"Blockchain governance" | Nathan Kaiser (Cardano Foundation) | UNCHAIN Convention 2019 Berlin



next weekend Navin Kaiser Kodama foundation one of our generous sponsors he will talk about blockchain governance on and off chain looking forward to your talk thanks a lot thanks a lot all right yeah it's gonna that works I press one okay great okay I'm not gonna do a thing here hi everybody it's uh thanks a lot for having me here it's it's my first time in Berlin since about ten years so I'm quite excited I have the artists all thing when I have presentations like this it's like all these organizers they seem to cooperate and always put me on the last spot on the last afternoon and then it's really up to me to wake everybody up and which usually works usually works so here we go I think that's about it people are coming back yeah you back there you can also take a seat I don't do repeated presentations I always choose a new topic so this is pretty off the path in that sense I got a couple of notes and the idea is also to make this a bit interactive so I'm going to talk about have some thoughts and on and off chain blockchain governments and and then it's really please ask me questions by the way this is not is we need to change this awfully big head it shouldn't be that big yeah and Cardano there's no age in Cardinal but so but please tend to ask questions this is not a sales pitch for Kedah no not at all but rather I'm interested personally interested in in blockchain governance and I think you should be as well because we do see that this is sort of one of the several unsolved issues so let's talk about governance and and let's first talk about Unchained governance okay what is on chain governance it's you know who votes how when where and who can vote you know spoof of word proof of stake different stakeholders that's not interesting I'm gonna speak in the first five seconds I'm gonna already switch over and say Unchained governance is really nothing else than the outcome of off chain governance and off chain governs becomes much more interesting because it's like wait who are the people behind the blockchain or around the blockchain who are the stakeholders and when we get to off chain governance we very quickly so we say people so what does that mean people so people that's actually you that's actually the boys and the girls who buy tokens who run nodes who co2 who develop apps and so on so it's actually us so really off chain governance is really about us and how we want to deal with a blockchain and when we say want to deal what does that mean so it's really about values about what you want what do I want what do I think you should want or what do I think you should not get or what do I think I should get so it's also about money it's about identity it's about trust so often there is this trustless we all know that's not the idea the idea is it's trusted and so Trust it's not trust in technology it's trust that the people behind the technology took the right decision said I agree with these decisions that's governance so I did that at my last presentation I got these things and then when I'm done I just throw them in there yeah they don't fly very far so when you read books or or articles about blockchain governance and arguably while this was a very empty field of study two years ago it slowly builds up it slowly builds up very quickly come to Lessing's code is law okay code is law that's 15 years old now that's not a blockchain thing that's 15 years old you very quickly come to and hear Berlina I think we have this thriving force of all code versus law no oh my god you know do we is it the techies versus the government is there this binary sort of decision I'm protec I'm against the government I'm Pro code I'm against regulation no that's not it that's not blockchain governance it's much more complicated than that it's really a lot of stakeholders involved and arguably let's talk about regulation I'm a lawyer by training I didn't present myself but you can probably google me there's a lot of regulation but it's regulation really holding us back listen to these two speak to two days of talk nobody said like oh my god if we only had this and that law or oh if we didn't have decent and specific prohibition we will all be thriving there's always details so we talked about I think there was Joe or John from DK YC talked about kyc regulation yeah that's tricky business yeah we don't like it the way it is yes it's outdated yes taking do it better but actually we're providing a solution and this is you know this is an iterative process where we say taking get it better and it will even eventually we'll know it's like a lot of things Tech will eventually get better the lawyers learned or legislators learned and the regulator's learn so I'm not worried about that it's not tech versus government either it's going well further no yeah okay so it's actually again really about people and people and then okay so people people people people it's how we as a community and they've within a block chen degang community is the users between them it's it's the enthusiasts is those who bought or invested whether there is an investment or not it's the developers the core developers it's those who came in later those who were there early how they actually want to organize themselves so it's the question of how a community wants to have its rules between themselves hmm and why do we care about that you care about this because of yourself because you want to be happy so now it gets really fast you know happiness but that's what it is justice you want to wake up in the morning you want a coat for that product project where you feel happy and fulfilling where you feel there's a fulfillment to work for the project or were you happy that you may have bought coin X for X Y and now it's much less so much more maybe yes there was not tomorrow it's done but you want a half of sense of belonging to all these other people who are working on the same project so it's about community blockchain governance is community governance why does this matter so Park heat is there's a couple of my team here for heat is here he's the one who made that head so big in the karana with no age but that that was a joke there's also other people there from IO HK we got we got people from the Colorado Foundation we got people so why does this matter let's use examples but he told me and you need an example it's like prep or something like that okay point reason example point thanks well you know what I'm gonna use an old one it's easier it's like all in in crypto I think times 7 to years 14 years ago there was the doll so let's use the town everybody here half of you were probably involved in some way or the other let's use the DAO so what was the tau really about was it about code versus law was it about tech versus some sort of arbitration that didn't exist no in the end it was the whole town thing was really about different people with different opinions I think we should do this and you think you have a different opinion you should you think you should do that and that's what it was no it was different people having different opinions the tech didn't arguably didn't even matter you can fork or not fork or four twice so whatever it was just I had a different opinion than you did and that was what the DA was about and did it matter oh yeah of course no because back no it's because of you because you had invested and you thought it would not be the right thing for you and maybe some people were less self-interested I thought I didn't invest but I think no because of values values values can be money or or or emotional values back to emotion happiness you remember I thought it was fuzzy but if you put all your life savings into the Dow and it was gone babe fuzzy there is no fuzziness about that yeah so a different example the Prachi I'm just taking a newer project Algar and which you know is a great effort and it's a one of the more recent efforts and how they're gonna distribute this and that and toker and then you know on again on chain on chain governance and when you read on this you can see people having opinions before it even happens and rightly so because we care we care yeah so sometimes have troubles reading my own notes yeah right so what do we want what do we want that's actually the question and here is my point or two points actually I think I should have made that early Bucky Dino the point is that the question of how you organize a group of people community is an old question and people have been thinking about this for a long time and I don't wanna go back you know 5000 years but I do want to go back 3,000 years at least and yep and so what's 3,000 years ago the Greeks know the Greeks democracy votes so we are thinking in the crypto industry and in our scene we are thinking about the same questions should you be able to vote yeah should you not be able to vote because you're disadvantaged or holding or staking you stake more you vote more those are the same questions so we need to be aware in our dear in this that it's not just the tech it's not just the law it's not just the finance guys and I'm gonna cite mark burner core who's over there who was the one person in these two days who said philosophers so what we actually need is philosophers we need social science scientists social sciences we don't just need the lawyers I'm a lawyer no I'm one of these typical crypto lawyers that hang out at the conferences and there's others and we don't need we need the lawyers of course you need the lawyers yeah you need the techies you need the finance guys Jeff but we also need philosophers we need people who think about people yeah that's that's something and I was gonna say my original draft here I was gonna say this conference like every other conference lacks the social scientists what's your big class of social sciences that were often lacking economists but okay you had sin here so you kind of kudos to the organizers I thought it was fantastic you had in the columnist on board we need more of these people on these conferences and please maybe next time in Berlin I'd be happy to come back next year let's find the philosopher yeah just gonna go from the Greeks quake obviously after the Greeks more stuff happened no the Romans this is a bit Western thinking we can do the the Asian thinking – and then Montesquieu and and Montesquieu was talking about separation of powers and you're all like oh my god these lawyers are talking about separation of powers now is is he and saying to bother the crypto industry with a notion that's 300 years old no that's exactly what you can read on all the crypto blogs every day separation of power who votes for what how do we do a fork and not to afford how do we do holder's users developers enter and third-party applications that's actually separation of power who decides on how to me happy how to make me happy or how to make you happy this Patel one is one of the main writings of Montesquieu so the spirit of laws is it fuzzy again it becomes laws matter because they are about people and I'm not talking the regulatory laws so ok we're seeing all that I'm talking the laws of crypto the record how is the blockchain govern it's about people it's about the spirit and that's what we we need to recognize that it's not a tech problem it's not a legal problem it's a people problem ok well this one is done so I can do at the same time ok I'm gonna do a couple I'm almost there I think time wise as well I'm gonna cite a lot which is one of the crypto cryptography guys in in in Berlin that I met earlier today and he said a blockchain takes a village and I was like oh my god can I cite you a blockchain takes a village no and and you you know what that means it means it takes a lot of people it takes schools and nurses and education and policemen and firemen and I think that's something it's none of us can say we just need more and better tech now it takes a village blockchain takes a village this is almost the end of the speech one more thing I had to do a little bit of advertisement I'm allowed to do so in about card ah no I'm not gonna go into details but we did this card this really cool card and a lot of it is network effect and we're talking we're talking how can we expand the network and so on and this is one attempt one of many a valid one IOH kt2 programming thanks io HK tangent at the cards thanks tension and we had the foundation made it possible everybody in here can get a card and you just pick him up at the entrance and I think we got 50 cards so we kind of didn't take enough so if you still didn't get the card then you can still give me one more second then then you can actually just leave your name it will mail your won all right and then last one and I have never time to actually have a sip of this roof of sip proof of sit this is the chin and from over there satoshi spirits thanks not Satoshi spirits it's a really great chin thanks a lot I know it's QA it's all yours we have some time for some questions please come in front and use the mic and us our favorite questionnaire so you're talking about Montesquieu would you think that in this case with the blockchain era is it more the hops and locks or is it more Montesquieu that actually Rousseau says is more like a socialism and what do you think like where would you put the blockchain era in the philosophy where hops are the very dark when you read Leviathan hops at this dark view or an arguably dark view on on the we would call it a regulator or the government and so actually I don't see it in that sense i I don't have as a lawyer and part of the legal system or the judiciary system am I you know the biggest enemy is your best end I mean that's always the government that's a lawyer if you get sued by the government or you sue the government that's the best no that's the true batch of Honor so I don't see it in a in a in a Hobson's sort of like Leviathan kind of you I I think it's again it's more about stakeholders this is a very modern world I think the Greeks didn't call them stakeholders I trust and so now I don't I don't see this as a black-and-white I think we're all helping each other to move this forward yeah you can get pushy questions to my question yes yes really yeah please please tell us about the card what is it oh okay okay okay again so I'm only the and the chairperson of the Cardinal foundation I'm like and not the tech guy I stopped programming basic when I was like 14 you to have these headaches 81 you remember that the black thing that you could really no tap on it's like yeah one kilogram one kilobyte yeah and then I have enough yeah so what the car does is it comes with an app it has a NFC chip and so you can securely store Krypton it different cars obviously do different crypto so this is not multi vallah this is not multi multi crypto this is the ADA version there is a Bitcoin version and so on and basically it allows you you have a private key somewhere and this is not hackable in that sense because it's secured the way it's that the chip is secured and then you can actually give this somebody in transfer the private key separately and you can keep this or or I keep it as storage at home and then with the private key I can then transfer the the crypto asset or value so it's a embodiment it's one of that's why I say and there's other people in the room who do similar projects and this is only one step and we're only at the beginning one step to make user friendliness it's an issue though I mean I could talk totally different story user interfaces no I mean like what is holding all this up Oh user interfaces is definitely holding all of us up no I mean not not not the regulators yeah not the Germans are not European Union and not even the SEC user interface is one of the issues please yeah question useful let's say to the merchants or shops let's say they have a card – card would they be able to pay in crypto directly and then just use that enough see do you have some system like that you're going to introduce right no so it's actually both so there's the idea of linking that system that the tangent system with a POS no so you're obviously would have the POS set up to read the card with the NFC and then the cold storage becomes kind of usable within a POS setting POS meaning physical breaking mortar store yeah but you know the truth is ask the guys from tangent or ask me okay okay and then the real answer is it's so early do we really know no of course we don't know no it's like it's up to you guys that the hackers the techies the commercial people to come up with new stuff because I I don't know you know people just put forward stuff and then we keep build no in an early presentation I said it's like Lego if you only have like five LEGO pieces you're not gonna build a castle or a Ferrari out of Lego so we're all of you guys think girls you're building LEGO pieces who are building LEGO pieces so with more pieces we can do more stuff yeah okay thank you so much thanks all thanks a lot [Applause]

12 Keys to success: Governance



hello welcome to option self-service video 12 keys to success today we're talking about the governance key so when we talk governance we're really talking program governance or part of the program management space we're really talking about things like cadence and accountability so why is it important so organizations where IT and businesses can jointly plan and manage their project portfolio in order to ensure correct disposition of protech related resources report 41% higher occurrence of IT projects generating positive ROI than those that don't so governance can do a couple things it can increase the success of a business transformation effort by one ensuring ongoing and consistent monitoring of project milestones and tasks and the completion of those goals provides regular involvement of an interaction with senior management to keep things on track increases accountability provides an avenue for bringing stakeholder groups together facilitates issue escalation where necessary to remove project roadblocks and raises awareness of success as milestones are achieved so some of the best practices we see are project delivery teams meet regularly you know weekly or bi-weekly the discuss tactical status update accomplishment snaps next steps escalation of critical issues you know status updates are documented and sent to participants prior to the meetings a steering committee with executive sponsorship is established project leads meets with the committee's on a frequent basis so every four to six weeks to discuss status updates again accomplishments financial or business outcomes next steps and escalation of critical issues there should be a one-on-one meeting with project leads and individual Keystone stakeholders prior steering committee meetings actions from each steering committee are captured and the status update provided on action items is the first item of the gent on the agenda from ordering the subsequent meeting progress of projects is monitored and compared against the plans for secure steering committee meetings variations are reported and if required corrective action is taken and the leadership senior leadership regularly reviews current resource allocations amongst different projects and takes time just timely decisions on urgent resource requirements and the organization has established tools for managing projects or tsa's and financials throughout each phase from initiation to closure and for example steering committee meeting agenda have a look on the right-hand side of your screen you'll see welcome as I mentioned before reviewing the progress against the goals so functional leads disposition of previously raised escalation you know functionally its presentation of new escalation issues functional leads discussion agreement on responses executive sponsor and then the scheduling of the next committee meeting hey that's it for project governance I want to thank you for your time and your common concentration as we looked at this governance key as part of the twelve keys to success Thanks

