characteristic or very quintessential and that’s what identifies the Austrian school, is a certain way, it’s known as the Praxeological method of argumentation of reasoning. So the idea is that you might start with a certain premise, such as “humans act purposefully and we try to achieve certain ends using scarce means and scarce resources.”

So from that, the idea is that you would then deduce certain other truths and that’s kind of one of the fundamental building blocks of Austrian economics. Then another very key related idea, and this is if you read the book “Economics in one lesson” by Henry Hazlitt, which is a great first read in terms of Austrian economics. So in that book, Henry Hazlitt basically talks to you about this lesson of the seen and the unseen. So the idea is, you probably would have learned in your economic classes this concept of ceteris paribus; keeping all other things equal. 

So that’s a quick example of how an Austrian would conceive of things to try and understand, okay, let’s say there was a broken window in the town and somebody said, “oh, but that might stimulate more demand for the glass guy, who is going to come and fix that.” But then an Austrian might step back and say, “well, hold on, remember that if that window was not broken, then whoever that shop owner was, could have spent that money on something else.” So the real loss might’ve been, say he was a baker, he might’ve been able to buy some other kind of baking machinery and that’s the real loss.

So that’s a key lesson, which is known as the parable of the broken windows. So that’s like a very introductory kind of lesson that a lot of Austrians would bring. So there’s a few things around that, but essentially what most of this boils down to or what it results in, in some cases, is a very free market approach to things. The idea is that we should have a society with voluntary interactions and with the inner system, with strong private property rights, then that is what enables a better consideration of the costs and the benefits of things and in doing so we would have a more economically stable and prosperous society.

Now I guess I might just anticipate a quick question here. Part of it is, we have to distinguish between the economics part of it and the political philosophy part of it. So the economics part is value free. It is a science. If you want society to be more productive etc, this is what we do better. But then the political philosophy part of it, on the other hand is more like, what is the moral component of that? That is value laden?

Are we saying it would be good to have a rich society and therefore, we should have a society that is more libertarian or more respectful of individual rights and private property rights. So I guess I would just call out to the listeners there, that that is the difference there. So economics itself is value free. It’s not passing a moral judgment, but the political philosophy part of libertarianism, that is value laden.

Peter McCormack: Okay, all right. A lot to get into here!

Stephan Livera: Does that make sense?

Peter McCormack: Yes and no. It’s a lot to get into and I’ve got different areas… I’m keeping notes as we do this. Your hero Tom Woods, I’m a regular listener to his show as well and I’m learning a lot about free markets and a lot of anti-socialist kind of rhetoric from him. Rhetoric the wrong word, just kind of like anti-socialist views, I find it very useful. It’s a great show. I don’t listen to all of them, but every now and again, it’s usually the ones where they focus on socialism, probably because as a kid you usually have some kind of heart and you want the best for everyone.

I felt like I was probably a socialist and as I’ve got older, I’ve kind of felt like I’m probably more conservative, but I do feel like I want some fairness for other people and I want to help other people. But being around Bitcoin and being around Bitcoiners and libertarians and various other people, I’ve started to realize there are a lot of problems with socialism. I’ve just been to Cambodia and I read a book about the Khmer Rouge and the Marxist state they tried to implement and how terrible that was.

Now I don’t believe every socialist wants a state similar to that, but what I’m saying is that I’m learning all these things, but there are a few areas I want to dive into first. The first question I have for you is, can you kind of follow Austrian economic principles in your daily life within the current political climate and the current structures that we have from the governments we already have? Is it something that you do and you follow with your own principles or are you restricted by the state and the legislation that currently exists?

Stephan Livera: Yeah, so I would say it’s not quite something that you can, in that sense, implement in your own life right now. There are certain insights that you can draw. So I remember actually from your recent interview with Saifedean, he mentioned a really good point, which is that often times the best trades you make are with your future self and that you can make certain decisions that might be short term pain for a long term gain, let’s say.

Maybe I don’t want to study hard or I don’t want to spend all the time to learn this new skill, but it’ll pay dividends down in the future. Something like that, kay, fair enough, that’s definitely something. But I would say for the most part, Austrian economics is like a prism through which you can view the world. It’s almost like you can sort of x-ray certain things and see the true purpose. Not to that level obviously, but it allows you to somewhat perceive a little bit more correctly what’s going on and I think to that extent, it may help you in certain decisions that you may make in terms of investment or things like that.

Now there are certain people who try to invest based on that cycle and so on. That’s sort of starting to step outside the specific Austrian economics and then sort of stepping into a role as like a timeologist sort of thing. But yeah, I would say it’s mostly more like an analysis of the system or the society that you are in and helping you to perceive more of what is the true economic impact of certain decisions that are made.

Peter McCormack: So you can critique the current system and identify flaws in it?

Stephan Livera: Yes. So we would say, okay, a tariff might be bad because it impedes a voluntarily beneficial trade and so in that sense, the consumers are worse off because they would’ve done this trade, but now they are restricted from doing so and this is something that can be sort of praxeologically said as well. So we can say, if you and I would have done a trade, but then the government says “no, Stephan and Peter, you may not do this trade” well then we are worse off because of that.

Peter McCormack: Right okay, so a good example might be, I was listening to Joe Rogan’s interview yesterday with Bernie Sanders. When you listen to Bernie and the way he explains things, you’re like, “that makes sense. Why wouldn’t you want that?” So a good example for me was when he was talking about minimum wage or a living wage, which we have in our country and in a lot of countries, I don’t know if you have it in Australia.

Now it kind of make sense to anyone when you’re thinking with your heart, of course you want people to have a minimum wage and a living wage, of course you want them to have that. Of course you want people to be able to survive, but there are a lot of flaws with minimum wages, right?

Stephan Livera: Oh absolutely! So this is one of the most hotly kind of debated, but it’s one of the most… I think amongst most economists, they really do appreciate this idea, which is that demand curves slope downwards and that the more you raise that minimum wage, the more that you are dis-employing or making sure that there’ll be less people employed at this certain level. Now it depends what level you want to talk at.

At the basic level, we would say that the first order impact is, “yeah, less people are getting employed at this wage, because they’re being denied from that trade; my hour of labour for your money. But then you can also see other impacts as well, that it might be things like, okay, the employer is not just making money out of nowhere, so he has to make ends meet somehow. He might pay you less, but he might give you less training or he might be more of a stickler and say, “oh, I saw you took a long lunch”, things like that to try and make sure he’s getting enough value.

Because if he’s not getting enough value out of the work you’re doing, he obviously can’t sustainably afford to keep you employed. I mean that’s a quick high level way to think through that issue and there are many other kind of insights that can be drawn from that as well, if you go and read the textbooks and so on.

Peter McCormack: So really there shouldn’t be any form of minimum wage? The market should decide the wage for each job independently?

Stephan Livera: Oh, absolutely. So the Austrian economist would be anti-minimum wage laws and they would suggest that they are negative for society and not just for the immediate here and now impact. It’s because a lot of, and this is a little more in the libertarian political philosophy realm, but in some sense, it’s like you’re kicking away the first few rungs of the ladder, because oftentimes people need to start somewhere. Also if you look at the statistics on this sort of thing, there’s not that many people who are literally earning the minimum wage or if they are, they’re not breadwinners.

They might be a kid living at home with their family and for them, it’s a stepping stone on the way up that ladder to build a skill. Also, I think in more of a social sense, it demeans you. Work is dignifying in some ways because it’s how people socialize and it’s how people learn new skills. Whereas those of us who are more sceptical of the government and government welfare programs and minimum wage laws and so on, would say, “well, is that really having a positive impact?

Or maybe it’s actually causing a bad downward spiral for people and in fact it would be better to have no minimum wage. In doing so, everyone could get a job and then they could start their way working up that ladder.”

Peter McCormack: Okay, so I guess the same is true for the reverse, that there shouldn’t really be salary caps either?

