Libra

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how they my name's dave you're drunk and this is talking politics one of the most difficult political questions who is trying to understand money what it is what it means when it gets it's extraordinary power here's another question what is money mean minutes issued by facebook talking politics is brought to you in partnership with the london review of books politics speeds up slowed down with a subscription to the yellow be what brexit i'm trump or any parts of the picture that includes while everything else reid relevant pieces and subscribe at a special rate at and i'll be don't cause the uk forward slash two we've got some people here you're gonna help us help me understand this this is hard i think we'll find out because there's so much going on here ellen thompson says he understands about money i i'm talking about many great first news hey who's the director of the center the government's and human rights which among other things system looks studying block chain technology which is what lies behind this oh you happy without we haven't done a lot of staying in finding technology now joe knows there's no rightfully observing john rights we have a newspaper and you have definitely written a lot about facebook and facebook's currency including last week unless something's changed yes and the thing is i have no money haley audio of crack team to tackle they said the way we're gonna do this is we're gonna start and i should win you before we start by the way the building was gang only living cambridge meantime there's always a building out somewhere that you just had something dropping in the background maybe we must stop by just discussing what facebook says it's doing its put out some statements in very face but talk about this and about how it's gonna transform the world that metron look at what we think that ready doing or what might the motivation be the business model be and then we got on some of these more complicated questions which is how does this thing this currency which is cool libra competitor other crypto currencies other forms of money money itself is this really money and then who knows where we go from the joan so he knew what what is the pitch house price book told us what they're doing i think one of eight understanding this is to remember that if facebook where country it would have a safe and united nations has more more subject rather than says than any other country on earth to point the real busy through performer and i think it's helpful to look at this by imagining facebook's thinking of itself as a state and essentially what you're saying is the safest wouldn't it be a good thing if there were a global currency and if the white paper that they issued in order to announce hold office says simply i'm breathing for but now labor's mission is to enable is simple global currency and financial infrastructure that empowers billions of people this document that are plans for a new decentralized obtain low volatility crypto currency and smart contract from together aimed to create a new opportunity for responsible financial services innovation paved so normally government says she white papers states stood any race and here's a large company saying you know what it would be good for the world habit global currency has since the rest of the world is to incompetent organize it we'll do so just the unpack some of the things going on in that part of the pitch is that this this will be genuinely global book as we face book when quite label yet but where's crisis and the thing on this planet part of the pitches the classic crypto currency pitch low volatility and then underlying it i think is this option the selling southern port will be convenience but actually it's it's gonna be noticed low volatility but very low friction forever so i wanna add in that i think part of the selling point in this is really visible in the beginning of the white paper but also in this very snazzy video video that you could find on the on the leave a website is that this global currency can bring it on bank banking hey and be make it a lot easier for people who send remittances abroad their family other countries to do that a cheaper lot faster so that's part of the convenience friction lewis yeah and it's a big part of the pitch i think and i have a lot of things to say that that i can't wait until later that's but when we will talk about what we releasing rather yes how what is it when you saw her denouncement what were they what do you what one thing i think they all think that doing anyway is trying to do something that is different let existing crypto currencies bitcoins instance she is very volatile its values rival the title of that to say that if we have this currency that we have these other partners in the consumer team and whatever the cooling it and we tie all currency labor to a basket of currencies said the double of the year in sterling excetera it will avoid those problems that bitcoin has so how's the kind of like let's take the decentralized idea that comes with a crypto currency but it's not take currency in the white which we've understood what crypto currencies are so far because he's not linked to existing currency and just one more thing part of what that setting in their own terms because thing which libra from kelly bryant so leave raise the currency kelly bryant is the wallet that facebook you're gonna offer to a lot of people the whole discount and see libra facebook is just one among many in this consortium of whatever it is a little bit more about that in a second i say would say the thing about the wall is yeah we are the wallet anyone could build the wall it i mean we just in a competitive virtual bullet marketplace and they all just say well lucky old us but we never face but actually when they built it network affects mean you're gonna have one right so that part of it they will control yes the trouble is the term wallet is misleading it suggests something in which you can hold your money that's the way it works and crypto currencies wallets holes fate cryptographic case which establish your ownership of things that are in the top ten but you can't use among the moment you have to have a well let's in order to in order to operate facebook's while it will be available instantaneously to two point four billion people and you think one of the chapters of somebody coming up but that does that for example if possible for somebody to make and you kind of