The Blockchain Socialist

OTNS: Is Code still Law? Interview with Lawrence Lessig

August 27, 2023 The Blockchain Socialist
OTNS: Is Code still Law? Interview with Lawrence Lessig
The Blockchain Socialist
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The Blockchain Socialist
OTNS: Is Code still Law? Interview with Lawrence Lessig
Aug 27, 2023
The Blockchain Socialist

Send me your questions or comments about the show and I'll read them out sometime.

In this episode we had the pleasure of speaking to Lawrence Lessig, the legal scholar known for coining the term "code is law" which if you've been in crypto, you'll know that this phrase has been very influential on the space. During the discussion we talk about the original design of the internet, how it has opened up a Pandora's box of overlapping sovereignties, and  the role of code in regulation and its implications for democracy.

 Check out a previous episode to learn more about our framework for out network state alternative,  coordi-nations.

JOIN THE BLOCKCHAINGOV DISCORD SERVER HERE IF YOU WANT TO TAKE PART IN THE CONTINUED OVERTHROW AND CONTRIBUTE TO THE RISE OF COORDI-NATIONS.

Overthrowing the Network State (OTNS) is a series in collaboration with Blockchaingov where we critique The Network State  by Balaji Srinivasan while also pulling out the salvageable parts and concepts in discussion with a variety of guests. You can find the first episode of OTNS where we give our initial criticisms and  alternatives here.

Blockchaingov is a 5-year long, transdisciplinary research effort aimed at restoring trust in institutions at the community and global levels, by promoting better on chain and off chain distributed governance practices. Throughout the series, each discussion will include me and a member of Blockchaingov with either a new guest each episode or a discussion between us to tackle various topics from the book.

If you liked the podcast be sure to give it a review on your preferred podcast platform. If you find content like this important consider donating to my Patreon starting at just $3 per month. It takes quite a lot of my time and resources so any amount helps. Follow me on Twitter (@TBSocialist) or Mastodon (@theblockchainsocialist@social.coop) and join the r/CryptoLeftists subreddit and Discord to join the discussion.

Support the Show.

ICYMI I've written a book about, no surprise, blockchains through a left political framework! The title is Blockchain Radicals: How Capitalism Ruined Crypto and How to Fix It and is being published through Repeater Books, the publishing house started by Mark Fisher who’s work influenced me a lot in my thinking.

The book is officially published and you use this linktree to find where you can purchase the book based on your region / country.

Show Notes Transcript Chapter Markers

Send me your questions or comments about the show and I'll read them out sometime.

In this episode we had the pleasure of speaking to Lawrence Lessig, the legal scholar known for coining the term "code is law" which if you've been in crypto, you'll know that this phrase has been very influential on the space. During the discussion we talk about the original design of the internet, how it has opened up a Pandora's box of overlapping sovereignties, and  the role of code in regulation and its implications for democracy.

 Check out a previous episode to learn more about our framework for out network state alternative,  coordi-nations.

JOIN THE BLOCKCHAINGOV DISCORD SERVER HERE IF YOU WANT TO TAKE PART IN THE CONTINUED OVERTHROW AND CONTRIBUTE TO THE RISE OF COORDI-NATIONS.

Overthrowing the Network State (OTNS) is a series in collaboration with Blockchaingov where we critique The Network State  by Balaji Srinivasan while also pulling out the salvageable parts and concepts in discussion with a variety of guests. You can find the first episode of OTNS where we give our initial criticisms and  alternatives here.

Blockchaingov is a 5-year long, transdisciplinary research effort aimed at restoring trust in institutions at the community and global levels, by promoting better on chain and off chain distributed governance practices. Throughout the series, each discussion will include me and a member of Blockchaingov with either a new guest each episode or a discussion between us to tackle various topics from the book.

If you liked the podcast be sure to give it a review on your preferred podcast platform. If you find content like this important consider donating to my Patreon starting at just $3 per month. It takes quite a lot of my time and resources so any amount helps. Follow me on Twitter (@TBSocialist) or Mastodon (@theblockchainsocialist@social.coop) and join the r/CryptoLeftists subreddit and Discord to join the discussion.