Taxation, governance and growth – Wilson Prichard



I'm here today to introduce the reading pact on taxation governance and growth and they get started I think it's useful to contextualize our new interest in taxation and governance within the broader debate of a tax and development that has prevailed for several decades that debate on tax and development has tended to focus on two broad questions first how can tax systems most efficiently and equitably raise revenue and second how can tax systems be designed to support economic growth a third question has been added to that group only recently and has really only taken root over the past decade how can taxation be designed in a way that contributes to broader improvements in governments and particularly in state capacity and accountability this third possibility has been critical to expand international support for taxation over the past decade and is also pivotal to any developmental agenda simply put if taxation isn't translated into accountability of responsiveness and improved government performance the case for strengthening taxation and environments of weak governance is not terribly persuasive given this growing interest in the connections between taxation and governance policymakers and practitioners are really confronted with three big new questions that they need to grapple with first is it in fact the case that expanded taxation can drive improved governance second if it is how exactly does this happen in practice and third in so far as we know how these processes happen what can policymakers do to promote improved outcomes in practice beginning with the first question does this happen in practice research has highlighted three broad ways through which taxation might be linked to improvements in governance first our common interest processes governance the depend on tax revenue have an incentive to promote economic growth as a route to increasing revenue over the longer term second state apparatus processes the need to raise taxes is complex and efforts to strengthen tax administration again therefore spill over to other areas of the public administration that's strengthening state capacity and third accountability and responsiveness processes the need to raise taxes creates incentives for governments to be responsive and accountable to citizens in order to encourage tax compliance while spurring taxpayers to make greater demands on governments for reciprocity but while these theoretical predictions are clear in each area the key message from peer achill research is the same while these positive synergies between taxes and governments are possible they are far from guaranteed as such the key challenge for policymakers and practitioners is begin to understand how exactly these positive connections emerge in practice and thus to understand how can they can actively attempt to promote positive games so what then do we know about how exactly tax has been related to improvements in government's in practice we can think first about the connections between tax and state building and here we see three broad ways in which taxation has spurred improvements in state capacity the first demonstration effects tax agencies pioneer new processes which are later adopted elsewhere in government that is the tax agencies the leading edge of bureaucratic modernization the second are spillover effects because improving taxation requires parallel improvements elsewhere in government the incentives to strengthen tax agencies can become an incentive to drag other parts of the public out of iratus towards improved performance as well and finally our information sharing effects tax it can be critical input to broader economic and social policy making while data from other areas of government is important to strengthening tax collection and that sharing of data can thus you know reciprocal gains turn into the connections between tax and accountability we similarly have an increasingly sophisticated understanding of what those links look like in practice and the key message here is again one of lexy the term tax bargaining for many people in ropes an image of a relatively explicit negotiation or exchange between taxpayers and governments in which the one pays new taxes and the other delivers improved services however the reality on the ground is often significantly more complex while certainly we see explicit forms of bargaining this tends to occur more implicitly garance and taxpayers come into conflict disagree fight but eventually each sides make each side compromises to some extent but there are also even more complex processes through tax may shape the extent of accountability in some cases governments may be unwilling to make compromises as citizens and citizens may respond by refusing to pay taxes and aggressively avoiding but in this way they may reduce the fiscal capacity of states and hasted longer-term change so resistance taxation can be part of political bargaining in the same way new taxes can sometimes spur the creation of new civil society organizations and those organizations can then play a key longer-term role in spurring improved accountability and responsiveness so if we haven't been a picture of how taxation can be really linked to state building and accountability the key question for policy makers and practitioners is what they can do to strengthen those links concretely again turning first to taxation and state building we can see three broad messages that emerge the first is to build stronger links between tax agencies and related branches of government including at a central and local levels in order to facilitate the kinds of demonstration effects and spillover effects that we know are possible we often think about tax reform in silos limited to tax agencies but because of the complexity of taxation and the potential for broader gains broadening our view to be more inclusive holds the potential to spur governance forward second is emphasizing in particular the important of day sharing across government data sharing holds vast potential that is also very infrequently practiced within existing governments in the developing world and indeed this is an easy reform to implement from a technical perspective and finally is emphasizing bureaucratic reforms that can be replicated elsewhere in government again there's been a tendency to treat tax agencies as entirely unique and to pursue reform in isolation but where reform of the tax agency is linked to broader reform programs the potential for broader gains is it is a simplified turning to the connections between tax and accountability again there are clear messages for policymakers and practitioners the first is the importance of emphasizing efforts to strengthen the political salience of Taxation that is helping citizens to understand what they pay and why they picked this can be done through an emphasis on direct taxes on income and property which are particularly visible it can also be achieved through greater transparency and through public education efforts by government or civil society to engage the public with tax debates a second goal is to emphasize the importance of horizontal equity in tax enforcement that is ensuring that everyone is treated the same under the law when citizens are treated in differential ways that undermines collective action because individual taxpayers seek to avoid evade and bargain their way out of taxes but when everyone is treated the same way under the law there are much stronger incentives for taxpayers to come together collectively and demand reciprocal benefits for governments and this is often particularly important for business associations third we can try to expand in transparency around the connections between taxation and budgeting because when citizens can understand that connections between taxes and public spending they're both better able to engage in make reciprocal demands and we're more able to see the construction of new forms of trust between governments and taxpayers when those links can be seen clearly and are developed further in areas of particularly low trusts some forms of limited tax here might also be useful drawing explicit connections between particular taxes and particular expenditure x' that citizens can see and demand from government finally there's scope for policy makers including donors to directly support popular engagement including the creation of inclusive institutional spaces for tax bargaining in order to facilitate engagement by tax payers with the government but also support directly for business associations civil society organizations in the media who can act as intermediaries in litigating citizens to toss debates finally of course although we now have a picture of what policy options are available there remain important challenges to implementing the medical practice and I would mention two big questions in particular that need to be navigated at the local level as donors think about how to push these agendas forward the first is about what the right approach is in mediating between the demands of traditional approaches to taxation focused on revenue and growth and more governments focused approaches stress focused on strengthening state capacity and accountability in many cases these two agendas are closely aligned and merely reinforce each other but there are going to be cases where they may be infringed and individual policy makers and practitioners will have to navigate where priorities should lie and where the greatest opportunities exists the second big question relates to how these reform processes can be pursued in environments of weak governance where political interests may be opposed to interagency cooperation and to tax reform its first broader public engagement to state the relatively obvious and unaccountable government is unlikely to support tax reform that's objective is specifically to encourage greater accountability but of course that's where reformers come in and try to push this agenda forward and I think three messages from the broader literature on public sector reform are particularly relevant here the first is to work from the government side but also from the society side bringing pressure from both sides to encourage more transparent and inclusive approaches detection for the second is to try to identify and work with allies within the tax administration despite their sometimes bad reputation many tax reformers have a very strong interest in seeing tax revenues used much more effectively in part because that makes their job much easier finding allies can be key to pushing forward reform and finally donors have an opportunity to continuously emphasize the important these soft aspects of reform focused on process transparency and inclusion and then just these windows of opportunity for advancing that agenda ultimately we have an increasingly sophisticated understanding of the ways in which tax can be a spur to improvements in governments but it's also essential to resist the temptation to think that this is automatic but instead to focus on specific concrete ways that policymakers and practitioners can try to put forward those positive connections and thus make taxation a spur to broader improvements in governance and development outcomes

Governance and Corruption



The core of Frank’s ideas, I would argue,
basically turn on this question of “How does human organization evolve over time?” You see him thinking about the practicalities. That’s at the core of some of his agenda
now on institutions and governance and bureaucracy, and the balance between the autonomy that
a bureaucracy might need to have to perform effectively, but the need for it to be accountable
as well. To me, it means basically the ability of a
government to deliver the basic services—security, education, health, infrastructure—that governments
are supposed to be able to provide their citizens. Some people think that governance is something
that’s done by organizations other than governments, like NGOs or transnational actors. But I think, appropriately, the focus ought
to be on the public sector and the ability of the public sector to do things that help
citizens. I think there’s been a critical recognition
that institutions are really important. That is to say, political structures—like
property rights, like stability, like the ability of commercial transactions to take
place under a rule of law—that are actually the foundations of economic growth. What makes poor countries poor is not the
lack of resources. Japan and Korea had no resources to speak
of when they began their development paths. Rather, it’s the lack of institutions that
makes countries poor. Therefore, there’s been an intense focus
on helping poor countries to develop stronger institutions. Corruption has a lot of different variations,
and correspondingly many definitions. Most people would say that corruption is the
private appropriation of public resources—if I steal from the public treasury as a policeman
or a politician and put it in a bank account for my own family. There’s other forms of behavior that are
related to corruption, like patronage—a politician will put his own supporters or
her own supporters in a public bureaucracy simply because they showed up for a rally
to get that person elected. I think that many people would say that corruption
isn’t that bad; you pay a little bribe and it greases the wheels of the machinery of
government and it gets you the ticket fixed or it gets you a permit more quickly. I think, though, that that can only be said
in a country where governance is really defective, because you really shouldn’t be paying for
those permits in the first place. There are both economic and political consequences
to corruption. Corruption is unfair. It means that money is going out of the pockets
of citizens [and] into the pockets usually of elites of one sort or another. It distorts public priorities—you bribe
a politician to spend money on a fighter aircraft rather than schools. And it has big political consequences. I would say that one of the biggest failings
of many countries attempting to transition to democracy is the fact that they’re corrupt. It delegitimizes otherwise democratic regimes. The failure, I think, to provide these basic
government services is one of the things that disappoints people about the performance of
democracy. So I think it’s also important in that political
sense, in preserving the legitimacy of the regime. Many developing countries, for example, experience
patronage and clientelism—beginning with the United States in the 19th century. But if you look at the politics of modern
India or Brazil or Mexico, you see that a lot of the political parties and the politicians
are in the habit of basically doling out public money in order to generate political support. You can take much more severe cases like Nigeria,
where recently there was a case… This country is now being racked by Islamist
terrorism—this group Boko Haram that captured several hundred schoolgirls and has been bombing
and assassinating people. So the government provides more money for
the army to beef up their security, and money just disappears before it gets to a single
soldier. What’s the consequence of corruption? The consequence is living in a country with
a lot of riches [and] you’ve got tremendous continuing poverty. I think actually one of the most interesting
cases is actually that of the United States. I think it’s an inspiring story for contemporary
developing countries. There’s this tendency in the developed world
to look down on corrupt developing countries and say “There’s something wrong with
them; they don’t understand what good government is and [what] honest politicians [are].” But in fact I think this is a universal phenomenon,
and in the United States, in the 19th century, the country had something called the patronage
system in which virtually every public official at a federal, state, and local level was the
result of a patronage appointment. It was a favor being paid by some politician
in exchange for votes. It led to very poor quality government in
the United States. One of the things that happened in the Progressive
Era beginning in the 1880s was that Americans began to mobilize because they were sick of
corruption. [There were] organizations like Tammany Hall
in New York that were notorious dens of influence peddling and graft. And so there was a big mobilization that brought
together people—there were middle class professionals, there were merchants that didn’t
want to have to pay the extra bribes, there were social reformers that thought that these
corrupt politicians were really ripping off the poor. And as a result of their ability to come together
and work through a democratic political system—they began first with the passage of something
known as the Pendleton Act that created the first civil service commission, that said
that from now on, federal employees had to take a civil service examination. They wouldn’t just be given a job because
of a politician, and that merit would be the basis for government service. It was a struggle that went on for almost
two generations in order to spread the classified civil service to cover most of the bureaucracy,
but it’s something that was successful by the 1920s or 30s. This also feeds into my most recent book,
which is the second volume of a two-volume series, which is entitled "Political Order
and Political Decay." The central issue in this book really has
to do with how did you get to a modern, relatively clean, uncorrupt, effective state. What was the magic sauce by which this happened
in places like Denmark or Germany or Japan or Britain? And what lessons does that hold for contemporary
developing countries? In the book I’ve come to a number of conclusions,
and some of them are a little bit pessimistic. The main inspiration for this book was Samuel
Huntington’s classic work, "Political Order in Changing Societies." Samuel Huntington was a Harvard political
scientist. He wrote this book back in 1968, and the basic
message of that book was “all good things do not go together.” Previously, the theory in development had
been that all good things did go together—if you had economic growth, the growth of individual
freedom, social mobilization, economic change— that all of this would be mutually self-supportive,
and it would support modern democracy. And Huntington looked around the world at
the time in the 1960s and said, “Well, that doesn’t seem to be happening. In fact, economic growth spurs social mobilization
[and] demands for participation; countries don’t meet it; and then you get coups, civil
wars, and a lot of political instability.” In many respects, I think that I agree with
him. I think that fundamental insight is correct. And so there are certain trade-offs that you
have to make between, for example, good governance on the one hand, and democracy and popular
participation on the other. Because good governance requires merit, expertise,
technical knowledge, authority, and the like, and I think that democracy demands popular
participation. Political decay, in my definition of it, stems
from one of two sources. First, it’s institutional and cognitive
rigidity. We create institutions. We human beings love to create rules that
govern our lives. But we’re also an extremely conservative
species. Once we create those rules that are based
on a certain mental model of how the world works, and if it turns out that—based on
empirical experience—the world isn’t working that way, we’re oftentimes very hesitant
to change the model. Religion is the best case of this. Religious doctrines are rules; they’re institutions. But people don’t abandon a religious doctrine
simply because somehow it doesn’t seem to be working out in real life. But [there are] other mental models [too]—Marxism,
for example, or even modern neoclassical economics. Sometimes these mental models don’t actually
correspond to empirical reality, and yet people are very reluctant to abandon them. That’s one source of decay—when you simply
don’t evolve. The other one that I think is particularly
relevant in contemporary America has to do with what political scientists call the elite
capture of institutions. Modern institutions are supposed to be impersonal. They’re supposed to treat people, as citizens,
not differently from one another based on whether you’re a pal of the President or
a member of Congress or something of that sort. And I think one phenomenon that occurs in
virtually all political regimes is that the rich and the powerful, particularly—and
sometimes it’s not only the rich and the powerful, but primarily those—use their
access to the political system to politically protect their interests by reducing competition,
by creating barriers to entry for other political players, by voting themselves subsidies or
protecting their jobs, or things of this sort. And that’s another factor in political decay—this
capture of state institutions by elites over time. Like many Americans, I’m worried that we’re
seeing some version of this. We certainly see a number of rigidities in
the way we think that institutions need to work, but more worrisome, I think, is just
the influence of lobbyists, interest groups, very powerful organized interests that of
course are legitimate in a democracy, but in—I think—the contemporary United States,
exert influence way beyond what they actually represent in the population. For that reason, I would say that the United
States has been experiencing political decay, and its political institutions are not functioning
as well as they could. This doesn’t mean that American civilization
is in decline because America has never primarily been about its government; it’s been more
about the private sector and business and entrepreneurship, and that’s booming. It’s been sickly, but it’s recovering
nicely. But I think American government is in a fair
amount of trouble. We can’t pass budgets, we can’t agree
on fairly simple commonsensical kinds of policies. That’s not a good sign. For many countries, the appeal of democracy
is very much rooted in just their vision of America, and the fact that America’s rich
and powerful and prosperous and seems to be doing well. And quite frankly, I think with the amount
of political polarization and dysfunction in Washington, that’s just not true any
longer. Partly it also has to do with foreign policy—the
various wars we’ve engaged in over the past decade—but it also has to do with our own
political process. I think that it’s hard to say that anyone
would turn to Washington and say “Yes, you as a young democracy ought to shut down the
government because you can’t agree on paying your past debts.” That’s not a model of good behavior for
anybody. And therefore I think American influence in
international affairs has diminished as a result of this. I think until we get our house in order, that
projection of our values and institutions is going to be very much more difficult.

How to improve good governance in oil, gas and mining?



so in my view the number one priority for strengthening extractive sector governance is better coordination between partners who support implementation who support policymakers as well as more resources allocated for implementation we think from the OECD's perspective it really should be pushing companies to implement international standards that is UN standards EITI standards obviously these standards we really think that's the key moving forward is it's really driving companies to meet their international expectations on on doing this responsibly particularly in an extractive sector the number one priority should be to overcome the information asymmetry that exists between governments and extractive companies yeah that's a very tricky question I think because you know you can get one side of the equation right like revenue collection but you can do it wrong on the spending side so I would say something that kind of transcribes everything is political will and social cohesion which is obviously very complex to achieve but I think that's probably the driving factor governance is essentially tied to the functioning of institutions meaning public management of the mining sector that goes all along from managing the licensing system and ends with with revenue culture a remarkable problem in the extractive industries is that the whole legal framework isn't available to a normal citizen that's because huge bits of the legal framework tend to be hidden away in contracts for that reason we should be publishing all of the contracts in the extractive industries

