Glen Weyl is the co-author, with Eric Posner, of Radical Markets: Uprooting Capitalism and Democracy for a Just Society. Despite its subtitle, the book is decidedly pro-market, arguing that price mechanisms are invaluable tools for allocating resources and building healthy societies. But those markets have to be carefully designed to achieve that goal.
The book argues, among other points, that large-scale private property actually distorts the function of markets, and that public goods like land should be managed through structures that benefit everyone (like auctions). The ideas, as the authors acknowledge, are in many ways a 21st-century update of the work of Henry George, who campaigned against private monopolies of natural resources, and in favor of collectively-owned systems like public transit. The book has been greeted with something close to rapture: Harvard economist Ken Rogoff called it “perhaps the most ambitious attempt to rethink democracy and markets since Milton Friedman.”
The book has attracted another big-name fan: Vitalik Buterin. The Ethereum creator saw “multifaceted and plentiful” connections between the book’s ideas and the goals of his smart contract platform. Buterin and Weyl have since worked together on papers refining the book’s ideas, and to start RadicalxChange, a conference and growing organization.
Weyl and I met at his New York office at Microsoft Research, where he is a principal researcher. We discussed the ideological differences between bitcoin and Ethereum, the doldrums of liberal democracy, and how to move global economic thinking forward. Our conversation has been lightly edited for length and clarity.
So what’s your role at Microsoft?
I’m a researcher, and I have freedom to do what I want to do. I do try to make sure I’m adding value to Microsoft in some ways, so my job is tenable.
And now you have this book out, which has turned into something much larger.
The book came out in May, and from mid-April through mid-July, I was giving seven talks a week, every week. I realized there needed to be a way for [people interested in the book’s ideas] to coordinate with each other. I decided to put together a conference, and on Twitter, Vitalik Buterin and I came up with the idea of RadicalxChange as a title for it.
By the end of September, we had 40 people giving 10 or more hours a week volunteering for it. We have four tracks: ideas and research, arts and communication, entrepreneurship and technology, and activism and government. We’ve got amazing people running each of these, and amazing people within each track—world-famous artists, important venture capitalists, activists and technocrats from all over. [Zcash founder] Zooko Wilcox is on one of the tracks. Now about 70 clubs have started around the world.
What specifically is the connection between Radical Markets and Ethereum?
A lot of people got into this blockchain world because they want to have a more decentralized structure for technology. That was the intention with which the web began, and that didn’t quite work out. A lot of people have the feeling that it’s hard to achieve that with superficially decentralized systems, without going several steps down the game tree, to how you set things up.
So the book is not really about blockchain at all. It is about the question of what mechanisms can lead to sustainably egalitarian and decentralized societies. I think a lot of people have come to feel, if they want decentralization to be sustainable, these mechanisms might be as important as blockchain technology itself.
And that got reinforced by the crypto crash. Often, when a bubble pops, there are religious revivals, because people feel they’ve strayed from their values and they’re being punished by God. And I think people in the [blockchain] world feel like they’ve strayed from their egalitarian values and they’re being punished by the gods of decentralization. The book’s ideas are built on these anti-speculation, anti-private property, pro-community values. That appeals to a lot of people who have thought: “This is the true path from which I’ve strayed. I should return to it.”
You can't have change in technology without change in social institutions to go along with it.
The fundamental premise of the book is the idea that you have to make social decisions about how markets are structured. And there’s a massive swathe of American politics that doesn’t accept that premise—that believes that if you just get out of the way, the market is a naturally-occurring phenomenon that somehow self-regulates. Is your project oriented towards trying to shift that attitude?
Yes. Social change happens through people’s changing conceptions of legitimacy, of what’s appropriate and natural and right. And that’s why we’ve divided the movement into these four parts. All of those things need to work together to change people’s feelings of legitimacy: you need art to help people imagine a different world, for instance.
A really substantial portion of economic discourse in crypto, too, is clustered around radical free marketeers like von Mises and Hayek.
In Bitcoinland. I think Ethereum is different. In fact, I really think it’s bitcoin versus everything else. I think the Ethereum style of discourse is the most common, outside of bitcoin.
How would you characterize that style of discourse?
I think the basic spirit is something I would call social liberal, or radical liberal, or something like that. People are on the one hand very community-oriented, and on the other hand, very into decentralization and free markets. Some would call it left-libertarian, but I don’t really like that term. I like social liberal, or radical liberal.
We used to call it anarcho-socialism.
Yeah, yeah yeah.
On the bitcoin side, what would you say to people who hew to that radical libertarian stance?
I think if you start at Milton Friedman, there’s roughly two directions you can go. You can say, I absolutely believe in private property, that’s my first principle. And I think then you’re inevitably led down the neoreactionary path, if you just follow the logic.
Neoreactionary—you’re comparing them to anti-democratic figures like Nick Land?
Right. Though I’m more familiar with Curtis Yarvin [Mencius Moldbug], and he comes more out of the rationalist movement. The influence that they’ve had is quite unbelievable, really.