Support the Show.

ICYMI I've written a book about, no surprise, blockchains through a left political framework! The title is Blockchain Radicals: How Capitalism Ruined Crypto and How to Fix It and is being published through Repeater Books, the publishing house started by Mark Fisher who’s work influenced me a lot in my thinking.

The book is officially published and you use this linktree to find where you can purchase the book based on your region / country.

Speaker 1:

Hello everyone, you're listening to the Blockchain Searchless Podcast. I'm Josh, I'm here with my co-host, primavera DeFilippi, and we are both in Florence at a I said a blockchain of sponsored crypto events, and we have the honor of having Laurence Lessig to come join us for the show. Laurence Lessig, you're known for, I believe, coining. The term code is law which has become very prevalent in the crypto world and throughout its history, and so I think it would be nice to start, if you want to just give a quick introduction to yourself and like, maybe recount the history of this term code is law and how it's, you know, changed or stayed the same over time.

Speaker 2:

Sure, so it's great to be here in Florence and in this conversation, and I've been a law professor for hundreds of years now and way back at the beginning of my legal work I was focused on the transition from communism in Eastern Europe, and so we would go there as naive Americans and we would see people offer constitutions to these countries, and very quickly you realize that it wasn't just legal texts they needed. They needed social norms to support the infrastructure of free, republican governments that they needed, and so the absence of norms made the law irrelevant. And then, five years into my work, I started looking at technology, intersection between law and technology, and again you had the lawyers who would pass rules that they would impose on the network. And here very quickly you recognize it was not just that there was an absence of certain norms, there was also the absence of an architecture that made it possible for those rules to have purchased or have a place. And as you saw that the architecture itself was plastic, it could be changed, the code could be rewritten, it could be different code you began to see that the values that the architecture supported really overrode the values implicit in the law.

Speaker 2:

So the original internet was stateless. You couldn't know where someone was, what they were doing, and so what that meant was it protected privacy. It protected the freedom to innovate, because you couldn't tell that I was using TCP to do voiceover, ip or to send email, and it also protected free speech, because I could say what I wanted and you couldn't regulate me. Those were features of the original architecture, and so what I did by original architecture.

Speaker 1:

Is this like the internet after it was given to the public or after it was?

Speaker 2:

Yeah, this is Internet circa 1994 and 1995. And so, as I originally framed it in my book Code and Other Laws of Cyberspace, I was able to, the point was that we should recognize the values, the political values implicit in that code, and that code was, in that sense, law. But then, once you see that the values were implicit in the architecture and you know that the architecture could change, what I was worried about was that people who had an interest in a different legal world or a different set of legal values would change the architecture to perfect their control or invasion of privacy or restriction of speech. And so that was the argument of Code and Other Laws of Cyberspace that we have an architecture that gives us values we celebrate. But we can't count on that architecture because the very people who made it can remake it or we can layer on top of it technologies that change those values.

Speaker 2:

And I remember the review of my book in the New York Times. David Pogue wrote Lessig writes as if the internet will become technology of persistent surveillance and constantly violate people's privacy. But the proof is just not there and it's like. Well, actually that's because we're sensitive enough to what was creating the privacy and how easily it could be taken away.

Speaker 1:

And so when you were saying Code is Law, I guess my impression is that it almost seems like a recognition that the internet was this kind of like plastic piece of infrastructure that can have kind of I would argue perhaps like a politics embedded into it. So it's also recognizing that the law is like a very political field, where whoever has the power to change the law has the power to change a lot of things change norms, change a whole bunch of stuff that people allow or not allow to do various things.

Speaker 2:

Right, I mean you can. In a general sense that's true. But then we realize that it's actually harder to change some things than to change others. So if we think about a government trying to regulate cigarettes or the consumption of cigarettes, the government could tax cigarettes. That's pretty easy to do in a well-functioning market because you can collect the tax. So that raises the price and people are less interested in smoking.