The Erosion of American Governance: In Conversation with Stephen Skowronek (The Governance Podcast)



welcome back to the governance podcast at the Center for the Study of governance in society at King's College London my name is Sam dekenia I'm a lecturer here in the department of political economy and I'm also the associate director of the Center for the Study of governance in society today we're very pleased to host Steven Skowronek Pilati a parrot professor of political and social science at Yale University professor Stronach has published widely on American politics in American political history he was one of the cofounders of the journal studies in American political development and he's currently the wynant professor at the ratham er American Institute at Oxford and University today we're going to be discussing the policy State professors chronics most recent book that was co-authored with Karen Oren of UCLA and which was recently published with Harvard University Press thanks for thanks for being here Steve it's good to be here um I wanted to start with just a few general questions about your research so you study American political history what some would call American political development this so this is the study of how American political institutions were created how they change over time can you tell us just a little bit about how you initially became interested in the historical study of American politics oh well that probably that goes back to graduate school when I studied I took a my first year of graduate school in school I took a course called bureaucracy and democracy it's basically a historical historically oriented development of modern states course I got caught up in a kind of a group of scholars who were interested in the work of Barrington Moore and Sam Huntington people thinking broadly about patterns of institutional development in different states and how different states configured Authority differently and both what consequences so it was a that graduate school environment that got me thinking about what is the nature of the American case and I was happened to happen to be lucky enough to study with Ted Loie at Cornell who whose book the end of liberalism was in fact a study of institutions in the profit but Christ but he subtitle of the book the crisis of authority in America so very sympathetic to this this way of thinking about American government American politics so your interest was it sort of occurred once you were a graduates once you were a graduate student at Cornell so I went to graduate school to study political philosophy and in fact I was my major advisor was Isaac RAM deck its political philosopher but as I moved into I had to take comparative politics as a field as a field requirement I took this course on bureaucracy and democracy seemed to me that many the questions I was interested in that interested me in political theory were being addressed by people who were thinking about institutional development changing configurations of authority variations in state structures over time and so it was an interesting it was an easy transition for me I actually got interested in how America how closely American political thought is tied to institutional configurations or institutional reform and political thought in America are so closely intertwined that it was a very easy transition for me to make hmm so when you initially were planning on going to graduate school as a theorist were there specific theorists that you were interested in studying well I this is a very long story I won't bore you with it it's always right so this was the early 1970s that was interested in well at that tom was the Marxist revival of theories of the state I was interested in people like Nicholas palance's and Ralph Miliband and the institution turn in in sociological theory social theory and Marxist theory in particular copy tall shot I remember was the name of the journal that we all read is as undergrads so yeah so it was attuned to these kinds of issues and and the transition between political theory and the study of institutional development was a very seemed to be a very easy one to make at that time I mean this was also you know this was also the time when theater scotch Paul was writing States and social revolutions and the whole movement of bringing the state back in I think that my early work was very much a part of that fantastic okay so on that on that point do you remember when theta scotch Paul wrote States and social revolutions she also wrote she was one of the editors in bringing this date back in published in 1985 do you remember when that volume came out what whether there was there was any sort of sense in political science at the time as a discipline how people how did people view it when when that well I think that was a huge volume and it had a it had an enormous impact the whole movement toward comparative study of states varieties of capitalism comparative state development American political development all of that was a very exciting time and a sort of a breaking down of disciplinary divisions between history and political science sociology and political science social theory and political science yeah it was a moment in which we which we saw a whole new community of scholars take place that's when we studied we started the journal studies in American political development you know now what is it and it's probably and it's closely closing in on 30 years great okay so what what which brings us to your current book what led you to write the policy state what was there it was there any sort of set of arguments that that were had been developing in in your mind or in discussions with Karen Orrin what what led to this book being being produced well I think that so I think Karen would answer this differently than I am I do I mean I think that the idea of in her book on our belated feudalism which talks about the labor revolution at the end of that book she she she discusses the future as a fully legislated quality of fully legislative polity so I think that was sort of the germ of the idea at what would we do with that idea right for me it was very much a response to my firt my dissertation my first book building a new American state was about the creation of the administrative state and in this book it was for me a kind of revisiting that a sense that we're no longer in the administrative state we were be something there's a new formation that's emerging that doesn't really has administration but it's not organized around administrative ideals the ideals of an administrative stage and so in this book for me it was well what lies beyond that administrative state but and what is this a newly emergent form and that's where we came to this idea of about the policy stage much more elemental a much more disaggregated form disaggregated in the sense that you seen on administrative actors is playing a central role in in governance well the things that you would that are the qualities that I associate with an administrative state rule regularity the authority of professionals and experts all of that I see as beginning to unravel and unravel it and that unraveling having taken place over many decades ah we dated back to the 1917 the United States back to the 1970s and we related in this book to this the what we call the abrasive qualities of policy that is to push against to abrade against institutional boundaries in wool regularity so I think about what's happening in Congress we talk about the collapse of regular order it the collapse of regular order I think is a kind of metaphor for what's happening in various institutional locations that I think is very different than what you get certainly out of a varying conception of legal-rational authority right it's a much more disaggregated contested world that doesn't really rules and regularity or in short supply and what would be what would be a specific example that you could give that you think is emblematic of that of that transition so would you would you see the conflicts over Obamacare well I'll give you so we want to say that policy of grades against rules and regularity so think about Trump's declaration of a national emergency to build his wall this book is organizer what is the policy the policy motive drives not contemporary politics so what it's driving against are all those things that we're supposed to resist policy right what are those things that are supposed to resist policy like structure of government is one right the basic structure of government what Trump says well Congress refuses to pass money from my wall I'm gonna declare a national emergency and we're going to build the wall this is exactly what we mean by policy the policy motive policy driven erosions of structure right and then Congress says well you can't do that we we have a constitutional authority to appropriate money well good luck well let's see how that works see how that works out so the so the form of so in a certain way you see the form of governance that the policy state is displacing is a stable administrative organization maybe doesn't even a minister state was the most recent incarnation of a kind of and we want to date that I think quite specifically to a consolidating movement of rent right after World War two when all the institutions of government seemed to have come to a I wouldn't say an agreement that's probably too strong but an acceptance of administrative authority and an administrative decision making that I think all begins to unravel after the 1970s and yes so so one thing is that it's displacing administration but I think it's much broader than that that policy has from the very beginning I mean you know American governments always made policy we want to say from the very beginning the policy motive has been eroding all the things about government that are not policy all the things about government and in America what does that mean what are the things about American government that are not supposed to be policy rights are not supposed to be policy and structure and what we see over the course of it as policy expands its reach or policy extends its domain itta braids against the boundaries of rights and structure that's what we want to say okay and not only that but rights in structure begin to to take on the qualities of policy they become negotiable they become contestant much more contestable they become pragmatic so you have in the pot we describe judges making pragmatic to say well you know it says that she has this rights but if we granted that right with the whole judicial system would you know be overrun with these complaints we're very pragmatic we can't have that so it's a rights themselves take on this kind of pragmatic programmatic negotiable quality in the policy state structure takes on this negotiable quality well it says in the Constitution that Congress has to appropriate the money well Congress doesn't appropriate the money and the president says well we need the policy right so we're gonna have the policy anyway this is policy driving a grading against the boundaries of structure so why do why do you think this transition happened well I mean in the book we described we just and we're not taking I should say that the book is not taking issue with the impetus behind these developments and the reason is that we recognize that this policy state is far more inclusive then what it replaced and it's actually far more responsive than what it replaced in the sense that it's so we want to say that this the world in which rights and structure had more purchase was a rule that was a world that was very exclusive a lot of people were left out a lot of people were left out women slaves labor they didn't have rights the masters had rights the husbands had rights the employers had rights those rights were enforceable as more and more as those old prior rights are overturned and more people are included more people have rights rights have to be balanced against one another rights themselves become less categorical it's like we refer in the book to Oliver Wendell Holmes who says we can't you know what criticizes a categorical approach to Rights and says we you have to adjudicate rights in terms of the neighborhood of principles in which they operate well you know it's that is adjust adjust rights to your principled understand is that what a good polity should be it becomes much more contestable much more negotiable much more but and that's and this is I think why why contests over the appointment of justices have become so explosive because now it's your rights are wholly dependent on the principles of the judges that you have that you're appointing right that neighborhood of principles is like everything at the right is completely contingent right um so on the one hand I can see how that's that is more inclusive there are farms that the number of groups that can influence policy is it's clearly expanded and the number of people who have rights right oh yeah but for us what's happened is that rights rights as twerkin said rights are Trump's I think that was a normative position right should be trumps but in fact in a democratic polity rights or non Trump's right right what we argue in the book is that in the policy state rights are chips that is they're tokens of access to a choice setting where the actual determination is very much a very much dependent on who the judge is what the principles of the judge who the decision-makers are their preferences and their principles right so rights for us or not nothing it makes a difference that all these people have access right but that's what they have they have access to a choice setting in which the actual balance you know the actual balance among these rights is contingent on the decision makers themselves did yeah as opposed to you know an employer could go to a court and get an injunction against those employees because they didn't have a right right the husband could take the kids and the wife didn't have a right right those were Trump's those rights were Trump's these rights when everybody's included everybody's in rights become less Trump like and much more chip like tokens of access so on the one hand I can I could see why this feature of the policy state would would be considered a good thing in the sense that rights are expanding more people have access access to them do you see any potential downsides – yes the downsides that you the book is called an American predicament the predicament is that we make this more inclusive polity a more democratic polity but the things that you depend on for rule regularity right rule dependability the stiffest stability of institutions all of these things begin to erode so but what the book is about are the consequences for governance of inclusion right you have this 18th century Constitution that's riddled with these conflicts which were largely ways of keeping you know ways of keeping those people who were out out now that everybody's in the institutional system itself no longer has legitimating rules – to make its commitments credible so you know Trump may get his wall but nobody half of the country is going to think this is an illegitimate act right right you could make a health care we could pass a health care program in 2010 and in 2014 it begins to unravel nothing is secure or stable in the policy state so the downside is the collapse of secure authority right the collapse of before the crisis of authority is shakedown of institutional authority is the concept of this policy state but if that processes is breaking down because the society is being made more inclusive and more democratic why couldn't a skeptic just respond by saying well they what you're what you're describing is a responsive democratic politics one response to this would be let it rip this let it rip right but I think that you would also say the democracies the programs that democracies modern democracies demand require a kind of credible commitment right and this this state is unable to secure any of its commitments that is everything remains contestable all the time everybody is in all issues are national everything is contested and everything is reversible so policy itself becomes let me put it this way policy to be secure requires rights and structure it requires a secure decision-making a dependable decision-making structure and secure rights that's what gives policy legitimacy if policy itself is undermining or upgrading the security of rights and the security of structure then policy is undermining its own legitimating anchors that's what we want to say and in that situation that's a that's a predicament that's a predicament word you know conservatives would say right we're making too much policy we're making too much policy or too many people around we've got to get these people out tried we got to restrict access we're not saying that what we're saying however is that this policy state has serious problems largely related to the shakedown of institutional authority that accompanies its own development do you see any problems associated with the expansion of policy the fact that we have so many decisions that have been that are being made and influenced by so many different actors do you see that as being a problem or posing a problem for for democratic legitimacy so Steve tell us at johns hopkins is made this argument that one of the problems that contemporary American government faces is just the wildering complexity that's associated with the expansion of government in the contemporary period that seems as though it might be creating a problem for voters that are trying to monitor and direct and control what all of these different political decisions are actually involving that might be separate and distinct from issues associated with enforcement of rights well I made that that makes sense to me it's not exactly what is sure exactly what we're saying I guess what we want to say is that there is no look there's no set institutional the institutional division of labor has completely broken down presidents make Congress was supposed to make policy Congress makes some policy presidents make policy judges make policy bureaucrats make policy there's no longer any set institutional locale the institutional division of labor has completely broken down and that makes authority less dependable less no intelligible mmm-hmm more contestable and less stable that's what we're trying to say okay um do you see any solutions to this problem it seems like a fair lead our vision of contemporary contemporary governance and I think it's an accurate description of what has happened but do you see any way of changing this serve or addressing this well uh as I said I'm better at diagnosis than I am a prescription I don't have a solution so there is an argument that's circulating or in legal circles about on left legal circles now constitutional rot constitutional rod and I think that there's something and so what are those are rotating those those are that the the constitutional crisis of our day is now it's not a crisis in the sense of some extraordinary external event is causing you know is that are we in a constitutional crisis because some event has happened Trump may be impeached that's a crisis right constitutional constitutional rod is it long term processes of erosion that are breaking down the institutional fabric of American government now what's the solution to that I mean some people would say we need a different Constitution I'm not sure that I want to go there I mean I think that's a pretty dangerous thing but I mean I can see that that we no longer have a constitution that corresponds in its organization to the scope of policymaking that is policy this Constitution was made to make policy about Commerce and security wasn't made to make policy about the things that were all excluded from policy space social relations and labor relations and family relations so we might want to think about what kinds of institutions are more suitable to the scope of discretionary decision-making what kinds of institutions with those I mean that you're asking me beyond my paygrade okay its normative theory we're really describing a set of institutional developments and describing them and we might describe this in a very empirical way that is the the labor revolution of the 1930s what was the constitutional implications of that well constitutional implications of that is the Const the Commerce Clause of the Constitution just basically breaks out the bottom falls out of it is a limit on policymaking well government now regular everything becomes commerce right the civil rights revolution these are the great democratic revolution what were the constitutional implications of the civil rights revolution is well federalism federalism breaks down as a kind of structure barrier on policymaking ah pet federalism doesn't go away the Commerce Clause doesn't go away so now we just come we're just always contesting the boundaries of federalism and the boundaries of the Commerce Clause and we have there's no social founding there's no social foundation to what were once real in meaningful institutional barriers to the Commerce Clause to federalism those have gone away and now we just can test okay just can't test one of the boundaries of federalism well five to four the Supreme Court will say this and you know five justices will say this and four justices will say that what are the boundaries of the Commerce Clause five to four you know nobody has it there's no agreement and it's not clear what's to be done about this I think that we have the right diagnosis and it's not the diagnose I think it's very different than what you see coming out of the left and on the right so on the right I think that the argument is we have to should go back to the go back to first principles the way the Constitution was original ISM well we want to say that the original Constitution worked when most people were excluded right when most people didn't have access to that decision-making structure and those institutional principles and the more people who were brought in the more those principles and structures broke down so it was just bun is just fundamentally incompatible and on the Left we want to say that we disagree with the left that the problems of modern governance today are just policy problems and that any necessary rearrangement of the furniture of the of the government that'll just take care of itself we want to say these problems of government so really front and center so much so that if you don't solve them policy itself is gonna lose its purchase and I think that's what we see now policy himself loses its legitimating anchor loses its it's it's staying power so do you have any given given that that's the diagnosis of the contemporary American political scene do you have any do you want to venture any predictions about what what's in course do you see this is just being sort of a lasting trend that's been put in place that's going to continue um well I mean this is kind of a dire right it is a kind of it is kind of a dire I don't think this is sustainable I think that somehow we have to reconfigure instant somehow we have to reconfigure institutional authorities so that rules have some not only stability and reliability reliable permanence yeah so you know I I recognize that there are all sorts of people who were not the only people who are grappling with this you know so I think conservatives have a regionalism that I think originalism is a response to the collapse of authority in the policies thing deliberative democracy I think the whole deliberative democracy movement is is a response to the collapse of authority in the policies so people you know normative theory is rich and alive with responses to this predicament of we're just trying to how did we get from there to here how do we get from there where we started to this moment do you I'm just curious do you see argument do you see deliberative democracy is is somehow addressing this and you know you know in a way that you think might be fruitful do I think it's a practical solution yeah I don't see it as a practical solution right now but I do see it as a response to the problem yeah that is I think I'm you know John do we said you can't have a modern democracy unless there's some modicum of like mindedness among the people right in deliberative democracy is a kind of one-on-one you have to build citizenship right build the kind of common parlance so that people are engaged in all you know find some way to engage in all of the system so see that deliberative democracy is a response to really the kinds of issues that Julie was talking about that you just can't have these bureaucrats making these decisions gonna create a crisis of authority and it has right but do I think the deliberative democracy is a practical solution right now I don't right now I don't why not I just think it's too localized for the magnitude and the pace the acceleration in some ways I think that originalism and deliberative these solutions are reflections of the problem that is original juridical democracy well right because we don't have a rule of law I agree with that deliberative democracy because we don't have citizens able to engage in the scope of governmental decision II I agree with that these are reflections of the problem I'm not sure they're practical solutions mhm and you can't think of any practical solution that might exist I don't spend a lot of time I have a hard enough time just trying to work out think about think clearly about how our institutions got into the state that they're in mm-hmm that's that's enough of a project for me and it's a large enough one I suppose so where do you where do you see yourself going with research after this book it's come to this sort of dour conclusion in a certain way it's it's dealing with themes that you sort of we're dealing with in your dissertation and then in your first book um what are you gonna work on next I'd now I'm working on some papers that are sort of spin-offs of this some other implications of this I don't know if I'll continue working on this thing I may just do something completely different well we look forward to reading it regardless of whatever whatever you choose to work on next looking forward to seeing what it is well thank you so much for joining us Steve it's been a really interesting discussion and I hope you hope you enjoyed hope you enjoyed thanks Sam you

