Monetary Systems in an International Context
This is epicenter episode. Three twenty in talk. I welcome to epicenter. My name is nick would you. Yeah well it is still the holidays and we are still on break so for the very last episode of the year. We're bringing you a panel discussion. which took place at Macro Acura Dot W. t.f which was a side event of SF blockchain week? Now if you're not familiar with the W. T. F. collective. They've organized two events so far at one during Defcon in Osaka which was called defied w. t. f. and then the second event macaroni. WPF during of blockchain week. And I'm quite sure they'll be organizing organizing more events during your major blockchain weeks in twenty twenty so macro dot w. t. f.. Was All about the intersection. Between macroeconomics academics and Crypto and sunny was co organizer so this particular panel is called monetary systems in an international context. And it's all about reshaping our thinking around international political economies. The panelists were John Conley. WHO's a professor of economics six at Vanderbilt University back? Kim Who is an investor Hashed Jay Quan the inventor of Tenement and Steve Alderman Alderman. WHO's in economics blogger at inter fluidity dot com sunny moderate this panel and I thought it was an interesting conversation because I learned about existing assisting problems and issues in monetary policy and economics and how economists are already projecting how these problems could carry over into the crypto space and in some ways as we'll see in the conversation already are starting to emerge in the crypto space and how that could affect things like monetary policy in stable table coins into a larger extent governance of CRYPTO network? So it was really cool conversation. I really hope you'll enjoy it now. The audio on this panel isn't great because as it was reported on a camera but we did try to clean it up as much as possible so that it's at least pleasant to listen to so I am now off on vacation. I'm going to be completely offline for a week. At least that's the plan. I hope I can make it but We'll be back here in January with brand new episodes on January. Seventh will release earned view with Charlie Schramm which was absolutely fantastic so looking forward to putting it out but until then I want to wish you all very a happy new year enjoy the celebrations be say but have fun and we'll see you back here in January before we go to the panel. I'd like to tell you about order sponsor for today's episode and that is Pepo. PEPO is a community of content creators sharing short video. Content on Crypto in entrepreneurship. And what's really interesting about. PEPO is the way that you show your love for content when you like something on Pepo you tip. The content created with pepe coins. When you want to take part in a conversation you show your interest by putting up pepe coins? Well so I'm Pepo you'll find an interesting community of people sharing short thirty second videos. Sharing your thoughts on Crypto. The sharing thoughts on entrepreneurship entrepreneurship and the community is growing. It's still small but it's growing in. The conversations are really interesting and I think really high quality I always learn something when I'm scrolling through my pepo feed so if you WANNA take part in this growing community you download Pepo for IOS or android. That's P. E. P. O.. You log in with your twitter account and they'll even give you some Pepo coin so you can start tipping people. If you create content you can also earn penguins as well and of course you can find me there. My name name is set. Two Point Zero said two zero. I regularly post content there and interact with the community and we'd love to see you there too and have a chat with view on Pepo. We'd like to thank Pepo for those supportive. Epicenter and with that here is monetary systems in an international context moderated by Sunni Agarwal. The goal of this panel is we're heavily going to sort of explore a lot of monetary policy. We've been talking about thus far but then what happens when it starts to come back into we've put it in an international context and so for those avenue. Sunny I was one of the organizers for this event Anima one of the researchers Cosmos and. I've been kind of really deep diving on the monetary theory lately. I've been taking. I took a course on Sarah economics of money and banking which I heavily recommend everyone kate and basically this maybe reading everything. I've been doing the last three years. I kind of inspired. Though this event up we learn more couldn't make it to the odd this panel values on the panel early this morning. Thanks Oh said we have Jay and I'll let him do himself and sunny. My name is Jay Quan. I invented. Tenements Co founded the the company and worked on Cosmos as well and along the way All of that started twenty fourteen. And since then I've become more aware of what's happening to the environment and how there needs to be a global coordinated efforts to combat it I think think or at least first consensus that it is a problem and I realized especially after Labor came out when Leyba came out came unclear that routed inflection point where crypto currencies will become this it will become the new money and it got me worried because consortium of for profit companies should not be dominating our monetary system and I think we need to really asked a question. What monetary system do we need in order to promote better balance with environment and promote now our communities? That's Becky. I'm still drunkenly my specialties. Or Game Theory Directly Economics Operations Research. axiomatic things like that I've been interested in