I hadn’t heard “neoreactionary” applied to the right-wing bitcoin crowd, but I think it’s a better characterization than even “radical libertarian.”
To people who believe in market mechanisms but want egalitarian goals, I would say: basic economics suggests that this “radical libertarian” or neoreactionary discourse, is wrong. Because fundamentally, civilization comes from increasing returns to scale: the idea that larger structures are more efficient. Standard libertarian stuff is based on economic models that ignore increasing returns to scale. Once you take that seriously, you see that standard private property arrangements create monopoly power all over the place, and they don’t lead you to the goals that people like Friedman claim. If you take his logic seriously, you end up with our position, liberal radicalism. You end up with a vision that is liberal and decentralized, but that has affordances for building communities and collective action.
You start from the position that an economy or a market is essentially a technology, a way that people share information about their desires. We have this religious faith in The Market, but if you look at it as a technology, it opens up the idea that you can change it.
That’s the attitude of mechanism design, and it’s new, and it’s old, like most things. [Progressive Era economist] Henry George was one of the central figures in putting that into the public imagination in the early 20th century. And I think it fell out because of the Cold War, and it fell out because of this whole End of History thesis [advanced by neoliberal Francis Fukuyama in the 1990s].
It’s not really just markets. There was this weird view that suddenly we didn’t need to innovate in our social institutions anymore—that technology would continue to advance, but we had reached the end of innovation in social structure. And I think that is an incredibly strange and confused perspective. You can’t have change in technology without change in social institutions to go along with it.
You hit that point early in the book, describing what was going on after the fall of the Berlin Wall.
Yeah. “Prosperity bred arrogance, arrogance bred complacency, and complacency sowed the seeds of the destruction of the Western order.”
Another core idea is auction design, which comes from George’s successor, William Vickrey. We have auctions now for radio spectrum, for public land or resources—
And also for ad space on Google and Facebook.
But you want to see that model applied more generally.
Right. These ideas were not originally intended to make profits for a few tech companies. They were meant to transform our society, and we want to reclaim that heritage. The cases we’ve talked about most are public resource leases: fisheries, spectrum, and other resources that are owned by the public but are privately managed. They currently have a lot of inertia.
Think about spectrum. Most of your readers probably don’t listen to a lot of over-the-air radio broadcasts, but they do use a lot of WiFi and LTE. But most of the spectrum is used up for those over-the-air broadcasts, because the government gave up these perpetual licenses and it’s really hard to buy up a bunch to use them for new purposes.
Another thing you talk about is how corporations originally came into being as a way of reducing transaction costs. And now we have technologies that are eroding some of the advantages that corporate structure gives. Do you see atomization, contract work, and Uberization as a corollary of increasing decentralization and other changes you envision?
No. Corporations came into existence because of economies of scale, which is the same reason governments and other social organizations came into existence. There are clusters of people and resources that can accomplish more together than they can in their individual capacity. And the problem with a corporation is that it tries to manage something that is basically a public good as private property. That’s just a logical mismatch.
I think maybe the killer app of blockchain is radical markets.
What’s the public good you’re referring to?
I mean public goods broadly—anything that has increasing returns to scale. Network effects, cities. Anything where the whole is greater than the sum of the parts. Which is the basis of all civilization.
When you manage a public good like it’s a piece of private property, you get all sorts of awkwardness and contradictions, and monopolies and extraction. It’s just an illogical thing. And it arises from the fact that standard economics has been aware of public goods, but sort of said, ‘eh, it’s an edge case, let’s not worry about it too much.’ I think that’s the fundamental problem.
You make some radical statements, including that private property has fundamentally subverted the economic goal of efficiently allocating resources. What kind of reaction do you get to that?
As a matter of economic theory, people can’t really argue with it, because it’s just right. Economists agree. On a fundamental level, if economies of scale were not a big deal, we wouldn’t have civilization. The fact that we’re even here [at Microsoft], with this cluster of people, shows that it must be a big deal.
Matt Prewitt, the deputy director of RadicalxChange, likes to tell this story from Henry George. Imagine an infinite savannah. Some settler comes along, chooses 1,000 acres to make his home, and just takes it, and says, this is my private property.
And someone else comes along, and they could take 1,000 beautiful acres, or they could take 100 acres next to this guy. But who needs all those acres? It’s much better to be near someone else, so you can share labor. And then a cluster of people like that form around him, and clusters form around that, and pretty soon you have a city, and this [first] guy is the richest guy. Just because everybody else came to be near him.
That’s an old-fashioned version of the issue of network effects. There was nothing that guy did, there’s nothing special about the piece of land that he was on. The point is that the value actually does not come from private efforts, it comes from the network effects. It was all about the social processes in which he was embedded. And treating that as if it was his private property is just a category failure. It creates paradoxes, like monopoly power, like misallocation of resources, like inequality.
Compared to improving auctions for public resources, that sounds like a problem with fewer immediate solutions.
