Tech & the Future of Governance (w/ Balaji Srinivasan)
ASH BENNINGTON: Yeah, and it seems as though there's demand for change right now. Maybe that's [INAUDIBLE]-- BALAJI SRINIVASAN: Yes. Absolutely ASH BENNINGTON: --that we can come to, that there is a sense of needing to do things differently, of finding new solutions. I think that, when people look at the efficiency with which China has handled some of their containment efforts, obviously, we're talking about very different cultures with very different views of individual liberty and human rights. But I still think there is a sense of that there is just the technological solutions that are being applied, the speed of innovation, it seems as though we have a way to go on this. BALAJI SRINIVASAN: Yeah, 1950s America had higher state capacity than 1950 China. But 2020 China has higher state capacity than 2020 America. That's obvious to everybody on the world stage, at least for something like this. If you're familiar with Maginot Line from World War II, that was something where the French developed it for World War I-- or rather, after the experience of World War I, to stop the Germans from coming in in the same way, in the trench warfare that had fortifications. And the Germans said, OK. And they just went around it with the blitzkrieg. And, in the same way, what we are learning is that the two oceans, the Atlantic and the Pacific, that protected US, the aircraft carriers and the F-16s and this extraordinarily expensive and gigantic and well-trained and equipped to military just got completely bypassed by the virus. The virus is the ultimate, asymmetric threat. And, to be clear, I'm not saying it's engineered or anything like that. I'm just saying that it just completely invalidated all those defenses and has literally basically taken out aircraft carriers. I don't know if you saw that report from earlier this month. But that captain of the aircraft carrier's like, hey, all of my sailors are getting sick from this. Some of them will die if they don't get treatment. And let's take them off. Otherwise, everyone's going to get sick. So that's like, to my knowledge, the first thing that has taken out an aircraft carrier. And I saw another follow-up report. There is something like 40 Naval warships have had this problem. So that's a really big deal because it means that, in a sense, the US military is like this giant Maginot Line versus a virus. And, for all the talk of WMD, everyone had focus on nuclear weapons or like Assad with chemical weapons, it looks like every-- I mean, not every regime in the world is nice. A lot of folks are looking at this and looking at, OK, well, the biological stuff really seems to have bypassed US defenses. So that's a dangerous two- or three- or four-year-out consequence of a lot of this. ASH BENNINGTON: Yeah, it's interesting. It feels as though it's not just software that's eating the world, as your colleague Marc Andreessen has suggested, but also the framework of software development, the framework of competitiveness, that's brought to us more broadly from the software world is eating the world. BALAJI SRINIVASAN: Yep, that's right. I think, basically, the only kinds of states that survive, I think it all converges on something I call the network state, where-- so, for example, over the last 10 years or so, every company had to become a software company or die. Frankly, that's actually happening now in an extremely-- in a way that I didn't expect it to happen. But the way it happened over the last 10 years was, OK, Blockbuster Video, you don't go online? OK, Netflix kills you. OK, Hollywood, you don't go online? Well, iTunes and, again, Netflix and so kills you, and so on and so forth, for industry after industry, like taxis, hotels, whatever. And now it's something where restaurants that didn't get with DoorDash are dead. Like higher Ed, any college that didn't invest in it Coursera and Udacity and so on is really out of luck and so on. Essentially what happened was anybody who didn't invest in the future doesn't even have a leg to stand on because it was just all internet. You don't work or die. And I think that that's now happening at the level of countries. And this is something where I think of as-- what I think of as a network state. Basically, you either have countries that are run by basically people who I consider the ability level of a top tech CEO, for example, Li Zhenlong at Singapore. He was like a mathematician at Cambridge, was the wrangler there, top his year. In Estonia, there's a guy, [INAUDIBLE], who isn't running the country and was actually presidents, who has never, to my knowledge, prime minister. But he was a computer scientist out of Princeton and responsible for Estonia's adoption of internet technologies, one of the bigger influences on it, and helped modernize them and make them into the force that they are today, very high strength-toweight ratio. In Israel, Netanyahu, he has political issues now. But he is an MIT graduate and, certainly, an intelligent person. And I think, if you go down the list, the folks who are kind of like those, who are tech savvy enough to use software and engineering, are the ones who will do well. On