How Big Tech Is Strangling Your Freedom
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I'm Barry Weiss, and this is Honestly. And today I'm speaking with the entrepreneur and venture capitalist David Sachs.

He was one of the members of what's now known as the PayPal Mafia, alongside people like Peter Thiel, Elon Musk, Max Levchin. He's also been an early investor in some companies you may have heard about, Airbnb, Facebook, Lyft, Postmates, Reddit, Slack, SpaceX, Twitter, Uber. And full disclosure, he's also graciously investing in our little startup here at Honestly and Common Sense.

David is now a general partner at Kraft Ventures, and perhaps most importantly, he's one of the hosts of a podcast called All In. David, thanks so much for being here today. Great to be with you. So David, you are massively invested in the world of tech. That's your world. And I would even argue that you kind of helped lay the foundations of the world that we now live in. But you're also something of a

whistleblower or at the very least a critic of that world. And to my mind, you've been making the case better than almost anyone else that despite the fact that we live in a liberal democracy with a Bill of Rights and a Constitution and a First Amendment, whether most Americans are aware of it or not,

We also are living inside a soft version of a social credit system, something that we think of as being in China. So for those people who are listening and hear that and think, wait, what? I want you to start by making that case. Right. Well,

Let's just start by defining what a social credit system is. A social credit system is a system that pretends to give you civil liberties and freedom, freedom of speech, freedom to express your opinion. It doesn't overtly send you to the gulag or something like that for expressing dissent, but rather conditions

the benefits of society, economic benefits, the ability to participate, to spend your money. It conditions those benefits on having the correct opinions. And if you don't, then your ability to participate in online platforms is diminished or curtailed entirely. That's the situation in which we are gradually heading towards.

And like you say, I'm a little bit of a dissenter in big tech, but I'm not the one who's changed. Big tech is the one who's changed. I didn't leave big tech, big tech left me. Back in the days when we were creating PayPal. - So this is an ATM. What we're gonna do is transform the traditional banking industry. - In the early 2000s, late 90s,

There was really a sense that technology and the internet increased global participation, would expand people's ability to engage in speech and commerce. Traditionally, power to communicate and to communicate

Control communication has been one of the most closely held prerogatives of the powerful. And for the first two decades of the internet, it really did. We're at the beginning of an industry and who knows where that industry is going to go. This could all turn into television again. It could be controlled by a small number of companies who decide what we see and hear. And there's a lot of precedent for that. But for the last half dozen years or so, we've really been restricting that access and trying to curtail it.

And that's sort of the trend that we're living in now is that these powers of deplatforming

And restricting people in both speech and commerce, it's taken on a life of its own. Those restrictions keep growing. When did you start to see the change? When did you start to see, as you put it, that big tech was leaving you and that the idea that it was going to be a technology that expanded freedom, you started to suspect maybe it actually was going to contract our freedoms? Is there a particular moment that you had that revelation?

Well, it's really been over the last half dozen years or so and you'd have to say that 2016 was a turning point. If you go all the way back to 2000, say, 10, when you had the Green Revolution happening in the Middle East. Protesters armed themselves not only with signs but with cell phones, allowing the protests to spread at social media speed. The use of

Twitter, YouTube, Facebook, all of these things, what it allowed people in these Arab countries to do is to circumvent these dictatorships. There was generally a sense in Silicon Valley of triumphalism. People were very excited about this. You know, hey, we're allowing, you know, social networks are allowing the people of these countries to express their view. They're sending a message to the leadership of these countries that they want change.

And you remember back then the CEO of Twitter said, Another one of our core values is defend and respect the user's voice, right? We talk internally about being the free speech wing of the free speech party. We are the free speech wing of the free speech party. That is how Silicon Valley saw itself. By 2020, say 10 years later, you have the view that's pretty widespread now that For years, Twitter billed itself as the free speech wing of the free speech party.

But it's been under growing public pressure over its failure to stop hate speech and harassment. There are new calls for social media companies to do more to block extremism and hate. Silicon Valley needs to restrict and regulate free speech on its platform. And you'd have to say that the turning point was 2016, obviously when Trump got elected against the wishes of pretty much everyone in Silicon Valley. That was a little too much populism for them and they

saw social media as being complicit in Trump's election. Right, like populism in the Arab Spring or in the Green Revolution was good, but in Trump it was not. Yes, it was a message they very much didn't want to hear and so they began to believe that

That message was somehow, you know, inauthentic. It was engineered by Russian disinformation and that there are platforms that somehow contributed to this. In Privacy Watch, a new study published by several political scientists has found that Facebook is the most important mechanism facilitating the spread of fake news. And that they needed to crack down and restrict

free speech so that it never happened again. The study compared the spread of fake news through other mediums as well, such as Google, Twitter, and email. Now, regardless of what you think about Trump, I think that was just the wrong message to draw from that election. I don't think Trump won because of foreign interference or hate speech or something like that. I think he won because, quite frankly,

the Democrats fielded a horrible candidate. And he narrowly won. It was less than 100,000 votes in a few key swing states in which Hillary Clinton barely campaigned. But rather than blame her or her campaign managers for running a bad campaign, they basically blamed social media and themselves for what happened and since then have been backpedaling on this idea of free speech.

OK, so one of the ways that I think we see that most acutely is this idea of deplatforming. Right. The idea that social media companies can use their power to kick people off on Facebook, off Twitter, off YouTube. Some people have compared the idea of deplatforming to having your digital tongue ripped out.

And I remember, for me at least, the first major case of this was Alex Jones in 2018. Breaking news out of Silicon Valley. Facebook has banned a number of prominent conspiracy theorists and alt-right figures, including Alex Jones.

Alex Jones and his media outlet InfoWars. Twitter has permanently suspended conservative radio host and conspiracy theorist Alex Jones from the site and from Periscope, along with accounts for his show InfoWars. The suspension comes after other sites including Facebook, YouTube, and Spotify banned Jones from posting content. Now, this was Alex Jones, right? This was the guy who said that the Sandy Hook shooting was a hoax. So people saw him kicked off and they saw InfoWars kicked off and they thought,

Good riddance. Why are they doing this now? Well, it's a good question as to why they waited this long. Yes, exactly. Why should this guy get the ability to make money off of YouTube ads? But I wondered if you could explain why it was wrong for people to cheer that outcome. Why it was wrong for people to cheer Alex Jones being deplatformed.