Stephan Livera: Yeah, absolutely not. So I think it would be a similar kind of idea, but in this case it would be sort of trying to trace out the impact of that. It might just impact the way people work or they might be more inclined to now go and start their own business, instead of staying at a certain business. It kind of varies how they impacted that or how they put that into place and it might cause a shortage in the number of people, because there might be people who, let’s say are a superstar and they should be getting paid $500,000 a year, but there’s a salary cap of $400,000 per year.

Well then companies might not be able to find the right talent or they might not be able to get the right talent to draw them in, to work in that industry. They might go work somewhere else because they’re worth $500,000 or whatever.

Peter McCormack: Well yes, so there’s two examples I can think of that. The first one is I’ve heard of salary caps with regards to sports teams and such, because they want to make it fairer and they want to make it fairer for other teams to compete. But at the same time, if you’ve got a salary cap, you can’t perhaps sign somebody you want, therefore you’re preventing, I guess a trade, an actual trade of a player.

The other time I’ve heard it is also with regards to CEOs. There’s kind of complaints in the UK, I think a report came out recently that the CEOs are earning 117 times more than the average employer wage. But I was thinking, that if you had some form of business salary cap, for say a CEO, and specifically, if that was say somewhere in the UK, well then you might not be able to get the CEO you want, because of the cap. Therefore he might go and work in another country and actually then you are also preventing another trade of some sorts there.

Stephan Livera: Exactly. So I would say firstly though, just with the football or sports example, that might be a little bit different because it’s more like those leagues are themselves a private organization and everyone’s opted into that league. So the league might’ve put in a rule because they want a certain level of fair play, so to speak. They don’t want to have like these super wealthy teams, who are just absolutely caning everyone else.

They want to sort of make it a little bit more of an even match, so they get more spectators coming to the game. So I could sort of see that, as that’s more of a private rules scenario. I think that’s the other thing as well, as that’s a common confusion with outsiders who are looking at libertarians or free market economists. They’re thinking, “oh you guys don’t want any organization”, it’s not quite. It’s more like we want private organization, we want in some sense, market regulation as opposed to government regulation.

That’s one way to put it. But absolutely the example with the CEOs, that is an example where we would say, “no, that’s actually counterproductive.” But that said, it’s difficult being a libertarian because then you kind of have to often say, “well hang on, we like the free market in general, but there are certain impacts that are being done right now, that are not a result of the free market.” So in order to understand that, you have to kind of understand, “okay, why is inflation bad? What is the Kantian effect? What are some of these other more complicated ideas?”

Peter McCormack: What about trade unions? What do Austrian economists think about trade unions?

Stephan Livera: I’m not as sure on this one. I think so long as it’s a voluntarily entered into agreement, as in… Are you referring to the union for employees kind of thing?

Peter McCormack: Yeah, like a teacher’s union or a pilot’s union.

Stephan Livera: Yeah, so most Austrians on this point would say, “voluntarily, it’s totally fine”, but here’s the catch. In reality, many trade unions have some form of government coercion or power that is not really a true free market. So for example, depending on the country you’re in obviously, there may be a law saying, “the trade union may force the employer to the bargaining table.” That’s an example where they’re given that kind of power by the state and so a free market libertarian would look at that and say, “well, hold on, that’s not quite right.”

The other point the Austrian economist would probably make on this point is that, there’s only so much that can be paid to these employees in a sustainable way. So sometimes what these trade unions do is they end up winning more pay for their members, at the cost of non-members and that’s a quick example. 

Another one might be if you look at the kind of Guilds or professional associations, some of those function to restrict the supply of new incoming competition. So they restrict the supply of new doctors coming in, so they keep the existing doctor’s salary very high or lawyers or pick whatever other profession. So that’s an example.

Peter McCormack: So for example, if you had a pilot’s union, say British airways had a pilot’s trade union and they go on strike and force some kind of pay rise for the pilots, that might be at the cost of, say, cabin crew getting a pay rise?

Stephan Livera: Well, yeah, potentially. That’s a potential implication. It’s not an area I’m sort of specialized in and I haven’t read into deeply, but kind of high level, yeah.

Peter McCormack: You can see how my brain is working though, because then the next thing I start to think of is that you get, say within politics, you tend to get worker’s parties. The worker’s parties who tend to want to represent the more working class, but they really also start to feel a little bit like a trade union themselves, whilst they’re a political party. Strictly speaking, you would argue that they’re more like Labour in the UK, they’re more of a left wing kind of socialist party.

So when I start to hear libertarians talk about the problems with the state and everyone being responsible for themselves and self-sovereignty etc, I can also see how groups of people want to come together and fight collectively for themselves as a group of people. Therefore I can see why, for certain people, certain socialist policies feel good and why socialist parties happen.

Stephan Livera: Yeah, so I guess ultimately a lot of these things are feel good policies, but they’re not necessarily what result in good long-term economic growth, because they do things like cause, as Dr Robert Higgs has spoken about, is this concept of regime uncertainty. So if the government constantly changes the rules of the game, then businessmen feel a bit more anxious about investing and so then they might now be more wary of going into that certain company or going into this certain industry. Then that might cause an overall downwards impact on that country’s economic growth and prosperity.

So that’s a quick example. I think another common thing or misunderstanding if you will, about a lot of libertarian ideas, is that if the government doesn’t do it, that means it’s not going to be done at all. Where actually, we would say no, there are alternatives that would be done for that. So a quick example would be the welfare state. There’s a good book on this called “From mutual aid to the welfare state” by David Beito. In that book he talks about how prior to the government’s welfare state, they actually had these things called beneficial societies or mutual aid societies and they would kind of do like private welfare, but there was a difference.

They were known for teaching a certain self-reliance and work ethic to people. The aim was to try and get them up out of poverty and get them back into the workforce and that kind of thing. This is another thing, even if you listen to Tom Woods, he touches on some of this stuff as well. He points out how, if you look at how the poverty rate was falling, until they started implementing the welfare state, and then it levelled off and it stayed levelled off rather than kept falling. 

So sometimes, the way we would look at it, is actually things were getting better for different reasons. Not deep dark conspiracies, but just for different reasons, such as politicians wanting to look good. So then they would come out and put out a program, that wasn’t actually helping or was in many cases counterproductive, and then the progress stalled.

Peter McCormack: A bit like Chavez in Venezuela, I guess?

Stephan Livera: Well that’s the extreme example! The sad thing is if you go back a few years, there were a lot of prominent left wingers who were saying, “oh, isn’t it so great, look how good Venezuela is!” Then once it all turns into a nightmare, then they start saying, “oh no, that wasn’t real socialism.” So the typical way to think about that is… And in fairness, someone could say, “well, hang on, Hong Kong and Singapore are not perfectly capitalists either. Why do you point to them?”

But I think the capitalist on this point has a better rejoinder. Reason being, we would say, “yeah sure, there’s never been perfectly an arco-capitalism. But those places that went really close to it, they were actually pretty good places to live. They grew very quickly and people came out of poverty.” Every time it’s been really tried, people did well. Whereas every time socialism has been “tried”, it’s been a horrible, horrible failure! Now the common rejoinder to that might be, “oh well see that wasn’t true socialism” and the thing is, you end up going around in circles with the socialists on that because they just never accept that that was a true real attempt of socialism.

Peter McCormack: See, it’s funny, if I went down the pub with some of my friends and we were talking about this and I put my Bitcoin libertarian, Austrian economist hat on and said, “we should get rid of all social welfare, it doesn’t help people”, they’ll look at me like I’m a monster! Everybody expects that you should have some form of social welfare and do you know what, the Conservative party in the UK have clamped down on a lot of social programs in the UK and the evidence shows a lot more people have been pushed into poverty, that’s the reality of it.

I don’t know what the long-term impact is, whether that puts pressure on people to avoid the need for social welfare and actually go out and work harder to get a job, I don’t know the impact. But what we have seen is a growth of more private charitable social programs, such as we have food banks.