ICT economics since Two Thousand and nine cloud computing initially and then on Internet and so so on a spinning spackle year at Microsoft research in two thousand sixteen seventeen and got interested in biometrics systems design nine networks and so on and really unhappy with these consensus protocols I observed and so that led me to I use the game to try to new and that's Mesquite project was mentioned here and consensus protocol honesty and and Now I'm here. Hi Keith. Waldon sometimes economics writer the Inter fluid in him sometimes in you're similarly to mighty who penn lists. I got interested in the stuff because you know the world is going to shed a lot of ways a so many dimensions and I think that we need a lot of institutional innovation and mostly what interests me about blockchain they're sort of superficially technical systems but they're really fundamentally social institutions rarefied in a technical way that make a lot of things that are sort of Hassett or opaque very visible auditable. And so. That's the optimistic for these things but there are a lot of pessimistic pizzas so along eight months of libra that these technical architectures don't carry social virtue with them repre- we have to bill things that are good and I think it's a very open question whether what we are currently in the middle of doing result in good things or not outlets I to make that happen I am back. I'm robotics engineer by training Turn native. Aw Kosovar ambassador. EVAC over fifty companies including customers initially and Lee inves- especially in Asia side international companies. That are building block protocols. Some of them are public buckskins. And these are touching some of the legislators on some monetary policy in holiday impact. Some of their ECOMMERCE payments Sunny. Reach out to me and to share a little bit more of US libbers impact on care w zoo. Green government lament has been paying extra attention into Cooke Baker System because of the high penetration rate off trip. The the surveys shows that are on third of the white collar. Population has has touched cryptocurrency at some point and increase about ninety percent of the payments are cashless. So it's all electric so severely easy environment Eh. This kind of product to widespread and takeover possibly Fiat and care w Asaf as country with the neighbors of a strong economy such as deputy gendarme be and USD. It is highly impacted by some of their monetary policy changes. But if you look at Rivera and as is Jay mentioned if he can actually stay in fiction point and restore the high potential. It could be another biggest Monterey system that W have to deal with it. So that hasn't been a big addition of a consistent so I guess I'd like to start by introducing one of the corner ideas that I've been thinking about especially when it comes to the International Monetary Systems and. I'm sure a number of the people on the panel may be aware of this year but Just give some background in the audience. There's this concept called Rodrick trauma or the trauma of the political economy. The proposed by a professor at Harvard in Rodrick and what he proposes. Is this trauma. We're very familiar with the space. But the one that he proposes is about economics and politics and the three points of the system are he called off but in terms of his terminologies is a bit odd but I would say globalization national sovereignty and democratic control over monetary policy. And he basically says you have to choose two of are- and so we've we've seen different regimes where we have all three of these so the gold standard is famously. The most up the one one good which was national sovereignty and globalization where we have these fixed exchange rates between countries have national sovereignty. But now now you don't have any sort of democratic control over decision. Making then we have you globalization and democratic control but you lose is out on national sovereignty and this is sort of what keynes proposed in his Bangor plan on also what the euro kind of attempt to do not at the global scale but maybe at the European scale Dale and then finally we have what's Breckenridge compromise or you know the most awesome owner where we have free floating exchange rates. We we need capital uh-huh controls in order to maintain a level of national sovereignty. So with that in mind I guess my question is start off is are we in Lulu right on this point. Currently the world that we live in is primarily focused on still in that Bretton Woods like Saddam Where we ignore we give up a lot of the national Globalization that is possible. And we have some pockets where we're trying more large-scale federalism like the the European Union You see this work can usually go or see more Aachen. You're we're gonNA see things devolve. I think we have the design assistance. Assistance based on the facts faxed environment is back to the world is we share deserve reshare the air and if now do vomit. Oh my gosh. It affects all of us. The many things affect all of us like political turmoil causes refugees so on or collapses trade war right so there's something about the global. I think that that needs to be taken out in order to for for everyone who wants to participate voluntarily to is it globally enforce or incentivizing things but on the other hand. We don't know what the best system is. We need decentralization experimentation and so we also need states or local localities to have their own houses too so I think I think you can't choose one jeter. Insensitive goldline's ation that means nation nation states. I think you need a balance as unique both. I don't like being told what to do. I prefer to do what I like to