Well, censorship always starts as something people like and then it turns into something that they don't like. Once the power and the precedent have been created, the use of it invariably grows and it gets applied to more and more people. So it starts with censoring somebody who's widely hated.

saying outrageous things, but eventually it gets used on somebody who you yourself like. And that's what we've basically seen over the last several years is that censorship power keeps growing, keeps getting applied to more and more cases. The most recent example was

-Serious questions tonight about whether the Russians are using Rudy Giuliani to interfere in the US presidential election. -For the 2020 election, you had reporting come out by the New York Post about Hunter Biden's business dealings in Ukraine. -And tonight, the Trump campaign is accusing Twitter and Facebook of censorship after the social media companies blocked the spread of an unverified story about former Vice President Joe Biden's son and a laptop allegedly full of his old emails.

Experts say it has all the hallmarks of information laundering and all the headaches of 2016. It's a story raising concerns about whether it's real or just designed to sow confusion in the final weeks of the election. Now, regardless of what you think about that story, it has now come out that the story was entirely true. And yet,

It was labeled disinformation and censored from social networks so the American people could not take it into account before the election. Another one would be around COVID. COVID-19 myths have spread just about as quickly as the disease itself. But one myth in particular just won't go away. That SARS-CoV-2, the virus that causes COVID-19, isn't naturally occurring and was actually man-made.

I mean, you had the censoring for over a year of the lab leak theory, basically on the origin of COVID. Now the lab leak theory is widely regarded as probably either the most likely theory or at least tied with the so-called zoonotic theory for the origins of COVID. And yet people who espouse that theory, scientists who are acting in good faith,

on social networks, on YouTube were censored for having that opinion. And so partisan political actors understand now how it works and they actually play into the censorship power. So what you saw with both the Hunter Biden story, the censoring of that and the lab leak censorship in both cases, it was a three-part process that was engineered by political partisans. So step one was they got highly conflicted

political partisans to write a letter. So in the case of Hunter Biden, you got people like Clapper and those folks in the national security establishment who've worked for democratic administrations. In the case of the lab leak theory, you got this guy, Peter Daszak, who's a British scientist who was funded by the NIH to do this gain-of-function research. In both cases, they write a letter to

saying that their respective point of view is the truth and anyone who disagrees with it is a conspiracy theorist.

The New York Times then, it's the second step in the process, writes a story basically saying that this is quote-unquote the truth, capital T, because it's being said by experts, capital E. And then the third step in the process is that social networks then engage in censorship based on the New York Times establishing this point of view as the expert truth. The only problem with it is it's not the truth.

And in both cases, they were censored, and they were censored because political partisans know how to hack this process of these social networks basically trying to arbitrate the truth based on expert opinion. And so now we're in this real morass. You start with something like Alex Jones, right?

who, you know, it's this guy who everybody hates what he's saying, good riddance, get him off the platform, where you end up is a system in which what the American people can see, read, and think is being monitored and arbitrated by these powerful big tech companies. More from David Sachs after the break.

This podcast is supported by FX's English Teacher, a new comedy from executive producers of What We Do in the Shadows and Baskets. English Teacher follows Evan, a teacher in Austin, Texas, who learns if it's really possible to be your full self at your job, while often finding himself at the intersection of the personal, professional, and political aspects of working at a high school. FX's English Teacher premieres September 2nd on FX. Stream on Hulu. ♪

Hey guys, Josh Hammer here, the host of America on Trial with Josh Hammer, a podcast for the First Podcast Network. Look, there are a lot of shows out there that are explaining the political news cycle, what's happening on the Hill, the this, the that.

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You've used the word cartel to describe how these companies operate, the speech cartel. And, you know, typically people hear the word cartel and they think like mustache twirling, you know, evil guys in a smoke-filled room. But explain to us what you mean by that word and how you saw it operating in the case of the Hunter Biden laptop story.

Right. Well, a cartel is really an economic term that refers to when companies that are supposed to be competitive with each other act in concert. And so, you see this with regard to price fixing, for example, that two companies that are supposed to be competing with each other, that are supposed to be setting different prices competitively, they actually somehow come together or they signal to each other that this is what the price should be, and they basically agree not to compete

on that dimension. And that's basically what a cartel is. So what a cartel does is it effectively creates a monopoly, even though there may be multiple players in the market. And I think that's probably, that's a better definition of what's happening in the case of speech

is that you have a speech cartel, that you have all these big tech companies coming together and they all act the same way. They all implement the same policy with regard to censoring speech. They all kick the same people off their platforms. So even though they're supposed to be competing with each other, even though really what competition should

do is drive them to want to appeal to a larger and larger audience and not kick people off. They all kind of work together to kick the same people off their platforms, the same opinions off their platforms. And that is a cartel. And so, you know, one of the arguments that you'll hear against this is

is, well, look, there's many different social networking sites. If you just get kicked off one, that's not a big deal. Go to the other ones. Right. If InfoWars is off of Facebook, it'll find somewhere else to go. So I think that Facebook is finding the courage now

to decide that they have to make standards and they have to enforce those standards. The problem with that is, well, if they're all acting the same way, to what extent do you have an alternative? And of all people, the person who admitted this was the case was Jack Dorsey in January of 2021. Twitter CEO Jack Dorsey addressing the ban on President Trump in a series of tweets last night. He said he did not celebrate the

or feel pride in having to ban the president from Twitter. He said the decision came down to public safety and that offline harm as a result of online speech is demonstrably real. Jack Dorsey was the CEO of Twitter at this time, and when Twitter was the first to kick Donald Trump off, what he said is that we, Twitter, did not realize what a backlash we would cause

By deplatforming Donald Trump as sitting president of the United States. When we did it, we thought we were just acting on our own. And there are plenty of other places that Donald Trump could go to get his free speech. But then what happened, this is basically what Jack said, is that all the other sites followed suit. And it became like the action of a government because everybody started doing it.