Now they feel terrible, I mean it must be shit to go to a food bank because you have the requirement, but I am pretty sure that a food bank program run by a charity or a private organization would be a much better run program than say one run by the government. It seems like anything that is privatized is usually run better than run by the government?

Stephan Livera: Absolutely. So there’s a few points here. I would say, first of all, consider the crowding out effect. Right now, people think, “hey, my tax money is already going to the welfare state, so I don’t need to do private charity.” But if there were no welfare state, then it would be more incumbent on us and we would think, “okay, actually now we should give up more money for these private charities, because there is no welfare state.” So that’s point 1. Secondly is just the point around effectiveness and efficacy.

So I think the challenge is, a lot of these government programs end up rewarding failure and if they fail, they just say, “oh well it’s because we didn’t have enough budget” or “it’s because we didn’t have enough regulation. We just need one more regulation or we just need another million dollars and then everything will be fine.” Whereas the free market actually drives towards success and it gives people a better incentive. So this is coming back to a very Austrian point where we would say something like, “a free market and individuals and companies within the free market are subject to a profit and loss test.”

So that’s how you know they are actually providing some kind of net social benefit, because it means people are voluntarily giving their money to you and so that is a much stronger assurance, that what you are doing is socially beneficial and being valued by society in the aggregate. If you can do it at a profit, then in that sense, you are kind of making more than you’re losing, it’s an indicator. Whereas with the government it tends to just have this ability… Well it does have this ability, as Hans-Hermann Hoppe calls it, “it’s the territorial monopoly of taxation and ultimate decision making.”

So if they fail, they can just tax you more and so it just creates this really bad downward spiral. Whereas in a free market world, we think it’s like this virtuous upward cycle and some of this plays into even some of the ideas, that obviously Saifedean touches on and many others such as Guido Hülsmann touches on, around this idea of time preference and the impacts, the cultural and spiritual consequences of fiat money on society are. Some of that is, well this big government is in part or very much so funded by debt. What’s enabling that debt is fiat money through this massive market for bonds.

So the government is able to sell bonds into that market, because there’s all this cheap credit out there and that is what helps the government fund all these big state welfare and warfare programs. So in a world where there is this cheap funding for the state, we believe that it would be more of an equity based society and people would think more of their future and they would be more careful in some sense, because the safety nets that would exist in a private free market world, would be a little more geared towards getting you back up onto your own 2 feet, rather than in the government welfare world, where it is less personalized and it’s more, “you just get it anyway, even if you’re an asshole.” 

Whereas in the private system, you have to be nice to your neighbours, because they’re the ones paying into that private welfare system. So if you’re an asshole to them, they all just say, “hey, why are we giving money to this guy?” So it drives nicer behaviours and it drives better behaviours. That’s what we would say on that point.

Peter McCormack: Yeah, so the time preference thing is really interesting and I’ve definitely noticed it impact me. I’ve definitely noticed that I am consuming less, I am saving more. I’m saving more than I have in my entire life. I am considering every single purchase I make now and going, “do I really need this?” And that’s definitely had an impact on me. But also at the same time, me and Saife have had a couple of disagreements about things recently with regard to this, because I, at the same time, disagree with him on art. I fundamentally disagree with him that all modern art is rubbish. I think art is subjective and personal, but that’s absolutely fine.

But also what I’ve noticed with not just Saife, but plenty of other people, is that he’s built this almost massive distrust of the state. Almost anything that the state says is potentially a lie or potentially manipulation. I am really struggling at the moment with climate change as an example. I now cannot find the truth in climate change. I can’t find it because I will go onto something like Greenpeace’s website and I’ll read what they’re saying about climate change. I’ll read everything that I’m finding with reference to the scientific studies, 97% of scientists agree that climate change is real, it seems real and there’s lots happening.

But then I’ll also see other people talk about this being about control. We’ve always had climate change. We’ve always had cycles and it’s not that I disagree or agree with anyone now. I don’t know where to find the truth. How do you find the truth in this? Because for every position there is a counter argument and every counter argument also comes with a little bit of shame like, “well, hold on, are you a statist?

If you believe in climate change you’re a statist and you’re just repeating what the state wants you to. You’re being controlled and you’re being manipulated.” But at the same time, if we’re wrong about climate change, it’s a big fucking problem. So it’s not that I disagree, I fundamentally agree with time preference, I think it’s a really interesting concept. I think it’s something we should teach our children, but at the same time, I worry if potentially it goes too far.

Stephan Livera: So on climate change, it’s a good question. I think one thing that’s very commonly missed is an economic assessment of these actions. So here’s the thing. Even if let’s say, “okay, everything’s going to be so bad in 50, 60, 100 years whatever”, what’s the best response to that? So one of the things that I would be quite sceptical of, is this idea that the government is the one that can coordinate the action, because that ends up being backdoor socialism. They tried through the front door and then they failed. Then now they’re trying backdoor socialism.

They’re trying to say, “oh, well we need a carbon tax and we’ll control your business via this backdoor way” or “we need some other intervention” or “we need the government to come in”. That is where you would say, “hold on, hold on, the government again does not face a profit and loss test.” What would actually be a superior response is a market based response. So a quick example of this would be, look at the prices of land near the ocean, near the coasts, near coastal land. What would the futures on that be?

Let people respond in their own voluntary way and in doing so, they will consider their own individual costs and benefits around this. If you want to take this even further, look at some of the work by Bob Murphy at the IER and he’s done some analysis on things like, a quick example, he would look at the IPCC numbers, literally the actual organization. Even on their own terms, he would say, “well hold on. Actually we would be better letting”… because ultimately it comes to a cost of what is going to be the cost of trying to reduce the emissions in that example and what would be the benefits of that?

Well, fundamentally there’s not that much benefit to it, because the amount, and what we’re talking about here is the amount of cost, that it would cost our societies, to dramatically restrict our emissions for not even a guarantee that we will mitigate all the impacts. Whereas if we were to basically let our economy grow so much faster, that we would be dramatically more wealthy in 50 or 60 years and that our kids and grandkids would be much, much wealthier and well-positioned to deal with any changes that were to come, even if that were the case. Understand me?

Peter McCormack: Yeah I think it comes with a lot of risks though, because what if we’re wrong. Also there’s another thing. I understand your point on the economic argument. This is where I start to think about there is a moral requirement to consider these things. This is where I struggle sometimes with free markets. Imagine a completely free market, but the free market takes out conservation; the free market for animals and species.

We have a market for agriculture, we have a market for meat, we have cows, you can produce cows, you can provide steaks and people can eat. But we have certain restrictions on things, whether they’re domestic or international, say for example, for the protection of certain animals. If we had a full free market, we would wipe out potentially a number of species of sharks. I recently watched a documentary about shark fin soup. I can’t remember the name, but it’s really worth watching.

If we had a free market for ivory, we would potentially wipe out elephants. So how does that fit into all of this? Because I sometimes think we don’t want a state, but can we only protect certain animals or can we only protect certain species and parts of the environment by having a state and having some kind of moral regulation?

Stephan Livera: So my suggestion on that would be, firstly we have to consider… There is actually such a thing, as free market environmentalism and what we should think about is again, who has the incentive to care? If somebody, and typically this is one of those things where if you, again, this is another common argument about things like legalized hunting of animals and things like that, because then if they were legalized and if they were permitted to actually farm those animals, that would actually help the species be maintained with those ones that people really wanted to and if they were, I guess technically feasible to maintain.

But then one problem that we see when the government tries to do these things, is it ends up just being a political football. It ends up being a political game of who wins what. Who wins what piece of the pie, who gets to do what and so that’s one thing that we would suggest on that. Also even on the diet thing as well, we would say there have been certain government interventions that drove us down certain pathways. So Saifedean would speak about this as like, fiat food and he would talk about how there’s this guy called Ancel Keys

He basically came out and kind of put up some dodgy maths and dodgy statistics to make his case look more legit. So it basically made it look more like we should be eating a lot of carbs and so on and this gets into again, a bit of the Bitcoin carnivore argument as well. So part of the argument on this would be that actually if we were to move back to a world with like the Allan Savory style management of life cycle management and use of cows as a way to actually help greenify the world, then that’s another example where we have been pushed into a pathway as a result of government and government interference in certain ways.