social network you can make any kind of photo sharing stuff and the rest of it brings you say look if someone comes up with a better search engine fine print business good luck whether it be the same thing i think they could be capitol instantaneous because it's go out for this considerable capacity for this role i mean did you say that there's some possibility the iran very considerable fast just go wrong so i mean nicer lawyers say this is a huge rich professionals concern because at the moment no wait at least signs that you know the way the face but works it kind of the software makes mistakes and he's ready gonna notice but you make mistakes if people's spending capacity they all end tonight is someone might build a better world yeah i don't pretend to understand anything do suffer even less when i understand about money but it just seems that this is a different kind of risk in terms of what they do in illogical terms and facebook's ever taken before and then there's the question of facebook's relationship with other partners bucking the county's house not meant to work so there's an association the labor association which they aimed have a hundred partners andy these partners the ones that are for profit after paying ten million dollars an there are also nonprofit numbers but right now there's only about twenty three of twenty four members you would recognize some of the names so for example big financial companies like mastercard there's tech companies like uber sort of ones in the middle of pay pal and there's also a you know these these few nonprofits like kiva and mercy corps i think what we have to remember though is right now and presumably when it grows the full size the membership of this association which is a nonprofit association is dominated by for profit institutions that do have the prophet mentality and the other thing we have to remember is that right now as set out out in the white paper there's a certain way this is gonna work however dissociation wisey agreement of two thirds of the membership is allowed to change any of that so this is just the beginning i think we have a lot of changes coming as this thing unfolds on to focus more appropriate size the minimum profits are made fan when facebook makes his pitch she'd never mentions profit it's always mentioned the public service the suffering and there are genuine potential huge potential benefits for users from this including not just the convenience but actually predictive of people in parts of the world really hard to use banking services just bypass that but there must be a profit motive in here on facebook have not said what the business model is in terms of money making and people speculating about what it might be that is one notorious way in which crypto currency might make his money which is offering a service to people he can't he's conventional money because they're crooks but if that's facebook's business model they're telling us but there are other ways i could make money out of this story will be charitable the first thing is there is a serious problem inequity across the world of some of this area for example if society which has a lot of damage diaspora say in the west there any good money they want to send it back home where it's really useful and important but when they do that they suffer from reality grotesque kind of rent sticking by they organization the finished organizations that transferring money from a desperate back to the countries where it's it's a headache i just i was really struck by this is thinking about libra watching the cricket world cup you watch england play india any ads off for money transfer services for indians working in this country once you transfer money back to self confident i just thought labor could just come in and clean up here because it's just look i mean these ads you could see what's going on but that would be i think in general good to reject because they could just offer yes and the points about doing it electronically using something like kind of lofton envisage is that you can do it with much lower construction coast in that sense their ideas attractive it's a bit like facebook's original pitch which was we're gonna connect everybody in the world is not a good thing and that worked out really well done well they're saying well we're gonna give all those people in the world who don't have access to the things we had access to a we're gonna give it to like paper over everybody and you could see that's quite attractive proposition is a challenge to the existing infrastructure or financial thought because the other soldiers the way they're gonna make money out of this is the way they always make money which is just accumulating more mode data more information about people people that that transactions and because facebook has this extraordinary monopoly on the whole range of human behaviors and monetize ing information about it this will just adds to that capacity again they've gone out of their way to say this information will not be used so it'll be connected to the face but services there'll be very careful about the plug it into the advertising models and yet and yet we believe them let's go back to that population yeah i would say that they will say the money if it was successful to made out of blending kurt because once you go basically people who have essentially public sin conventional money terms in labor then you could stop lending it to other people who want not money and charging transport in that sense it's very like tape out because papers very convenient to use for those of us who have access to it but after a while when you use typo you find you start getting off at credit it'll be say you most starting but they couldn't take the reserves being used the buttons currency and linda right no no i don't think well i don't know a minimal like dying i don't know about that because i think they've got a bit of a i think they would struggle with that because i understand it so similar then basically they take some money out of labor wants conventional consumer hockey game than the labor has come out of circulation festively said 'cause they won't every unit leap to be backed by actual financial assets so that scene necessarily lends itself to easy lending what i think would be mole they chose the pulitzer essentially if you building up you know your counting neighbor say people using it sufficiently she got a reasonable amount of money in that the equivalent of having a binding then will be let