And so Dorsey described well the process by which this happens, which is one of these big tech companies takes the lead and then all the others follow suit. It's like signaling. And it becomes like a speech blockade. And when each company basically joins the blockade, the pressure grows on every other company to do the same thing. Otherwise, they're subject to

you know, a boycott or, you know, a rage mob on Twitter. They're basically pressured into it. The pressure keeps growing on all the others to do the same thing. So this is the thing that's very vexing about the problem is it appears to be decentralized. It's not like there's one centralized actor, but the collective effect is that they all do it.

So it's a little bit like the airlines, like the very small number of providers who closely monitor each other's practices and then act in concert to set prices. Right, exactly. But they're not fixing prices, they're fixing speech. Here's what I want to understand for someone who's really on the outside of this world. I see it happening, the phenomenon you're describing. I want to understand why or how it happens. Like, are these people on a signal group together? Why are they all deciding to make the same choice?

Well, I think there's a pressure that comes from both above and below. And so, those pressures are very similar. So, the pressure that's coming from above is you've got the United States Senate has hauled up these CEOs of these social media companies,

Zuckerberg and Dorsey and Sundar and people like that, they've hauled them up no fewer than I think four times to lecture them on the need to take down more speech. And so these people who wield great power, you know,

at the same time, will also tell these CEOs that we are looking at you on antitrust grounds. We're going to break up your monopoly. They're basically hanging a sword of Damocles over their head, basically saying, you know, nice little social network you got there. It'd be a real shame if anything happened to it. So that's the pressure that's coming from above from Washington is that you've got this coercion of basically private companies by these enormously powerful people in government who

who are using the levers, the powers of government to conduct antitrust lawsuits against them, to push bills through Congress, to break up their businesses or otherwise harm their businesses. That's what's going on from above. From below, you've got the employees and the tweet mobs and basically forming these boycotts and subjecting the management of the company to pressure. They sign these letters.

We saw this over and over again at Apple.

In other companies, you had this case at Apple where Antonio Garcia Martinez got basically fired because of a letter-writing campaign from other employees. But it's really just the tip of the iceberg. For a book that he had written a decade before that everyone had read. Yeah, that everyone already knew about. And then, of course, you've got the management of these companies are ultimately sympathetic to the political ideology that's being espoused here. It would take a very strong leader to stand up

to these pressures and corporate executives tend not to have a tremendous amount of spine to begin with, but then on top of it, they're somewhat sympathetic to the ideology and the result is they just give in to the pressure. It's interesting to me because I think the sympathetic view of the CEOs in charge of these companies is that they're somehow being held hostage, but you're actually saying that they're kind of sympathetic to the ideology themselves.

Well, I think they're part of the same political elite. They all kind of drink from the same monocultural fountain. They all went to the same universities. I think that they may not be true believers or the radicals that the people are actually signing the petitions are, but they do, I think, politically have those leanings. I think where you see more ideological diversity is among the founders themselves. The founder personality type tends to be a little bit more

of a rebel. They tend to have more of a disruptor. They're disruptors, right? And so they tend to have a personality type that cuts against the grain a little bit more, whereas your typical kind of corporate executive

They tend to be a go with the flow type of personality. So it really takes a strong founder to stand up to the pressure. And you'll occasionally see it. For example, Brian Armstrong is the founder of Coinbase. CEO Brian Armstrong wants his employees to know that they are in the cryptocurrency business, not the business of social activism. He finally had enough of these pressure tactics and boycotts.

And he declared one day that, you know, at Coinbase, we're going to leave our politics to the door. You're free to have your own political views on your own time.

you know, in your personal life, say what you want on Twitter, donate to whatever causes you want. But when you come to work at Coinbase, you leave your politics on the door. You know, I think Coinbase is a company that has people from all different backgrounds, all different skill sets. We're all very different and that's a really important part of our culture. But we all want to have this kind of, you know, thing in common, which is our passion and our belief for the mission. That's kind of what we all signed up to work on was how do we create more economic freedom in the world?

And yes, there are a lot of other problems in the world. And we can all probably at Coinbase acknowledge those problems, but we don't always agree on what the actual solution is to those problems. And so my point of view is that companies today with great intentions can sometimes end up creating division and kind of actually unwelcoming environments internally by engaging in some of these issues. And I think every company should really pick something big that they want to try to solve in the world. And for us, that's economic freedom. And it's a

it's important to have everybody aligned and rolling in the same direction to really go tackle something that big and ambitious we're not going to discuss these political debates inside the company we're not going to be roiled by these controversies we're going to focus on the mission of coinbase basically he was insisting on the old etiquette

of the workplace, which is, you come to work to work, not to Twitterize. But he did it actually in a very smart way. He basically said, "Listen, this is the new policy, and if you don't like it, we'll give you a very generous severance." Only 5% of the employees took that severance, and a year later, he reported that this policy was the best thing he ever did, because the 95% of people who remained are so happy

that they're not subject to all of these political debates and controversies. They don't have to worry about saying the wrong thing or staying silent, right? Because if you stay silent in the face of these controversies, silence is violence too. And so if you don't sign the right petition now, you're looked at as maybe the next target. So the employees are so much happier. They get to focus on the mission of the company. He says it's the best thing he's ever done. However,

Brian was, of course, subjected to the New York Times, the obligatory New York Times hit piece for, you know, and many other hit pieces for implementing this policy. So most...

founders don't have Brian's courage. Rather, they are expressing their true thoughts in signal groups with disappearing messages. Some of these groups I'm in, so I know what they really think, but they just don't have the courage to stand up. If they could all do it at the same time and implement Brian's policy, I think the Coinbase policy, I think

it would create a meaningful change, but none of them wants to become a target. Well, right. In light of the hit piece on Coinbase, the dynamic to me always seemed to be this in The Times and in other places. Founder either is wildly successful or maybe is wildly successful combined with the fact that they don't quite fit in with the new ideological orthodoxy. Target gets put on their back and this sort of entire cohort of tech media journalists are

go after them. And maybe they'll go after them for their ideology or maybe the company themselves. But in general, it's operating as a kind of hive mind in which the view is not the old school liberal view, more speech is better even if that speech is bad. It's these companies are sort of falling down on their moral obligation to democracy by not policing hate speech and not policing what they call disinformation on their platforms.