So certain funding for certain research and certain academic gatekeepers as well, who at that time were influential and drove the nutritional guidelines in a certain direction to say, “oh, you’ve got to have cereals and bread at the bottom of your food pyramid”, whereas most of us are more about the carnivore lifestyle, who want to eat some steaks and we believe that’s actually more nutritious and it’s quite a disservice that the government is doing to our health, because it’s driving so many people into diabetes and obesity and heart disease and you name it. So a bit of a winding answer, but hopefully that helps.

Peter McCormack: I tell you where it’s all coming back to and it reminds me of something Erik Voorhees said about having less government, in that every year we get more and more government, but actually what we need is less government. I’m not aware of, you might correct me and say there is, but I’m not aware of any libertarian party that’s ever won an election, but it’s not to say it couldn’t happen. We’ve seen over the last, at least decade, a fast rise of far right parties, who are having political clout. We’ve seen it in France, we’ve seen in Germany, we’ve seen it in the UK.

So there’s nothing to say, we won’t see some kind of revolution, some kind of change, where people will start, I guess finding the appeal of libertarianism, maybe start voting for a libertarian party. So in an ideal world, and we’ll go with Australia. Just say we have the rise of a libertarian party, they take power. What are the things you would like to see change? What are the key policy changes that you would see with regard to governments, with regards to individuals, that you would like to see happen?

Stephan Livera: Where do I start? As the great Stephan Kinsella says, “lower my goddamn taxes!” I think number one would just be find ways to cut spending and find ways to cut regulation. I would say probably one and two, they’re probably the key things. Obviously ending central banking is a big factor. Intellectual property obviously is a big factor. Occupational licensing laws, they need to go. Basically just try to look for places where you can cut the taxes and reduce the size of the government. Now that said, I am quite sceptical of political action.

So even though I’m a libertarian and I want the government to be smaller or zero in the anarcho-capitalist case, I think that’s not what’s actually going to happen. I don’t think it’s going to happen that way. I think it’s going to be more like, Bitcoin is just economic reality, it will assert itself onto the world and those people who do not adopt it, the way I put it is, you can either ride this wave or you’ll get crushed by this wave.

So ultimately I think that is what’s going to drive the size of government down and we’re likely to see a world with many, many smaller states. I would see that as an improvement on the current scenario. So we tend to talk about this idea of, in the ideal case, individual succession, the right of succession down to an individual, but failing that, at least smaller and more localized versions of government, preferable to this massive, gargantuan state that’s hundreds of kilometers away from you, staffed by all these politicians and bureaucrats who don’t know you.

So fundamentally, that’s the other thing as well. If you think about what is really an impact in your day to day life, it’s your local police department, it’s your local courts, pretty much all of the local decisions are being made and they’re the ones that matter most to you. So that’s one way I would put it.

Peter McCormack: Well I’m not going to let you off the hook without digging into that a bit deeper, but that goes back to my conversation with Giacomo, because obviously in the UK we have the big Brexit fight at the moment, the big argument! We have many people who support Brexit and many people who are anti-Brexit.

Most of my friends are anti-Brexit and trying to even discuss it with them, trying to explain to them that a smaller state is better, blah, blah, blah, I always get an attack back at me with points such as, “well, you’re going to reduce the free movement of people.

It’s all based on lies of immigration. You’re a Nazi!” All the same stuff coming back. But I did the conversation with Giacomo and at the end of it, I was like, “okay, no, I’m pro-Brexit now. I think Brexit’s a good thing. I support it.” So I guess you feel the same about Brexit?

Stephan Livera: Absolutely. I would say probably 98% or 99% of libertarians would be pro Brexit. There’s probably like 1% or 2% hipster libertarians who think Brexit is a bad idea, but most of them would be pro it. The reason being, smaller is better. There’s a great talk by Jeff Deist on this topic and it’s called “smaller is better”. Part of the idea there is, again, the closer you bring it to you, the closer you are to individual succession and the closer you are to you having some additional control and ability to impact what’s going on in your own life.

Part of that was again, I can understand for the British people who wanted to feel like, “hey, this is our country and we really control it” instead of these unaccountable bureaucrats and all these people over there in the EU who are making all these decisions on our behalf and stopping us from trading. So you guys can’t do a free trade deal with Australia or Canada for example and now there’s talk of that because Australia, Canada and these other countries like New Zealand, these other countries, we share a lot of cultural similarities and obviously the English language and so on.

There’s a lot of similarities there. So it’s an increasingly global and digital world, why wouldn’t we try to have more and more free trade and open trade? So that’s absolutely the libertarian position on that kind of thing.

Peter McCormack: So you believe we can get to a point of no state and no taxes and it will be better for everyone?

Stephan Livera: Well, do I think it’ll happen in my lifetime? Probably not.

Peter McCormack: No, I’m talking more about whether it would it be a good thing?

Stephan Livera: Yes, I believe, fundamentally speaking, a free market, a narco-capitalist society, would be more prosperous, it would be more just, you would have more choice, people would think more about their long-term, we would probably care more about our families and our communities. Whereas now the state sort of impedes that. It infantilizes our children, it makes our people grow up slower, it forces them down these occupational licensing pathways and it’s very, “ask for permission, you can’t go out and innovate.”

Whereas we would see a society that would be, not utopian, it’s not a utopian vision, but it is a vision of a society that really balances people’s individual costs and benefits better and allows for that individual choice. So fundamentally it’s about having respect for private property rights and thinking, “okay, what are some ways that we can solve this with additional private property rights and respect for private property rights”, as opposed to, “there ought to be a law”, which is kind of like the top down, statist kind of interventionist way of thinking about that.

Peter McCormack: But do you as a libertarian or other libertarians ever debate the downside potential of this? And has it ever been tested? Because I can imagine in small groups, in a village, a small town, this works very well. I try and think of a country with 300 million people and wonder, “would it be all out anarchy?” Does it come with other downsides?

A lot of the conversations I’ve had with Americans recently is with regards to guns and the Second Amendment and I totally understand what they’re saying. At the same time, I don’t want guns in my country. We don’t really have them and I don’t really want them introduced. So do you ever debate the downsides? Are there any risks that you as a libertarian, identify and worry about if this was to happen?

Stephan Livera: So look, there are internal libertarian debates till the cows come home! There are massive, massive debates about a lot of these things. So even amongst the libertarians, you’ve got the minarchist, small state ones. So for example, someone like Francis Pouliot, he’s a minarchist and then there’ll be others who are more on the anarcho-capitalist side, right? So those people are always debating.

There’s a lot of different debates about these things, about things like, could in an anarcho-capitalist society, could they do national defense? There are debates about that. So absolutely, there’s a lot of different questions on this and obviously we’re not going to solve them all in this podcast, but I can give you just a rough outline on some of these things, if you wish?

Peter McCormack: Yes please!

Stephan Livera: So there are some examples, not like full blown anarco-capitalism, but there are some historical examples. So someone like Rodrick T Long has written on some of these examples of like kind of chieftains in Nordic countries and I think the idea was, you could live anywhere but choose a different chieftain to be your representative for you. That’s a quick example. There are other books such as “The enterprise of law” by Bruce Benson or “Private governance” by Edward Stringham and talking about this idea of, what would market driven law look like? What might that look like and how could it be done?

Or you could look at some of the work by Bob Murphy, he’s got a pamphlet called “Chaos theory”, Murray Rothbard’s “The ethics of Liberty” speaks about some of these points. Hans-Herman Hoppe has a few essays on this kind of thing as well, I think it’s called “The provision of national defense”, something like that, I can’t remember the exact title. But essentially there’ve been many theorists as well, who have spoken about this or looked at certain examples. Another one you might be interested in is this guy Peter Leeson and he wrote a book about the anarchy that existed in Somalia.