Speaker 2:

The government could try to stigmatize people who smoke. So California did this. It had all sorts of ads on billboards that made people who smoke seem like weak people or pathetic people. So that's trying to change the norms around smoking. That's harder. But there's a period of time where the federal government was talking about regulating the nicotine in cigarettes to make them less addictive, so changing the code of the cigarette, and if that were effective, that would be a pretty cheap way to reduce the addictiveness and thereby achieve the objective of reducing smoking. Each of these is an intervention and what the regulator needs to do is step back and say well, what's the easiest intervention or the least liberty restrictive kind of intervention or whatever the dimension is that you're trying to maximize for what's the right way to intervene to achieve the result that you're trying to achieve and that's the dynamic that I think was missing in the context of people thinking about how the law interacted with technology.

Speaker 3:

And so in this concept of Cody's Law, it's also the thing that anyone that controls the code controls the law, and if it is like some private actor, then you can create some kind of powerful private ordering. But the private actor is also subject to a government and therefore, whatever private ordering you're trying to do, eventually, if the government is regulating the online operator, the government is also operating the technological infrastructure. So this means that there is limited, so there ain't in the technological infrastructure that is created. So do you think that blockchain changed the situation?

Speaker 2:

Well, blockchain changes it to the extent it is a more entrenched set of technical values. So you couldn't have built a cryptocurrency on top of Web 1.0. I mean, it was stateless. You had no infrastructure for private key encryption Like none of that would have been feasible and so if you tried to do a cryptocurrency, it would not have been effective because it would have been so easy to cheat.

Speaker 2:

But when you have a blockchain cryptocurrency, then the code is making it practically impossible to cheat, at least on the ledger, not at the edge, and so that code is a much more significant value to those who want to build this particular kind of application. And it challenges the sovereignty of governments, because, to the extent, governments enjoyed having a monopoly over currency regulation. Now there's an effective currency they can't regulate, but it's always relative, it's never absolute. I mean the government does have sovereign authority over blockchain in the sense that they can start shutting down every exchange and everybody who's participating and anybody who's got high electricity demands, because that's probably crypto mining going on. The government can always do something. It's not clear the government can always do it effectively or efficiently, because the code can create too big of an obstacle.

Speaker 3:

So I'm trying to play around with the analogy of network states and blockchains and in some way I'm wondering whether the government really has sovereignty over the blockchain or does it have sovereignty over the interfaces and the gateways that are bringing the blockchain into its own jurisdiction? So if they want to shut down crypto exchanges, it's because the crypto exchanges exist in their own jurisdictions. They might have a much harder time shutting down decentralized exchanges and, of course, they might figure out they could sanction them. But again, this is only with the interface with the people in their own jurisdictions. So I'm wondering isn't that similar to saying that there is a not our nation states that has its own currency, and then, of course, one country can say well, we cannot exchange this currency in our jurisdiction, we don't accept this currency in our jurisdiction, but that doesn't mean that they have jurisdiction over the issuance of that foreign currency.

Speaker 2:

So that's exactly the way to think about it, that they have relative effect, even though they don't have an absolute effect over the technology itself. There have been many stages in the history of the internet where people have talked about open source software in this way the open source software is out there, the government can't control it once it's out there. Sure, in the sense that the government's not going to blow up the chips that are running the software. But the government can make it practically useless by taxing anybody who engages with the software, or regulating exchanges that are facilitating the software, or whatever intervention makes sense. The government has a lot of power to muck about with this software, but even though they don't have the power to ultimately destroy the knowledge that the software represents, and so it's always just thinking about what's the relative efficiency of different ways of intervening and recognize, the government now has a wider range of tools that it can deploy using these different modalities of control.

Speaker 3:

In some way? So if we take currency as one specific prerogative of the state, do you think that blockchain technology is also enabling additional things that usually are associated with a particular government, For instance, like identification and things like this Like are there alternative toolkits that the blockchain technology provides that were not available before that can now somehow compete or maybe be complementary with those things that usually were the monopoly of the state functions?

Speaker 2:

Yeah, I mean. So states encourage the development of mature institutions again in banking, but not just in banking and those are costly things to establish, and blockchain allows the establishment of the function of that institution without the institution itself. And that becomes really valuable if you're in a relatively underdeveloped context where the institutions don't exist, but the function of the institution now exists because we have a computer connected to the internet that can then connect to a blockchain technology. And so I think we should just think about the range of functions that we wanna encourage or discourage and then think about how each of these different modalities code or norms or law or markets facilitate or inhibit each of these. And my point was always to say we need to think about this in a holistic way.