Governance and Risk Meeting: Ep. 43



hello everyone welcome to the July 11th edition of the scientific governs and risk meeting my name is Richard Brown I had a few developments we're going to be talking about risk and governance and in this call today we have a special presentation from Cyrus he's continuing his presentation of the general model for us I want to end a shouldn't just give people the shesh will be at presenting his vishesha lytx but when he protects us about the state of the peg and then Matthew Rabinowitz will be giving us his weekly recap recap sorry or the weekly narrative towards the end of the hour possibly afterwards I want to keep momentum up though so it was scramble through the preamble here so if you have something to say please say it don't be shy if you have a microphone let's leverage that capacity if you don't have a microphone please type your questions in the chat and either David and I will be monitoring that and we'll ask the questions for you when we get a chance or you can just store them up in there and after the hour I've been hanging around for another 30 minutes to just do a general Q&A you might everyone's more than welcome to hang around for that I think that's gonna get the preambles right now I'm gonna jump into you what I want to talk about and hopefully not burn up too much time we have a new forum and that forum was long overdue there's all kinds reasons why we waited a bit I think that that worked out well there's a there was a critical mass of content that was ready to go and so we have people jumping into the forum and I could not be happier with how well it's turned out the content in there is amazing the the the way that people are coming together and figuring out what needs to be done and how we should be doing it is extremely impressive so I if anybody in this call hasn't checked it out yet I highly recommend that you do I'm typing into your world and basically discover little format maker down have a look and I contribute wherever you can what I want about today though he is merchant merchant processes and workflows and communities and those are three different things when you combine them they get even more complicated sorry and one of the things that I want us and group to begin to think about is how do we surface valuable information how do we collect that information where does that information live and how do we all work together these are all super hard questions to give you some context though we're solving them slowly over time and introducing them sort of one by one and now it's time to start putting those pieces together the pieces that we have are these calls we have written down as we go so we have these calls these calls are a very small time window but they're all held in English they're in North American friendly time zones I repeat these caveats every single time that's why we don't make decisions in these calls we home set governments as north governors happens or governance decisions happen this is where governance debates in the education and community building and some of the social consensus occurs what we all kind of figure out whether we're on the same page or not that's great and it's required and we and it's super valuable and so valuable that in the near future I hope we're going to be expanding these calls to let's do one for the APEC region let's have another one that's going weekly for the Latin American region we need more than just one call and we need to expand these things because they are so valuable but there's all kinds of downsides too so that there's no opportunity for deep debates or deep discussion we're not going to start pulling apart algorithms in these calls we can't have given everyone an opportunity you can have it back and forth because there's just not enough time there very temporal so they they last for an hour if you right now and a half if you missed that you're out of luck you have to watch a YouTube so it has its pros it has its cons and the pros and cons for each one of these things I'm going to list or basically the same there's the immediacy there's sort of this dynamic interaction aspect and those are always traded off against their time to live basically so calls last for an hour they last for a week or potentially I guess they could last forever somebody wants to go back into the archives and watch 49 straight hours of community college they're more than welcome to go that's unlikely to happen so in order to allow us as a group to create to design workflows and have debates and figure out what our process is we have these other forums and decided form our venues are designed to allow for less immediacy but more longtail utility and discoverability and auditability and those other locations are the chess the chats are all actually I think will be probably the best chatting crypto and I can go and record it saying that oh the chat is amazing but it's also very temporal so these calls the last an hour for every week we have these really really cool cha that's in rocket that last 20 minutes an hour at a time and then they kind of cycle out of visibility after 24 hours or so so that gets it's good for rapid-fire debates getting to the heart of an issue and then coming up with an answer or something and then having that answer slowly disappeared through the history as you scroll huh so it's just solve that problem we have a forum and this forum like I said earlier is turning out swimmingly so in this forum we have deeper debates these debates last they could last forever if you're familiar with the way things the debates happen in e3 search and some other venues that they could potentially happen for months and once at a time and then go quite and then resurface and that's what we need because there's a lot of complicated things happening a maker down what we're doing is actually serious business there's lots of super smart people that need to be heard and there needs to that needs to happen in a venue that's there's no fear that's like chats or these calls or reddit you know which cycles out after 24 hours or 7 days we have this location where we can all get together have our say compose some well-thought-out arguments and then get feedback from everybody else in the community that's amazing but it's also temporal and it's also a bit messy and we need to be concerned about it's getting to the situation where we start devising canonical documents in the forum week we don't want to be in a position where six months down the line people are constantly referencing this epic thread and that's where we expect the world to go to discover what it is that happen to maker down at that point the forum should be there to arrive at a decision to format a document to discover a process and once that happens that information needs to move out of the form and it needs to go somewhere even more canonical than the forum and what we do and what we have been doing for the last year or so maker down community group which has been working out very well is we have a workflow and that workflow is we iterate with community members on specific projects or ideas we generally end up in a hack MD where engaged stakeholders are working together to iterate on a talk we discuss those changes in various venues like chat or the forum and once a final draft has been achieved and this doc has utility to the wider ecosystem is probably going to last what happens is that document gets taken out of hack MD or copied out of a forum or out of a chat or other muriatic post and it goes into github because that's the world that we live in we might be writing documentation but it's it has all kinds of pros for us as a community it's a flat file content database it's easily distributed to multiple people or X number of people it's is version of all it has public audit trail there's lots and lots and lots of reasons what github is a great place to put a document once that document is finished and so we in the community if we put those documents into github and then after that know another reason why github is so great is that it you ingest content there – anything you could possibly imagine so once that content is in github it gets it could get pulled into the CDP portal or the voting portal or it can get pulled into various other flat-file the marketing our primary web sites or even to the third-party websites or welcome to start ingesting that content as they please and that's it's a discussion that I want start having with the community here as well as we start to get to governance and risk more deeply now that we have this forum I'll be making a post about this recapping some of these thoughts and then putting out some some suggestions about what these emergent workflows could look like so no we something starts a discussion starts in rocket it'd be nice if we go into the habit saying okay this is this is a great discussion let's consumer use recap this for the forums and then let's take into the forums and if if it turns into something perhaps we can say all right well this throws into a hack MD and let's find people that want to own this process or this idea and then we can iterate on that and once it's done it goes into github and then it becomes canonical or it becomes official ish in air quotes and then from there we can display it or every like and if it comes time to review or revise we have a very clear path that's well understood we you submit an issue and get up and you submit a PR and then we now we have a new dock where it's a technical business we're in full of technologists I don't think it's going to be too freaky to expect that kind of behavior but I would like to explore it and that's that is my speechifying for the week so there'll be it there'll be a forum thread soon that encapsulate some these ideas that's basically looking for feedback from the community about how how are we going to capture this cool work that's happening how do we sort of formalize it have been how do we make sure that it doesn't get lost the information that you see coming out of the forum into github is stuff that is important to decision making from Agra holder so like like am i understanding correctly the types of docs would be like collateral onboarding applications due diligence stuff things of that nature or are you also thinking about like int like interesting threads important conversations important debates well yeah and this is what I'm gonna make a foreign threats we can all hash this out together so the initial my initial thoughts are and I don't want to embarrass people and/or pick favorites but I'll do it anyways so long for wisdom was long for wisdom is doing a lot of really cool stuff in the forums and one of the reasons why I wanted this forum to be out there is because of this continuing heartbreak that I've been experiencing with Reddit over the last year to where somebody would sit down with a great deal of time and effort and thought into a forum post and it would be completely ignored and the reason it gets completely ignored is because people go to reddit for to get themselves raised up and or to just figure out what's going on and as soon as they see a wall of text they they don't even engage at all there's not even enough will to like complain about things and I wanted to get around that problem so in the forum's we've already seen deep engagement but the second part of the heartbreak was having a stuff h outs and not actually go anywhere and I think that's making sure that it ends up in a place that's that discoverable centrally understood like this is the repo where things go to and this is how we update those things goes a long way to making or converting some of these documents into canonical things but there's also going to be a few different buckets like it is this going to be like a idea idea for improvements in the system is this an idea for some kind of public resource or how to engage with governance is this going to be like tools and tips or collateral invest supersleuths whatever they call them so i don't know we need to figure out some buckets and where these things live and whether they actually become official we need to figure out but I want to make sure that we start collecting the stuff and it doesn't get lost because there's just much good work happening okay I am going to stop talking now Cyrus I'm gonna hand it off to you for risk okay cool you you you we get one screen be good okay okay so just a reminder where we are in the process the collateral onboarding guide did come out this week but I don't I don't want to break the flow of what we're time i right now so I'll probably come back to that in I think one or maybe two weeks today we're gonna mainly finish up and recap the stability fee model and yeah and then first I want to talk a little bit about the discussion at the end of last week that Matthew brought up regarding the DSR and risk premia Murray I want to clarify a couple things and open up for discussion essentially the way I'm thinking about it I think others are as well is that we know that borrowers pay stability fee which is comprised of a few different costs that are associated with with the loan one of those is this fee associated with expanding the dye supply and is essentially a value Trant from borrowers to the counterparties who end up holding the die right so let's say someone goes out and borrows 100 million died and then they want to just flood the market with it there needs to be some sort of a compensation to the counterparty to incentivize them to to hold on to that die now is we all know and we've discussed before a single collateral die did not implement this optimally the DSR isn't actually live and so this this value transferred doesn't doesn't work as as we would like it to and this has led to potentially a higher than the normal stability fee now in addition to this this fee associated with helping people die stable there's also this element of credit risk associated with the CDP and this is a risk compensation also paid by the borrower but to the mkr token holders and we call this the risk premium or the risk premium rate and the collateral risk models which we've been discussing the last couple weeks and the next couple weeks are all designed to cover this this ladder risk premium not so much the DSR and so it's very simply we can think of the total stability fee as being the sum of this monetary supply expansion and this credit risk and then there are a few others as well such as risking compensation and some others but that's not important for right now and so right now the stability fee being eight and a half percent we should be asking is that due to the expansion of the dye supply or because of the risk premium associated with ether well I think it's pretty clear that it was actually due to this supply expansion right as a community we've never really even talked about the potential collateral risk of eath die launched with half a percent stability fee and it only started to we only started raising the stability fee as the dye supply grew and the dye peg started to weaken and right so as we as we approached MCD launched we got to start thinking about how that dsr portion of the stability fee will evolve once the DSR is actually functioning and how we're going to handle the the risk premium rate and so this is kind of what I imagined the setup to look like right now where we have the bulk of the stability fee being paid for by the monetary expansion and pretty much nothing to the risk premium rate and after MCD launched once the DSR is live that the supply rate will almost certainly drop considerably but then we will have to add back what is the proper reflection of credit risk for the CDP due to the collateral backing it it's also interesting to note that this right hand side was never really discussed by by anyone over the months given that every but you know that the media was always harping on the increasing rates but technically speaking there is also somewhat of an offset with the lack of any risk premium being assessed and it also kind of highlights that in the end borrowers and really everybody just cares about this this total stability fee and sometimes breaking it down into the individual components can maybe potentially comp complicate the analysis a little bit and this is even more true when we start talking about how different collateral types impacting the DSR might negatively impact well I'll let me just get to the next slide but basically what Matthew was was talking about last week as a result of the conversation is that if the if the risk premiums are not properly set then potentially certain collateral types impacting the DSR my unfairly impact other collaterals and in essence might pricing them so let's say the DSR needs to be raised and a price is a certain collect a certain collateral asset out of the portfolio is this something that we care about is this something that we should actively stop from happening my view is that this is not really a risk decision at that point but more of a business decision by the MKR community on how they want to proceed so for example you could raise the DSR but then adjust a certain collateral types risk premium back downwards to offset it and help help keep it how keep it safe yeah does anybody have any thoughts or questions on this I know there is just a tiny bit of confusion last week uh yeah I do SARS so when we think about the risk premium rate that's going to apply to each collateral type correct right and then the DSR is obviously going to apply apply across all of those collateral types so it's this one larger figure that's going to move to hopefully help us expand and contract supply round and so then every CDP holder will have a stability fee based on their collateral and that that DSR per century right okay that's it right so yeah I think hopefully that clarifies that Matthew do you have any comments on this no it's really to just comment back and you know vishesh I think you're on the line but it's to kind of compliment him on it's common probably two or three weeks ago when it said basically if we just set the risk premium rates correctly that really should adjust it and so in my mind I you know the risk premiums are just purely conditions based on a given collateral whatever those whatever the risk associated to that collateral would be and trying to segregate risk prop risk policy and monetary policy exactly yeah I think it's it's fairly intuitive to segregate the monetary policy in risk policy from from a risk perspective but then if the community wants to go back and manually override certain parameters for the benefit of a collateral type then that's perfectly doable possible maybe even recommend it in some cases but just want to highlight that that's we should try to avoid it because at the end of the day that can also turn into an attack vector which is vishesh is point what he mentioned was if we just set them correctly in the first place and that may mean that the DSR should be elevated and some of the risk premiums actually should be significantly increased even if it's not politically appetizing if there's more associated risk than that the consequence of risk is a risk premium increase right yeah just this is I think the the place like this is this subject area the reason that like I think you and Matthew are both kind of getting involved on the same issue is because this is kind of that intersection between sort of the risk premiums the risk modeling and the monetary policy going forward in MCD because yeah Matthews right I said that you know in the event that we set the risk premiums properly you wouldn't have this sort of discriminatory effect but if they are improperly set there needs to be a plan in place for how could you correct them and I think the number one way that they would get improperly set other than just you know people not doing their jobs correctly and you know anybody doing math etc this is something that can happen but also you know a lot of that risk modeling is going to be based on certain behavioral patterns historical data assumptions if be like state the system changes significantly mid-flight you need to be able to have a lever to make adjustments and I think that would be the cases like if you model risk under certain assumptions and those assumptions change you need a you know path to correcting that and the DSR won't be that path was kind of my point because the DSR is a broad tool right so what we're gonna need to develop tools to evaluate or analyze when things are out of line and for example hopefully we can converged somewhat quickly on what the correct DSR level should be so that if we see large deviations in the DSR then we can try to figure out if something that's wrong on the other side of the equation yeah and I think the like as we go forward it's gonna be really easy to tell if something is wrong I think it's gonna become really hard to tell which thing that is wrong is causing the overall outcome in terms of like multiple different assets and attributing different behaviors to you know the the CDP's from and get an asset I think that's gonna become a really tricky problem yeah tell so many more it's also mean really difficult if a bunch of new collateral types start flooding in at once right if say every cycle something like ten collateral types are added and then and then the peg the peg adjusts poorly then it's gonna be tough to figure out what that also will be just a progression where you start off with a given quote/unquote collateral package and you you intentionally have a stability fee that is ridiculously conservatively high with a full intent over the period of say six months to release an identical collateral package with a lower stability fee and drop the debt ceiling on a in favor of B and slowly roll out I guess what I'm saying is just slowly introduce a very conservative approach which is very be risk and hit and and naturally progress downward right I'm gonna echo that I think like design principles are going to become really important hammer down here and like we talked about scientific governance well a big part of scientific governance it's like experimentation and controlling for variables and like we saw this what's the stability feed change too much too quickly you don't know what the effect was so one is I think you don't want to add ten things that you know that scenario you described I would you know recommend finding a way to deface things out as much as possible and then I agree with Matthew as well like starting off safer and then easing the dial as you go is also going to help control for for potential issues yeah I imagine this will be one of the first major things we would work on after MCP lunch at least as part of risk and research I mean realistically you're not gonna rip the band-aid off until like for big time Luke lotto coming in after maybe a couple of our cloud types on the theorem but like when security tokens when that happens that's when woful flood of collateral to combat when the sec starts a lot long that to come out right the danger which is you observe the collaterals behavior over a time interval that you don't have a choice over in other words it could be that you're observing in over a period that is under collateral crisis between minutes favorable to the asset and you believe that there is less credit risk there you haven't seen a bad environment for it and so you know you leave it open for a year it's a good year and over that you're declining it really the next year is where the problems begin which is why I think it also makes sense to think a little bit more first principle with some of these and saying well you know how much do we want to use the dial here because that's that's how you get situations where you your own euphoria allows you to take more and more risk when in fact you should be doing the opposite just waiting things over time doesn't always give you the right answer and I'm not sure if I'm agreeing or disagreeing with you here Alex but like a classic component of a lot of uncertainty mapping like algorithms in AI is you sort of up your confidence interval with more data that you've seen and so initially you should actually