I mean, that's how I see it as this sort of hive mind. Now, you could see it, though, as democratic, right? You could say these founders, when they're responding to their angry employees or when they're responding to their angry stakeholders on Twitter or in The New York Times or wherever, by changing their tack—

That's democracy in action. First of all, this is not democracy. This is coercion. This is a form of social control. I don't believe that most people in society favor this. It's rather a small number of highly organized activists who are doing it and they're doing it to silence people and prevent them from exercising their free speech rights or having dissenting opinions. That's

deeply undemocratic. I mean, democracy requires dissent and it also requires tolerance. I mean, the bedrock principle, you can't have democracy without liberalism. I think this is one of the things we see all over the world is that when you try to impose democracy on a country without liberalism, you get, you know, you get one man, one vote, one time. I mean, it doesn't, it doesn't stick. And the reason is because

in order for democracy to work, you need to have a foundation of tolerance. People have to be willing to tolerate other people's point of view. If you don't have that, then you get what Erdogan said in Turkey is that he described the problem as democracy is just the bus that people are taking until they get where they're going. And then once they have power, they seize it to basically prevent anybody else from ever getting power, right? And so,

Fundamentally, this is intolerant. It's undemocratic. It's coercive. It's fundamentally at odds with the liberalism that must undergird our democracy. The second criticism that I hear a ton in response to what you're saying is, OK, but these are private companies, David. You know, if—

I invent YouTube and I pay for the servers of YouTube and I've set up the whole architecture of the company. Why can't I do what I want? You know, and same with Facebook. Why don't I get to decide that I don't want kind of clickbait or fake news or whatever on my thing? I'm going to police it. And who are you to tell me I can't?

Right. Well, I think it's a very disingenuous argument because the same people who say that these social media companies, these big tech companies should be free to do whatever they want because they're private companies, they're the same people pushing six bills through Congress right now to restrict and regulate those companies because they see them as monopolies. So they don't even believe their own argument. They all start making these libertarian arguments when these big tech companies are restricting speech in a way that they like, when they agree with the outcome of

They want to give these companies the freedom to produce that outcome. But in any other context, they will make the argument that these companies need to be restricted and regulated. So that's one thing is that the argument is disingenuous. The other part of it is that we have to understand that free speech in our society has been privatized. The town square has been privatized. That when the Constitution was written, the framers and the founders of our country were

You know, obviously the internet didn't exist. And so back then the town square was a physical place that you could go and there was a multiplicity of town squares all over the country. There were thousands of them and anybody can put their soapbox down and speak and anyone could gather around and listen.

And that is why, if you look at the First Amendment, it doesn't just protect freedom of speech and of the press. It also protects the right to peacefully assemble. Where do people assemble today? They assemble in these giant social networks that have these gigantic network effects. That is where speech, especially political speech, occurs. And if you are shut out of that digital town square, to what extent do you still even have a First Amendment right to speech? Well, I don't think you do.

This is how you put it in 2021. You were talking specifically in the wake of Donald Trump being kicked off Twitter. This is what you said.

A lot of people make the argument that these are all private companies. They should be able to do whatever they want. But here's the problem with that. Our free speech rights have been privatized. Speech became digitized when it moved to the Internet. And now that's the place where most political speech occurs. Speech has become digitized, privatized, and centralized in the hands of a small number of players, a handful of oligarchs, if you will.

The framers of the Constitution, which you just mentioned before, could never have anticipated that that was going to happen. Back in their day, there were a multiplicity of places you could go for speech. There were town squares all over the country. And those town squares have all now been replaced by a handful of social media sites. So, David, are you saying, just to reiterate, that in the 21st century, in the digital world, a platform like Facebook and Twitter and YouTube is more like a sidewalk than a store?

Kind of, yeah. I mean, and there is case law for this. There's an example. There's these shopping center cases where there were political protesters who gathered at shopping malls to picket or have a protest. And the shopping mall tried to kick them off, and it was ruled that they actually had free speech rights because the shopping mall had created a public affordance even though it was privately owned. And so their free speech rights were upheld.

I think that there's no question that these social networks have become the place that political discourse occurs. And I just think it's too much power for the

private actors who control these sites to be able to summarily kick people off and decide who in this country has a free speech right. Now, I wouldn't go all the way to making them public utilities necessarily, but I don't think they should have the right to discriminate willy-nilly against anybody they want to just because they don't like their political ideology. It's just too much power concentrated in the hands of a few private actors.

And again, it would be different if all those private actors thought differently, if they all reached different outcomes with respect to speech. Then you could argue, okay, well, there's competition in the marketplace of ideas, but they don't. In practice, the reality is they all reach the same decisions. They act as a cartel and that is just unacceptable. I wonder if maybe this is a helpful metaphor.

American law prohibits discrimination, even in private businesses. You cannot discriminate based on a person's race, religion, disability, sex, national origin.

Are you sort of suggesting that in our new world that someone's political views should be seen like those other categories? And in the same way you can't kick someone off use of YouTube because they're gay or black or Christian, you shouldn't be able to kick someone off because they're a political conservative or a TERF. I think we're probably going to need something like that. I mean, the fundamental American principle is that you can't discriminate against someone because of their race, color or creed. What does creed mean?

Well, that's a good question. I mean, historically, it has not necessarily meant political ideology, but I think it may need to. I think that's where we're headed is if we don't create some protection for

then the discrimination against people on the basis of their political views is going to continue and grow. Okay, but of course, even our free speech laws here in America, which are really strong, come with important distinctions or barriers, right? The most well-known is that you can't yell fire in a crowded theater when there's not actually a fire and cause a stampede that injures people or worse, kills them.

So clearly in my mind, there's got to be room in whatever new paradigm governs the digital public square for protecting people from, I don't know, let's say getting recruited by ISIS.

One of the misconceptions about the First Amendment and the right to free speech is that it means anything goes. It doesn't. There are many categories of speech that the Supreme Court over the last couple of centuries have ruled you don't have a right to that kind of speech. So you don't have the right to incite violence or a crime. You don't have the right to

engage in speech that's perpetrating a fraud on somebody. There's actually nine different categories of speech that are not protected by the Constitution. And I think it would be possible, what I've argued is that it would be possible to create a social media moderation policy that is rooted in First Amendment principles that says that these are the categories of acceptable or unacceptable speech. And

And that way at least social media moderation will be grounded in case law that's been developed by the Supreme Court over the last 230 years as opposed to being made up by these social networks as they please. So, David, what do you say to the people who basically argue, "If you don't like the way YouTube conducts itself, if you don't like the way Facebook conducts itself, no problem. Go make another one." Why in your view is that not an acceptable solution or answer to this problem?