Speaker 2:

It was never to suggest that one dominated or necessarily dominated, which is why I think, josh, as you open the interview, it's kind of weird for me to hear the way people have used the meme code as law. I mean, I felt really bad, I felt kind of guilty listening to some of these defendants who are being prosecuted for their crypto schemes insist, no, this is the loud, because code is law. And I'm like, oh my God, am I liable here? I mean because, yes, code is law, but it's just not the only law. So, okay, you could say that the law of the code allowed me to do this, but if the law of SEC regulation says you can't do this, you're stuck. And so it's never about like one thing being the only thing. It's about recognizing how each of these things is part of a whole, and any smart regulator will have to think about what the trade-off among them will be.

Speaker 3:

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

Speaker 3:

I think that there are at least two reasons to justification why people are thinking or are promoting the idea of network state.

Speaker 3:

One, which is very clearly we don't like the jurisdiction of the state in which we are in and therefore we want to move away and create an alternative jurisdiction that we are no longer subject to the sovereignty of the state.

Speaker 3:

The other one is we realize that now we do have new affordance because of those technologies that enable us to, as a community, as a network nation doesn't matter how, what's the right vocabulary but that enable us to have our own currency, to have our own identification system, to use the function of those institutions, which is more of an additional layer that we can add on top of the existing territorial jurisdiction that we are not necessarily interested in escaping. And so, from hearing what you say, it sounds to me that you don't believe that blockchain technology alone enabled to escape from the jurisdiction, because, if you're resident on the country, they will still find a way to criminalize whatever you do with the blockchain, but do you believe that it nonetheless enabled the creation of those additional layer of sovereignty, and do you consider this additional layer to be a sovereign layer, despite the fact that it's an overlapping jurisdiction with the national territorial jurisdiction.

Speaker 2:

Right? Yes, because sovereignty is always overlapping and so we can emphasize the difference with times past and emphasize the continuity with times past. So the difference would be to say this now gives people the opportunity to exit to all sorts of different communities, like I could have been somebody that was out there working in a coal mine and now I understand that I can become a programmer and to stay in my house and have all of my economy through my internet connection and I can order food to be delivered, and so in some sense I've escaped from the life I had before in that jurisdiction. But I remain in that jurisdiction. So if I engage in illegal activities on my computer child pornography or something like that the doors will be broken down and somebody will come in and arrest me. So I'm never completely escaping. So that makes it sound like this is something new. I can escape.

Speaker 2:

But of course, historically we've always been living in worlds that have overlapping jurisdictions. So you are a priest in a church in a town in a nation. As a priest in the church, you had a certain sovereignty within the church, and many states recognized the power of the church to protect those within it. But that power was limited, it wasn't complete and you might, in the community, be okay, but the state might be taken over by a different church and begin to want to regulate you because you're the wrong church. So these overlapping layers have always existed, but I think they're more significant now because it is easier to move into a more complete existence in these quote separate spaces, even though they're not separate in an absolute physical sense, they're just kind of layers on top of the physical space that you're living. So you're always both online and in the real world and You're never just online not yet.

Speaker 1:

Maybe when we can migrate our intelligence to AI Completely, then that will be different one of the things that I think, sometimes the feeling that I get with a lot of, I guess, techno to utopian types is that they it's almost like they forget that they're humans made out of flesh and bone and like yeah, I think yeah, like as if they already live online completely.

Speaker 2:

Yeah, and I think another thing that we forget is the kind of not designed, unintentional Constraints of the real world that makes society possible. So one of the most important in the old days was you couldn't really filter out what you didn't want to see or know or hear. Like you lived in a town, you picked up the newspaper. The newspaper covered all the news. You walked around, you saw homeless people or you saw buildings that were dilapidated. You just had to confront that and deal with that. And one consequence of that is we had relatively well functioning Democratic structures because people knew and had to deal with the same problems. They lived in the same world. One fear about the opportunity to move into every different world you want is that the capacity to filter out what you don't want to hear or know or deal with anymore grows dramatically.

