ET friend and contributor David Salem is back! Here with his Constitution Day address at Middlebury College, David makes the rich tradition of academic speeches richer still, with nods to the Founders and Vitalik Buterin alike. You can contact David at [email protected] and on Twitter at @dsaleminvestor. As with all of our guest contributors, David’s post may not represent the views of Epsilon Theory or Second Foundation Partners, and should not be construed as advice to purchase or sell any security. An Address in Celebration of Constitution Day 2021 Middlebury College David A. Salem ’78 Preface Thanks for the kind intro, Murray. When I stepped into Professor Dry’s classroom for the first time as a Midd kid, he was thirty percent older and many times wiser
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ET friend and contributor David Salem is back!
Here with his Constitution Day address at Middlebury College, David makes the rich tradition of academic speeches richer still, with nods to the Founders and Vitalik Buterin alike.
As with all of our guest contributors, David’s post may not represent the views of Epsilon Theory or Second Foundation Partners, and should not be construed as advice to purchase or sell any security.
An Address in Celebration of Constitution Day 2021
David A. Salem ’78
Thanks for the kind intro, Murray. When I stepped into Professor Dry’s classroom for the first time as a Midd kid, he was thirty percent older and many times wiser than me. Through the passage of time, the first quotient—Murray’s age relative to mine—has shrunk materially while the second—his accumulated wisdom relative to mine—has grown even more materially. All of which is to say that it’s an honor to share this bully pulpit with Murray and a privilege to do so on this special occasion—the anniversary of the US Constitution’s signing by its Framers on the 100th and final day of their memorable meet-up in Philly in 1787.
With Murray’s concurrence, I’m going to speak for 30 minutes, give or take, after which I’ll gladly field questions on anything discussed in my talk or indeed any topic, subject to the condition that everyone speaking today including me do our best to achieve an aim the Framers themselves pursued, namely to make every word tell.
Anyone know how many words the original or unamended Constitution comprised? A tad over 4,500—a remarkably concise document given the breadth of societal challenges it sought to address—challenges the Framers knew would morph over time, thus rendering foolish any attempt by them to codify fully how the nation they were creating should be governed or regulated.
Similarly, it’d be foolish for me to attempt here a full exam of the Constitution’s evolving capacity to achieve its stated aims. Instead, I’m going to do three things in this talk:
1—Serve up select comments on the unamended Constitution and key players in its creation;
2—Speculate on what these Founders might find especially uplifting, or depressing, about America in 2021; and
3—Flag opportunities and perils that’d be top of mind for me if I were in the enviable position today’s collegians occupy—enviable because the century now unfolding will likely spawn even better opportunities for today’s collegians to do good, orwell, or both than the Founders enjoyed back in the day.
That’s my opinion, of course, as distinct from provable fact—an opinion animating the title of this talk, which I borrowed loosely from the hit play about a key player in America’s founding. As I segue into Part 1 of these remarks—brief reflections on v.1 of our Constitution and key players in its crafting and adoption—I’ll ask that you raise a hand if you know for sure which character in Hamilton delivers the line in question: “How lucky we are to be alive right now”?
Part 1—Constitution 1.0 and Key Players in Its Creation
I see that the youngest person in the room has her hand up, so I’ll call on my daughter Thea for the answer. It is indeed Hamilton’s better half, Liza, a remarkable figure whom I’m giving a shout-out here to highlight four thoughts that come readily to my mind when I ponder the Framers and their initial handiwork.
One, they were a homogeneous bunch—55 white males, two-thirds of whom had spent substantial time before convening in Philly doing something even their most brilliant wives and daughters weren’t allowed to do: practice law or receive formal training in it.
Two, given the high “E” as well “I” Qs of Liza Hamilton, Abigail Adams and other leading ladies of the day, the crafting of a new interstate compact would’ve been less contentious, and the resulting document less imperfect, if women had wielded as much clout in American politics in the 1780s as they’re deservedly wielding today.
Three, like the slaves owned either routinely or episodically by a third of the Constitution’s signatories, the Framers were human beings, and thus imperfect, none more so than Hamilton, as Miranda’s rather perfect play about his life and times makes plain.
Four, as flawed human beings tackling a task never attempted let alone accomplished previously, the Framers recognized their initial handiwork was flawed—intolerably so for several delegates who refused to sign the final document, and materially enough for the oldest and most revered signatory, Ben Franklin, to voice reservations about the Constitution even as he put his signature to it.