other people is no like bank where they get up relatively small reserves and then use the rest to undermine which i've seen the last but it's kind of a bit like a currency pulled in that aspect of it i don't think is well suited to lending one question i had is if which libra facebook itself could be lending so not backed by the league but but facebook itself with his own money could be making loans and that could be a way for facebook to make money is that a possibility but the as it was the wallet could have a click here if you would like to board a bit more yeah and then you go after facebook's lawn service not to lieber and they offer these amazing compressor larry nassar i'm pretty sure why in the world and you could escape being subject to someone's regulatory authority but the thing about the wallets said i cannot imagine a situation in which regulators will enough wants to implement on each while it the kinds of requirements they have for conventional financial operations for example they gave the you know your customer you know you're client that if you want to operate while it's legitimately and in particular jurisdiction then you'd have to satisfy they money laundering requirements of that jurisdiction in we don't know because it's very short on details at the moment but my hunch is that the wallace is going to be the punch of focus for control at least some of the regulatory system which is why it's really important even though they don't trust anything except cryptographic case and there is a basic tension there which is they appeal not just the best of other crypto currencies is they will bite poss the clogging up the money system by excessive regulation and so on and yet when we think about if it were ready to take off because they haven't yet if it was released takeoff is the means people used to transact across the board across the world that would be more regulation than that but when they have it both ways come any kind of very that's the big question because this is a very bold proposal it's unprecedented and it's put together by an organization was very substantial resources and when you look at the work that's already been done by the labor crowd on the block channels things quite impressive and doesn't fit into any regulatory capacity release at the moment so they only way of addressing it would be for as it were the rest of the world get his act together and have a view about it but we we know that's not likely to happen but certainly the rest of the world range way in which this thing could slip through but do you as house of representatives is it already between the last twenty four hours basically set or members of it anyway sent elected by city testifies to this just so i don't think they the sights of the political authority or regulatory authority in central parts of some of the fbi and say okay this could happen but i do think there is a defense industry specific could face booking talking the language least wanting to cooperate with the regulators say no we're not doing this for you because we've talked so told us out and that is a very different picture the bitcoin which is called a very strong libertarian engine political agenda around the so pointed to completely bypass states if you're talking the language of corporation which states or at least with central banks and regulations what that means in practice courses is another matter they should be said the central find to say i wasn't interested in digital currency it's not like they go no interest in think about these things and then how does it compare with micro credit because that's another public good innocence and they're all some comparisons i think between the approaches these two things just posted river seaver yeah when i started thinking about how this might you know the speculation around the different business models around this in the white paper does talk about how be interest from the reserves are gonna be paid back and dividends through the original association members so that sort of one way of funding the system but surely this is just the starting point and so if there were to be a loan product layered on top that's when it starts looking a bit like micro credit and the reason is this so the way that micro credit works is that it's alone can go to people who traditionally were kind of on banked or in parts of the world with such small projects they know collateral they couldn't get alone micro credit allows them to essentially used used their social capital as collateral so they could say you know like i don't have a house to put against this loan however i promised my village will pay back i can't pay back and the way that it is designed to work is that the threat of social exclusion if you make all of you really really angry with you could you default fault is enough to keep people in line i've always been creeped out by that because i think you're social capital is actually should always be separate from you're economic capital because it is actually a safety net right so how one institution that can have elaborate both w social capital economic capital is wrong and when you look at what facebook is doing if it starts doing personal loans basically it has leverage over you're economic capital but also you're social capital 'cause we don't know in the future how these to kind of sites are going to enter play like what if you suddenly have something on your feet it says this person has not paid back their loans like shame them into it i mean that that's a bit extreme but it's the same kind of situation where ashley i think these two things should be maintained quite separately for reasons of sort of safety particularly the number of his name so i said well if that's the capital so let's come back to that question john you could we should defoe which is all you reassured i'm guessing you know by what they said about the separation the lines of separation between the different parts of the business we know how face but makes funny it's cool surveillance capitalism now they say they won't pay money money money is this money you're gonna be immune from the practices of surveillance capitalism i think notes but that doesn't mean that you we won't get these assurances is at the beginning on facebook has form but all of these corporations have form in that sense for example when they spoke about what's that one of the guarantees was that they say accumulates by whatsapp would not be available to facebook's well guess what that didn't