do. And the extent that don't cause harm to other people probably what I'm allowed to do but there are two nowadays you can you can be air you can mislabeled who they're all kinds of things that have enormous impacts on the rest of people even at a global scale. The problem is that you can't really necessarily trust the central authorities lease to internalize those externalities directly. Soon as you focus power will then. The power focuses on itself. So it's not clear what the right thing to Louis. I think. I think the what I try to do is is designed things as much as possible so that individuals make decisions and don't cost extra allergies and reserve the minimum possible possible for the the Higher Authority. And that's one reason. I like Crypto that is I think the only technological thing that we have. That's big right now. That moves in the direction action of centralization a machine learning big data universal activity Iot all of these things are instruments so civilization control and the extra hours so we have hope it somewhere watching now. These are battery or Tom And all that Steve or new logo scale. We make water that I actually use all alleyne quantity of Is that an acceptable moral or is one degree decision of you. See what my governments do is take care of me and I and every level. I want my government to do that. I want my city government to take care of me as a city. I want my state government to take care of me as a state. I don't really want my thinking about Alabama Emma New York that much because that's not not their job they're looking after me. There's a degree of benevolence though. I mean I would be upset if my government is doing really malicious horrible things that would upset my sense of ethics and morality but I think the first the first responsibility of any hierarchical unit is to take take care of the people that it's it's over. Take care of your family or lost. You know it's not the job of my boss door about other companies. He worries about this company. So and then you're gonNA point. I think it's just a balance of power even in the role Not It doesn't work like this guy that they take kind of all the extended ladies making sure all the parties involved in the A landscape I think many of the projects are doing this in a way that they can become bigger too big to be shut down rather than asking for some of the admission into this system or acceptance. I think regarding lever since it's the topic One thing that I thought was maybe wrong position was that didn't even lunch at but the purpose idea but but they made it to public early not becoming tippy enough with the strong incentive All this nurse before making it that this is all laid out in the system of social graphs and I think one of the approach that I like is Tara. It's a snip. AUCOIN project AUSTAR Hilton sentiment and the ads out cold cooked component and make just a good payment product. And now it's a Five hundred case on users within three months where onto three million dollars per day and government don't really see it as a threat maybe Abia. FM Rich to whole additional payment. Let's get that I mentioned which is ninety percent of the whole career. It could be too big for to be sometime so I like these. Push better than thinking about all this inter twined a power balance in the the venue of yet pieces from Ceelo long time stable against the. US saw and good morning as the encouraged us all the world Motivate the that the US controlled the United States policy all economies throughout the world. It's a long while you're away from the VR Aw I mean research of course right there but one of the reasons The core reason was that even. US is volatile and as the receiver at the US and China tension nitpicking to a single dollar. A single monetary policy can be volatile offered a whole because an. SDR is one of the. Most I think the most stable currency bucket right now with yet so it makes sense. I live also pack test yard. Carney I'd like to answer your original question about the Donnie love I'M GONNA BE Survey opposite of my neighbor a little bit Other very much share that inclination towards centralization as a design goal a little bit more pessimistic about the possibility that in the world that we live in an externalities can be disentangled. So a libertarian. Universe looks very nice to the degree that we can kind of localize the fact of our actions things. We should have liberty where we don't hurt her adversely affect other people and unfortunately I think we are in a time of great crisis and a significant part of that crisis is the patriotism awesome worked pretty well especially in the United States which was a big not very dense country when technology didn't bring us all together as much when on our economy was a little bit less developed when there was a stronger notion of the local and I think that what we're struggling for right now and it's kind of a part of this is is that when there are extra analogies we need to be in France is. There's going to have to be some kind of a decision-making system beyond we have the liberty to do what we want and we need to be enfranchised in that system and with robotics points to is just a tremendous some tension between from an economic development perspective active. You want a global system. It's sort of standard. Economic reasons has a lot to offer but from an enfranchisement perspective. You really want things to be local uh-huh and so the president would compromise with. After the experience of the words that came from a similar period of globalization followed by backlash of people who felt. It's like they no longer had communities say or less doubt and a retrenchment towards