Russ Roberts

Marc Andreessen Postmortem

EconTalk Extra
by Russ Roberts
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This week's interview with Marc Andreessen was one of my favorite episodes in a while.

I know an episode is a good one when afterward I'm eager to share things I've learned with friends and family and this one had a bunch of interesting thought-provoking insights that stayed with me and that I wanted to share.

I wish the sound quality had been better. Marc was on his cell phone which at first sounded fine but I realized later wasn't the best. My sound engineer, Rich Goyette, did a great job improving it but it still was not up to our usual standards. Plus Marc talks as fast as Richard Epstein so that 60 minutes has about 90 minutes of material...

A commenter named David wondered why we didn't talk about Mt Gox when discussing BitCoin. There was no particular reason--I just didn't think about it. You have to understand that when you're hosting, there are a million things going through your head, whether to interrupt, whether to change the topic, whether to ask a follow-up question, and so on. You're looking at the clock worrying whether you have too many questions, not enough, and so on. I didn't expect to get that deeply into bitcoin but we did, which was fascinating. I have a lot more questions on just the mechanics of bitcoin. I felt we barely scratched the surface. Don't worry, I expect we'll come back to it.

I really enjoyed his insights into venture capital. What a crazy business. How weird it must be to worry about missing out on the next big thing when the next big thing only makes sense to the people with the idea. Almost no one else sees it. The fear of missing the next Google may explain Andreessen's enthusiasm for bitcoin. He's assuming it's the next big thing when almost no one else agrees. He's either going to make a lot of money or lose a lot. His 2x2 matrix is a great way to think about abnormal returns and the whole idea of risk-taking and entrepreneurship.

The other big takeaway for me is his point that software is eating the world. It's just a matter of time but a lot of traditional industries are going to change in the next 5-10 years. It seems likely that Uber will be using drones soon--you'll use your cell phone to order a driverless taxi. I wouldn't pay a lot for that New York City taxi medallion. Wonder if the price is falling...

I hope Marc will come on again sooner than later. Coming on Monday--Yuval Levin on Burke and Paine, talking about his book. The Great Debate.

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COMMENTS (9 to date)
ed writes:

"I wish the sound quality had been better."

Yes...I found it difficult to even listen to. I kept thinking "If new technology is so great, why is the sound quality so much worse than on a 1970s era landline?"

BitBob writes:

I wish you'd have asked him about libertarians. Much of the stuff he says on Twitter is libertarian in bent, but he's also said that Bitcoin is started by a fringe movement (libertarians) and as it matures, the fringe leaves. He said the libertarians like Glenn Beck would turn on Bitcoin once they found out the blockchain was public.

I'm curious as to his general perception of what libertarians believe. For example, even though the blockchain is public, Bitcoin has fixed currency unit growth not amenable to the whims of a central bank. That itself is a libertarian victory. Contrast this to Marc's own belief that John Law was a genius for inventing fiat currency.

Does Marc realize that you, Russ, are a libertarian, and a fairly radical one at that? Does he think Glenn Beck is the modal libertarian? Does he realize that Satoshi, based on his writing, along with the entire cypherpunk movement, was largely libertarian?

David writes:

Thank you for addressing my question! Understandable that a lot is going through your head at the time of a live interview, especially with a guy who talks as fast as Marc does. (Side note: There's this subculture--I might even call it a fetish--in the Silicon Valley world of people who talk really really really fast. It's not just Marc. Reid Hoffman's the same way as are others. It's like you are proving to the world how fast you think and how fast your business moves by how fast you can speak. Contrast that with Steve Jobs, Marissa Meyer, Larry Ellison, etc. who don't feel the need to talk really really fast.)

Anyway, as I said before, I thought this was a great interview. Great work! Look forward to your next episode!

Lei writes:

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Joey writes:

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William writes:

I think the problem with Mt. Gox is that although the encryption of BitCoin itself may not be breakable, the computers hosting them are.

Banks can afford to obtain the best firewalls and IT securities to keep all our financial data save; and still they lose millions; if not billions of dollars to cyber crime every year.

The idea that independent 3rd party with a $1,000 computer can be the intermediary for these currencies shows the weakness of the system.

Lennie writes:

Mt. Gox is pretty irrelevant. Because it was just one company.

I know it was a bit of a shock to people, but at least now people know how important security is.

Which means there will be a long list of companies trying to find the sweetspot between convenience and security.

Steve Stofka writes:

I thought the sound quality was fine. Marc's discussion of currency as essentially digital contracts was intriguing. After much delay because of state by state real estate regulations , several software companies have enabled digital signing of real estate contracts. In the commercial real estate market, contracts used to be Fed-exed all over the country to get the relevant signatures. I agree with Marc that every piece of our lives - bit by bit - is moving into the digital world.
Digital currencies will be welcomed by governments and the legal profession for its ability to verify transactions, both legal and illegal purchaes. That is one aspect that troubles me - the erosion of the protections of our individual privacy.

Brad Hutchings writes:

Andreessen brought a very interesting perspective on crypto currencies, as Steve Stofka mentioned above. The value lies in the audit trail. I'm not pessimistic about crypto currencies destroying privacy, any more than involving a notary public in a transaction destroys privacy. They don't need to have convertible cash value to do that kind of thing. That was the big underlying point I heard from your guest.

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