hold the chinese well between what's happening face but didn't hold the chinese will retain instagram and facebook didn't hold these things don't work because there's a corporation which kind of forward to renege on the commitment if it suits and so we have another commitment which is said sure we'll have all people the users of facebook well if we will have access to to their financial information okay but but on the other hand perish the thought that we would think that with what we know about the facebook's we're expected to believe this not only that but it seems to me that surveillance capitalism already built into the kleber wallets i read somewhere that that you know facebook would then have access to information about who you transact west and saying that that's harmless it's a bit like saying meditate as harmless and we know all this from going through all of that sort of snoopers charter 'em kerfuffle recently is that met a data is really valuable meditated tells you a lot so they're already be collecting that fermented at the mothers who walks the mets the yankees we don't know what you said but we know you talks x and y and then this guy says we don't know what money changed hands but we know something changed between you and you do you have any financial relationship that's what it is but we know it exists i think this is the domestic political impediments to the whole thing because face simply does not have sufficient trust and credibility to make these kind of promises and that is why it's already kind of political reaction housing me in usa will be one of the things you say john for a company didn't have facebook's form about making promises to keep to be doing this is quite another when you're talking about the project is sit face to be saying these things i think the reaction is really telling 'cause it's it's making me think of and the kind of social to media revolution so twitter revolution to the arab spring at cetera where essentially where it's like you were saying john kind of already having these promises from these social media companies which is that their technology was gonna bring around democracy in actually the press coverage at that time and the governmental mental reaction with very very positive and in fact they were you know sort of steps taken to support these social media companies in that kind of work and then of course we've seen since then exactly how much of a kind of veneer of sort of false promises and and solution solution isn't that was and all the problems with these social media companies and said this time around we get the same kind of grand promises but immediate reaction in the public sphere is one of skepticism disbelief anger distress so i think we're in a very different politically terrain then we were at the beginning of this decade with these social media revolutions or or which is another way which is surveillance capitalism as we have it at the moment especially what happens is the people's behavior is monitored in order to enable predictions about what they might be willing to buy that's one bit of it but in this kind of capitalism with with what you actually know how much money they have on their free among other things you then know what they might be prepared to pay and can you imagine the temptation then to link those two together yes and layer on top of that is similar deepen the white paper amc commitment to developing technology for a kind of globally recognized identity system so you connect that to these financial transactions and you know you're not just dealing west eight kind of avatar someone vaccine that someone could you had the identity talking politics is brought to you in partnership with the london review of books one way this could work i'm thinking of helen's point the wiser now so if we don't stop it before it gets off the ground it could very quickly become indispensable to many people i mean one of the ways that facebook's uprights is they make the promises that they could build a network and when the network is sufficiently lodge on embedded in people's arrives then it's much much much harder for regulate tree in political authorities the pushback so no question this could be still now that would be the means to make it impossible for face but because of the ground but giving it will have enormous benefit so many many people and it will be incredibly convenient one could imagine it becoming quite quickly ubiquitous in many parts of the world if we don't stop it now if he doesn't get store now actually it will be very very hot stove it i the point where the promises of being broken so it's almost like we have to stop it before the promises would be broken because if we wait to test whether the promises will be broken it will be to light but i'm not an argument will then having analogy lists the climate change strange thing which is western countries was to deprive us of the economic development they have benefited from and simply because it's inconvenient or it's dangerous for them all over the world is perhaps the symmetry there and that kind of we wanna stop for people in in other countries having the kind of easy access to digital money the we have through pay pal all of those things is simply because we are concerned about damage to her interest so why might resistance come from so it might come from united states congress that real anxiety about this in china and there is another modal here and again when you reid about facebook's things is doing and what was the impetus of facebook's no question one part of its we chat they they ubiquitous chinese transaction so this one historical a timeout people together china and they come back and they say i tried something cash at the top of a mountain in the middle of nowhere and they wouldn't take cash they were there any take my phone and the the we scott service and the way that has really taken over almost all forms of financial transaction in china but then presumably leaper as a threat to we shot hoped and she reaches a threat to libra these rival systems oil suggests ones inspiration fifty other i mean we know the facebook has been thinking about crypto currency for quite a long time my hunch is that facebook executives go to china as well and they had noticed the fact that they use social media companies have basically created the kind of money the just work no it's not a crypto currency is i mean which which is just a way to transact in conventional currency incredibly conveniently to the point of this