have a very low confidence for most assets like each might be a slight exception but for most assets you should have a very low confidence you know gain dial and then you know increase that I think as you start to see more behavior more data that you can actually you know draw inferences from yeah I don't know if you're agreeing or disagreeing with me either but that sounds correct to me okay cool let's move on so track two the model which is designed to find out what that correct risk premium rate should be okay so last week we went through a very simple model on how to calculate expected loss for CDP I made a few assumptions introduce an options analogy towards the end think a lot of it was a bit confusing so I'm gonna try to get another shot and do a review of it and hopefully be more clear today in general it's not particularly easy covering the full scope of these models in 30 minute increments so please get involved on the rocket jet and on the forum if you want to dive into these a little bit deeper okay so we know that this premium rate has something to do with the credit risk of the CEP in the credit risk and by credit risk I mean the potential for losses and uncertainties for M care holders and so we're uniquely concerned with what these losses look like how they occur why they occur how badly they are simple way to think about losses for CDP's is that they occur when collateral prices gapped down suddenly or when their the the options don't clear due to liquidity and slippage concerns so if you think about it if you were to completely remove black swans and huge gaps gap gaps down and have and be able to liquidate infinite collateral at spot price you'd never have any loss in a CDP no matter what and so our goal in trying to describe these losses is that we want to convert this notion of loss into the stability fee or the risk premium rate and so there's a very general model of how to do this which involves looking at the the likelihood of default as well as the severity of the losses the loss given default but these general models aren't are sometimes just kind of intuition driven and when you actually kind of dive deep to do the actual analysis you'll you'll see that it's highly dependent on the type of loan it is so for example calculating loss metrics for an eighth backed CDP is is much different than if you're trying to figure out your risk on a credit card loan so and and the reason being should also be somewhat intuitive in the sense that for credit cards you could probably look back at you know a hundred years or whatever of credit card data and estimate what these frequencies should be because they probably don't change dramatically over time but with ether we don't have a lot of historical data we don't have great intuition and how it evolves and we can identify a handful of latent risk factors that could cause some pretty catastrophic price movements things that haven't actually ever occurred but we can imagine they occur and so as we go from this general risk model we have to apply our own our own understanding of ether to make the model be realistic and so this is how we've more or less arrived at how to do the the ether backed credit risk model so first step is you collect your inputs which is your due diligence report your risk rating the onboarding application you have your trading history you have historical CDP stats and you have the currents EDP distribution we define our loss event as when the collateralization ratio reaches the liquidation ratio and our next step is to identify what can cause this collateralization ratio to go up or down and collateralization ratios essentially change based on the underlying asset price as well as user behavior and so when we when we dive into these risk factors we want to know what does eath do how does it move and for behavior what do users do in response to for one eath price drops so when it rallies or Falls and locking and unlocking collateral but potentially user behavior can be impacted by other factors as well and our risk rating which is one of our paints so we're looking for fundamental information that can that can impact asset prices and I mean typically things that aren't immediately clear just by looking at the price chart and that can be just a simple classification is make a fundamental risks protocol risks exchange risks and regulatory and these are pretty important to understand as we create CDP's and so we want to be able to convert these risks into a risk rating which will then somehow make its way into the actual calculations and so once you've defined and analyzed your risk factors you essentially want to simulate them to see how they intermixed with each other and how they evolve over time and so what we're doing is we start with the currents EDP distribution and at every time increment forward we apply a function that that is a change in the asset price when we model this using a stochastic asset pricing model which we discussed a little bit last week and in here we we include factors such as the volatility and we are tracking and we're tracking the risk rating as well and how it affects and how it impacts any sorts of jump risks obviously we know that that liquidations can occur slowly or can gap downwards we also apply a behavioral function that increases or decreases the amount of die drawn or the amount of eath locked up and this is a whole aspect of research in itself and then we also apply a slippage function to deal with to deal with liquidation you you run the simulation a whole bunch of times and for each one of those paths you essentially track how much collateral was liquidated and you record how much loss was incurred right so let's say you do this thousands of times and you you end up with a distribution of losses and some of these paths nothing happens right eath Bryce just goes up no liquidations fine some of these pads you'll have liquidations but well some you'll have liquidations but the collateral is fine some will have liquidations but the collateral is not fine because of liquidity and then sometimes you'll just see the asset just completely collapse downwards right and so with this simulation we've more or less achieved what we were trying to get at which is a pseudo potential distribution of losses and we can I mean a simple characterization of this distribution is the expected loss or the average of those losses so this is kind of what the visual is this is like a visual representation of that simulation right so you have some pads that are fine send plenty that breach the zatia ratio threshold and for those you want to apply a slippage analysis yeah yeah and so now now we have a handle on is a for a particular CDP or group of CDP's what can we expect to lose for M care holders how much bad debt is expected to be triggered and of course M shareholders are not are not bearing this risk for nothing so there needs to be some sort of risk compensation for this and of course that is what the risk cream rate is in the first place and so you convert your you convert that expected loss into this credit spread which is actually quite simple calculation at this point once you've done the simulations we talked a little bit about this last week as well right and then so back to back to what I was time out last week with the whole options analogy and essentially if you were to simplify that simulation with a bunch of assumptions such as no behavioral changes no jump risk and a few others your loss distribution is is equivalent to that of a put option on the underlying collateral ether and in this should make sense that MKR holders they they are behaviorally short of put right when the ether price collapses their losses increase the further the the price goes down what they receive stability fees in as compensation for that and so in this in the simplified example you could actually just apply the black Scholes formula but of course we can't exactly do that analytically because we do have to factor in behavior and jump risk and a whole bunch of other stuff and so another way to describe this example is if you had a CDP with 100 idaite and a $200 liquidation price you can then you constructed a put option with the same parameters then the CDP would be completely riskless right there'd be no way for the CDP to lose money because as as ether price dips below 200 the put option will perfectly offset any losses and so you can kind of you can kind of glean that a CDP that hypothetically has this has this put option embedded into it which of course there isn't but if it was then the CDP shouldn't actually command any sort of risk premium because there is no risk to it and so now that we've removed this hypothetical put then you can you can reason about what that risk premium should be and it's essentially it's dependent on what the price of this what this put is in the inside yeah sorry to drop B just so I understand something the to the PUD doesn't purely and completely offset 1 to 1 to see even less as an additional assumption about how people are managing their debt if write correctly right so in other word would is will always be so the value on the other side for the seller is always sorry of the by it's always greater than or equal to the value of a book right because in it's alright witness to the seller I third correction be the seller can get back at least that value or they can get more if they can exercise and keep the difference right insofar as you believe that make the CBP owner has properly rebalance so not only does the default not happen I even lost in materialized you also know how to put option so it's on accurate quality to greater than or equal to relationship right that's that's that's assuming the nkr whole so implicitly if the nkr holder is selling a put implicitly you're saying the CBP owner is buying that right some somebody has to buy it if you're selling right and so I understood your question though but right this you're assuming here that there's no like there's no rebalancing happening right I don't write to my CBP and quality holds strictly but in reality people do Manitoba sometimes well or sometimes poorly right because is just basically the worst-case scenario if they manage it quite poorly like it up perfectly offsets right so right so so the behavior can make can add to the risk as well right so I think oh yeah that's right that's right – was I was I think if I'm understanding your point correctly I think me and vishesha spoke about this recently where if the ether price were to rally a bunch and then a user would either and a user would withdraw a whole bunch of collateral then they have added risk to their CDP right right right you're right and so yes so these are these there's a little bit weaker then it's like it's not just that there's no recapitalization happening at all is that the recapitalisation that's positive in this negative to the system like yeah you have to you'd have to like dynamically manage your your put options right you don't always have to be going in and out of of different of different strikes and different notional amounts yes that's a price that makes sense thank you just Josh will you say something sorry no I mean I was roughly gonna say the same thing it's similar to like you you know if you have many different CD because it's not just one in CDP right it's really a pool of CDs that are entering and exiting all these different states and so you know basically the idea is at equilibrium if if price goes up in the short-term collateralization that's an increase but then it does balance out a bit and then similarly when eath priced appreciates people do reclad arise and so these things like the hypothesis or the theory is that they they roughly balance out to some sort of steady state thank you and okay cool so and one of the one of the interesting insights from looking at this from an options perspective is that aspects that are important to options pricing are also relevant to us and in particular the volatility and so when we talked about the volatility of the CDP and in particular the the default risk and all that were pretty interested in the in the tails right and tail risk is obviously one of the most important aspects of risk management for maker and while there's no simple way to reason about the tails for a bunch of reasons that I've mentioned before we are looking at three components of of the volatility here one being standard market volatility standard deviation returns another being the liquidity analysis for auctions and then finally that probably the most important one being these fundamental risk factors that caused the sudden gap these sudden gaps downward and so some of the research we've been doing here is we've been going back and collecting data on all of the major losses and drawdowns of the ether price over the past couple years and kind of classifying them by what caused them and and and a whole bunch of different metrics and and this is where we've kind of gleaned that the main source of drawdowns can are typically protocol related exchange related and regulatory related and using these metrics you can have an approximation of one how frequent these big draw downs are and to the severity of these losses and and in that way we can can input these these metrics into our simulation to help create more realistic tales for the losses and I would say that this is kind of just the beginning of this research there's a lot of different ways to go from here in terms of collecting information so for example redoing this analysis but but for Bitcoin and then you know making an assumption that the frequency and severity of each drawdowns is somewhat correlated to bitcoins as well and by doing so you can maybe get more data into your model but essentially the goal here is essentially I mean the ultimate goal is we want we want to know how bad these losses can get right and so our our estimation for losses from our simulation has to factor in somehow that these events do occur not frequently but they do occur and they can be damaging all right this may seem like a fairly imprecise manner of of doing so but again this is this is ongoing research and I think we can all I mean this is it's just an approximation that will have to suffice for now and and so yeah I mean going into some some questions of complexity and for the research about this entire model yeah I mean as its as its listed on the slide there's the this is work that will be iterated on hopefully for potentially years and years to come right as we as we sharpen up our data and our models for now though as we as we get near to MCD launch just having kind of a rough idea of you know a rough awareness that these types of big draw downs occur particulars so that we don't under price our tails which is a particular concern with standard asset pricing models but I would say that this is the the fun part of risk work it's the interesting part of risk work for sure so yet again pop into the forums if you want to discuss more about this stuff and there's actually a lot of other aspects of the model as well so so far we've just kind of hit on the high points but you know we can we can do more analysis into that's a typo that should say liquidation penalties not ratios so oh no sorry that's at the bottom yeah higher liquidation ratios do result in different amounts of expected losses so for example if you have your your liquidation ratio at 200 percent then losses would be significantly lower and stability fees would also be lower I will talk about this next time with liquidity analysis Oh quick question this is for when we're basically creating and needing to determine a risk premium completely you know vanilla when we don't have any any background behind it how would we compare like I think we've mentioned this one so it's like a credit default swap or you know a bond for a given company doesn't matter that's got a credit rating and at c.d.s that's a known CD f's how much of our risk work would we I wouldn't use the word outsource but you know get guidance from inspiration from to get some of those metrics a lot as much as as much as possible in terms of guidance and out sources of course I mean I would I don't see why we wouldn't borrow as much efficient public market information as possible I mean in fact the only reason we couldn't do that right now is because I don't trust the terabit eath the options market for or anything and certainly no CBS market on CDP's so that public market information just isn't available for our particular choice of collateral backing right now completely correct more commenting like just you know if we took JPMorgan dead and somehow whatever legal construct would allow us to use it as collateral and then we were to decide what should be the stability fee for that where it's an investment grade cash flowing asset and there's a known CD s for that security right how much of that would that I wouldn't say directly we wouldn't want to just cut and paste it but we should be able to take a good 95 percent of the work has already been done on a debt security sure yeah I don't know I guess we'll see when we when we get there all right I definitely agree with the sentiment right as rich mentioned earlier the user by the name of longed for wisdom has started a community due diligence initiative right now going through the collateral onboarding guide and collecting information over the next few weeks we will start releasing further frameworks for qualitative due diligence and basically getting ready for collateral evaluations should be interesting stuff and that is it any questions about anything hopefully like made things a little bit clearer from last week you you all right cool there are no questions and vishesh I guess if you want to jump into the monetary policy stuff sure so a lot to cover but I'll still try to do it pretty quickly okay so hopefully everyone can see my screen all right fun fact we've crossed 360 million loans originated from maker so yay all right so the eath price I think we noticed that you know for about a week there was going down a bit that you know was following a tale of a huge volume of eath ford i traded and then you know a successively a fair amount of leveraging behavior with the price coming down and and I don't think there was a lot of contention around that explanation it seemed to track with a lot of what we'd seen before obviously you know things have been pretty stable or around the 16.5% level because there had not been you know as much leveraging all at once so when the student needs a little bit lower and you have a lot of leveraging all at once it you know is pretty reasonable to expect that the dye price would take a little bit of a hit there was a fair amount of discussion around whether this should be resolved on its own or whether a stability fee increase was necessary seems you know I was kind of in Billund on that it could have recovered and so on I think but the community I think chose to take a more cautious approach I guess and increase the stability fee to try and write the ship relatively manually so that civility was increases 17.5% things were pretty stable it was increased to eighteen point five percent again so it'll be interesting to see if sometimes the stability fee increases are timed hilariously poorly with eath price movements so it's hard to tell which had an effect but it will be interesting to get more data points to see if this actually pushes up the dye price level so the just to touch on what's been going on in the last 24 hours pretty much same state as what had been shown in that graph roughly hovering around the 0.98 level pretty solid spreads that we've seen recently and I think pretty solid volume so when you have kind of that increased amount of volume you do tend to see a more smooth or less discreet spread continuous to sort out so yeah as I mentioned the eath price you know for the majority of June if it could have been running up a bit and then just around the tail end of June started to take a hit similarly the dye price did kind of a similar thing where it was holding pretty steady and then took kind of a hit this is primarily leveraged in this area and then you know as eath price started to recover a little bit dye price turned to recover a little bit and then eath you know took another nosedive and even the most recent nosedive is cut off you yeah let's give him a second to return she used the dead air while we're waiting Matthew happily reminded us that there's been a discussion in the forums recently about the debt ceiling we should talk about it it's today it's called because it's an interesting probably the first example of a signal being raised in the forum I could potentially precede a poll in the governance system and we're still trying to figure out what that mechanism looks like please visit the link that I posted in the sidebar or in the chat have a look at what's going on in there and let's uh let's have a discussion about this the one thing that's missing in that thread rich is the option for no change just like as a as a general I think most people are in agreement that that ceiling should be raised but I know somebody had brought it up there yeah and this is this ties back to my emerging process emergent behavior kind of meme that I've been pushing is that we need to figure out what that actually looks like so this is the first kick at the can but I would like to have some kind of a standard so here's know and actually I think that long for wisdoms already yeah going down that road that there need to be some kind of standards so here's an official title here's an official set of options here's how we do public or non-public here's how we make sure that there's no change or you know a lack of confidence in the poll there's things we need to understand and that's probably a good example of one of those sort of theoretical github documents that I was talking about because that would be a good example though an official talk about what does signal generation look like in the forums and then people can do this reference this github page that says you know make sure all the options are there make sure that it's public or private or whatever is that community decides and then we'll know what to refer people to next time they come up with a signal request now what is the next step with that you know we're just going to debate it on the forum and then we mean the race where the best ceiling specifically yeah I don't know this is this is where you know I wish I had more time in the day so I could have come back with a great plan for you guys but I don't have one so we need to figure this out the forum is there in order to collect signals and to have great debates and for us to figure out as a group what we should be doing and it happened sooner than I expected and so the first example of that is the debt ceiling thing but how we move ahead with this thing I'm still kind of in the dark about we're hobbled right now with so yeah let me set some context here and this should probably all be captured in the forum so I promise to put these thoughts in there but we're we're hobbled right now and that we are the governance is completely ruled by stability fees because we have severe limitations in the capacity of our voting mechanism that's those limitations have been promised well I haven't been promised but I'm assuming some promise that's what I heard that there's gonna be a new portal coming out very racing and potentially this month or early the first week of next which will allow us to do significant number of arbitrary polls so the question in my mind is do we put the stability fee our ability to to alter the stability fee on hold while we think about debt ceilings so we need to figure out I think the severity of the requirements for this change look do we need to fix the debt ceiling in the next three weeks or something bad gonna happen if we don't then yeah we can say okay we're gonna put the stability on hold next week or the week after but as I not shy to point out I'm not smart enough to know so a way I require the analysts and the monetary policy experts and the rich teams to sort of meet that discussion I guess or at least frame