Tellingly, the reason US Constitution 1.0 garnered 39 signatures on this date in 1787 rather than those of all 42 delegates in attendance is that it lacked what the three refuseniks plus many of their contemporaries deemed an essential feature: a meaningfully robust but nonetheless actionably concise catalog of citizens’ rights.
As most of you know—or should know—the “missing” rights we hold so dear got embodied in the Constitution not during its initial framing but rather through amendments. To his credit, the man who drafted America’s justly hallowed Bill of Rights put aside his initial objections to amendments of any kind in order to make less imperfect the concededly imperfect national compact he’d already labored mightily to construct.
As most of you also know—or should know—the Founder to whom I’m alluding was James Madison: a truly great mind and, like Franklin, a man who understood well the perils of letting the perfect be the enemy of the good. As a corollary, Madison and indeed all of the Constitution’s signatories viewed compromise and the comity it presupposes as essential virtues of the political regime they designed—as features, if you will, as distinct from bugs.
Before diving into Part 2 of this talk—aspects of modern America that my favorite Founders might find especially uplifting or depressing—I want to flag briefly an aspect of American life as the Founders knew it that, for them no less than us, generated both heat and light: pseudonymous speech.
In 18th century America, pseudonymity was employed most consequentially by Madison, Hamilton and Hamilton’s fellow New Yorker John Jay, joint authors of 85 pro-ratification essays published in newspapers under the pseudonym Publius.
Would the Constitution 1.0 have garnered the votes needed for ratification if the essays just referenced hadn’t been published? Maybe, but I doubt it.
Would The Federalist Papers have shaped state-level debates over ratification as materially as they did if their authors’ true identities had been revealed? Maybe, but I doubt that too, New Yorkers at the time being highly suspicious of Virginians like Madison, and Virginians being even more suspicious of New Yorkers like Hamilton and Jay.
Part 2—Uppers and Downers
Hold that thought—about the mixed blessings that pseudonymous speech or indeed pseudonymous labors of any kind entail—while I flag aspects of today’s America that my favorite founders might find especially uplifting or depressing, starting with a condition they’d surely applaud: the extension of constitutionally protected rights to all Americans, in law if not always in fact, including persons of color.
Of course, it took a Civil War to achieve this condition, and more specifically postbellum amendments to the Constitution that subject state governments to the same strictures to which the federal government has been subject since ten of the twelve amendments drafted by Madison were ratified in 1791.
Would slave-owning founders like Madison and Jefferson truly applaud their progeny’s adoption of the postbellum amendments just referenced and the altered race relations such reforms have catalyzed? I think so, their own vast hypocrisies notwithstanding, some of which reflected the natural tendency for virtues to become vices when taken to extremes. This was especially true respecting America’s most conspicuously hypocritical and gifted founder, Jefferson, who let legal obligations to creditors trump ethical obligations to mankind as a whole when choosing to free a shamefully small fraction of the many slaves he owned in his lifetime.
What else about modern America might get Jefferson and other genius founders especially jazzed?
My necessarily condensed answer to this question constitutes my key message for today, or at least my key message for those of you of college age or younger. By careful design, it’s an upbeat message, crafted to counter at least partly if fleetingly the torrent of gloomy news and opinions pouring down on all of us these days.
It’s a sincere message as well, reflecting what I perceive as genuine causes for optimism as the current century unfolds, due largely to actual or anticipated breakthroughs in select fields of human endeavor in which the star Founders already mentioned might plausibly become immersed if each were alive today and compelled by the exigencies of 21st century life to specialize in one such field in the pursuit of money, public acclaim or both. For concision sake, I’ll pinpoint three such fields, only one of which I’ll discuss with specificity, for reasons that’ll be obvious as my discussion of it unfolds.
By my lights, the modern fields of human endeavor that genius Founders like Jefferson, Hamilton and Franklin would likely find most alluring would be artificial intelligence, genomics and blockchain technologies broadly defined.
Why these fields in particular? Because all three, including especially the last—blockchain technologies broadly defined—arguably provide the most expansive opportunities for public spirited persons to do good if not also well as the current century unfolds.
What do these desiderata—good and well—mean in this context?
Taking them in reverse order, well as used here means the pursuit of personal wealth for its own sake. Good means something quite different—the conscious pursuit of the noblest aim imaginable: the shaping and conduct of human affairs in a manner enabling all human beings to achieve their full potential, regardless of race, gender or other personal attributes, inherited or self-selected.