election now you contract with the cash it's like apple pay right but but the the point is that's in china that you don't need protection so you're you don't need a block chain because you're in charge of it well even facebook must realize that that wouldn't work in the west wichita in charge of brutal just couldn't have the country the episode in charge of it couldn't do it we chat does have to something else well it does something else by creating the labor association in other words kind of distance itself from it it it it has a thing that we only one basically this one hundred strong group and and so on so forth it's detoxifying the lack of trust fund the model just to be clear it works because of the very tight relationship between social media companies in china and the chinese state the pitch of this one is as we go crypto currencies it will work because it will not be subject to those kinds of state interference which over time actually make money such such a problem i think i think it's better to think of it as digital currency maybe then there's a crypto currency you can't quite make the comparison we went facebook's daughter space but when it started in clinton's network is doing something that didn't exist because he did exist on digital currencies sees all being thought about by other players other than facebook's including lease central banks who know more about currency some money and face booking it's trust consulting whatever does on the central banks hop got their own interest four play in providing a competitor did you to come in and say to save face up to seven devices about this in a way which they were when they collected the sexual methods and how much difference it makes it the thing with facebook has short jumpstarted no one else has his two point four billion people in network so anyone who tries to stop this is go to confront the fact these volunteers of facebook's thoughts from a case competing in the landscape weather all genuine rivals his building this out of nothing but there are no rivals owners screw and i think you don't wanna be real selling points here i mean i mean thinking of consumer it's like what i used this in what's that you know just send money doesn't one one of the things that we would you well this is this is what this is i'm getting you one of the promises around efficiency it's so much easier probably just hit a button send it over libra you know my friend than it is to leave what's that gonna pay pal find her idea blah blah blah i think this you know in the grand tradition of these tech projects which a promising officiency inefficiency of so tempting it's so persuasive and seductive the knicks are ever complicating life easier but we tend to to overlook the things we lose when we kind of worship at alter efficiency so we may also yeah but i don't want facebook to have my transactional data but you know it's harmless in this case and it's so fast i'm gonna do it and i think that is one of these questions around this thing of the two point four billion customers is they're gonna all probably making and everyone knows about surveillance capitalism now probably efficiency thing will still be highly persuasive and with officiency becomes dependency i mean the thought but actually this is how you try to shame efficiency it's possible that she doesn't believe i i say i pretend to understand china or anything like that but it it's a huge asked to make this kind of thing work that's why the chinese system works so well because they don't need a block chain you need a block chain was the trust issue and the trouble with buck changes the intrinsic inefficient so at the delivery level the block chain is unnecessary inefficiency but it never less is probably the case that at the consumer and as as we were saying this could be a quick did do something that previously took twenty clicks and what we know from from this technology for safety is is that convenience appears did jump everything how much go wrong and again there's been quite a lot of speculation about the ways in which this when work on some of it does cut across this question but is it really a crypto currency or is it something else i some people the reason they went work is actually because it's tied to real currencies that relationship will break down one way or the other i mean something go wrong with the real currencies which would undermine the appeal of liberal something to go wrong with libra and that would cause real problems for the currency so that relationship is i wish the whole point of bitcoin whatever is that okay super volatile when being exchanged for real currencies on the market but it is no you know if the dollar fails that's a big problem libra it's not a big from the bitcoin in theory at least i mean from practice it's a problem for everyone if the deal the files i'm looking at how the and she's not looking happy the defense what you mean by the door failing i mean that's why they wanna basket of currencies because they don't want it tied say the dollar ceases to be the world's global reserve currency and there's a real massive breakdown in the relationship between american that in chinese credit so libra is not gonna be immune from the i'm not saying bitcoin will be immune from either bitcoins pitches it operates in some cetera magical universe where this extremely inefficient mining is untouchable by all of the year fiddling around the politicians and bankers and everyone else with this count the pitch is it's the ultimate page which is gonna it's gonna get trust from the fact that it's tight yes but just imagine for a moment the thing we just take off and becomes a big deal what happens then is that there's a lot of labor around which means the huge basket of currencies on financial instruments held by the labor associations it could be the biggest oppressor in the global bond market freaks out but without a cause you need states to be willing to issue that in labor unorthodox be the case no but that but for example they sociation could keep some of its reserves and use government bumped it doesn't just have to hold currencies hold other financial statements it's about supposedly supposedly it gets really big and then supposing one day something happens and there's a panic about labor and people come back say i want my money back as well here's my here might be but i can i please have the donors back and that happens on a global scale and it gets out of control there's a run on the reserve as it were then went