the other side of it, I think-- so that's kind of a state getting the qualities of a company. The flip side is a company getting qualities of state. And so, now, for example, companies can issue digital currencies. Or they're trying to. Facebook's trying to Libra. And what I think is going to happen with Facebook and Google and Amazon and YouTube and so on and so forth is they're basically going to step into the gap where the WHO and UN and so on. Those are kind of fading and leaving the stage, in many ways, because there's a loss of international confidence in them. And so the trustworthy, multinational institutions are going to be these giant tech companies because they have billions of users around the world. They have the balance sheets. They are kind of in this sort of diplomat kind of role, where they have to maintain relations with lots of different countries. And they are, frankly, more competent than WHO or UN. Who would you trust to implement contact tracing? It's going to be Apple or Google, not really the UN. Maybe WHO, but they're not going to be able to code it or ship it on a billion iOS devices or Android devices. ASH BENNINGTON: So let me just push back a little bit of this. So we all love big tech companies, those of us who are passionate about technology-- BALAJI SRINIVASAN: Sure. ASH BENNINGTON: But the question is, you know, look-- the counter argument could be, look, these are not states. These are not organizations that have the consent of the governed. They are there to make money for their shareholders. And some might say, even more cynically, they're there to make money for management. And look, these do not have-- the argument would go-- the interest of the broader population at heart. There's a reason that we have governments and not private corporations that run the world. One could have made this argument in the 19th century and certainly in the 20th century about corporations being more effective, more nimble, more technologically savvy. And the history there is not a very strong one when you look at things like environmental pollution and those sorts of things. Why should we have trust that big tech companies have the interests of the broader population at heart? BALAJI SRINIVASAN: So three points there. So first is I don't think one should have implicit trust. Actually, I'm a big fan of crypto and decentralization and internet encryption and so on and so forth. I definitely think we need a check on the power of large tech companies, which can do censorship, deplatforming, demonetization, and, yes, certainly abuse for management. So let me put that on the table first. Second is I do think that, with that said, big tech companies are actually, in many ways, more accountable than, let's say, the UN or WHO because, first of all, you are a shareholder. Yes, you could become a shareholder. You can't become easily a shareholder of the UN or WHO, number one. Number two, you're often a customer of these companies. And a large customer can raise a stink or what have you. Number three is I actually feel that it's more transparent in the sense of the process by which a WHO bureaucrat is appointed is not-- how much democratic accountability really is there? You vote for a president who appoints somebody who appoints somebody. It gets pretty dilute at that point. You're talking 1 over 300 million of a vote for this for that. It's effectively zero whereas, I think, that, if you actually want to affect that process, you actually go join the WHO or write about it. And then it's similar to your influence on an Apple, where you just join Apple and write about it, so in terms of practical influence from that standpoint. And then, finally, there's [INAUDIBLE] just competence. Ultimately, the proof is in the pudding. I'm not saying-- and I should be clear about this. I'm not saying that centralized governments are necessarily incompetent. In fact, there is a period from 1933 and 1969, roughly Hoover Dam, Manhattan Project, Apollo Project, where, in that period, the United States government got all the best talent and all the best scientists and was able to do things that no private sector company could do. And I think I would argue that's because technology in the mid-20th century greatly favorite centralization. It was mass media. And it was mass production. It was mass society. And you basically couldn't make something unless a bunch of people were in a factory, all working together. So you needed ideologies that supported those technologies. And then, if you go both forward and backward in time, you go more and more decentralized. The 1950s was kind of like a mirror moment, where you have-- So, for example, 1950, you have one telephone company. And you have two superpowers. And you have three television stations. So it's like the centralized century. And then you go forward in time. And you get cable television. And then you get the internet. And you start getting the explosion of things after the internet. It's like the internet's reopening the frontier. If you go backwards in time from 1950, pre-World War I, and then you go to 1890, and the frontier reopens as you go backwards in time. Then you get robber barons. And so I