What he was trying to do is look at, “okay, well hang on, actually Somalia in that time that it was going, was actually improving at a better pace than some of the other nations surrounding it.” So that’s another quick example where private governance and private law can actually still provide a certain level of governance that we might prefer to see. So again, as I’ll just make sure to clarify here, it’s not a utopian vision, but there are definitely concepts that we can look at and think about, “well, hang on, how did people solve some of these issues in a way where they didn’t have government recourse?”

So in other one, Peter Leeson talks about pirates and how they had certain codes of conduct and laws amongst themselves and how did they resolve some of these issues. So it’s really interesting thing when you sort of dive further into that world and look at some of the explanations about things. Another good one would be David Friedman’s “The machinery of freedom”, which is a classic. So that is also a classic in terms of anarcho-capitalism and understanding what might it look like. So I guess there’s just a few examples!

Peter McCormack: Yeah, so you’ve touched on a couple of things that I do think about with this. So I get it with free markets, I get it with trade and business, it makes sense. I actually really like the idea of free markets, but I do then think about law and order, what happens? Do we have a police force? Is it a private police force? How is it regulated? If somebody steals from me, do they get their hands chopped off or do we have prisons? How does that all operate there?

I don’t know how that works! I also do think in terms of national defense, is a country like this, opening itself up to being attacked? I wish there were no armies! I wish no money was spent on warfare. I don’t like the fact my taxes are spent on drones and missiles to bomb people in the Middle East, I think it’s bullshit. But at the same time I do worry about what happens in this situation.

Stephan Livera: Again, I’ll give a very quick answer, but for more detail, I would say look on YouTube. There’s a talk by Bob Murphy at the Mises Institute, it’s called “The market for security”. He pretty much does that every year at the Mises Institute, at the Mises seminar. But I’ll give you the kind of the high level summary of some of those points. So he talks about this idea of private law. A good analogy might be the English language or just language in general. There are certain rules, it’s not arbitrary. The grammatical structure of our sentences and somewhat, there are certain rules and yet at the same time there is no top-down commander or King of the English language.

It just evolves over time and we have little emoticons and LOL and whatever. We say these things and language changes over time. So a quick example would be, look at the dictionary. The dictionary merely codifies the law. They codify the language, they don’t set the language. If the dictionary came out with some examples saying, “up was actually down”, we would laugh. We wouldn’t say, “oh well the dictionary must be right. I guess I’ve been saying it wrong the whole time!” No, we’d say, “haha, these dictionary guys have got it wrong.” So in the same kind of way, there would be legal experts in a certain field. Yes there’d be disputes, but even now there are disputes and things go wrong. So even with Ross Ulbricht, the government got that wrong!

So we’ve got these examples where right now, the government is getting it wrong. So fundamentally we would see, maybe a world where there might be legal experts in different things. There might be a legal expert for petty crime, a legal expert for residential property disputes, a legal expert for environment, a legal expert in the radio spectrum broadcasting, etc and that might be one part. Then another part might be private police or private security. So let’s say somebody steals from you, you might go to a private court or private judge and these people would have a reputation to uphold.

You might have your counterparty who thinks this other guy stole it, you might say to this other guy, “hey look, there are 10 reputable judges on small crimes or small theft. I’m happy to go to any of these. Let’s take this to court.” After a while, the community, let’s say the other guy was an ass and he just didn’t go to court, it would start to look clear that, “okay, this guy’s not willing to go to court and prove himself.” So these are just some examples. Let me just touch on the national defense part as well.

So I guess the quick way to think about that, would be insurance. So you’ve got this little town or this little area and first of all, take a step back. Let’s understand that what we’re comparing to here is not perfection, because even now with government, there are states that lose in a war against other states. So there are some national defenses that failed! So again, we’ve got to remember that a good comparative would be a similar sized anarcho-capitalist society versus a similar sized statist society, for want of a better word.

So theoretically, if you’ve got a big building, you’ve got a big skyscraper, you put millions of dollars into building it, well you’re going to need to get insurance on that, the same way you would have fire insurance and terrorism and whatever, you might have some kind of national defense. In the same way that an insurance company might say, “hey Peter, if you want me to insure your home against fire, I want you to install sprinklers and if you install sprinklers, I’ll give you a discount on your premium.”

Same way, there might be national defense agencies who say, “okay well, before we insure you, we want you to have this level of counterterrorism or this level of surface to air missile defense.” You can sort of see where I’m going with this idea, right? Especially in a world that we’re moving towards, which is a lot of the wealth is not theoretically physical, a lot of that is human capital. So if someone wanted to try and invade England or whatever, probably a lot of the wealth would be in people’s minds; the intellectual ability and capability of people.

So there’s less and less to be gained by conquest now and more and more to be gained by trade. So that’s kind of the fundamental way we would approach that problem and think about it, which is fundamentally that it’s cheaper and better to trade with people, than to go to war with them about it. Even still, there would be mechanisms that may act to provide something akin to national defense as it exist today.

Peter McCormack: See, the thing is, every time I talk to somebody like yourself or Saife about Austrian economics or libertarianism, everything just makes sense. I listened to him and it just makes sense! So why isn’t this more popular? Is there any studies into… Is this kind of anti-human? Is it just natural for humans to organize themselves in a way of leaders and followers, where we have people with big egos and perhaps narcissists who want to lead people and in leading people, they end up creating rules etc.

Is that just a natural way humans evolved? Because whilst the state is obviously, especially like in my country or America or even worse, Russia, China, it’s clearly in many cases evil, in many cases done awful, terrible things and lie to us etc. But I don’t, also at the same time, believe there’s like a group of people in an underground bunker saying, “let’s control the people!” So is this just a natural way humans have evolved? Are there any studies into that?

Stephan Livera: None directly on that, but I would say, and this is something I’ve seen someone mentioning this wording and I liked it, it’s this idea of conspiracy without conspirators. It’s just everyone is playing to their own best interests. The politician is just looking for ways to expand his empire. The business bureaucrat, again, they want to look like they’ve got a big department. So all of it drives this expansion in the state and that’s if you read Hans-Herman Hoppe, he’ll speak about some of these points about how the worst people tend to rise to the top in this sort of system.

So that’s just kind of how it goes. So if you look at some other people like say Jonathan Haidt, he’s done work on personality types and what that drives. Typically like a libertarian type of person, tends to be a little bit more analytical. They’re the most analytical, if you look at like political orientation and things, libertarians tend to be that sort of type. Now in my view, the system has been such, that it just has, as Dr Robert Higgs talks about, this ratchet effect, it just expands a little and it doesn’t go back down.

It expands a little and it doesn’t go back down. That was in “Crisis and leviathan”. So I think fundamentally that’s why many of us Bitcoiners, many of us were libertarians, more politically about it actively. But we just grew disillusioned in it, because we actually think Bitcoin is what’s going to drive this change much more than actual direct political action, because what does it take for someone to become a libertarian?

They’ve got to go and do all this reading, they’ve got to watch videos, listen to podcasts and learn! Most people are not interested in that. It’s fundamentally like you need to have enough wealth, that you can afford to spend the time doing that and then you’ve got to be disagreeable enough and you’ve got to be willing enough to buck the trend, be the unpopular person. It’s not the path of least resistance!

Peter McCormack: Well look, how many books and talks have you recommended to me in this… What have we done, an hour and 15 minutes so far? I reckon it’s at least 10 or 15 books or talks! I don’t have the time to do them all, I don’t. I’ve got Rothwell’s book downstairs, I still haven’t opened it, so don’t hate me! But at least I went and took the step and bought it. I’m going to read it, but it’s a lot to take on board. I mean look, you’re in, you know this through and through.

This is in your DNA. You can talk about this coherently. You can talk about this, like I could talk about heavy metal. You’ve got it, you’re coherent, you know it all. What’s it like with your friends? Do they think you’re like some wacky libertarian or have you made progress? Have you converted people?