up to who builds up that well i dunno i think that's why you get round not whether they're setting up by basically saying is is that they will only be libra not is backed by actual financial assets but i created what happens then when you go things being done with these financial officers that is a is a hold of the question but i think it's all about what might be out but for example if you think of it in in terms of the kind of punishment students we know the moment they have and the situation station which has a lot of solid acids but some of them are illiquid for example they're hard to get rid of it quickly and we've seen that investment trusts things so it's working have this event where there's some panic and then everybody wants to exchange deliberate for a coach real currency and they they holder of the basket has the sudden they've kind of confederate their assets into the cash that needs to go back till april holders and it's not easy to immediately out quickly or whatever then what happens this is predicated on the assumption that this thing would work can be successful and therefore be on a global scale so do we get to the point actually where facebook controls something which is to use the face too big to fail and in those circumstances who would be a smart smith a dead end up in missouri another scenario i'm just this is all we need him to i think it's china off loads american government bonds and the libra association steps into by 'cause it's it's this powerful it says big play as as the biggest states and the world potentially ole miss you miss wet does become ubiquitous it becomes this kind of the full could just start accumulating the power the associated with states to the saudis i think that she seems that this could get to that point without that being a host of other developments prior to that no lease central banks saying you can't do these things because those sentencings once any financial corporation of any kind stop doing that they have to fall under some legal regulation on that will put limits on the kinds of things but facebook and do with this unless they work corporated relationships with the regulations on i would say the central banks as well and this is why do you think they're gonna run into the issue of the central banks have their own interest in digital to cohen says they've been doing their own work on it and i can't see that just gonna leave face spoke spoke to be the dominant player in this area but i'm sure that's right but my puzzle simply is actually how the central banks gonna get their act together as a singer roles i mean if it's a swiss central bank bank said that she's going to be the regulation in this context 'cause reposition space i i see the points in principle that central banks can do this and the regulations can do that the question is can they do it in a way the copes with the global scope this can they do that in time when i did well the answer to that is but i think that it is important to see that the premise legal question then is it can get to global scott before any of these regular three questions come into play and that's where i'm where i'm skeptical guys that chicken and egg thing like you stop it if you stop it before it starts quite easily and we promote it probably will get lots of berries in the way but there is a point with all of these things where the network effects really take off it becomes much much i mean then we're in uncharted territory we don't actually know and we discovered that would be original facebook's you got about ten years you'd think well states and regulation other people will you know before this thing gets out of hand like they will really get a grip on it they didn't i'm gonna have another comb but the the thing here i think there's different it is a face which gave me with the social network i don't think the state's engage with states profoundly engage with money and the you know one way of thinking about money is in relation to states and that it makes mommy mommy and the money's purpose in some sense becomes a there is a means by which you could pay you exercise woman historical way of thinking about what money as as i said there's all kinds of money that i think we should go down that rabbit hole in his obviously arguments it's against that as well but when you were talking about apply at that is not stay engaging in something that is fundamental to stay stay ready different question and will face full of us out of this which is one unspoken parts of the pitch could potentially be in many parts of the world it's not just the people find it hard to make transactions states find ridi helped collect taxes is could this be part of the pitch to states have is gonna make it safer indian state that is a huge problem into a beautifully parks move so i guess i'm that's an interesting thought i'm gonna sidestepped the question though just thinking about what helen was talking about the difference between a state eight making money end of private corporation making money i think the question there is one about accountability to the citizens right and so in a democracy you know you're state makes monetary policy and does it somewhat independently 'cause it's an area of expertise but at the same time is beholden to the citizenry citizenry in terms of that decision making and what really troubles me here as if this takes off like were talking speculating about there is no accountability system whatsoever in place because it's a private corporations in association so it's pure regulation rosen accountability in that sense i mean the kind of politically constantly until we are turkey rely on when people don't think they're comfortable to us regulators to regulate this yeah it's not like where we still cool democracy itself doesn't have incentive to regulate itself like estate dies because it doesn't have that relationship with people like state does when when the news first broke about this plan ugly britain's respite my first thought so it was this is the first case in human history where we have an organization that is not thinking of itself has staked so this thing represents i think the first instance of corporations behaving as if it were states with global power that's why you said you may be absolutely right the states will see this in the same way this is a challenge to us that we've never had from a corporation before well east india company nothing which is a bit statements highschool dislike stay because they did the other thing that