Speaker 2:

This is, this is I think, the paradigm Example of why the United States's political system is falling apart. Because people opt into their own news Universe and, like we, live in these different bubbles and we don't even understand the same facts. And that's, that's a feature or a bug of this increasingly sophisticated, efficient technology for deciding. I know who you are and I'm gonna feed you what you want and I'm not gonna feed you what I know you don't want, because you won't watch me as much if I do. And you know, nobody created the world that we had before. That made Democrat deliberation possible. Now we have to recreate that world, or recreate the conditions for Democratic deliberation, if we want something like Democrat Society to continue.

Speaker 1:

Yeah, I completely agree. I mean I think that Like one of the side effects of globalization, I feel like has been like alienation from your just look local space. So, like I mean, most people do not know like who their local, I don't know like town counselors or even neighbor.

Speaker 2:

I mean, yeah, or neighbors, yeah, you have these Bedwarden communities in America where people like sleep and then they Commute into the city and they work and they have no connection to their local community other than they just need water and electricity.

Speaker 2:

Yeah, and, and the point is like the different, the older world where you had to connect Was never designed by anybody. It was just like a feature of friction, a feature of the way the world was like you just had, and and the challenges that certain human capabilities, affordances, social affordances, depended on that contingent reality.

Speaker 3:

And when we have a different reality, then we have to figure out whether it's possible to recreate those affordances or at the same time Maybe because I'm very keen of the internet world, but at the same time I think that it's also true that when we are like in a particular country, we interact mostly with people that share at least the culture of this country, including, like, foreigners and immigrants.

Speaker 3:

The internet is also allowing us to interconnect with people all around the world which Might have, might be aligned like.

Speaker 3:

There is like a strong value aligned with this. That's, that's the objective with this type of community or network nation, which is you're quite aligned on a particular degree, but that also that doesn't necessarily mean that you're sharing the same culture and that, like that, you're thinking the same way. And so I think there is also a benefit when we think about those network nation which is all of Sudan, you also, in addition to the territorial proximity that you have with your neighbors, which oftentimes you don't really feel proximity with them, but by by interfacing and or by by identifying people across the world that share particular affinity and value Yet might come for very different background, very different culture and stuff so far, it's also a way to connect with people that have diversity of Opinion and whatnot, which would be much more hard to to identify or to to create kinship with, if you were only to be able to create a nation with people that you have territorial proximity with yeah, so it's, that's true.

Speaker 2:

And Janice faced, it goes both ways right. So you know, if you think of yourself as a gay teen in the middle of Iowa, what the internet enables you to do Is to connect with lots of other similar people to you around the world, because there probably aren't that many who are Out in the middle of Iowa, or at least you know 50 years, 15 years ago. But the flip side to that is, if you are a child pornographer, what are you you care about? You know child sex. It was hard in the old world to to feed that, but it's easier in the new world to feed that.

Speaker 2:

So these communities that you are enabling Can be both good and bad, and you know, and I think we just have to learn to Celebrate the good and and and mitigate the bad. I mean, because I'm certainly not against any of this, I'm just. I'm just for us having a more sophisticated or or subtle understanding of what the influences in this space are going to be and how we, how we respond to them, and I firmly reject the Naturalism or the ism of the way people talk about this. Like when the internet was born, my friend John Perry Barlow would say the internet just is a Place where behavior can't be regulated, and that, I think, led people not to pay attention To the way in which the architecture was evolving to make it really easy To identify and track and regulate all sorts of behavior that they thought the internet was going to protect. So that that's the that's the point. I I still think we don't have any good recognition.

Speaker 1:

Hi everyone. If you're enjoying this episode so far, be sure to subscribe, leave a review, share with a friend and join the Crypto leftist communities on discord or reddit, which you can find links to the show notes. If you're enjoying the episode or find the content and make important, you can pitch into my efforts, starting at three dollars a month on Patreon, comm slash the blockchain socialist. Help me out and join the newest patrons, like qualia, jonathan and Casey, which really helps, since making this stuff isn't free in terms of money or time. As a patron, you get a shout out on an episode, like I just did, an access to bonus content like Q&A episodes. You can submit and vote on questions you'd like me to answer and I'll give my thoughts in roughly 20 minutes.