Well, this is what you heard when Twitter and Facebook banned Trump and these other accounts. The argument was, well, that's not censorship. Just go create an account somewhere else. Go to a different app. And then Apple and Google banned Parler, which was the different app to go to.

And then the argument was, well, that's not censorship. Just go create a website, right? You don't need the app store. And then AWS, Amazon Web Services, started banning websites. You know, let's not be obtuse to the power of these monopolies. And I think people are being selectively oblivious to the network effects, the massive power of these network effect monopolies when they like the outcome of the speech decisions that are being made. We hear that phrase a lot, network effects. What does it mean, actually? Yeah.

So a network effect business is one where the value of the service increases with the number of users. So if you think about

Twitter or Facebook or the phone company the more people who are on the service the more value to everybody else the value actually increases exponentially because the number of connections that can be made every time someone joins the service it increases Exponentially if you or I wanted to create our own Twitter clone It would be very very hard to do that because nobody else would be on it and so knowing that if if a new user wants to join that and

they wouldn't see any value in joining that service because there's nobody else on it. So you have this huge chicken and egg problem. And this is why these social networks are so powerful is that they've got these huge network effects based on the fact that everybody's already on them. And it gets very, very hard to try and create a competing one.

Let's move from the question of deplatforming and the way these companies maybe work as a speech cartel, as you argue, to where this goes after speech gets shut down. And perhaps this is an even bigger problem. It's what you've called debanking. First of all, David, what does that term mean? Because it's not just related to actual banks, right? Right.

Well, what it means is that you are denied access to a financial service based on your political views. Your access to your money or to your ability to conduct a transaction or to pay people, all of that gets restricted because your views are deemed unacceptable by the people who run these services.

So give us an example. Maybe we can use the company you helped build, PayPal, and the creation of what you've called their no-buy list, sort of like a no-fly list. Right. Well, so PayPal...

which you're right, I was one of the people who in the early days who helped build and found that company. Back in the early days, we believed that our mission was to expand access to the financial system. Now today, PayPal under new management is working to deny people access. And so they've actually partnered with a couple of left-wing partisan groups, the ADL and the SPLC, to create lists of users and groups to ban from the platform. And they've actually announced this, they're proud of this.

Now, the ADL and the SPLC, these are groups with a storied history. And, you know, Barry, I'm sure that you and I both appreciate

the ADL's historical role as a watchdog against anti-Semitism. Yeah. The Anti-Defamation League and the Southern Poverty Law Center. Yeah. Right. Exactly. And I think they did very good work historically in the past. And the ADL, I think, was- It was really important, but it's the same phrase. It's, I didn't leave the ADL, the ADL left me. Right. Exactly. They used to be fairly bipartisan or nonpartisan in their denunciation of anti-Semitism. So whether the

the anti-semitism was coming from the aryan nation or the nation of islam the adl i think did admirable work in combating it but the adl has changed it's under new management and they've broadened their portfolio from anti-semitism to cover anything they consider to be hate or extremism in general

And their definition of extremism is basically anything that disagrees with conventional Democratic Party politics or orthodoxy. So, you know, the ADL opposed the Supreme Court nomination of Brett Kavanaugh because, quote unquote, hostility to reproductive freedom.

It basically partnered with Al Sharpton to boycott Facebook for allowing hate speech on their platform, which is pretty amazing given Al Sharpton's history. It opposed Trump's executive order banning critical race theory in federal government training. It called for Fox News to fire Tucker Carlson for his comments on immigration.

So it's basically a fairly partisan left-wing group now. And my point is not whether you agree with any of these positions. The point is just that the ADL now is using this historical capital that it was built up as this arbiter of true anti-Semitism and hate and now applying it

to all these fairly conventional political debates. And so when they partner with PayPal to create a list of banned groups or accounts, they've massively expanded the list of people who can be thrown off these services. I mean, basically, if you just express political opinion that is dissenting from the orthodoxy, you can now be kicked off these platforms. It's basically just enormous concept creep, right? Yeah.

Right. And it's as—I want to make sure I'm getting this argument right. It's, you know, as transacting has become so centralized, if you end up on one of these baddie lists, you're

You're sort of kicked out of your ability to transact in the digital world, which is the world. Right. One example that came to mind, and again, it was a little bit like an Alex Jones example. No one would want to stick their neck out and defend Michelle Malkin. But a few months ago, she got an email from Airbnb that said she had been a keynote speaker at the 2021 American Renaissance Conference in Tennessee. I don't know what that conference is. I presume...

when Airbnb suggests that there were hate groups and white nationalists there, you know, I have no reason not to believe them. But as a result of her speaking at this conference, they removed her account from Airbnb. And then they took it even further and they said, "Because we see that your Airbnb trips are typically reserved via your husband's account, we're also going to remove him."

I call this six degrees of deplorable, where they can't point to anything Michelle Malkin herself said that would get her banned. She just attended the wrong conference, and then her husband is associated with her, and so he's banned. And so we play this game of contamination by association, where not only if you have the wrong views are you not going to get kicked off Airbnb, but if you're merely associated with somebody who's got the wrong views, you can get kicked off.

This is the slippery slope that we're on of this vast power of deplatforming is being wielded and used in more and more cases, more and more indiscriminately against people who you can't really say exactly what they've done wrong. They just have unacceptable views. Later, I want to get to what we can do to protect ourselves from it as people who are on these platforms. But I want to sort

sort of explain how this has gone in a very, very short time span from people getting booted off of PayPal or Airbnb to governments wielding this power. So a few weeks ago, we saw this Freedom Convoy, the Canadian truckers who gathered in Ottawa and also at critical junctures of the border to protest Canada's COVID mandates. And what the prime minister did, Justin Trudeau,

is he invokes something called the Emergencies Act.