think, in many ways, our future is like our past. This has been something I've been writing about for a long time. And it's jumbled. It's not necessarily in exactly the same order. But guess what? We just kind of replayed-- we're replaying the Spanish flu. It's a little bit out of order, robber barons, Spanish flu. There's other things, by the way. In the 1830s, there is a whole thing about private banking. Do you know about that? ASH BENNINGTON: Yes, of course. BALAJI SRINIVASAN: Yeah, OK. ASH BENNINGTON: Yeah. BALAJI SRINIVASAN: Private banking, all right. So that's come back, too, with crypto. And so, essentially-- ASH BENNINGTON: It's almost like you had this sort of sinusoidal wave of centralization and decentralization that continues to alternate. I'm curious about what you think about the potential to do in some of these in an open source way, perhaps in a way that is not as proprietary and that doesn't belong to, you know, pick the larger tech company of your choosing. BALAJI SRINIVASAN: Yeah, so that's actually what I-- I do care about that a lot. And I think that what blockchains allow us to do-- and it's not just blockchains, but let's just say decentralized technologies, OK. ASH BENNINGTON: Give us a [INAUDIBLE] on what that means for people who aren't as familiar-- BALAJI SRINIVASAN: Totally. ASH BENNINGTON: --with technology. BALAJI SRINIVASAN: Totally, totally. So most people probably who are listening to this are familiar the concept of open source, which is source code that you can download, and inspect, and look at, and replicate, and usually modify, and what have you. And the fact that you can do that gives you more confidence in its correctness and so on and so forth. ASH BENNINGTON: Actually, I'm going to say something. I'm not sure that most people are familiar with the open source movement. I think most people who are passionate about technology are familiar with the open source movement. But this is a very different model than most people who have iOS or Android phones, for example, are used to thinking about. So explain a little bit about that, yeah. BALAJI SRINIVASAN: Sure, sure, so it's funny because-- OK, well, first, iOS and Android are very heavily based on open source technology. Android itself is, essentially, Linux, though they have closed up pieces of it, effectively, over time. It's basically like copyright almost. If you can just take content, images, music files, and mix them together, freely, it's easy to make something cool and creative in a mashup. If you have to go and get a bunch of license agreements from people, that's massive friction. And it means you're just not going to do it because it's so hard to do it that you just don't do it. And so that's kind of what open source is like. It's basically something where you can look at code, take snippets, be inspired by it, understand what's going on, gets smarter, and then share it with others. ASH BENNINGTON: Yeah, one metaphor for this might be-- we were talking earlier about NEJM, the Lancet, the New England Journal of Medicine. One metaphor might be the idea of peerreviewed journals are open source in the sense that the information is really shareable. You can comment on it. You can replicate or attempt to replicate it. You can analyze it. BALAJI SRINIVASAN: Right, though, not all of those journals-- they don't-- there's a whole movement for so-called reproducible research. So not every journal article is, quote, reproducible research, but it's getting better over time. OK, so, now, this may be-- for an audience that is new to open source, the following, what I'm about to say, may be too much of a leap. But I'll just go there anyway. So what blockchains give you is kind of the next step after open source, which is open state and open execution. OK, so open state means you don't just have the source code. You also have the database. OK, so that's publicly visible now. And open execution means you don't just have the source code and the database. You can trace through every single step that's happening. So let me give an example. People wonder whether Twitter is filtering their searches. Am I getting filtered or what have you? If Twitter is-- and it's not possible today, but it might be possible-- it probably will be possible in like 10 years, maybe sooner. If Twitter was based on a blockchain-like backend, you could inspect it for yourself or get a developer to confirm that, oh, your searches aren't being filtered, OK. So that's actually really interesting, where it's a stateful application that millions of people can write to and read from at the same time. It operates in a low trust way, where, essentially, you can use computation to confirm that it's not biased against you and, in fact, that it cannot be biased against you because it's cryptographically guaranteed to not be able to be biased against you. And that's a really, really powerful construct, where, essentially, what we do is we trade computational time for trust because computational time has become cheaper. So you do essentially math that your CPUs can crank out to replace or reduce the need for human trust. ASH BENNINGTON: This has been an incredibly wide-ranging discussion. And