states to like i said states have money states make money money might states states may will make states facebook is not yet i mean that's the next stage it's kind of globally cynicism police for whatever but we know that yet coercion is the key thing in the states relationship to money its ability to force people to pay the taxes that's not present habit was present with east india company i think i think we we got in mind is is that the whole question of currencies on the use of currency things in austin use of currencies has already quite a shock geopolitical question because we have a situation in which the dollar is dominant currency in the world another pretty problematic from the chinese and the russians point of view in some other countries in well including you have some people in the european union who are who are saying things that are quite on television saying we have a problem the world's reserve currency being adult is to problematic in you have an american position at oversee for the most part because it does come with complications avenue will reserve currency wants to protect the united states positions i think if you look at the state level of this question of alternative digital currencies could be quite thought about outside the question of the future of the dollars they see international reserve currency before we even get into the front and is effectively that another system going around the euro dollar system which is the one the final she's between cells another chicken and egg version of this there is a critique of this person looks out that journalists and others say one of the new york times where they also ended by century saying any company this big enough to issue is currency is too big for for other reasons it needs to be broken up but you could say any company this genuinely big enough issues and currency is already too big to be easily broken up that sweet spot between if they genuinely do this the thing they say they were ready trouble in that respect if they can't do it well they can't do it and what am i trying to you know we came round that cycle which is we will discover whether facebook and do this or not by whether they can do and that sounds obvious but i will be the test regular travail seriously gonna try this isn't just a stunt it's not so well clicks both from i did have a question about if it was a stunt which is which is that facebook's in a lot of hot water huge amount of hot water around you know russian manipulation around be live streaming of horrible events around cambridge analytica and surveillance capitalism and so one of my question is what's interesting is i gigantic huge splashy project is now in all the media which is something completely different from their kind of core business model is a complete distractions so it's convenient and the other sense of the word convenient yes that's exactly what i think i don't think that means they're not gonna do it i just think that they are benefiting from the fact that were all kind of you know try get a heads it's not actually remembering all that terrible stuff they're doing and we know that facebook is thinking about a revamp you know mark zuckerberg came out and said we're gonna move from the public square model to a private living remodel and maybe they're using this distraction is weighted figure that out so could be they do this for two years then they don't do it and then 'cause it was too hot in those two years they pulled himself priceless time doesn't know conspiratorial way of thinking about that what's in this facebook well first of all you have this association of a hundred people in hounded elevations and they take ten ten minutes okay that's just just like that split second bit of it is seventy five percent facebook's users are in north america and europe the rest are already in asia and in what we call the rest of the world the amount of money in terms of average revenue per user that facebook can squeeze out of the seventy five percent is definitely reducing so in order to have growth it has to find some way of extracting more revenue from those in asia and and rest of the world but suddenly enough fighting banking services to these nice people might not be such a bad idea that's what what else is well remember the date transactions are almost friction lewis the key ways almost they're not completely fictional is this a commission for each one it's more efficient and so on but nevertheless it and you you start thinking about some by new commission on hundred billion transactions and you suddenly have any revenue stream you get that from the boats then the see the permanent how do you address the threat from the chinese companies well this may be a benefit to and finally if you're in facebook's you could think of this is a way to really entrench her power and make us on but triple layer a few more things onto that one is that by keeping you on platform through the wallet to make payments you get more eyeballs time which means more people to sell to advertisers number one number two there is this kind of strange question if i don't know if you've heard of belfast coin but it is a coin developed in belfast as a way to get people to spend local it's a crypto currency i think but also you get paid by the city for being a good citizen so recycling or shopping local at cetera you get financial rewards so my question has been is they're gonna be a point when suddenly that starts happening in the face the platform which is ashley monetization of labor the were already doing some sense asking you to do certain things be on mine for certain amount of time if you get paid for the facts you more fair system the right now when we're doing that labor free then i had this you know question which is sort of you know is it possible that this this new system will actually help facebook isn't me thinking optimistically move away from the surveillance capitalism model which is so problematic because actually it's it's making money through financial transactions subsidize the social network so in that sense it could buy up a couple of beers actually since not just a stunt genuinely does want to shift in mind yeah they keep it cuts in my parents had anything about the night so they could at least six it's the scales then also lieber as they original what the pound into the lsd palestinians in penn seattle which becomes a pound science lieber but to me the widely praised don't delete lows noble libra his great novel about lee harvey world and