And the Emergencies Act allowed the government to issue a directive that required all kinds of financial institutions, banks, credit unions, loan companies, trusts, even crypto wallets, to stop providing any financial or related services to anyone associated with the protests, even if they were nonviolent, which the vast majority of the protests were. So it didn't matter if you were the leader of the Freedom Convoy or

or if you contributed $15 via GoFundMe, or even if you had sold them gelato or coffee. There was a famous example of a woman that owned a gelato shop. Their accounts were frozen. Their money was stranded. Their credit cards, they couldn't use them. And this is exactly what you have been warning us about. Right. Well, it was a very disturbing case because you have here all the elements of this toxic student. I'm here to be my freedom. I'm here to be my freedom. I'm here to be my freedom.

First, you've got civil disobedience by these truckers. They came to protest COVID restrictions and mandates. Tired of the mandates. Sure. We're sick of the mandate. No passport. I want to be free in my country. In all honesty, I'm kind of done with the government mandates for the for the whole border pass and everything. I do long haul over the country. So it makes my life very difficult at this at this point in time. Right.

Mandates and restrictions, by the way, that were on their way out while the protest was going on, many of the provincial governors got the message and started repealing these mandates. But that wasn't good enough for Trudeau. He first declared that these protesters had unacceptable views. Conservative Party members can stand with people who wave swastikas. They can stand with people who wave the Confederate flag. We will choose to stand.

And then he invoked this sort of Emergencies Act based on this first fake emergency. The federal government has invoked the Emergencies Act.

to supplement provincial and territorial capacity to address the blockades and occupations. The conditions for invoking that act weren't met. In fact, that act was originally created to fight things like terrorism. That was the kind of emergency that was contemplated when that act was created. So using the power of the Emergencies Act, they then took this action. The government is issuing an order with immediate effect

under the Emergencies Act authorizing Canadian financial institutions to temporarily cease providing financial services

where the institution suspects that an account is being used to further the illegal blockades and occupations. Anyone who is associated with the protest, their account will get frozen, their money will get stranded, their credit cards will get cancelled. So the RCMP have been sharing information with these financial institutions on the protesters, their supporters, the organizers here, trying to sort of starve off or choke off access to money, which of course has now been frozen.

funding this for some three weeks. And the government has cited terrorist fundraising laws, now directing financial institutions to target people who have perhaps donated. And "designated person" referred not just to anyone directly participating in the protest, but it could refer to anyone indirectly participating in the protest as well. And so, like you said, if you just gave a $25 donation,

to the protesters, that implicated this law and your account could be frozen. Right away, I saw this story and I thought that it was really scary. And I looked around and I saw some people, including some people I was, you know, pleasantly surprised by speak out against it. Ilhan Omar is not someone I find myself agreeing with almost any of the time. But even she commented on Twitter about the excesses of this. You know, but overwhelmingly, it seemed to me that

This was either cheered on or just shrugged off or ignored by most people. And I wondered watching it if this was a little bit of a mini version of an Alex Jones situation all over again. In other words, that lots of people who had been reading the mainstream press were led to believe that these truckers were unsympathetic or even maybe worse than unsympathetic, that maybe they were sort of white supremacists or white nationalists. And so who cared if this happened to them? Why worry about it?

And I guess I'm just struck by the lack of moral imagination. You know, just imagine if Trump was the president and there was a Black Lives Matter protest in an American city. And let's say someone that donated to a bail fund was shut out of their PayPal, was shut out of their credit card, was shut out of their Bitcoin wallet. Can you just imagine what the response would be? And I wonder why there's, you know, such an inability to

to imagine that scenario and to sort of apply the principle in a consistent way. Because they're happy with the short-term political result that's achieved and they don't really think about the precedent that's being created. Or, you know, they're happy with the precedent because fundamentally they are illiberal and don't really believe that we should live in a society that has a multiplicity of views. They want to crack down and restrict, you

you know, on the limits of acceptable discourse. David, what do you think, you know, now that the truckers have gone back home and the protest is over, what do you think the follow-on effects of that whole incident are going to be?

Well, it's very interesting because one of the most indefensible aspects of what Trudeau did is that this freezing of accounts was done retroactively, meaning that at the time that the protesters engaged in their civil disobedience or the people who donated to them wrote out their contribution, that was perfectly legal activity.

And yet their accounts were frozen based on having contributed in the past, again, at a time when it was completely illegal. So what you had was not just the fact that you had this unprecedented expansion of aiding and abetting liability to anyone who contributed to the cause, but that that liability was being retroactively determined. So in other words, anybody who had views that Justin Trudeau believed were unacceptable, his words, could retroactively be subject to this punishment.

And I think that that precedent must have a chilling effect on speech moving forward because if you today are a citizen in Canada contemplating making a contribution to a political cause that you believe that Justin Trudeau doesn't like, the precedent has been set that at some point in the future, Trudeau could look back at that contribution and basically freeze your account for having made it in the past even though it's completely legal at the time that you do it.

So that is one of the worst aspects of this whole thing. It's the precedent that was created for retroactively determining that perfectly legal actions at the time they were made are no longer acceptable because of the cause that they are supporting. And you have to believe that moving forward, there's going to be a chilling effect on people's willingness to contribute to causes that Justin Trudeau doesn't like.

After the break, David Sacks on how all of this relates to what's happening right now in Russia, plus a lightning round. Stay with us. OK, so, David, let's talk a little bit about Russia. Right now, the U.S., Europe, our democratic allies around the world are united in a way that I don't really remember, maybe since 9-11.

governments from Germany to the U.S. to New Zealand have these severe sanctions on Russia that are tanking its economy. Now, before we go to what you make of these sanctions, what your feelings are about the war, I want to first talk about what private companies are doing in Russia. In the past few weeks, we've seen McDonald's, Pepsi, Coke, Starbucks, Apple, Netflix, Visa, MasterCard, dozens more.

announced that they're pulling out or soon will freeze their businesses inside Russia. And a lot of people on the left and the right in the United States have praised this. President Zelensky in Ukraine has praised this. And I'm curious, as someone who has been opposed to private sanctions, essentially, here at home, what you make of this development?

What you're seeing hailed right now is the use of this new economic weapon, this sort of financial nuke it's been called, where we don't just sanction a country, but we actually engage in a complete severing of economic ties. That's basically what's happened with Russia, is that private companies went far beyond what they were required to with the sanctions, and they all pulled up stakes out of the country. And you saw a rolling boycott where any conglomerate

company that didn't announce that they were pulling out was sort of subject to the Twitter mob and pressure to do so.