that discussion and interpret the value of the arguments that showed up in the that foreign thread I think if it turns out that it is critical then yeah we can say all right as a group everybody needs to go to this thread they need to pull vote in that poll and depending on the results next week a week afterwards we're going to replace the stability feed with the dead soon erase I think that was an unsatisfying answer but did that cover what you're asking message I mean yes and no I mean I guess the part I'm trying to break out this that we have so much to try and gain rough consensus around on I guess I'll be presenting some of it here in the next three minutes or five minutes fish hasn't come back you know how we're gonna go from A to B where we're gonna be in say six eight ten months doesn't matter of the number and we have so much consensus to get through between now and then you know right now we're seeing the price degrade a little bit and we just right we've just raised the stability feat so maybe there's a wisdom and saying we need to have another week between the two so in my mind I raising the debt ceiling doesn't really present a material risk unless we change the debt ceiling to some huge number which we've discussed in the forums but for me personally I'd love to see at least the poll this week even if it's an executive vote but a poll to try to increase that number because we've got so many items that we have to get rough consensus on related to MCD the the debt ceiling is just some brain damage we have in the middle that we it's a distraction that we need to put on the side and put it to bed through the segment it's it's technical debt and so technical debts talk for hours about the philosophies around technical debt but it needs to be addressed that the question that I'm posing those doesn't need to be addressed in the next three weeks because sure cleaning up a number of decisions that we need to make it would be useful but is that utility more than the expense of losing flexibility and the stability fingers there's obviously interest in what's a permit stability right now we've just moved to 18 and I took the opportunity because I forgot to look at the poll before we started this call and the community signaling for 20.5 now so obviously there's interest in the stability fee it is hard to predict what what the future is going to hold like next week the week after ring so I guess this is my question though I have two questions because I don't know the answer so they're not rhetorical do we need to do this now is the question and here's from my neophyte financial analysis I thought that we have we have a debt ceiling because of liquidity risk right like cyrus correct me if i'm wrong like isn't the idea here that we have 100 million because somebody did mass somewhere that said that that over a 24-hour period in this market we can comfortably liquidate x amount through them mechanisms right uh i mean that's the way you're supposed to do it i think it's part of kind of the Alpha of SCD they're just somewhat arbitrarily chosen yes it's it's not like it's not like moving it in upwards would poses significant liquidity risk beyond what risk were already taking right now yeah I guess that's the question in my mind is that you're right it is arbitrary and I was those kind of a leading question cuz I knew it was our returns but um how much more arbitrary like how do you measure arbitrary at this point q like so we don't know for sure whether 100 million was good or not so do we know for sure whether 150 is gonna be as good or you know I mean we will know as soon as the models are fully finished and and we can run him but yeah in any case I don't think it I mean just from a pragmatic standpoint I don't think they should be raised 50 million at a time when this environment on the on the press of discus huh you know just an or 20 million I think is probably makes more sense to me a negative tone on the criticism but without knowing when MCD is actually going to launch quote-unquote soon right time we go through an executive whole and then an executive vote there's a two-week cycle between those two points and knowing the quantity of things we have to vote on and the community not knowing when soon is I'm trying to take the more conservative approach of let's raids get rid of the headache get rid of the brain damage earlier than later or at least push it off for enough time to allow us to get through the rest of the consensus that we need to to be able to watch yeah I'm completely on board of that and let me clarify a couple of things so when we say the same thing is COI and it's cute and all the rest of it but one of the reasons one of the primary reasons we say soon is because we don't know exactly and so that's that's even more unsatisfying but here's why we don't know because Cyrus and I and a bunch of other people have been spending you'd be shocked to learn how much time we've been spending in meetings over the last two weeks trying to figure out how we can optimize and speed up the process to get us to energy you watch and the reason so as we pull apart these processes and the way that the system could potentially work and how we can optimize it in front more complexity here and then increase agility there that the take away over and over and over again is that when an CD launches has nothing to do with well I should say nothing it's not up to make her down it's up to the community and it's up to governance and it's up to the the risk teams it's what's decided in these calls and in the forums and in the governance portal is is what determines when MCD launches we have a significant amount of work that needs to be completed and I've touched on this in the blog posts that have gone out recently but we need to get the the general model in we need to evaluate these asset classes we need to figure out how we need to find out how much debate is going to be kicked off by these things we need to figure out the communities there the governance of maker token voters appetite for risks or their appetite for complexity in the system because we could find that you know we get into this cycle where we're talking about these asset classes and people are just waiting for us to stop talking and so they can just say yes or we could find out that you know the model goes notes or the quantitative analysis go out and then thousands of shells show up in the forums and we need to sort through all of it and that might take far longer than anybody expects so we don't know how long it's going to take the iterate through these things so that that was sort of my speech about the soon thing and I probably lost the threat here a bit but my I guess my question still remains so it let's assume that in three weeks we have a new governance of portal and that governance portal allows us to put up one two or a thousand polls at once do we need to delay the stability fee votes between now and then in order to handle the debt ceiling pull yeah I would say raid three weeks from my sense of things it could wait three weeks we're not that close to the limit right now if it was at 99 million I would say with the urgent yeah and yeah it's well I understand I'm not trying to create leading questions because I literally don't know and so there's obviously risks here that you know it's maybe a couple of whales to show up or maybe the market turns on us and maybe you know we rapidly approach that say in the next couple weeks it's impossible to guess but there's there's those those concerns and the other concern to is it loops back to my initial thing to invest at the top of the hour where we have these emergent processes and we need to achieve consensus we need to surface signals we need to have debates and we're just now taking the first baby steps but what that process actually it looks like and this forum posts that I put in the link there is a great first step but maybe I'm being too being overcautious but I still don't I'm still unclear but at what point do we decide okay something has happened here this this is where it's hard right like we have the poll we have you know here's an example I'm not calling art Ivanka Steve is one of my favorite people but the the framing of this poll is says based on various amounts of suggestion in our chat and forum I look at that and I go well what suggestions and what which which sub reddits and what were those suggestions and were they good or not or the logical or not so in my mind this is just a popularity poll it's not exactly scientific governance what I would love to see would be somebody coming into the forum saying that okay we have a situation with with the debt ceiling because of X Y & Z look at this graph here's my arguments for and then somebody can say here's my arguments against and then after people digest this stuff they go okay I'm going to vote for this number that would be the ideal situation but we haven't seen that in this thread and I'm sure that's coming very soon but there is that question like how considered are these these options do they need to be considered like this or like a certain bar that needs to be met and at what points oh yeah sorry I was gonna say we don't know when it closes but I stand corrected it just says it says it it closed five hours ago so I guess we do have time limits on these things I guess what I let me wrap this up so when is vishesh coming back oh my god so let me wrap this up we need to figure out what this process looks like and I'm not going to tell people what this process looks like so we need to figure it up in the forum so there's another there's another thread that's like how do we how do we achieve signal and how do we determine that the signal has started and the signal has ended and that we're all comfortable with the quality of that signal and once we figure that out that's gonna be the pipeline where and this is there's actually in another for my part talks about okay we have loose chests here they're read at Twitter or whatever it goes into a forum thread it goes into discussion at some point that discussion ends or all ends we review it in a governance College saying like well this is actually we're doing right now so this is more said well we in the government's call we say hey look if this signal request we have a little chitchat and then at some point that just turns into a poll know that turning into a poll thing is a significant event right now because we can only have one poll at a time in three weeks it will not be a significant event because we can have arbitrary numbers of poles all right I feel like sorry Matthew I feel like for like the second or third time and responsible your questions I just began directing aimlessly I think I might be burned out did that answer your question so business did just returned yes all Wi-Fi they I'm almost afraid to ask how hard that they were you were you talking for a while and not realizing like could you've been talking for like ten minutes a few minutes the last thing I remember was that you were talking about the eath price dropping with June yeah yet you said our model doesn't have that drop off yet and then you dropped off well if you're interested I'm happy to to finish running through otherwise I know that eight uptime yeah we need to know what would fish ash – so it's okay my apologies ironically the last thing that I have actually said in person was that was a lot in a little time so hopefully I went through it quick enough okay so yeah so roughly I'd I was just mentioning supply head run up you know fairly significantly in that time period there was some nation' of you know big chunky you know 1 million died transactions in the last couple days but in the grand scheme of things that's really not very huge I mean really at the end of June we saw you know a 4.3 million die minted in one day so that significantly you know puts things in perspective we saw that supply kind of increasing despite the increase the increase in the stability fee although there was a slight dip after the 17.5% increase which does make sense when you increase the stability fee you do tend to see it a little bit more of a refinancing over to secondary lending platforms but you know even through the 18.5% increase overall the supply did continue dangers it's kind of leveled out around that ninety 1.3 million level so you know some of this is also explained potentially by some of this is also potentially explained by what's been going on with secondary lending platforms but overall it has been increasing on debt circulation so basically the amount the age of open debt has consistently decreased the age of close debt is kind of held pretty steady so essentially this is due to new debt being created and not much more old debt as being paid back although there was a slight decrease through the most recent stability fee increases you know more dies being drawn from new CDP's than old over the course of the month which you know kind of does make sense with a lot of new diving minted and some of this may be due to the fact that you know the same potential owners at the end of the day have opened new CDs because they previously closed all blondes so what we saw to basically echo what Cyrus was saying with the collateralization ratio is over the month of June that collateralization ratio ran up with the eath price and then back down although far more dramatically than the eve price actually moved if you look at like nominal percentage terms so this kind of echoes that idea that as the eath price decreases collateralization in the short term decreases but then people do tend to increase their collateral to quote unquote top up and then as the eath price you know peaked around that June timeframe June 25th timeframe collateralization did run up as well but then ran down more dramatically than the eath priced in that same time period so again as the collateralization shoots up due to eath price in the short term people do tend to pull collateral out commensurately and so you saw sort of this increase in leverage right at the end of June beginning of July which corresponded with some of the quote unquote damage to the dye price so I had already gone through the spread but essentially that same volume weighted average has kind of held steady even though there's been a more dramatic drop in the eath price in that same time frame so you know kind of that cut off of eath dropping from you know to 80s – to 70s but during that same time frame the dye price is kind of held around that 0.98 level which sorry that cipher takes time to load in the meantime the secondary lending rates so there was some new stuff on here so the volume wait the weighted average borrow and supply rates the weighted average borrow rate tends to hold just below that stability fee even though dy/dx tends to hold a bit of a premium over compound on that average level it does just hover below that line so what's interesting is over the month of June the May was kind of an explosion for the secondary lending platform June has kind of been a steady increase in borrow volume and supply volume as well hard to see from these graphs but the supply willingness kind of outpaced the borrow volume a little bit more so that you see in this excess supply graph this is the amount of supply that is not being borrowed on these secondary lending platforms and so this does tend a pretty closely correspond with those rates it's a lot of these platforms actually just algorithmically set their rates based on what this quote-unquote cash float is so that rate is that excess if I kind of been increasing through the month of June and into early July with a bit of a dip around that same June 25th time period where the e price it kind of peaked so this is interesting because you see the excess supply has increased recently even though the overall dye supply has increased and the stability fee is increased although a little bit of dip now recently as people heard that 18.5% was coming around the bend so the excess has decreased as dye got more expensive which made sense but initially it was running up with that dye supply so that was that was interesting potentially people purchasing dye from others who were selling it for leverage and then real ending it on secondary lending but it was just to get you know a little bit extra interest so this last graph just basically makes this one around the utilization rates so I had kind of looked at this initially see if there's a relationship between the stability fee and the utilization rates on the secondary lending platforms to basically circle back to an old conversation that we have with rich around to what extent can use secondary lending platforms to learn what to do with the stability fee or other monetary policy things on maker but you know I think we tend to see what's were roughly expected which there is a relationship when the stability fee is decreased or increased to what happens to these utilization rates but during the time period when the stability fee is flat you also do see some pretty solid fluctuation in these rates so when what I'm basically saying is when the stability has been changed or other significant monetary policy components being changed from maker you need to wait I think for some of these metrics to settle on the secondary lending platforms but whilst you know all is quiet on the Western Front then YouTube you do tend to see some potentially leading indicators that you can listen to around what's going on in terms of basically oversupply and so it's it's been a complex I think point to touch on some people talking about to what extent is this supply people who've leveraged out of dye and sold it and other people who are just purchasing it and lending versus people were actually drawing dye out and then holding on to of it and in the meantime actually lending it out of the secondary lending platforms one of the data points that I think will be helpful to luminate that which sorry I was looking for tab that I'd recently closed in a second but I'll just verbally describe so the transaction volume on the SEC on dye has actually been pretty huge lately so over the course of the last month or so here the transaction volume has been actually since May really the transaction volume has been significantly higher than it had been pretty much through the end of 2018 in the beginning 2019 with the exception of around that you know and November December time period for 2018 but that was kind of an atypical point for everything in maker so since then you've kind of seen a pretty significant increase in that transaction volume which is I think a positive indicator for people who are and in you know it's significantly outpaced the increase in trading volume during that time so it's not just attributable to trading one so I think that's a pretty positive indicator for people who are wanting to look at you know to what extent has died being used and transacted on outside of just being traded for leverage it doesn't clear to have been to have picked up fairly significantly so the other will ask one touch on and sorry for taking up extra time here but the liquidations so you know some people have talked about oh there was you know significant amount of liquidations recently just want to put that in perspective so the liquidations recently have been yes present but overall in the grand scheme of things not huge and have actually been at fairly high collateralization ratios so this can potentially be attributable to less volatility in the eath price although i think we know that's not true the eath price has you know drop significantly recently but I think also attributable to the fact that there was a higher overall collateralization ratio recently than there had been in the past and I think you know potential more efficiency in how these liquidations are being carried out so you see a bit of an you have any long-term I mean is that all of the history there for all of the liquidations do we know what the lowest like have we ever had anything go lower than 1.4 whatever that number is for 3 so the one caveat I will say is there are sometimes transactions and this is what makes liquidations hard in the same block and there's sometimes changes to the collateralization ratio and liquidations either same block in the same transaction hat and so ordering those events properly is sometimes a little bit tricky and ordering them also with the in the same block price tick because there tends to be liquidation in the block that there is a price tick so getting that level of precision and being a hundred percent confident is hard but that being said I think there are some rounding errors where once in a blue moon you'll see a collateralization ratio around like 154 which is you know not possible but pretty much every data set there's just one liquidation I've kept my eyes on happened early on and it happened at 154 % cauterization but pretty much every data set I've seen round maker shows that same clip so but it's very tiny and so that's my point is I'll say there are sometimes outliers in the data sets either slightly above the line or fairly fairly low but I think those are very small CDP's we're kind of that rounding error can can make things seem a little bit more extreme than it is so accepting those cases by and large yeah I think the collateralization 's have all been like in this range roughly so the takeaway is overall collateralization 's have been pretty safe and they've got unsafe ER recently and I think this is primarily due to the fact that collateralization overall if I could flip back over this has collateralization overall has come up hugely from you know a year ago six months ago but also I think a little bit of improvement in efficiency of how the keepers are operating and and how quickly they're getting to those rotations but the latter is really really difficult to show all the data ok sorry I took extra time but hopefully that was worth it for the people that stayed all right we're at an hour and a half but I don't have a hard stop so I'm fine with sticking around Syrus can you stick Ranson for a little bit yeah all right if there's questions for vishesh we can address those or Matthew do you still want to I think it's the narrative do and I've been talking about it's the process of going through rather than after an hour and a half it's probably best if we just put a link in the chat group or going to discuss the points from the forum but it's going through the consensus and the logical sequence about how we can float basically died when we reinvented or relaunch it it's you know absolutely not a statement that we have to do it that way but just let's beat the crap out of it and make it better okay vishesh TC any questions in the chat that you wanted to dress I just answered one real quick and then one point that was touched on earlier I think is the debt ceiling I think I just want to make sure that that conversation is moving forward because as I see we talking about well you were cut out okay earlier ah so obviously did that and then yeah I answered 18.5 again I would have waited from the 17.5% increase to see what would happen before even doing the 18.5% increase does that happen rather quickly in my opinion further potential increase I think is a little bit premature so I am generally going to recommend more wait and see in collection of data kind of mentality before making potentially rash decisions because I think some of the effects of these changes to take time to realize all right I think that well maybe we were running understand a bit it was a great call though we got through a lot so thank you the shank you Matthew for your input and your gracious willingness to move things to the forum after this long call Cyrus and thank you to me from my deepest wisdom in insights all right this post will go up I'm moving the conversation away from reddit and into the forum so the reddit summaries for these agendas have been loved and um direct people perform so if you're interested in looking at the summary keep an eye on the forums to David we'll get something up there for you soon and I'll be posting links to the socials in on Twitter all right thanks everybody