it's cooled labor labor with lee harvey oswald stop signs for me they should've just called a conspiracy goodman which turned joins us right now if you listen to this podcast regularly you'll know the face but is it that we keep scratching withdrawn and i'm sure we will come back to it but there's something else wants to talk about this week which messes move for us and that is to pay tribute to our dear friend and colleague aaron who who died last week at the age of seventy eight aaron was an integral part of this podcast he was part of the reason we kept going in the beginning we started out talking about british politics and then when donald trump began making hey with american presidential election we want to talk about america we particularly wants to with aaron about america we want him to enlighten us and also to be honest to make us laugh which he did and he continue to do so he is there off the all the time the aaron appeared on this podcast he was battling cancer and he was facing a pretty bleak prognosis but i don't think anyone who didn't know that already would have guessed listening to him because he pro more wit more energy and enthusiasm to what we do and anyone he talked about a lot of things with us he talked about trump and about america about the world he talked about warren piece he took by international relations which was his field he talked about nuclear weapons which was one of his specialism and he talked to us about history to and we put together a montage of moments when talking about some of these objects starting with the night in twenty sixteen when donald trump became president united states and finishing with a moment from podcast recorded about a favor inaugural address is in which aaron rather bits of his favorite which because it's almost justin's inaugural from eighteen one aaron was a rat on multiple person he was much loved and he will be deeply missed it is currently three ten in in the morning and i'm watching bbc election coverage clinton who is supposed to win virginia so comfortably that it didn't really show up as a swing state in any polling site that i saw a is barely ahead thereby about point five percent of the vote so even if she wins virginia that bodes very badly it is five in the morning and i am about to go to bed but it looks like a the polling industry got everything entirely wrong because at the moment i see absolutely no path forward for hillary clinton to be the next president of the united states will be donald trump so pack your bags and batten down the hatches it's going to be interesting for years i had there's an expression sometimes use called gambling fur resurrection right if you are very desperate you may pick a choice that you know probably nine times out of ten is gonna leave you worse off but that one time it might make you really much better off right and perhaps the safe choice that perhaps makes you incrementally better off when you're living with a kind of pardon my french shitty city status quo that might not be so appealing whereas the possibility of big payout fell slightly to kind of a dystopia in future is more appealing morris is up to you i am terrified i really don't think i know what to do yeah and you kind of think right you don't want to wait is they in their defense they did keep their campaign promises which was they don't know what they're doing but i keep getting drawn back to john oliver is take on trump and the trump russia scandal which is that it's stupid watergate as john all recalls is watergate by people who have nine thirty knowledge nor inclination to gain the knowledge necessary successfully pull off a caper of this magnitude and so the tweet that caught my eye the most well it's the one where trump virtually admits to obstructing justice which he'd already kind of done before in the past when he announced on live television you know russia if you're listening please do hack into the dnc emails and release more dirt that wasn't so much obstruction of justice the south you know asking a foreign adversary to intervene in usa sovereign and that was so twenty six nutso twentysix is hiding anything in any way it's very bold kind of strategy although i don't know if it's a strategy right is a lot of it seems to me reflects on reaction but by putting it all out there and demonstrating that in fact the republican party isn't going to do very much shit can in some ways having dampening effect on any expectations in washington or amongst the population in the united states let anything will happen because you're covering up about as badly as you could cover up raise more of the what's the opposite of a cover up everything's a big reveal and it's in your face straightness were getting away with what you're gonna do about it and so far the answer is you know not much 'cause we still need you to sign off on tax reform farm and entitlement reform and all this other stuff so it's a way of possibly it's a way of demonstrating power so there is a summit between soviet leaders an american leaders a little known summit takes place shortly thereafter and which one of these events of the kind of sit down and watch a movie together and the movie is about chinese attitudes towards nuclear weapons were even though now the soviets americans think of them as unconventional right different they're not just big artillery pieces the movies he seems to imply right but this is exactly right how the chinese think about them right there just weapons like any other weapons they just have a bigger bang for your buck and so the scares the jesus out of mcnamara another kind of hard headed people at this meeting and you get agreement on nuclear proliferation pretty shortly thereafter how big a shift then to new way of thinking about these weapons is the here's the way i view nuclear weapons they keep the world safer every single year until they will eventually kill us all and the way i view this is probably the most famous section of the inaugural as he says every difference of opinion is not a difference of principles we have called by different names brethren of the same principle we are all republicans we are all federalists if there'd be any among us would wish to dissolve this union or to change its republican form arm let them stand undisturbed as monuments of the safety with which error of opinion may be tolerated were reason is less free combative we've been talking politics and we'd be remembering what a privilege

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