Stephan Livera: I would say that some of my close friends now are libertarians. It’s because I met them through libertarian circles and stuff, but my non-libertarian friends, yeah, definitely, I think some of them I have, but others I’ve just kind of let them be because I don’t want to be overbearing about it. Same with Bitcoin as well. 

I’m there available if they’ve got any questions and they know they can always come and ask me about Bitcoin or whatever, but I try to not be too overbearing. Obviously I post a lot of the material on Twitter and everywhere, but I don’t expect… If we’re just hanging out socially, I don’t necessarily bring it up.

Peter McCormack: Well I do, I bring up all the time! The only time people take an interest, especially with Bitcoin, is when the price goes up! Okay, so what’s stopping libertarianism growing? Like I said to me, it just makes sense. Is it because people are brainwashed into kind of two party politics? There’s a left and a right, which has got a lot worse recently. Is it that? What’s stopping the growth of this?

Stephan Livera: Well, I think a big part of it is just the government education system, which teaches people in a very statist way. So you just grow up in that. You’re a fish and this is just the water you’re swimming in. You don’t even realize it’s the water you’re swimming in and it’s been the progressive century. We’ve seen in the last a hundred years, the governments around the world have expanded so much. If you looked at almost what some of the progressives like a hundred years ago were saying, they probably succeeded beyond their wildest dreams in terms of how much more government we have today.

In terms of why is it not successful? I think it comes back to those points I was saying, the system is set up in such a way that it’s not like a conspirator sense, it’s more just like every person is playing to their best interest and that tends to result in this expansion of the state and expansion of government surveillance and financial surveillance and all of this. In my view, I think it’s not going to change until Bitcoin forces that change.

Peter McCormack: All right, well listen, I’ve got one more question about Austrian economics before we move on to talking a little bit about Bitcoin. But the one thing that comes up consistently that I hear you reference, I hear Tom Woods reference, is that everything always starts with property rights. Everyone talks about the importance of property rights, but can you explain it? I obviously know what it means, but can you explain what it really means?

Stephan Livera: Tough one! So I would say, here’s the thing. Every political philosophy has some theory of property rights. It’s that the libertarians and the Austrian libertarians specifically, have a specific theory of what they should be. So we’re talking about private property rights and so if you look at say, Hans-Herman Hoppe, he would explain something like the first comer. So the idea, is the person who is the first to that, should be the rightful owner of it. You should either be the first to it or the legitimate owner of it through trade.

Sorry, let me take a step back. Why do we have these property rights? Ultimately it’s because we have certain means that we want to achieve, but there is scarcity in the world, there’s only so much land and whatever. So fundamentally the only way to resolve that and not have conflict of these scarce resources, is to assign property rights. If you read Rothbard’s, “The ethics of Liberty” or Hans-Herman Hoppe’s work on some of this stuff as well, “A theory of socialism and capitalism”, for example, that’s kind of what they’re getting at. 

They’re saying, “look, ultimately, if we want to be able to peacefully coexist in this world, we need ways to apportion those property rights.” I think a lot of the Austrians would sort of say, “well, without private property rights, you can’t correctly calculate the costs and benefits of things. Without doing that, we can’t have a naturally functioning society, because fundamentally speaking, it just becomes more of a political game.” Then it becomes, ?”oh this is my mate, or that’s my brother or that’s my sister, that’s my mum, I’m going to give them favors and I’m going to give them better property.”

Fundamentally that’s been unfortunately the way of the world, that’s become very politicized. Whereas we think of it more like democracy, really it’s just like a soft version of socialism. That’s how Hoppe explained it and that’s how many of us think of it really. It’s just a soft socialism and that really, the more precise way to go about this is to assign a property right and then respect that property right. Does that make sense to you?

Peter McCormack: Yeah, no it does and it brings up two questions. Actually, one thing it made me think, was politics is something we don’t need. Politics is a barrier!

Stephan Livera: Absolutely! We would agree with that. I think we want to see a world where politics is less important, where it matters less. Personally, even as I’ve grown up, I’ve seen more and more things become politicized. As a kid, people might go to the football game or whatever and it wouldn’t have been so politicized. People might be, say fans of the same team, but politically have differences, but they didn’t care because they set that aside and were here just here to watch the game kind of thing.

Whereas nowadays, everything’s getting politicized and now it’s like, you’ve got to wear the right color shirt and you’ve got to do the right thing. This is one of the dangers, if anything, of an increasingly, overly politicized society, as opposed to one where, a private property ethic is reigning.

Peter McCormack: Okay, and the other thing it made me think of, are your private keys a very good example of property rights?

Stephan Livera: Oh, okay! So this one depends who you ask. Actually, if you listen to Stephen Kinsella, I had in mind and I spoke about this exact concept and he was basically saying, “you actually can’t own Bitcoins.” I know that’s very weird in some sense…

Peter McCormack: Because they are not physical and in your person?

Stephan Livera: Exactly, and this is part of Stephen Kinsella’s argument against intellectual property as well, because they’re not scarce, they’re not rivalrous. So anyway, that’s another whole kettle of fish. We don’t have to go into that, but that’s his argument. So I think, look, the way to kind of square this circle, is essentially just be sure that you are the only one who controls them! So even if you are theoretically not owning the Bitcoins, just make sure you’re the only one who controls the private keys to those Bitcoins obviously, to stop yourself getting stolen from.

Peter McCormack: Okay, but let’s forget what Stephen Kinsella says. Essentially your private keys assign the property rights of those Bitcoins to you?

Stephan Livera: Sort of. It’s more like, we would say in Bitcoin, the private keys are what enable you to spend those Bitcoins. But I guess if you want to get really precise about it, it might well be that you can’t technically in some sense, own Bitcoin, but really it’s more like you’re the only one who can control them.

Peter McCormack: All right okay. Well look, let’s go back a few years. How long have you been studying libertarianism? When did it become part of your life? Was it as a teenager? Was it your adult life?

Stephan Livera: Yeah, actually I was like 14 or 15. So basically over half my life at this point. I was hanging out on IRC, Internet Relay Chat and I was on some Australian politics channel. Obviously as a kid, you haven’t really been politically well developed, you’re just sort of whatever and this guy kept linking to Mises daily articles. So at first I just thought, “what the hell, that’s all crazy, anarcho-capitalism that would never work. Wouldn’t gangs take over? Wouldn’t warlords take over?”

All this stuff and all these different things. Slowly but surely, as I read some of those articles and then I compared that back to what I was learning at school in economics class and stuff like that, the Austrian stuff just made so much more sense to me. I think it was not something I could grasp precisely why that was, but I think later I understood that more and I think it’s precisely that the Austrian method is a little bit more methodical and systematic. So there’s a certain deductive reasoning and procedural method to it.

That was something that appealed to me, because it just felt… So intuitively, it just made common sense. But I think the reason for that was it was a lot more logically coherent and consistent. That was my experience. Then kind of going further down that rabbit hole, the Austrian economics and libertarianism rabbit hole is essentially, I just listened to different podcasts, I read different articles, I read the books obviously. So that was my journey down that.

Peter McCormack: Okay, so along that journey though, along came Bitcoin, right?

Stephan Livera: Well, Bitcoin came after for me. I was already…

Peter McCormack: Yeah that’s what I mean. You were already in. But during this journey of, I don’t know how old you are, but say the last whatever, 10 to 15 years, during that journey, along came Bitcoin. You obviously mixed in libertarian circles, you’ve discussed this with people, but in some ways it feels like you’ve suddenly got a tool which is really useful for opening the door to Austrian economics to people, libertarianism. It feels like in some ways it’s become a great marketing tool for these kinds of principles.

Stephan Livera: Somewhat yeah, that’s right. I would say one thing with that is, there were a lot of libertarians who didn’t come into Bitcoin, but the funny thing is now there are some people that got into Bitcoin and then got into libertarianism and Austrian economics from that side of it. For me, my kind of come to Bitcoin moment was actually an Erik Voorhees article in late 2012. I stumbled across an article by Erik Voorhees and that was my like, “whoa!” Up until that, I’d heard of Bitcoin before, I like seen it on slashdot or whatever, but I didn’t really pay much attention to it. It was December 2012, reading that Erik Voorhees article that actually got me into it.