we've talked-- we begin with your background in technology and business. We shifted it over to the virus. We've talked now about these broader philosophical issues. Looking back on this, I'm not sure we could have done it any differently because you really are framing a different approach to management, a different approach to governance, a different approach to the way that we think about challenges in the health and medical domain but also more broadly. So as we come to the close of this interview, could you start to sum up things that people can take away from this and maybe other ideas that they should explore if they're interested in some of the topics that we touched on today? BALAJI SRINIVASAN: Macro kind of points-- I think that what we're going to see is a centralized East and a decentralized West. So that's to say, I think, that Asian countries will, by and large, probably be able to control the virus and keep their economies together with some exceptions, not 100% but generally speaking. And then those that don't, China will export a green zone to them. That is to say, the most important export that China has now is the ability to turn something into a green zone and, by a green zone, I mean a place that has no new case of the virus for, let's say, the last four weeks. So it's a way to get the virus under control with testing, and quarantine, and lockdown, and surveillance, and so on and so forth. So any country that is a red zone that wants to become a green zone can say, OK, hey, you know, China, you can put boots on the ground here. Just please fix my country. And so that's kind of like Belt and Road 2.0, where Mattel China essentially expands into Africa, into Iran, into all these places where it already was present. So the commons, you'll be able to walk around in Asia, I think. In the West, I think we're going to get something very different, which is-- I have this one liner, the virus breaks centralized states. So, if you've got a large centralized state that is simply not at the clock speed, doesn't move at the speed of the virus, you're going to face defection from within. Like, for example, there's individual Italian towns that are barring entry to people. And this is happening in the US. ASH BENNINGTON: I mean, that represents a dramatic shift in the conception of the nation state and the ability of federalized governments to actually implement, execute, and manage. BALAJI SRINIVASAN: That's exactly right. And the thing is, if it's just one city that was doing this, the other-- like the rest of Italy, which is, I don't know how many thousands cities-- would provide the resources to tell that one city, no, you can't do this. It'd be end versus one. When it's happening in every city at the same time, things fall apart. The center cannot hold. This is happening in the US, too, by the way. There's a North Carolina county that's barring entrance. 16 states have had quarantine borders since early April. I need to look at the latest numbers. But, basically, interstate travel is harder than it's ever been before. You have to basically stay 14 days as you go state to state. And so what I think happens is-- ASH BENNINGTON: Not ever, Balaji. Just since 1865. BALAJI SRINIVASAN: Sure, OK, fine. You're right. In fact, I'd say it like maybe even 1789 or something-- yeah, you're right. It'd have to be like Civil War level stuff, right. Tyler Cowen's also observed this. He's talked about how we're basically returning to the Articles of Confederation. And confederation didn't used to be a bad word. It just meant that there's more devolution of power. And that's basically what's happening. And that's how you're seeing Cuomo and others all talk about the 10th Amendment. The states are renegotiating their compact with the federal government. And, essentially, the US is becoming a monetary union, where the main thing that unites it is the dollar. And states are pursuing increasingly different policies on critical matters of things like lockdown, which affect the economy and health and so on. And they're just going their own way. And then so, if the US is becoming the EU and, basically, at least federating, the EU is, essentially, in my view, de facto broken it up. And the reason I say that is countries have denied each other masks. They've denied each other aid. They've closed their borders to each other. This is something that was already shaky for the last 10 years after the financial crisis, the Greeks versus the Germans and back and forth for a while. And Hungary going and doing its thing, you know, obviously, Brexit. There's a bunch of different countries that want to break off for a bunch of different reasons a bunch of different directions. But the whole thing reminds me of, geopolitically, my macro view is this is similar to what happened in the '80s with the Eastern Bloc and the USSR. So they were kind of tottering over the course of the '80s. You had solidarity. And you had Glasnost and Perestroika. And you basically had the bread lines. And, essentially, faith in the Soviet system seemed to be tottering. And then, suddenly, it all just came apart with the Berlin Wall in '89, the break of the Eastern Bloc, and then, eventually, the