a much more national world. I think we're reliving exactly the same struggle Ogle. Exactly the same offence will need to have in the short term. Exactly the same outcomes which is to say Contra period of in Rodeo to limit new liberal technocracy Chrissy where we're we've been part of global economy from which we've been disenfranchised from what we haven't had any meaningful democratic but and we've projected it right. Trump is rejection of that. Brexit is a rejection of that all the various anti liberal Authoritarians who rising up around the world are basically people trying to sort of take back more organic communities unity's from this neoliberal technocratic version of the rope. We can't actually go back to local to sort of part of the trial of the triangle. Angle that is wearing franchised. In our nation's disentangled economically we have a democracy in the markets. But not the globals. Because we're much to entangle so crypto. In my view the reason one reason to be interested in it it's one way or another. We have to figure out democratic institutions that will get us to the global democracy side of the triangle where we do have a global economy. Because we can't help it but where we have a meaningful kind of democracy that franchise is all of us. That doesn't have US feel like we're falling behind. That were left behind Lacrosse. Where press were Nord and we just have a limited time as a as a species to figure out how to organize a meaningful all global system in which we feel franchise and the institutional development aspect of CRYPTO? The the idea of being able to build new kinds of institutions agents new kinds of voting systems and organizations. I think optimistically might play a crucial part in that In the meantime until we get better institutions working to retrench into a more national world. Because it's the only way we don't tariffs those apart. So I used to be libertarian. I got better disease of you but no I mean I I like your program. I wish the concern I have. Is this the more locally. Are the smaller your group bigger. Say say and the more likely it is to reflect your preferences. I'm not saying that you can reduce promised your group but I say to whatever extent you can. That's the preferred option. Now the problem with global or even large of voting is so this is why animists have no friends because we know about impossibility rooms. There's a possibility there enlist Saturday Saturday. There's impossibility propagation. It just turns out that as is even abstract exercise you really cannot in any reasonable way satisfies any reasonable set of conditions. Let People Express preferences in a way. That doesn't really disaster. It's just not possible. I mean I I wish it was I really do and I. I would love to have a global government that was good in significant but the theory says no I think. The empirical evidence is not so strongly actually agree with everyone here. I don't think that's what I'm trying to say is When when I say I want some global aspect of economy? I'm not saying I WANNA go government. That were bound to I am only promoting being voluntary associations. And I think basically by enabling people to create their own monetary systems into half competition Fiat. Uh we will be able to create a system that balances the needs of local in Monterey needs as well as global coordination by having competition of many global models in allowing people to freely. So I think we'll come up with the best set of balances. I just one more thing reason why. Why believes so strongly like my dad lost his job or the company that's working or folded because of the IMF crisis? I do too the way that the Interest rates were changed by the and then the housing crisis to affect my family. The same so at this point I don't want to be bound by any Fiat currency I would rather die than be held to a decree that says I have to use his money because I don't support this money any system. I don't support the dollar support. The wars that were raging. I want to stop using Steve. I mean a lot of your talk was about how the system stop the slavery system. That grades is somewhat beneficial. Still running a well-functioning society. So what would you say. J example about like could we ever ever have one of the topics Hi De Nationalization of money is that ever possible in a world in which beyond currency exists in which the government requires taxes in one currency governments have a tremendous advantage at defining would get to be the sort of high network effect parents. He because they uniquely we have the capacity to create that obligations Acne Hill from nothing so anything can kind of be monetize we can coordinate on cigarettes or gold or whatever for a while but the reason why states are really good at it is that they can make something desirable by Fiat. I think you have to pay taxes in it. You know. It's a little bit like facebook. I hate these in one. See the race from Europe that plane. But it's really hard to deal with because they have this tremendous network effect and social networks. Really do have value associated with the network effect so Fiat currencies currencies in general have a tremendous network in fact there's a tremendous benefit to having one that everybody uses so given that governments. Have this capacity ready to make the thing that they issue to give an advantage to the thing that the issue is currency become a core a currency coordination point. They have a tremendous advantage. And those things WANNA be big. I don't really see a role for kind of as a general purpose. Currency or lots of little things interacting with one another. You're I wanNA caveat that on the institutional side because