Well, mechanism design is about trying to come up with formal protocols that incorporate those features. I have a paper with Vitalik Buterin and Zoë Hitzig called “Liberal Radicalism.” And it proposes an alternative to the capitalist way of conceiving of value, where funding occurs through the principle of public goods rather than through capitalist private property. And it’s a formal protocol that has actually already been deployed in certain places.
Is there a blockchain element to that, or is it just a shared interest between you and Vitalik?
What was the Temple of Jerusalem in 500 B.C. good for? What was its killer app? People at the time probably thought it was like, making it rain, or winning a war against the Jebusites or something like that.
But it turned out, the killer app was Sigmund Freud and Albert Einstein. It created a civilization that valued learning. Which, when the industrial revolution came along, was really valuable, and lead to all sorts of great science. So that as pretty indirect.
Your point being that there’s a culture growing up around blockchain technology.
Exactly. I think maybe the killer app of blockchain is radical markets. But if you ask me to say precisely what role does the technology play in it, that’s more abstract.
One potential blockchain application is managing personal data, which you discuss in the book. And it seems to correspond with your point about public goods: There’s this almost accidental capture of a public data by private interests like Facebook. In the book, you present an alternative model that has people getting paid for their data.
Yes, but we’ve kept working on that. It needs to be more than that. Fundamentally, the problem is not really about people getting paid. Payment is just the economically quantifiable representation of power.
And what we need is for power to get transferred away from centralized platforms, not back to individuals, who in their isolated capacity can’t actually exercise that power effectively. Instead, that power needs to be transferred back to a rich, diverse, overlapping set of collective organizations to which individuals belong, so that there’s no longer a single hegemon. We need new versions of labor unions and universities for the digital age, because they’ve been been downgraded by the internet. They would correspond to the needs people have: to manage their attention, to maintain their reputations for task work.
The book, and now the organization you’re building, seem oriented towards breaking a political and economic logjam we’re in: an unequal distribution of resources and goods. There has also been a resurgence of some form of socialism in the U.S. Have you engaged with that strand of politics at all?
I’ve seen roughly three coherent philosophies in response to this moment. One is neoreaction. One is Matt Bruenig-style socialism—Alexandria Ocasio-Cortez, Jeremy Corbyn. And the third one is some form of liberal radicalism. I think RadicalxChange is the most coherent and developed version of that, but what The Economist magazine has been writing lately would fit broadly, along with someone like Margrethe Vestager, the European Commissioner for Competition [who levied historic fines against Google]. Vitalik obviously, and a lot of the blockchain movement, is part of that.
No classical conservatives? No small-government conservatives, on that list of people trying to offer answers.
I think that world is kind of dying. I think it’s a rearguard action, and it’s not up to responding to the moment.
My take is that they were always kind of riding on top of the neoreactionaries, and keeping them in check.
Right, and they’ve lost the ability to do that.
Those are the three responses I see. But I think that liberal radicalism ultimately has the broadest potential appeal. I think it is the least clear and coherent organization so far, but I think we’re building. So I think we have a chance to win over a lot of the left—as well as a lot of the right. We have people involved in the movement who think of themselves as anarcho-socialists, as standard people on the left, who are centrist technocrats, and those who think of themselves as libertarians.
Bitcoin maximalists say there should be bitcoin, and there should be anonymous individuals, and that’s it. That is precisely the totalitarian worldview.
But I don’t think you would define what you’re articulating as a middle path. It’s something different than that.
Ultimately, it’s syncretic. It’s more socialist than the neosocialists are. It has more freedom and free markets, certainly, than the neoreactionaries. By taking the ideas of each of these camps more seriously, we can actually transcend the divisions.
I’ve even spoken to more Christian conservatives recently—I just talked honestly and respected them. They love de Tocqueville, and he’s a huge influence [on me]. He has a vision where the only way to sustain liberty is through collective organization. I think in some ways he’s the philosopher most closely aligned to these ideas. We need intermediate-sized organizations that can be repositories of reputation and value and culture that are not just a single global hegemon.
The neoreactionaries have an island notion of the individual—sometimes literally, they want to sea-stead. But I think of the individual as a crossroads: If I meet someone, the things I find interesting about them are usually the diverse sets of communities they belong to, and the surprising combination of communities that they’re a part of.
The great evil of totalitarianism—and I would increasingly include the current platform economy in that category—is that it wants to erase so many of those affiliations. It wants to leave us as an individual in the face of overwhelming collective power. But the individual can only exist if there’s that diversity of connections and relationships that no one else has.
One of the things that I’ve always found fascinating about blockchain is that it’s this public entity, with private players forming it.
The problem is bitcoin maximalists say there should be bitcoin, and there should be anonymous individuals, and that’s it. That is precisely the totalitarian worldview. Everything is either public, or private. Ethereum starts to move away from that. The attitude is, there are going to be all these different things. That, fundamentally, is the architecture we need: diverse, overlapping communities, not a center and an individual.