fall of the Soviet Union by December 1991. The whole thing just broke apart. And I think this is at that level. I think this is something where, at a minimum, it's causing the breakup of the EU and the radical decentralization of the US into these interstate compacts. Those are like sci-fi headlines, by the way. ASH BENNINGTON: Yes. BALAJI SRINIVASAN: Right, like Gavin Newsom announces another two states joining the Western States Compact. That's absolutely sci-fi headlines. And it'll have "medium to long term" serious consequences, not necessarily all bad, by the way, because it could be that smaller states in this time are easier to manage and give you more options, more different modes of governance, more different real things. We're already going in this direction with sanctuary cities and different gun laws and different marijuana laws. And this is that to the nth power. And so we get-- I think macro is you have the centralized East and you have a decentralized West, where there's now maybe dozens of polities with different policies. And then, once we kind of stabilize, some of those will be green zones. And some will be red zone ones, which have more or less control over the virus and also better or worse economies because anything that's become a red zone is a place where lots people die, where the economy is hit because there's lockdowns and shutdowns and social distancing and people fleeing. And red zones get burnt out like Detroit. Or maybe not exactly at that level but similarly. And green zones, by contrast, have lots of people who want to emigrate there, who want to buy property there, want to come there. And green zones will be very picky about which immigrants they let in with these community passports or other kinds of things. ASH BENNINGTON: As we come to a close here, there are still a lot of people who are suffering with this virus, people who are suffering economically, obviously, the people who are sick and who have lost loved ones. In terms of framing out what you think [INAUDIBLE] is the single most important thing that we can do to really kind of attempt to either solve the underlying medical problems that people are experiencing, which have been so terrible, and/or to attempt to get the economy back on track and moving forward so that we can continue to build capacity to fight this virus and to support people's lives, what would you say to someone who asks you to answer that question in two minutes or less? BALAJI SRINIVASAN: Sure, so I'd say, we have to stop the virus. We should let it go to 100%. First, we should have expanded "right to try" such that states can rapidly approve tests, vaccines, and drugs without going through the FDA. Second, states should close borders and, whether at the state or county level, should adopt a policy of lockdown until zero new cases, after which they do test, trace, and isolate to, basically, make sure that the cases aren't just flying around. third, they should open up carefully with masks mandatory for everybody, social distancing with everything that they could possibly do in terms of telework, in terms of banning things like PIN pads or other forms of contagion. Fourth, they should, basically, the same "right to try", should accelerate drugs and vaccines. And, fifth, we should take some of these trillions of dollars in printed money and allocate it towards prizes for vaccines, for masks, for this and that. Relatedly, sixth, we should remove price controls from these things because this is not like a one day thing like a hurricane where you can accuse somebody of price gouging or what have you. This is something where the economy is reallocating. And, if you can't have-- if people are not allowed to make large amounts of money, for example, making masks, or making drugs, or vaccines, then they cannot hire lots of people and put them back to work. So it's actually really important that people be allowed to make a lot of money doing COVID response in order to hire people and put them back to work because, otherwise, you get the worst of all worlds, which is both the viral and the economic destruction. So that's the summary, just to recap. A, expanded "right to try", B, lockdown until no new cases, C, test, trace, and isolate to keep cases down, D, accelerate drugs and vaccines. There are things called challenge trials, for example, that could accelerate it, where people are exposed to vaccine-- take the vaccine. They're exposed to virus on purpose to see if it works. E, make sure that you're giving prizes and things like that, allocating moneys towards funding these novel technologies. And, F, take away the price controls and other kinds of things that are restricting people from getting the economy going again. So that's like a two minute drill. I could do it much longer. But, hopefully, that's interesting. ASH BENNINGTON: Yes, wonderful. We've barely scratched the surface here. I feel like we could go on for hours to talk about this. I hope you come back to talk about the broader framework and to get into some of the things that you think that the United States needs to do to become more competitive. It's been an incredibly interesting conversation. Thank you for joining us.