I think that it's one thing to use this financial nuke against a foreign actor in a time of war. What I worry about now is that this power will be used in other contexts. And the precedent has now been created. We've already seen it being used against Canadian truckers. And I just wonder, who else will this power be used at? It's the power to basically...

de-platform with the push of a button the power to deny people access to their money, their livelihood. And so I worry that, you know, everyone's hailing this as like some great alternative to war that we figured out. Well, first of all, I don't even know if that's true. It seems to me that this doesn't in any way preclude physical war. It may just be one step along the way to it. I hope it's not. But I worry about the, you know, enormous power that's being created here and who else it might be used against.

What is the difference, if there is one in your mind, morally or politically, between the domestic use of these tools and the use of these tools in a situation like the one in Russia abroad? Is there one?

Well, sure, because American citizens have rights or they're supposed to. And these types of powers were always created to deal with essentially a foreign emergency. And yet what happens is that over time, these powers get used and applied to domestic political dissent or that's the great danger. So we already have seen this. The Department of Homeland Security recently put out a statement

saying that disinformation about the election or about COVID increased the terrorism threat level. So what they were saying was that disinformation in the way that, you know, the so-called experts, social media have been defining it, that is basically tantamount to domestic terrorism. So we already have these alarming signs that

that powers of the government, the surveillance state that was created in reaction to 9/11 is now being refocused and retargeted towards the domestic political situation. That's very dangerous in the same way that Justin Trudeau invoked an Emergencies Act that was really designed to deal with a foreign invasion or some sort of

espionage or sabotage, some great danger like that. It was applied domestically to these working class truckers. I think there's a risk that these new sweeping powers that

Again, they always arise in some extreme context in the same way that— Right. It's always an emergency. That's right. In the same way that you start censorship in a case like Alex Jones, the most extreme case. You start the financial nuke in the context of a Russian invasion, right? But soon these powers get used more and more. There's a slippery slope, and it gets applied to a domestic audience. Right.

Let me draw that out a little bit. I'm curious if you draw a distinction between China and the attempt to pressure the Chinese Communist Party, which controls the whole country, and what's going on in Russia. So let's say, you know, after China disappeared, Peng Shui, one of its most famous tennis players for blowing the whistle on sexual assault, you know, I cheered when the Women's Tennis Association responded by suspending tournaments in China.

What is the difference between that action, which I'm curious if you support it or not, and what McDonald's and Starbucks are doing? Is it just the scale of it? I think it's because in the China case, it was targeted. And in this case, it's just a frenzy. You know, in this case, we're basically depersoning 144 million Russians. And it's just not targeted. We have this financial system that's now...

quite centralized, more so than anything we saw in the analog world. You know, a system that requires a few keystrokes, basically, to kick people out of. And there's a large contingent of, let's just say, crypto lovers online, Balaji being one of them, who say that

cryptocurrency like Bitcoin is the solution to this problem, that because it's decentralized, it gives people an opportunity to opt out of this very easily abused centralized system and to protect themselves from the potential of authoritarian abuse.

Do you buy that? And if Bitcoin isn't the solution, what is the solution in your mind? Well, I think what Balaji is talking about is a good example of us not thinking through the second and third order consequences of our actions. And so, in addition to the fact that I think our response isn't particularly carefully thought out and it's not targeted,

We're not really thinking about the ways this could boomerang back on us. Let me give you a couple of examples. So first of all, David Freberg, who is on the All In pod with me, talked about what's going to happen to the production of wheat. You not only have a good chance that the spring planting of wheat in Ukraine will not happen, looks like it's not going to because of the war, which would deprive the

world of a huge amount of its wheat production. But also, because of the sanctions, he talks about how the price of nitrogen has gone from $200 to $1,000. The price of potassium has gone from $200 to $700. The price of phosphorus has gone up and so on. So fertilizer has gotten much more expensive. And so he thinks that there's going to be a lot of farmers all around the world who are going to be pulling

acres out of production because of the cost of fertilizer. And he thinks that millions of people, maybe hundreds of millions of people, are going to be experiencing famine later this year because of the sort of the sanctions that we've taken. So I think it's just a good example of not really thinking through the second and third order consequences of

pulling the plug on an entire economy because we're in a Twitter mob as opposed to bringing about a targeted action to end the war. I think there is a role for sanctions here to create pressure on the Putin regime to negotiate and deal, but I don't know that we've really thought things through that carefully. Another big second or third order consequence is I think what you're referring to with Balji where

We are now redefining what the U.S. dollar means. Historically, when people thought about a currency, especially a reserve currency like the U.S. dollar, you could see it as a store of value, or you could see it as a medium of exchange. I think there's now a third way of looking at the U.S. dollar, which is it's a platform.

And what the U.S. government has basically said is that if your money or wealth is on the U.S. dollar platform, you don't really own that money. Your account is basically a feature on our platform. And we can seize that money, we can take it away, we can confiscate your assets.

I think that's going to have a big impact. We don't really even know what the full impact of that is going to be yet. But I do think that a great many people around the world are going to be asking, "Wait a second, is the U.S. dollar a platform I want to be on when really it's fully controlled by the U.S. government?"

I think you're going to see people looking for alternatives. So one of the great boomerangs here could be if the U.S. dollar loses its reserve status because of actions like this, it's going to make the U.S. significantly poorer. The only reason we can be $30 trillion in debt without really destroying our economy is because we are the world's reserve currency. And it gives us a great deal of

flexibility and freedom to do things like borrow huge amounts of money. That could come crashing to an end if people want to get off the dollar as the world's reserve currency. There's no great alternative as of yet. But what Bology is sort of postulating is that cryptocurrency could be that alternative. David, where do we go from here?

Just sort of circling back to the beginning of our conversation about deplatforming, right, and debanking, right? If the solution isn't to make new YouTubes or make new PayPals because of the powers of network effects, what can either individuals do or the American government do to protect us from the kind of authoritarianism that you're warning about?