Peter McCormack: So you went out bought hundreds and hundreds of Bitcoins!

Stephan Livera: I wish!

Peter McCormack: Don’t we all wish! I’m actually a huge fan of Erik’s. I know he’s got some critics for what happened with the New York Agreement and I know Shapeshift allows for trading shitcoins, but I’m a huge fan of Erik’s and I love talking to him about this stuff and I’m a big fan. I’m glad that’s how you came in. So at one point during that, Bitcoin clicked for you with Erik’s article. Did it immediately click as something that was aligned with both libertarianism and Austrian economics? What was it that really kind of made you go, “ah, this is important!”

Stephan Livera: Absolutely it was those things. So in that article, I can’t remember the exact title. I think it’s something like “a libertarian introduction to Bitcoin”, he wrote it for a libertarian, so obviously it hit the right notes to get the libertarian in. So that for me was seeing… Because obviously I was already skeptical of central banking, I was skeptical of fiat money and then this was like, “well, okay, this is like a whole parallel system that could exist and people could use it.” Now obviously in those days when I was first encountering it, it was more like an asymmetric bet. I thought of it more like that.

I thought of it more like, as the famous Satoshi words are, “it might make sense to get some, in cases it catches on.” Then as I slowly got further into it, and then I started reading different articles by say Tuur Demeester, back then Konrad Graf, Pierre Rochard, Michael Goldstein and Trace Mayer as well. So that was what made me become even more and more bullish on it. Then in some sense that made me go back and read further into some of those Austrian monetary economics components of it as well.

Because I had read basically most of the Austrian big name books, but I hadn’t had as much of a focus on the monetary economics side of it. So it was kind of after getting into that, that I went back and kind of re-read and looked a little more deeply into some of these ideas such as “deflation and liberty” by Guido Hülsmann, “the ethics of money production” by Guido Hülsmann and various other concepts around things like deflation and a lot of those Austrian monetary economics concepts that help us perceive Bitcoin.

Peter McCormack: Okay, that’s really interesting. It clicked for you immediately, you bought into it, you understood it, what are the key things that Bitcoin therefore offers to people? What is it going to improve? What does it change? How does it change the game for everyone?

Stephan Livera: Well, I mean fundamentally, it’s stuff that you can get from reading “the Bitcoin standard.” But ultimately it’s this idea of this really hard money, the supply cap, the fact that it can be sent anywhere around the world at the click of a button, it should be compared mostly, as Saifedean does, to this idea of settling gold internationally at a fraction of the cost and a fraction of the time. So that, in my view, is a smarter way to think of Bitcoin and that is fundamentally why it may succeed, where gold got co-opted in the past.

So that’s kind of how most of the, what I would call the Bitcoin Austrians, so Saifedean, Pierre, Michael Goldstein, Vijay and some of these other guys, they would speak of it in that term. They would think of it like, “well look, gold got co-opted and because there were other systems operating on top of gold, the government could just co-opt that and kind of turn that into its own machinery.” Whereas Bitcoin has certain characteristics about it, that are resistant to that kind of manipulation.

So we may see a world with thousands and thousands of Bitcoin banks and in some sense, when you run your Bitcoin full node and youre Lightning node on top of that Bitcoin full node, you might help become a financial institution in the future. You might open channels and let’s say you got people doing channel management and you might run apps for other people to even be a customer of your bank. Hopefully, now this comes into this idea of how accessible is a full node and hopefully it remains very, very accessible for people to set up their own full node, both Bitcoin and Lightning and whatever else comes.

Hopefully then, that helps maintain this decentralized money and that is how we see it playing out over time, because it’s just hard money. It’s just economic reality that’s just asserting itself onto the world and it doesn’t really matter that much what you are I say or do about it and no one person is that important really. Whether you’re a big podcaster or you’re a nobody, it doesn’t really matter. Ultimately this thing is just going to get adopted, because it’s just a superior money.

In a world where there’s all this monetary craziness out there, you see negative rates, we’re seeing financial surveillance, we’re seeing all the sorts of repression and controls, things like AML, sanctions, “where did you get that money from?” And “what’s the source of funds and who are you sending it to?” “KYC them, KYC you and KYC this, that and the other.” In that world, wouldn’t it make sense to have this hard money that can be sent anywhere and can’t be easily stopped? That is fundamentally in some cases, that’s the bullish argument for Bitcoin, is that it’s just this massive asymmetric bet of a lifetime of a species, as Trace Mayer says.

Peter McCormack: Yeah and the bullish case for Bitcoin, as Vijay says, with his amazing article, which I’ll share out as part of this. So is this where the Bcashers go wrong then? Because they just think of it purely as a way of settling a individual trade? “I want to buy A from B, I want to do it as quickly as possible, therefore Bcash makes sense.” Whereas what they’re missing is the bigger point that this can actually change the entire system.

Stephan Livera: Absolutely. So I liked the way Giacomo Zucco putsq this one. So he was saying, look, you’ve got the Bcashers and then the Bitcoiners. The Bcashers, they thought of it like,” oh hey, we want decentralization of transactions and we want it to be super cheap for people to do coffee on the Blockchain.” Whereas the Bitcoiners were more like, “no, no, hold on. We need to maintain the overall decentralization of validation or verification.”

Hence where, the full node part comes in, because your full node in Bitcoin helps you ensure that the rules of Bitcoin were not broken and that yes, you correctly did receive Bitcoins and so on, whereas the Bcashers, were thinking of it too much in a transactional sense, rather than viewing it more like, certain characteristics of the systems, decentralization must be preserved. So few quick examples. There were people like Adam Back or Christian Decker, they would make this argument that, “look, if you raise the block size too much, you will impact block propagation and you will impact the ability of the network to remain in consensus.”

That’s very important because obviously we want this decentralized money to continue existing and be a longterm sustainable thing. Well, obviously the network has to be able to stay in consensus and it needs to be accessible for people to verify. Whereas the Bcashers were more like, “no, I just want cheap transactions” and in the Bitcoiner view, those Bcashers were essentially placing too much risk on centralization and placing too much power and control into the miners, because that’s essentially what it ends up doing.

It ends up also driving a certain centralization in the way those miners operate because of the block propagation. There are certain limits imposed by the speed of light, such that it would drive centralization in the mining. Whereas what we want for Bitcoin is decentralized mining, in multiple ways and decentralization in terms of location of the mining, decentralization in terms of the mining pools and also the manufacturer of the mining equipment.

We want all of those things to be well decentralized or sufficiently decentralized and so that is fundamentally what gives Bitcoin its government resistance. If it’s not government resistant, I think you’ve basically given up the game.

Peter McCormack: Yeah, it’s government resistant in terms I guess, of control of the protocol, control of decisions, etc. But it’s not proving resistant in terms of privacy at the moment. You’ve talked about KYC/AML, government wanting their taxes from Bitcoin or they’ve obviously paid in fiat. It’d be interesting if we got to a point where the government wanted their taxes paid in Bitcoin, that would be very interesting! But do you think it’s inevitable if Bitcoin continues to grow, that it would destroy fiat?

Also do you think it’s essential for Bitcoin to destroy fiat or do you think we’ll end up with kind of a dual currency system? I’ve just been out to Cambodia and they operate with dual currencies. They operate with the dollar and they operate with the riel. It’s quite interesting, like in that scenario that I was living in, it felt like the dollar was their Bitcoin. That was their hard money. It was a really interesting experience.

Stephan Livera: Oh I’m sure that would’ve been fascinating, because you’re seeing almost like that dollarization and when it gets really, really bad, that’s what happens in some of these countries. You get the monetary hot potatoes effect and then they start using dollars instead of their other, whatever their fiat shitcoin is. Right. So our view on this, the Bitcoin Austrian view, would essentially be that there’s just going to be a tendency of convergence.