Speaker 1:

Of course, I'll still be making free content like this interview, to help spread the message that blockchain doesn't need to be used to Further entrench capitalist exploitation, if we put our efforts into it. So if that message resonates with you, I hope you'll consider helping out. Also, my book blockchain radicals how capitalism ruined crypto and how to fix it is finally out through repeater books, so if you'd like to grab a copy, you can find a link to a link tree, which has many different links for different regions and countries, so you can find a way to get a copy of your own. There are also digital copies, so even if it's difficult for you to get a physical one, you can still read it through a digital copy.

Speaker 3:

Do you think it is desirable that those networked communities, which we like to call network nation for different reasons, do you think that that is desirable? That all of Sudan, those communities, get to Organize themselves in a way that goes beyond the way in which traditionally online communities organized, but that, and where the difference is essentially that they can benefit from these sovereign type of infrastructure, so that it's no longer just a community with a server in a particular country, it's a community that is creating its own sovereign currency, sovereign identification system. So, do you see, do you see this is desirable, or do you see this, that is, these are also can generate some strange competition or Strange interfaces with existing nation states both.

Speaker 2:

I think it's desirable, in the sense that I think the liberty to create all sorts of different communities is a presumptive good, but I also think that inevitably they're going to create real tensions with real world existence too, and so we need to be capable of balancing or restricting or creating other affordances to make sure that the real world is not destroyed by these affordances of these different spaces. And again, I think the political debate is the easiest place to see this. If the consequence of everybody living in their own network state is that they don't understand the basic problems of the physical world like they just don't either understand that there is global warming or that the water is polluted or whatever then acting politically in the real world becomes impossible or sensibly becomes impossible. And so I think there needs to be some capacity to assure that, yes, you're living in your little network state, you have your own little sovereignty is going on, but they exist with a physical world that we also have to take account of and recognize.

Speaker 3:

I would also like to argue that the opposite is also true, meaning that today it is difficult for municipality, for sure, but even for a nation, to actually be able to internationally coordinate in order to cope with those global challenges, because it's just too small of a unit. And in an ideal implementation of those network state system, I can also see how, because of the Sudan, you're actually creating transnational networks of people in different countries that choose to coordinate with one another because they identify as a network nation, all of Sudan. They also can enable some form of political cross-pollination, if you like, in which, because I'm coordinating with people all over the world which we all live in a particular country nonetheless, then there is some kind of like backward possession in which the political agenda that we have as a network state inherently will have repercussion on each individual nation state, which might actually facilitate international coordination if properly designed.

Speaker 2:

I'm sure that's true to some degree. I was much more optimistic of its force prior to the Ukraine war. I mean, I thought what would happen with the Ukraine war is that all the budding, yuppie middle class Russians would feel the consequence of them being cut off from the rest of their community, which was all the Starbucks consuming people around the world, and that that being cut off would turn them into political resistance fighters inside their own nation. Right, it didn't happen like that. I mean very quickly the local dominance identity overwhelms this international identity. Now it might be just too early. Maybe Ukraine war in 20 years if we are alive in 20 years would be more openly and effectively resisted by the internal forces within a country like Russia. But I think it's hard to say that we're there right now.

Speaker 1:

I really wanted to go into a direction, a bit more into the specifics of blockchain. So I imagine you are aware of how people use the term code as law in crypto world generally as a justification for why nothing should change essentially about the Bitcoin code, or, for example I'm sure you've read about the Dow. I'm curious what your thoughts are in those types of situations where they use that term code as law, in this type of context, where it's not a nation state but it's a very high stakes financial game going on, I guess.