I think we have to reinvigorate our civil liberties and I don't think you're going to get it from the current administration because frankly a lot of the pressure for censorship and deplatforming is coming from the Democratic Party. And you actually see this in poll results. This is not a partisan point, but if you look at polling about views about censorship and deplatforming, there is a huge partisan divide.

between Democrats and Republicans on this issue. And it really started, like I said, about six years ago. If you go back 10 years ago, both parties had the same views on censorship. They were against it. Everyone was in favor of free speech, but there's been a huge divergence. And so I think it's going to take a new administration, presumably the next Republican administration,

to want to take action. And we're going to have to reinvigorate our civil liberties by realizing that these private actors have huge amounts of control over our right to speech, our right to

commerce, our right to make a livelihood, and they should not be able to exercise those powers. They should not be able to use those powers to deny us those liberties. That's going to require the Republican Party to embrace a role that it has not historically

in, which is to be a little bit more of a regulator of private companies. You have to go back all the way to someone like TR, Teddy Roosevelt. Whose statue is now being melted down, but yes. Right, exactly. Well, he was a different kind of – he was not a laissez-faire Republican. He was the trust buster. He basically said these monopolies have too much power and we need to bring them to heel to protect the rights of the common man, the ordinary working American.

And that is why Teddy Roosevelt is on Mount Rushmore. I mean, it's because he did that. He stood up for the rights of the common man, the working man against the power of these gigantic monopolies. And I think that the next Republican who's going to be successful has to take a page out of TR's playbook here, which is we do not represent the interests of these oligarchs and these big, powerful companies. We represent the interests of the working man and woman to

to have the right to free speech, to make a living, to conduct payments, and it should not be up to tech oligarchs to decide who has those rights. At the same time, or maybe in reaction to the thing we've been talking about for the past hour, there's a growing swath of the Republican Party that some would argue is also becoming enamored with censoriousness and making laws that attack free speech, especially in the classroom. I'm wondering what you make of that.

I think one of the ways that you see people deflecting from this issue of censorship is they'll point to school curriculums, something like that, and say, well, look, Republicans are doing it too. They're trying to take books out of the curriculum. They're trying to ban CRT. The problem with this is that –

The curriculum that the things that kids learn about in school, it's always been limited. I mean, you can't teach them everything. So there's always been a curriculum. There's always been a canon. And so therefore, it's perfectly acceptable to have debates about what kids should be learning. That is not a free speech issue. And I remember back when I was in college and they were getting rid of the, you know, so-called dead white males in the Western civ curriculum. And

you know, there were plenty of conservatives who opposed that, but not a one of them claimed that it was censorship. Everyone understood that when you have a canon, you have to exercise selection over what's in and what's out. So that's not really a free speech context. Now, I do think that some of the debates that, you know, Republicans are getting caught up in, like, you know, what books to allow in the library. I think it's dumb to be pulling books out of the library, right? Because there's no

There's not a need to limit the library in that way. Like, there is inherently that question in the curriculum. So I tend to think that, you know, if I were running these school boards, I wouldn't be wasting my time trying to figure out what to pull out of the library. But I tend to think that those...

Those debates are sort of isolated examples, and the left loves to make a big deal out of them to try and, again, make this argument that conservatives are doing it too. But I just think that school curriculums are just fundamentally different. Okay. David Sachs, lightning round. Sure. David, do you identify as a populist?

Well, I guess the way I see myself is – well, there's a quote from the movie Gladiator. Senator Gracchus says, I may not be a man of the people, but I try to be a man for the people. And that's sort of my personal motto. Most impressive member of the PayPal mafia? Well, you probably have to go with Elon or Peter. Those are the two CEOs that I learned the most from. What percentage of your portfolio is in crypto?

Something like 1% or 2%. Do you own any NFTs? No. Do you think NFTs are bullshit? More or less. Are you excited about them? Hold on. Let me go back. Okay. Do I think NFTs are bullshit? What I think is the technology is real and gives us the ability to create new kinds of digital art with real provenance. But any particular NFT, you have to be careful about what the real value is.

excited about AI or worried about AI? Moderately excited, but I tend to think both the excitement and the danger are probably somewhat overstated. Why do you hate hobbies? I don't necessarily hate hobbies. It's more that I don't like when people say, try to draw a sharp distinction between their work and their hobbies because it implies that they don't really enjoy their work.

and their work is just something they put up with and bear in order to get to their hobbies. I think it's a lot better when your work and your hobbies are more or less synonymous. Drink of choice? Coffee. Bullish or bearish on San Francisco? That's a good question. Well, I think we're about to win these recalls.

The long-term trend is bearish, but I think there's some short-term bullish signs about turning it around. Are you religious? No. What's the best part about being rich? Freedom from anxieties about certain things, about not having enough money for certain things. What can't money buy? I think it was Coco Chanel who said that the best things in life are free, but the second best things are very expensive. Who's your nemesis?

I don't really have a nemesis, I would say, although I have been very actively supporting the recall of Chesa Boudin. So that election's on June 7th. The district attorney in San Francisco. The district attorney in San Francisco. So if that happens, I'll be very happy. Do you read the New York Times? Sure. American Dream, alive, dead, or on life support? I think the American Dream is... I think it's alive. I think that the...

What I see in Silicon Valley is that the new economy is alive and well. It's very powerful. The problem is that... I mean, there's basically three problems, right? One is that the country's $30 trillion in debt, so the financial management's been very bad. Second, our civil liberties are under threat. And then third, we keep involving ourselves in foreign wars. We've fought seven wars since the end of the Cold War.

And we've lost just about every single one of them. And so we keep involving ourselves in all these crazy foreign wars. So I think if you could just correct those three problems, I think the fundamental engine of American prosperity is alive and well. It's the economy that I see is dynamic and the entrepreneurial spirit in America is still alive and well.

What's going to be the world's most powerful country in 100 years? I mean, that really is the crux of it is whether it's going to be the U.S. and China. And I think it should be the U.S. if we play our cards right. But I'm very worried that we're not. What's the tech company that you are most excited about right now?

Well, I mean, it's in my portfolio, but I guess you'd say that like SpaceX would be probably – it's in my portfolio, but it's probably the most exciting one objectively as well. David Sachs, thank you so much for your time. Yeah, great to be here. Thanks for listening. If you want to hear more from David Sachs, please go to our sub stack Common Sense and look up his essays. They're really illuminating. And if you want to listen to his dulcet tones, check out his podcast. It's called All In.

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