So if you look at Mises, “The Theory of Money and Credit”, there’s a section, I can’t remember the exact wording, but it’s something like, “one by one commodities will be rejected, the less saleable ones, until you’ve kind of getting to the most saleable one.” So that would be, I guess the convergence argument, towards the one best money. Now as Saifedean points out, there are certain risk factors, one of which would be the government just simply instituting a gold standard. It’s unlikely, but it’s a possibility that the government might say, “well fine, we need to impose some level of control on ourselves and restraint on ourselves, we’re going to have to go back voluntarily to a gold standard.”

Now even there, you might say that people might not trust the government and they might still prefer to go with Bitcoin, because Bitcoin has a known supply emission schedule, rather than the government, which might again just pull a 1971 on your ars and just remove the constraint, which was meant to be a temporary closure of the gold window. But as Milton Friedman says, “there’s nothing so permanent as a temporary government program.”

Peter McCormack: You know what’s interesting about that last interview that I did with Saife? He talked about, quite interestingly, the biggest threat to Bitcoin is government operating a responsible fiscal policy and it never even crossed my mind. But Bitcoin might end up becoming such a threat, that it enforces proper fiscal policy from government, which had never really crossed my mind. But I still think I would own a bit a Bitcoin then.

Stephan Livera: Yeah, so I think it would probably be more closely related to the monetary policy, which is the issuance of new money. But yeah, absolutely. I think that’s the argument that Saifedean presented in “the Bitcoin standard” research bulletin number 5 and also on my podcast and on your podcast. So yeah, that’s one argument. Look, I think the other argument though is also just simply that people just keep adopting Bitcoin as a parallel system.

It’s just this parallel system and we’re all just upgrading to it, because we’re leaving the worst one behind. That’s increasingly the way many Bitcoiners are thinking about this now. They’re starting to think, “well fine, the government is screwing it up, the government is going to fail under its own steam. Bitcoin isn’t even doing this. The government is doing it to itself and we just need a viable alternative” and right now Bitcoin is the best alternative.

Peter McCormack: And you’re fully bought in, obviously now you’re a massive Bitcoiner. You are globally successful Bitcoin podcaster. I won’t call you an influencer! All right man, well listen, I think we could do another five hours, but listen, I’m conscious of time. So a couple of things I want to close out on. We both recently interviewed Raoul Pal, what an interesting guy and what a great interview! Yours was really helpful for me to prep for mine, so thank you for that.

There’s a lot of doom and gloom with the global economy, I think rightly so. I’ve spoke to Caitlin Long a couple of times and the things she’s predicted are looking like they’re coming true. Do you see this as a real test for Bitcoin? I’m hesitant to say an opportunity, because I don’t want to see a collapse in the global economy, as like, “hey Bitcoin is great now because…” I don’t know, there’ll be a lot of suffering with that. But do you see this as an interesting testing time for Bitcoin?

Stephan Livera: For sure. I think if you look at say, PlanB’s work, he has spoken about how this next coming year or two will be, in some sense, a test of some of his work with the regression and stuff you might’ve seen. Absolutely, yeah, I think it’ll be interesting to see what happens. It may even be that Bitcoin doesn’t rise, in terms of the depression or whatever, if we were to hit some kind of financial recession or whatever. Maybe it’s the next one, who knows.

But I just fundamentally think there is a tendency towards the best money and I think more and more people are learning that and more and more people are coming around to that idea and it’s becoming easier and easier to set up with Bitcoin. Obviously there are difficulties and there’s a lot of work being done to make that easier in terms of like running your node, running Bitcoin, and Lightning wallets and software. So yeah, my cautious suggestion is that it will be sort of a test if we do see a recession over the next year let’s say, but I agree with you.

Your interview with Raoul was great as well and ultimately it’s not something we should be happy about, the recession coming obviously. It’s more like a grim realization or acceptance that this is coming and we have to now try to do something about it and what’s the best way to move on to something better? Well, in my view and I presume your view as well, it’s Bitcoin.

Peter McCormack: Definitely it’s Bitcoin! All right, last couple of questions for you before we close out. If somebody’s new to Austrian economics and new to libertarianism and they kind of just want to dive in, give them a good starting point, like the first couple of books, presentations, things you would recommend somebody go and check out? Obviously I’m going to tell them to check out your podcast, but what are your kind of starting point recommendations?

Stephan Livera: For Austrian economics, I would say “economics in one lesson”. Much of this stuff is free on and they’ve got a lot of videos as well. So you can go and just click through some of those videos and just click around on what different topics you like. But some suggested books or articles and things to read, I would say, “economics in one lesson”, there’s a good one called “lessons for the young economists”, which is a free textbook by Bob Murphy on

Then yes, obviously “the Bitcoin standard”, that’s taken as granted, “the ethics of money production” is a fantastic book to read. “How is fiat money possible” is a fantastic essay by Hans-Herman Hoppe, “democracy, the God that failed” by Hans-Herman Hoppe is also a great one. Then as you progress up then you try to work your way to the Magnum Opus level texts, which are “human action” by Mises and “man economy and state” by Murray Rothbard.

So those are kind of like the top level texts and also from a banking point of view, if you want to work your way up to that, I would say this book by Jesus Huerta De Soto which is called “money bank credit and economic cycles”. That’s a fantastic book. I guess there are a few recommendations I would give, but fundamentally if you just go to, click around on there, read some articles, read some books, a lot of them are free, you can find a lot of material there.

I owe a great debt to the Mises Institute. I think that I owe so much to them, as an institution and how much I’ve learned from them. So I was very grateful to have Jeff Deist on the show and Guido Hülsmann as well. I will hopefully be getting more people from the Mises Institute on the podcast as well.

Peter McCormack: Yeah, definitely do that. Do you know what, a side thing I’ve just remembered, I forgot to tell you. It might be of no interest to you at all, but when I was out in Vietnam, I watched my first Aussie rules game of football!

Stephan Livera: How’d you find it?

Peter McCormack: Chaos! Crazy, like nothing I’ve ever seen before in my life. I was aware of it and I’ve seen clips before, but we went to watch a Premier League football game, but they had the Aussie rules game on a huge screen and the bar was full of these Aussie guys. It was a big game, some team trying to get into the playoffs or something. I’ve never watched a whole game before, fucking crazy game! Do you watch it?

Stephan Livera: Not really, but I have in the past obviously and it’s one of those games takes incredible fitness. You’re talking about AFL here, right? For that, you’ve got to be so fit for that, it is incredibly grueling. They do so much running and if you watch the way they tackle each other and catch a mark and stuff, it’s pretty intense!

Peter McCormack: It kind of reminds me a little bit of like when we’re playing football or rugby in the playground as kids, because there’s just so many on each team and everyone’s just kind of fighting and going for it. But yeah, I kind of liked it! Anyway before we close out, tell people where to find you, tell them what’s coming up, tell them how to find your show. I’ll obviously share it out. I share it out anyway, but just tell people how to find you.

Stephan Livera: For sure, so my Twitter is @stephanlivera and my website is You can find the podcast on iTunes, Spotify, YouTube and all that if you search Stephan Livera podcast. In terms of what I’ve got coming up, so I’m working on this hardware wallet interview series right now. I’ve got some ideas for another series I’m working on for next month. I would say basically have a listen if you’re interested to learn a bit more about basically Bitcoin and Austrian economics.

Peter McCormack: Well, I hope you do a series on Austrian economics as well, because that one I would definitely check out. But thanks for coming on, we did 1 hour and 45 minutes, we probably could have done double that. I could talk to you for hours. It’s been great getting to know you, I consider you a friend now. It was great to meet you out in the States and I look forward to seeing you in Riga. Thank you for all the support you’ve given me in everything I do!

Stephan Livera: Well look, thank you very much as well. It was great to meet you and thank you for inviting me on the show.

Peter McCormack: No worries man, take care!