I think you know I I don't actually disagree all that much with my neighbor. I think it's critically important as much as possible to create notions of locality for ourselves because our our larger affiliations are always GonNa be unhappy with them to some degree and within smaller communities is one way that you can kind of bind together give sort of sinews and blood to a smaller community is by having the community sort of describe patterns of how economic value flows and those can be expressed as something like a complementary currency so I can see a world in which there lots of quote nationalized money that are kind of the scripture tokens of local intense or very small. Not necessarily very small but small all validity to the nation state communities. But I don't think we're going to get to a world of kind of competing monies for general purpose commerce. Okay so okay you mentioned earlier about you know. Maybe we can build the democratic tools to like the global governance possible extent. You know I think the best example case as we have today is the euro zone and they essentially created monetary union but they have been unable to fiscal union. And what makes us thank that. We can do that in a global sense of Canyon due to the incense and when it comes to Lebron for example we can't even get European countries. Let's share like a European Union to pull risks to issue common bond. How can we get these multinational companies competing interests to do so? I think we probably shouldn't. I mean the reason that Greece in Germany don't have a common turn coming fiscal policies that Greeks Germans and have not only behave differently. They have different Krepinevich. They wished to behave differently. And the policy. That's right for the Germans is not right for the Greeks and so there's a reason to have separation with missile policies in a single marker Don't think this will you went like I say i. It's always about with right. There's the extra analogy. There's the networks network accidentally benefit of of getting together. But then there's the loss of a personal preference and choice if you do that and so so the balance you know. There's not a there's not a single right answer it's my personal opinion. I'm still learning this That that the EU should not have had the euro that the benefit of a single currency is not that great you can instruct other means on top of individual states currencies Z's and make the reason why we need something global primarily to deal with things that are naturally global suggests the jazz dealing with the environment. Now there should be a global system or incentivizing the plenty of trees carbon sequestration and not not suggesting that this system is be forced on everyone but states or towns for example and participate voluntarily choose to if we find the right model that has correct legitimacy with the right transparency and accountability decisions. Then choose to fund these fatty. Thank you this volunteer in the environmental issue. What happens like I don't want to feel like they're they don't want to sacrifice economic activity or violent? The likes scale dilemma. were all anywhere to do but no one wants. They need to do something worth it. Not so much. An enforcement from the tot from cheers so for example you can have a union. Nyan appears that say well. We're going to Not Trade with his partner until they adopt something sensible for example So as Steve said I think Fiat currency having the governance of the government than nations forcing it as big power in keeping everything within the same. But I also agree with a J. also isn't Remind me some idea like this idea that I was that causing around with my friends. Are you know today super-rich or even just pop. Maybe one percent are free from Financial Wealth or their activities. And I think with the cryptocurrency unit and we see a lot of Couteau Conferences their global Constricted away from the national. Id's and also Role so in the future like some people say that you know this comp- The governance brings people from the centralized communities into more back to nomadic communities. So maybe this wealth accumulating Criticized could lead to next dollars that represent you know like an intern the nationalities that that is aligned within the ones that share similar interests and Maybe the denationalisation of money. Yeah some of. Let's just starting a project called Virgo and it is to create an association of Technologists but also the economists and so on in order for us to not not only decentralized social media communications our financial systems in governance systems but ultimately so he can ask questions like what should our monetary system and software things things like global warming. Now it's not tech centric. You know we're not restarting aid as a as a people centric organization in project so please join us for go dot org you'll see the Links to form the yes so much. Thank you for joining us. On this week's episode we released new episodes besides every week you can find. Subscribe to the show on Itunes spotify Youtube soundcloud or wherever you listen to podcasts and Google home or Alexa device. You can tell to listen to the latest episode of the epicenter. PODCASTONE EPICENTER DOT TV slash. Subscribe for a full list of places where you can watch and listen while you're there be sure to sign up for the newsletter so you get new episodes in your inbox as the released if you want to interact with us guest early podcast listeners. You can follow us on twitter and please leave us a review on. I two helps people on the show and we're always happening. Thanks so much and we look forward to being back next week I don't know.