Speaker 2:

Yeah, I mean that was, I think, a classic example of what people like Sunstein have called the incompletely theorized agreements of life. Like everybody in the Ethereum space would have uttered code as law and believed. I mean, people did say expressly that this was a unimmutable platform, that this is why you could trust it, and some of the people the Ethereum classic people really believe that all the way down. I mean, if all of a sudden it turned out Ethereum was going to launch nuclear weapons on all of Western Europe it just turned out the code was going to do that or enable that would they still insist? We're going to lock it down, we're not going to allow it to change? I don't know, but at least within the realm of financial loss from something like the Dow hack, they're willing to say hell yeah, and then other people that was too high a price to pay. Now they didn't have to resolve that during the early stages of Ethereum because it didn't really come up. It didn't really matter.

Speaker 2:

But once it came up, once this latent ambiguity surfaced, then it seemed the community was not as united as it was in its split and I think that is always going to be present with this code as law framework, because nobody is really saying regardless of the consequences, even the end of civilization. Nobody's saying that. They're saying something less and, depending on the context, I would be Ethereum classic. If we're talking about a Roblox game or I've talking about Minecraft and the consequences, I lose my whole community. But hell, that's code as law. That's just the way it is. But once you realize that you're affecting people outside of the game for example, you're affecting the ability of people to retire, you're affecting all sorts of real world things I totally understand why you shift into a different mode and the law would certainly step in and say yeah, it's very interesting, you have this little game going on, but the consequence of your little game is that we've lost $400 million of productive assets or something.

Speaker 1:

So do you think the decision to reverse the blockchain or to go back and remove the hack, does that still fall under code being law?

Speaker 2:

Well, I would say what it shows is that code is law, and not the only law. So there was a code that created the opportunity to perform that hack, but there was another law on the outside that was saying that hack is actually violative of certain pretty fundamental principles of the economy. And so when they decided to reverse the hack or to fork so that you could reverse the hack, that was respecting the external law and trying to protect the interests that the external law is trying to protect while violating the internal code is law principle. So one code wins and the other code loses, and I think that conflict is going to be inevitable.

Speaker 3:

So, if we bring this back to the network state question, it feels that, on the one hand, if you want to be a network state, you need to have this sovereign infrastructure. At the same time, the only way in which this sovereign infrastructure is really really sovereign is that it is as much reducing capacity for individual intervention, which also means that somehow this leads to this very paradoxical situation in which the only way you can be fully self-soverring as a network state is to have this completely immutable governmental structure or institutional scaffolding, because the more you leave room for human intervention, the more you leave room for a particular government to regulate the humans that can intervene into the system and therefore also reducing the self-soverignty.

Speaker 2:

Which, yes, which is a good reason never to imagine you're going to have a completely self-sovereign network state, because, to the extent we all live on this planet still, and to the extent governments remain powerful, they will need to intervene at certain places. They will most aggressively intervene to protect tax revenues or to protect vulnerable people like children, but I think they will more systematically intervene, too, to protect other, less significant interests, whether it's like labor rights or whatever. But all of those are reasons why the government will intervene, and if you expect you're going to build a state that's immune from all of that, I don't think you're long for this world.

Speaker 1:

Devastating.

Speaker 3:

And just perhaps one question concerning the ontological terminology, because we've been discussing a lot. Are we talking about network states? Are we talking about something that is not a state? What is it that makes a state a state? And one hypothesis which I would love to hear your opinion on is that it does make sense to call those networks state a state to the extent that they actually have at least a partial degree of sovereignty. While it would be weird to say that a digital community that is governing itself on a particular server in a jurisdiction will be like a network state you're just an online community but the fact that there is at least this desire of creating a sovereign institutional framework even though it's not the only sovereign that can that regulates the people having this infrastructure that has some degree of sovereignty, do you think this is a justification to actually move towards the terminology of the state as opposed to just online community?

Speaker 2:

I don't think there's any harm referring to it as a state, as long as you recognize that there are competing, overlapping, state-like jurisdictions.

Speaker 2:

And to assert that it's a state is not necessarily to assert its actual capacity to regulate everything that goes on in the state.

Speaker 2:

At the end of Code and other laws of cyberspace, I reflected on the experience of going to Vietnam in the 1990s and that was at that time a single, unitary, authoritarian-like state. So the state had the power to regulate whatever it wanted, but the technology of regulation was really poor. So, in fact, people had very free lives. They could do basically whatever they wanted, because the ability of the state to do anything about it was very weak. By contrast, the United States sets itself up as being a free society where you can do whatever you want, but the efficiency of regulation all the way down into the most minute corners of your life is overwhelming. So they're both states. The difference between them is the technology of regulation or the efficiency of the technology of regulation, and I don't think we question the sovereignty of the United States versus the sovereignty of Vietnam just because we observe that the United States' capacity to regulate is wildly greater than Vietnam's capacity to regulate.