What Intellectual History Teaches Us: A Conversation w/ Quentin Skinner (The Governance Podcast Ep6)



welcome back to the governance podcast and sent for the study of governance and society of King's College London my name is Jeremy Jennings I'm a professor here and head of the school of politics and economics and I'm your host today IRA please welcome Quentin Skinner who is Barbara Bowman professor of humanities at school of history of Queen Mary University of London and who was formerly Regis professor of history at the University of Cambridge professor Skinner is well known as a leading intellectual historian and political theorist his most recent book from humanism to Hobbes studies in rhetoric and politics was recently published with Cambridge University Press Quentin thanks so much for joining us at the governance podcast we've actually looking forward to discussing your new book however before we do that I want to just you a few general questions about your research interests and what you study you're an intellectual historian often associated with what is referred to as the Cambridge School of intellectual history can you explain first what do intellectual historians do and second what are the defining features of the Cambridge schools approach to intellectual history well thank you Jeremy and thank you very much for agreeing to talk to me it's a great pleasure to be back in touch with you pleasure for me to in Center well being an intellectual historian I think I would have to concede that it's not a wonderful label is it I mean you can see how it came to replace the traditional label of historian of ideas because that seemed to reify the ideas and get rid of agency and of course that was polemical from the outset but intellectual historians I suppose would think of themselves as people who study not just the philosophies but more generally the beliefs and attitudes that we encounter in the past but then what's meant to be the distinction with cultural history and then again what about the history of science are they examples of intellectual historians I think they would all want to say probably not so there are porous bound is here but I think what it's trying to capture is the idea that we are studying the activity of thinking in the past rather in the same manner as you would study any other activity in the past you know making things or growing things or whatever historians have traditionally studied now as to the Cambridge School Jeremy um a vexed question really as you kindly said in your introduction as many years since I taught at the University of Cambridge so I'm not sure if there's still a Cambridge school but I could certainly tell you what my approach looks like and maybe there's something distinctive about that certainly there has been supposed to be over time or else I wouldn't have had so many critics so I think I could encapsulate my approach to the sort of intellectual history I study by saying something very general about the phenomenon of natural languages it seems to me we do have to think in rather than continue in terms of languages as having you might say two dimensions and there's the one that's traditionally thought of as meanings meanings of words meanings of propositions meanings of entire texts and that's been the traditional topic of hermeneutics the interpretation of texts has been an attempt to recover their meaning of course deconstruction came along but didn't alter the traditional questions of hermeneutics it simply told us that there were no stable meanings so I have wanted to focus on something other than meanings and they're assumed stability or instability I've wanted to focus on what I'm calling this other dimension which one might think of as language as a species of social action so that the question when I'm saying something is not what it means exclusively but what am i doing I'm an agent issuing an utterance what is going on here and let me give you an example that will I I hope really clarify how this significantly alters intellectual history take the case it's a writer I've written a lot about of Machiavelli integrating if the Prince Machiavelli says successful prince must learn to imitate the line on the Fox well interpreters have said here what we have to do obviously is unpack the metaphor the lion is the symbol of force the Fox is the symbol of guile and so the meaning of the passage is that successful rulers have to reckon to include both force and fraud in being successful in politics I have nothing to say against that that's obviously all correct but now consider the following the most important work of moral political philosophy to anyone of Machiavelli's generation in Renaissance Italy would have been Cicero's delicous his book concerning duties now in the opening book he talks about the virtues and especially because he's talking about morals and politics the virtue of justice and he says there are two ways in which injustice can be done either by force or by fraud but force reduces you to the level of learn and fraud to the level of the Fox this is beastly this is not manly this is unworthy of humankind all right so now let's go back to Machiavelli it turns out it was in addition to everything we've said about unpacking the metaphor he is quoting Cicero he is also commenting on a particular formulation of Cicero's about injustice he is repudiating it and you might say in addition he's satirizing Cicero's moral earnestness this is what he's doing so a whole new dimension enters and if you were to ask why that matters the answer is that now when we think about the texts that intellectual historians characteristically study we are thinking about interventions in discursive contexts and that is very much the approach I always tried to adopt what's going on to put it more pejoratively what is this writer up to is there any particular reason why most of those over the house was 50 years of publishing it's probably longer I don't know yes it's a long long time there's been a whole spin the book most they were focused on the early modern period yeah is there a particular reason why you've been especially drawn to that in terms of what you've just said is that it to me I noticed one of the phrases you've going to phrase of you use and many of your books as I said the in epoch-making he has the sense that what the frig you look at something really big is going on there that's very interesting I don't expect to have been very self conscious about that but I wanted to go sufficiently far back in time for there to be as you say epochs so that we're able to show moral systems shifting religious systems shifting whole conceptual schemes being abandoned and maybe we'll even talk about that and subsequently and I think that my attraction to these much earlier periods and I suppose I written on the 14th century and 5060 17th never later than the early 18th century is this wish to come upon strong contrasts and especially moments when contrasts are very strongly drawn and white but particularly mentioned your interest in Machiavelli about whom you've written a lot but one thing's probably primarily of you writing about Hobbes of late what suspect when you're not alone in being fascinated by Hobbes Michael okay shot the walls and others yes what Dwight what's the particular attraction of hops why's Hobbes so important yes in all of this because you manifest in the ears why yeah as your book well traditionally of course Hobbes has been thought important as the most systematic exponent of a theory of absolutism in modern physical philosophy and again that's not wrong he clearly is but I have been interested in Hobbes for two quite separate reasons and which are not strongly connected with that way of thinking about Hobbes and one is in Hobbes as a theorist of freedom and there we have a revolution Hobson is the person who introduces into Anglophone political philosophy a particular way of thinking about freedom namely that the antonym of freedom is coercion which seems to us obvious but was a revolution at the time I was very interested in what exactly he was up to in wanting to produce that formulation and the short answer to that is an engagement with Republican political theory but for me what's most important about Hobbs and here I'd been much in discussion with David ransom inand his wonderful work early work on Hobbes and personality of the state is Hobbes as a theorist of the state and that's where he is as it were in our present as well as in his own past Leviathan is the state and Hobbes is the exponent of a particular way of thinking about the state namely that it's the name of a distinct person a fictional person but nevertheless the seat of sovereignty which I think is in contemporary political theory neglected to the detriment of our ways of thinking about public path and so it's really in relation to those two themes freedom and the state that Hobbes seems to me a person we really need to engage with in one case we might want to question an account is account of freedom which we would in general now tend to endorse but in the other case I would think there's a case for reviving thinking about the state um as a kind of moral person actually would say pass on behalf you know this project is very very much concerned with good governance in general that well F obviously the state were to say little bit more about what was so regional about the Hobson conception of the state yes certainly well the state is a piece of musical terminology was not very well established at the time when hops was writing of course I would want to say that any attempt to isolate any strongly normative term which is also foundation for our politics and give a definition which we could at least in principle agree on is a lost cause I mean these concepts are always weapons they're always part of wars and debates and we're never going to get a neutral account of these sorts of normative concepts but what's important about hops is the way in which he enters existing discussions about the state so here there would be a very strong contrast with contemporary political theory seems to me we've largely evacuated traditional ways of thinking about the state if you open any newspaper it talks about the state but by the state it just means the government so should the state re nationalize the railways that's a question about the present governments who did not do that if you're feeling in a very fancy mood you would pick up max Faber's view which was has been incredibly influential that when we talk about the state we're talking indeed simply about a coercive apparatus the apparatus of government but it is apparatus over a particular territory all right that adds something else but notice that we've just said we're talking about an apparatus of government now in the way in which the concept was first introduced into Western political theory the whole pint of talking about the state was to oppose it to existing systems of government as a way of inquiring into their legitimacy and the first way in which this was done was through the very traditional image of the body politic and the very natural way of thinking about the body is having a head as we still say a head of state and so that's the way that Cantara it's thinks about the the Kings two bodies which is that there's the personal body of the king but the Sabari of the King as head of state and that's a natural metaphor a head and body but of course it was intensely contested in the revolutions of the early modern period but I hope people who wanted to say this is a false metaphor political bodies are not like natural ones a political body is its own head if we're asking about the seat of sovereignty he's not the king it is the people now it's into that huge debate in English revolution which is way of articulating the English revolution in the 1640s with it with after on the abolition of the monarchy and the execution of the head of state that Hubbs enters to say not the seat of sovereignty is not the king of it as head of state but it's also not the people it is a completely separate entity and that's a revolutionary moment that's Leviathan and that comes about by Hobbes saying well what exists in nature the state doesn't exist in nature a multitude exists in nature but it would comes to see that it can't live as an altitude because they have conflicting desires and the state of nature is going to be one of their altar life so it's rational to recognize that and it's therefore rational to have a critical covenant in which you will away your rights to an authorized representative who acts in your name and of course any theory of representative democracy agrees with that so Hobbes says notice however and this is it's really crucial conceptual rule that if a multitude authorizes its representation it ceases to be a multitude because it now has a single will and a single voice and it can act because it can act through a representative so there's a new question in political theory which is what is the name of the multitude which makes itself a person by having a representative or to put the question as Hobbes does who does the sovereign represent and the answer is the state now the state is simply a fiction but HUD says we need these legal fictions and of course he's right there we need the idea that the corporation is more than its members and the state is more than a government if we're going to talk about for example the idea of responsibility we can't hold an organization responsible unless we can treat it as a person and identify the natural persons who represent the fictional person so there is Hobbes theory of the state and at the time of course it's absolutely epoch-making it's not very influential in England but I'm hardly tell you this it's extraordinary influential in the natural law theory of the state in continental Europe I mean this is what proof and off takes up he says wrong to think of it as a fictional person it's an immoral person persona Morales that's of course what we so takes from proof and off the pass on the high that's what Kant takes from from Rousseau that's what Hegel takes from can't and so it's an extraordinary story of the evolution of a particular way of thinking about the state one which we have completely so one of the questions that the historian of ideas should always be asking is well we've abandoned it but is that loss or is that the game and in this case I think it's a clear loss because the motivation was to find the standing means to ask about the decency of government granted that what renders government's legitimate is that they act for the benefit of the people as a whole ie for the benefit of the state I wouldn't think about it isn't England or Britain that we've seen are the most difficulty talking about mistakes it's a choice whereas in continental Europe the end if you walk up to the average French citizen and say what is the state yes well that actually feels pretty reasonable yes I knew that in Britain people just look at this room I couldn't agree more it's a very interesting fact about English liberalism that it couldn't adopt this view and if you ask why I connected strongly to the rise of classical utilitarianism because if there's one thing that Bentham in his early youth hates and of course it's the grounds of his attack on Blackstone is the idea of legal fictions but the legal fiction as Maitland was later to say trying to revive the idea is the state it is the most important legal fiction it's only a fictional person although it's the person who declares Ward puts you in jail and understanding politics is understanding how a fiction can put you in jail and of course the miracle notion is representation that does everything but we've never thought in those terms because you through terrorism has told us well we have to talk about facts and the fact is that there's a gunman yes yes so that's obviously fascinating just at any back to bet the first question about about what does the intellectual historian – I mean we've all hoop like myself and generations until it's historians have learned so much from you and I think I think the first thing we review those brilliant first essays you wrote was this was a really important thing to do and there was almost no I was incredible science department it almost reached the stage where every default would have its Titan political yeah serious or historically the sort which said caged they're bringing out the cupboard and that was it and you may bring it back at center stage is a really important part of what we want done and and that's had an impact and extraordinary impact I think but looking at the sometimes of this question about well what does intellectual storyand do one of the ways in which you've expressed I think many many times is in a sense obviously I want to and use in the latest book you talk you start with Hobbes says and that beautiful phrase you've got about my you say you say my aim is simply to supply enough history to understand the meanings and tensions of the right as I discuss by recovering the circumstances in which they wrote which is not crazy enough which is your paraphrase of yeah of harvest which is absolutely wonderful some wonderful beginning to the book elsewhere you know you said some defective or one things we do one things about history is you stay in fact history for its own sake but it tells you about the courses which we do not take gadget it tell us about what we've done but what we've not taken and therefore the possibilities that were available – unless again that's something I think we've all been greatly don't a lot from that one of the course has not taken ography has been republicanism and that's that's the other yes one of the other in very very important strands of your work over many years which it's pretty to say something more about that and because one of your books is Hobbes and republicanism emigrated could you say something more about that because here's an alternative tradition yes and one of your views which has been largely forgotten right away and one of the things you've been doing is excavating around and bringing it to the to the surface again would you say something more about what you understand by republicanism why you think this is so important well thank you Jeremy that's a beautiful account of one of the things I've been trying to do as you say I've wanted to historic eyes the subject of fiscal theory and to make it about discursive contexts in which sometimes similar but sometimes different concepts are as issue sometimes if they look familiar sometimes they look deeply unfamiliar and I suppose going back to what I said at the beginning one reason I've wanted a long survey is to see the paths not taken and of course one path not taken we've talked about which is the state we just have given up on that idea in Anglophone philosophy if you talk especially United States to people about the state they have no notion of what although it's called the United States so the other concept that I have subjected to the same kind of scrutiny you rightly point out is the theory of freedom it's not I who called it Republican freedom the classic work on this has been done by Philip Pettit in his book of 1997 republicanism and I published a book about a month later in 1998 which was called Liberty before liberalism and so we announced our views about this issue very much the same time but we've been talking together for many years and I've been greatly influenced by I feel it's work so what he calls a Republican theory of freedom and what I've preferred to call near Rome is a view which challenges what I've already set out as the Hobbesian view or the view that would nowadays seem very natural to adopt which is that if you are free and a choice what that means is no one is stopping you from doing what you want you're free you're free because no one is impeding you and so the Antonine of freedom is taken to be coercion coercion might be physical you might be stopped from doing it it might be moral in as much as a threat might cause you not to do it but that's the way the fundamental way in which freedom is affected by acts of interference with your will now the Republican view it says well that is of course all true but that absolutely misses what's critical was crucial to the theory of freedom which is that the Antonine of the fundamental antonym for freedom is not interference or coercion it is dependence so the large conceptual gulf that opens up there is that on this account you could be unfree even in the absence of any act of interference or even in the absence of any threatened active interference because what it is to be unfree is for you to be dependent upon the world of somebody else the reason i wanted to call this new roman' is that the aura text for freedom seen as the Antonine of dependence is the roman law terminal of course has been the law code starts by asking who is subject to the law and since it's a slave society it has to say well citizens or subjects of the law but slaves or not and that's because citizens are free and slaves by definition are not free but of course that leaves the Roman law with the question well what is it that makes a citizen free it must be the same as makes a slave unfree and the answer is having a master the slave has a master and the citizen does not so the citizen might be poorer than the slave or might be in very exigent circumstances or might have all sorts of difficulties which was laid with a benign master does not have but the fact remains that the slave has a master benign as' is neither here nor there because it to be subject to the will of somebody else means that you're at their mercy it may be all right but the horror of slavery is that you never know if it's going to be all right now whereas the status of the free person is that he or she has an independent will so there's the Republican view and of course it has enormous implications for thinking about our contemporary world because this is the view that we gave up and if you asked me in this case where we wise to give it up I would say that it was a one of the great ideological missed steps that we took it's very easy to understand why we took it but we did I just saw that I'd recently bought a while ago if everything went back to me buh-bye Christoph turbo more only hadn't wrote a book on Ireland and as a marvelous passage I I should send it to him in Senate you where he precisely articulates that position in the context of the Irish and the British yes and you know it doesn't matter how free they look good they are not free like it cannot be free precisely because of their dependence on the English and the fact that the English at any time yes at their choosing yes couldn't be yeah at least and that's usually the case of islands where it good exam yes think of I think of that way of thinking very good and I think that's a very profound case because me it's the one that comes up from a very early stage in this debate in fact Molyneux's book called the case of Ireland in the 1720s argues exactly this and it was at a point where there was some pressure being brought to bear on the idea that freedom should be understood as absence of dependence and of course the Irish case is one of pure dependence so they want to say we're in a slave condition of all companies earn a slave condition and of course that became the rallying cry for the enemies of the colonists in the United States as an as in Canaan and that's to say this is the theory of freedom which is presented to the British soon and there's very little that the British can do within the parameters of the Neo Roman view the freedom to answer that because the famous allegation of course is that we're being taxed without representation and so the level of Taxation is wholly arbitrary and discretionary well as in Ireland and and of course this is the answer that was always given is well you can trust us we won't do we won't do anything terrible but the point is that slavery buddy why should we trust you because we're completely at your mercy and I connect the repudiation of this new roman view of freedom which was more or less Universal before the 17th century to the fact that they don't have an answer to the colonies they don't have an answer to an 18th century Empire but what they do begin to say is as Bentham of course says as great an enemy of the Declaration of Independence they don't understand freedom freedom is completely de-facto so only the question am I being coerced of course I'm not being coerced you know this was the English did do terrible things as well but how sure yes but but I thought thank you so I came across this than that I should have realized that they've been broader debate about the irish case it's such an obvious yes well as an instance of the general case of colonies if you look at the renaissance Reviver of the new roman understanding of freedom in great republican thinkers Machiavelli and this is why I'm so interested in Machiavelli not as the author of the prince but the author of the discourses Lizzie on the how Rome gave up monarchy and became a free state as he calls it a cavitus Libre in in Livy the being stati in America what is it to be started inhibitor well it's the same for your body as it is for a body politic it is for your body to be under the control of your own will but of course if you're a colony or under the control of somebody else's will just as if you're a slave so body politics can be slipped enslaved and that attack on Empire and that insistence on republicanism in the strict sense of being anti-monarchic or is the whole Machiavellian legacy we might come back on to the the roots not taken late later on and what were his broader implications of that fact that Mia Roman theory of Liberty but now I would like to give me the opportunity to tell us something about your your new book oh good yeah sound from humanism to Hobbes and it's what are the books about why is it important because it's essentially about teaching to humanities and its impact upon ears political thought and soul each one thing I know it's Bob it's a marvelous read and extraordinarily rich and well it's called studies in rhetoric and politics and it is a series of linked studies stemming from work I've been doing on questions about rhetoric and politics now for quite a long time as you rightly say it's organized really around the idea of history of a curriculum the humanities in the early modern period and stemming again from classical antiquity and its Reviva the Renaissance was the name of a curriculum and it was a curriculum in five parts of which the first was so-called grammar to go to school hence the name grammar schools of course because what you learned was Latin Latin grammar and then you learned classical rhetoric and that was what you did for three years in the so called sixth form which was sometimes called the rhetoric form that's what you learned and what you were being trained in and this containing would continue at university in the Renaissance universities in this country of course only to Oxford in Cambridge they reformed their curricula in the 16th century to make them humanists which meant that you went on to study rhetoric once again treated not of course just as a way of embellishing our utterances although it is that and that was important but as a theory of persuasive argument rhetoric told you the optimal way to present an argument to have the space of force and so what mattered to the restorations was not so much from what they called ornament that's to say the figure the figures and tropes of speech but what they called invention and disposition invention meaning the finding out of the best arguments and disposition meaning organizing me to the best effects now that's what you learnt at university and you learn poetry and history because of course there were examples of this and then finally moral philosophy in the fifth item where you applied all of this and this is a very practical training because what we were going to do if you've been to university one of three things you'd either go into the law or you go to politics or above all you go into the church but all of these avocations put the public speaking especially in the Protestant country of course absolutely at the top of the agenda so it was meant to be a very practical training for an elite now my point is that the Macy figures whom I talk about this is unashamed Western European elite culture but there are four people whom I've always written about from this perspective and the first chronologically is Machiavelli and the second is Shakespeare who's been occupying me always but I wrote my last book about him published 2014 forensic Shakespeare the third is Milton who's never far from my thoughts in whom I've written a lot about and finally as you've been rightly saying Hobbes on whom I've written three books now all of these people had in common that they went through this humanist education Shakespeare is the one who doesn't go to university but he goes to a very good grammar school and so he gets all of this now my point is that there are many features of the writing of all of these major figures that you actually have no chance of understanding unless you see that the structure of their thinking is a rather unfamiliar structure to us it's the structure of rhetorical invention and so in a succession of essays I try to show that first of all in the case of Machiavelli and hysteria political virtue and then in two of Shakespeare's plays where I try to show engagement Venice and also in Coriolanus that these are wholly rhetorically organized plays and then of course Milton and Hobbes are humanists in politics and I really want to say about Hobbes that the the step from humanism to Hobbes the title of my book is a very short stem indeed Hobbes's often thought of as someone who replaced his rhetoric was science in politics and that's not wrong he does aspire to that but he is deeply indebted to the humanist tradition and above all to humanist understandings of how to think about representation especially in classical theories of representation and so that's what I try to pick up in talking about jobs and there's a mob a section on their own on laughter are there is something about that I mean this is there's so much in this book is fascinating things it's a section of math again so if you bank you make Duque Beijing hopes but you do say the thing of what important this thing this Hobbs Games gives up on this bit he ties up this with time and he doesn't say bunions like yes well the psychology of laughter has always interested me and there's a brilliant book by Mary beard that's recently come out called laughter in age Rome which puts me right about various things but also goes over some terrain that I've been deeply interested in which is what emotion is being expressed by laughter and what I encourse a called the classical view although it may be hoc is just one classical view is the view that although you may not like the sound of this the truth is that when you laugh you're expressing contempt and this is picked up in the Roman rhetorical tradition and in quintillion he says look this is even written into our language reader a latin verb for to laugh is the same as do either a the latin verb for to the right so when you laugh you're always expressing derision an uncomfortable thought but one that is extremely intellectual in Renaissance and early modern culture in two ways one of which has been much written about and one hardly written about at all the one that's been much written about sees laughter a Saturn alien it's a way of keeping the elite in order it's a way of mocking elite and bactine celebration study of her ballet is an important source here has given rise to a large literature on Saturn alien ridicule the world turned upside down the sort of thing that Natalie Davis so interestingly and picked out I'm interested in something quite different which has been very little written about which is that the elite also uses laughter understood as an expression of contempt to police the alien and a lot of the conduct books beginning with caste Leone which of course is enormous ly indebted into classical sources especially Cicero you have the view that you're trying to produce a courtly elite with values which are not barbaric they're not militaristic they are civilized they're meant to be tolerant and they are going to be great enemies of what a seen as the potential worst vices of the elite namely pride and arrogance and vanity and avarice and so I was interested in the use of laughter to police the elite by the indeed and Hobbs picks this up in his early writings and he says yes laughter expresses contempt we never laugh with people were always laughing at them and he takes this classical view what's interesting in Leviathan is rightly as you say he eventually comes to view that this is not only a partial view of laughter but it's a very cruel and it's a kind of warning to the elite in the Leviathan that laughing at people is very dangerous because he's dealing with a Dueling Society in which he says you knew you loved someone you might be dead but it's all part of what I take to be Hobbes's fundamental watchword in the Leviathan which is calm down this is the society which is very very uncommon and the aristocratic ethos with the code of dueling refusing even the law as somehow got to be tamed and so much of what Hobbes is saying is look these laws of nature I'm telling you about which are precepts of reason there are all precepts like you know don't mock people don't be prideful be cooperative these are the laws of nature because these are the ways to live in peace and so laughter is seen there is an enemy of peace the next question is is really the sense it's the theme of the book so if they were so forgiving it at that we can summarize this but the point you've already made it actually when when you actually do look at this the distance from humanism to Hobbes is by no means as great yeah as one would be inclined yeah I think at the outset no that's true and that the most important instance in which I try to show that is in Hobbes's theory of representation shall I say a word about there because that's what most interests me in the harbor city um Hobbes enters into a political arena in which in the course of the English revolution in the 1640s a very substantial theory of political representation had been evolved which was called virtual representation just suppose is roughly the view that we still have today where the fundamental metaphor for vertical representation is taken from this offering a good representation of someone in traditional aesthetics is offering as people used to say a speaking likeness so political representation the representation of the people should be the creation of the likeness of the people now of course Hobbes can't tolerate that thought because that means that any valid representation of the people must itself be a body of people so that seems to cancel monarchy and of course it was intended to it's a very radical view now Hobbes comes along to say and it's one of the most creative moments in his political theory but it comes straight out of classical humanism you've got the wrong metaphor for representation representation is not a matter for the O's anything to the visual arts it owes everything to the theatre and that's how he introduces it and it's from a quotation from sis from Cicero saying that what representation is is speaking someone else's lines so representation on the stage is not necessarily when I resemble you we've never really worked out on the stage whether we think people should resemble other people but that's not the point it's not impersonation it's personation I take upon you I take upon myself your role I act your part I speak your lines all the world's a stage so Hobbes profoundly believes that all the world's a stage you're either representing yourself or you're representing somebody else and that means you're either speaking your own lines or you're speaking somebody else's lines so notice he's disjoining political representation from any act of authorizing a body that has to resemble you he's saying think of it more like a theater or a court of law when you go into a court of law and the judge says who represents you you can point to an advocate who is a woman and you could say she represents me the judge won't say well she doesn't look anything like you you say that's absolutely fine or you can say I'm going to represent myself the judge will probably say well I wouldn't do that if I were you but that is your right but is saying that's representation it's a sufficient condition of you being my representative that I have authorized you it's nothing to do with whether you look like me because that is a dramatic moment because there of course monarchy is immediately placed on the same footing as any representative assembly and we can start that debate again just me no because we were about 45 minutes already and so again going back to this says what it means to be an intellectual historian and the wrong and paths we've taken etc you've described a series of wrong paths mutate already today how does that bear then upon the present and there's sort of debates we might now have about representation about the stage about the meaning of freedom as always yes what would you sell you as an intellectual historian how would you how would you situate yourself in those yes well very very good question thank you well I'm an historian and through my fundamental aspiration is to reconstruct the past of our thinking about these issues so far as possible on its own terms of course that's an ideal type and all sorts of contaminations from the present are likely likely to enter but the aspiration of the intellectual historian has to be to give an account of what the project was that one of these writers I'm interested in was himself interested in but then when I do that when I study Machiavelli I find this particular view of freedom it blazes out from the first two chapters of the discourses how do we think about freedom that's the fundamental question in the theory of the state because in the absence of freedom there is no greatness of states so there's Machiavelli's problematic when I read Hobbs on representation I see him repudiating the view of representation that seems to us completely natural when I think about Hobbes on the state I see that we've completely abandoned thinking about state personality so in each of these cases once I've reconstituted the theory as best I may in its own terms it becomes a candidate for belief there it is it's not the way we think about these things anymore but is that good or is that bad we can start to think again about that that reconnects us with our traditions but it in a way abolish is the distinction between the past and the present because the past is in the present here and is asking us to think again about our past but of course my aspiration is to hold the past in the present completely free from one another because the more you import yourself into the past the more you contaminate it and say you just use it as a mirror yes yes and the more you use it as a mirror the more you admire yourself and so that means why are we bothering with the past the reason morally speaking for bothering with the past is that it has things to tell us that's one of the great tensions isn't it that this past and present and happened of the I guess the aspiration is always in Scent in census is to remove ourselves from the present yeah but I think from what you're saying that inevitably there are these these implications from the present yes is it enough in terms of what you do my opposed just sketched it just sort of in sense to leave it there if something we've read I've recovered this I've set this out for yet and there you are I mean there's a Marvis one of your famous phrase across many many years ago is about doing your thinking for yourself yes of course I mean and how does that bear upon very good after idea yes good right um well my aspiration is to set the past before the present and to set it before the present in its own terms and we're not here to praise or blame the past but here to learn from it now to learn from it in the very strict sense that we're now talking about Germany would not be to act in propria persona as an historian it would be to act as a first-order moralist but I find that with increasing age and with having spent so much time trying to reconstitute what seem to me important debates about freedom about representation about the state in their own terms very much more interested now in stepping forward as a moralist and saying for example in relation to the theory of freedom we really have gone in a terrible direction and near liberalism as a theory of the state and as the view that you're free as long as no one is messing you around it's doing terrible damage to our institution and I really want to come forward to say that the reason that damage is being done to our institutions is because we have the wrong view of freedom I really want to say that it's not a fruitful view it misses out extraordinarily important elements in anything that's to do with the phenomenology of feeling free I do not feel free if I know that all my actions are in fact permissions and that you could stop me from doing them if you wanted although as it happens you're not or you say I'm completely benign this leaves me in a condition of dependency so one of the things I become very upset about is the D unionizing of labor forces where we now have contracts which allow of course dismissal at will by the employer they are of course said to be free contracts because they're not coercive Lee entered into but they're not free contracts if you think the freedom is dependents because they leave you at the mercy of an employer moreover as employers know perfectly well and this is another insight from antiquity slaves are always slavish if you live in servitude you can't fail to be served out of course because you don't know what's going to happen to you so that seems to me a tremendous loss another thing which I've become a profound enemy of is all institutions which tell us that they're benign but harvest huge amounts of personal data which are available for sale now to harvest personal data on colossal scale is rightly of course seen in contemporary political debate as an attack on privacy it is of course but that again shows that we're thinking wrong about freedom it's also an attack on freedom because this information is power now what is said by the huge engines that create and hold all this information is one that we're not going to do anything harmful with is of course and I want to say well but I'm being manipulated here and you could do something very harmful you could for example you might be able to blackmail me but you say well I would never dream of doing that but these are very server relationships that we're talking about so if we were thinking differently about freedom we would certainly think differently about Facebook we wouldn't say look this is a bit of a problem for privacy we would say this is a fundamental attack on freedom we would also be saying this I think about much that passes for liberal democracy now I mean I'm very struck that the conditions that produce freedom in democracies which of course are not simply electoral but include and must include other institutions which mean that people have control over that democracy these are increasingly under threat and I was very shocked in the brexit negotiations when the High Court judges employing as we must I think if we're going to value freedom a mixed constitution came out with the judgment which made them enemies of the people this is very dangerous talk and I think that anyone who thinks about freedom as I do will want to say that you not only need to have a mixed Constitution and sense that there must be parties that are able to impose on another and have proper and informed debates but there must be some complex relationships between executive branch and the legislative branch and the judicial branch and that none of these must use up the others because any such usurpation loses popular control and popular control is the name of democracy so I worry about democracy because I worry that we've got the wrong theory of freedom it's not a democratic theory at all hmm and so how would you own this is obviously obviously fascinating so how would you I'm not a distinction between the historian and the more how do you I mean I'm aware that you you have been associated with certain political interventions over for exit for example you're cited as one of the people supporting remain and what-have-you how do you see yourself I mean can we expect the next book to be the Quinton Skinner more or less book well yes if you sort I mean yeah you articulate those things minute how do you see yourself taking those things further I guess into broader public debate eyes well thank you yes because I have been extremely exercised by the constitutional aspect of the brexit negotiations not just the public we heaped upon the judges for doing their job which seemed to me an extremely sinister development but also the very fact that it was thought an appropriate mechanism under our Constitution to ask the latitude for its view the multitude doesn't have one view that's Hobbs this punch the multitude almost never has a single view and indeed our multitude had 52% had one view and 48% had the other view or if you take how many were eligible to vote then 37.5% of the multitude had the view that Great Britain should leave the European Union but um our Constitution tells us that we don't poll the multitude we have a representative system in which my understanding is that when we vote for members of parliament we vote for someone to use their discretion as a result of hearing debates in order to help to arrive at a judgement which they think to be for the public good that is our system rightly or wrongly now if in the brexit negotiations we do not come to a point in which the houses of parliament say look Parliament is sovereign thanks for doing the negotiations it is now our constitutional duty to see whether we believe that to be in the public good they will be in dereliction of the fundamental constitutional duty as a representative assembly and I wait with great trepidation to see what will happen are we going to be ruled by the vote of a minority of those eligible to vote in the multitude who were in a highly mendacious campaign told a pack of lies or are we going to use our own Constitution are we really not going to use our own Constitution I feel very exercised about all of this but of course that's to speak as a citizen and as a moralist and as someone interested in the theory of representation yes but to answer your more general question well honesty Jeremy how long am I going to be able to do this you sweet you said I've been doing it quite a long time and it's true that my earliest that's because you started young yeah okay well the fact remains that my earliest published work on these issues was in 1962 says that it's a long time ago and I don't take for granted that I'm going to be able to do this but my current research is about how we ever came to lose this theory of freedom and it's going to be an attempt to show historically what the forces were that undermined the few of freedom which is a view of equal freedom and therefore a view of democratic freedom which seems to me is alone of your freedom that we should have in a democracy so that will be an historical work well the motivation will not be historical but I think if the truth be told my motivations have never been historical they've always been moralistic and I've always wanted to study those aspects of historical record that enable me to try to say something of some moral relevance well it's very interesting that's a good point I think to end thank you very very much indeed thank you I'm looking forward greatly to the next book because I'm sure everyone who's heard this this podcast will be thinking and we cannot wait to read oh well it'll take me some time absolutely absolutely marvelous thank you very much indeed I think it's been a marvelous overview of what you've done and why you do it and why it's so important and I'm saying thank you very very much indeed well let me just end by thanking you Jeremy for excellent questions and for letting us pursue them in this winding and conversational way I've really like it'd been a pleasure thank very much indeed you