Speaker 1:

I just wanted to check. Do we have to be done by a Maybe for? Thanks so much for spending the time to talk to us. One last question that I had to be a little bit provocative to ask you, although maybe we have answered that partially through our conversation. But is code still law for you now, so many years after writing the original book and piece on that, or as well, if you were to do it again, would you have rephrased it or added some nuance to the meme?

Speaker 2:

I didn't know, I would have rephrased it from the standpoint of all publicity is good publicity, so even the misunderstandings lead to understandings. But no, I think code is more law today than it was then. And think about privacy. We had an effective privacy way back in the day because of the inefficiency of surveillance. Now the technology of the internet is an extremely efficient technology for surveillance. It's really hard to hide, like you know. I know there are, I know, people who could effectively hide, but for mere mortals you are persistently effectively surveilled in absolutely everything you do. That's because of the code. It's a business model that drove that code, so I don't think we should miss the economic incentive here.

Speaker 1:

Privatization played a big part in this, yeah absolutely.

Speaker 2:

And computer capacity. So the fact that you had computers that could begin to run AI models that would target advertising based on people's preferences, drove the technology of surveillance capitalism, Like. That's what made it possible, and so the code is more significant today than it was back then, for sure, and so I don't think there's any less reason to be sensitive and critical of values implicit in the code. In fact, I think there's more reason to and like, to the extent you can point out, the code embeds values that are inconsistent with what we say our values are. That at least tees up the question well, what are we going to do about that? Are we just going to accept it?

Speaker 2:

So when you say that the code of surveillance capitalism, plus the incentives of the platforms, produces a political marketplace of ideas that has an incentive to keep people ignorant and angry at people on the other side and that defeats the possibility of democracy, when you recognize that, then you've got to then say what am I going to do about it? You know nothing. I'm just going to sit there and let democracy collapse because of this interaction? And I think the answer should be no. But the point is, pointing out the connections makes it easier to think about how I can intervene, Like, what can I do?

Speaker 2:

And in that particular case, I don't think you're going to do anything about the technology. You're not going to blow up AI, You're not going to blow up processors, general processing units but you can begin to think about, you know, taxing the business model, taxing the attention economy. You know quadratic tax on the amount of time that Facebook gets you, so you know the more hours it spends as a quadratic price increase for that. I mean, there are lots of ways to intervene to address this problem, but I think you know we've got to tee up the fact we need to intervene Nice.

Speaker 3:

So I also like the way in which you have been, I guess, adding to this motto of like code is low, but it's not the only low and in some way I think it's a nice reflection on the different way in which we think about network state, where I will say that Balaji is more, the code is low, or my network state is my network state.

Speaker 3:

Yeah, it's like there's one low, and that's either code or sovereign state, as opposed to the way in which we perceive the notion of network state, which is more this additional layer of sovereignty, which is you can create your own low, which is made by code or whatever infrastructure you manage to construct. But it's also not the only one and there are ideally many other network state that you can also belong to, plus the underlying nation state that also will always have like the real or whatever system to have. So it's kind of like the evolution, I think, of the motto that you're trying to promote now. I think is a very compatible vision of the way in which we try to promote network state as opposed to the absolute type of Balaji.

Speaker 2:

Yes, I'm glad it's helpful because it seems some change in the understanding is necessary, if only for those poor SAPs that are going to jail now because they thought God was law in the absolute sense.

Speaker 1:

All right, well, thank you so much for taking time again. Is there, would you like to share with the audience anything like any plugs, any social media or?

Speaker 2:

no, no plugs, no advertising. Stay off the internet, kids.

Code's Impact on Crypto World
Digital Age's Overlapping Sovereignty Impact
Network States
The Role of Code in Regulation
Promoting Network State vs Absolute Beliefs