Regardless of domicile too, I hasten to add, with the globalized character of modern commerce and culture likely inducing geniuses like those previously mentioned to pursue global as distinct from merely US-focused opportunities to do well and good if they were launching careers today.
I’m speculating, of course, as no one truly knows what Jefferson, Hamilton or Franklin would do with his “one wild and precious life”, to quote poet Mary Oliver, if each of these men were alive and kicking today. But it’s fun to ponder the possibilities, with blockchains comprising an especially promising means of empowering all humans to achieve their full potential.
Why are blockchains an especially promising means of achieving this noble aim? Because they enable humans to coordinate their labors with unprecedented efficiency and effectiveness—to fashion arrangements that, borrowing from the Constitution’s Preamble, “promote the general Welfare” while also securing the “Blessings of Liberty” and other cherished rights and freedoms to the maximum feasible extent.
That’s a heavy lift, I know. And I’m well aware that making the world a better place measured by any or all of the metrics just mentioned isn’t a central or even subsidiary aim of all blockchain-based undertakings. But it is the overriding aim of some, including a diverse and rapidly growing array of Decentralized Autonomous Organizations or DAOs whose viability rests on the availability of reasonably decentralized, secure and scalable blockchains.
Note that I said reasonably, not perfectly, blockchain design—like nation-building—being unavoidably an endeavor entailing tradeoffs among relevant parameters or values. Ditto for the design of DAOs, about which I’ll say more in Part 3 of this talk.
Conceding fully that my fascination with America’s founding may cause me to view emerging technologies like blockchains and DAOs through a distorted lens, I’ll nonetheless suggest that the key challenges blockchain and DAO designers confront as they go about their work differ little if at all from those the Framers confronted as they labored to replace a loose and inherently insecure confederation of sovereign states with a more tightly interwoven, scalable and defensible national union.
Don’t believe me? Study carefully the best-written white papers on such challenges and you’ll see what I mean. Which papers fit this bill? Several come readily to mind: Federalist numbers 10, 51 and 78, which comprise collectively the best white paper yet produced on arguably the best-engineered large scale system yet devised by man; and the closest blockchain-focused analog to the Federalist—Vitalik Buterin’s white paper comprising the blueprint for what’s become and will likely remain the world’s most heavily used general purpose blockchain, Ethereum.
In that white paper and other communications beefy enough to make the famously voluble Hamilton seem positively shy, Buterin explores incisively the so-called “blockchain trilemma”—a term Buterin coined to describe the challenge blockchain builders face in striking a balance among the three parameters mentioned a minute ago: decentralization, security and scalability.
While these modern terms of art—decentralization, security and scalability—aren’t used as such in The Federalist—the parameters to which they refer were as central to the Framers’ efforts to replace a malfunctioning confederation with something superior as they’ve been to Buterin’s efforts to build a blockchain-based ecosystem superior to the first such ecosystem of that kind, namely Bitcoin.
Buterin launched such efforts in earnest in 2013, at the ripe old age of 19, and has made amazing progress since then, catalyzing countless hours of both paid and unpaid work by programmers to build the so-called Ethereum Virtual Machine or EVM: a truly decentralized yet increasingly scalable and secure system for storing and exchanging digitized representations of human labors of any and all kinds.
As I’ll discuss more fully in the closing part of this talk—my career advice for the Midd kids among you—I’m convinced that at least some of my favorite Founders would be blockchain builders if they were working stiffs today, jazzed as they’d surely be by the opportunity to do what the Constitution’s chief architects and promoters did back in the day: engineer a system for the successful and sustained pursuit of happiness by self-sovereign individuals, subject to reasonable limits on their capacity to harm the planet or other living creatures.
Turning quickly from aspects of modern life that’d likely delight my favorite founders to the converse—to features or more precisely bugs of our current setup that my guys might find especially repugnant—I may surprise you by putting something other than Trumpism at the top of the list.
To be sure, all of the Framers mentioned thus far plus all those unmentioned would be appalled by Trump the person. All would be appalled by his conduct as president as well—appalled but not truly surprised, the Framers having anticipated that a thug like Trump would eventually occupy the nation’s highest elective office. Accordingly, they took care to devise safeguards preventing thugs like Trump from damaging the republic both materially and permanently.
By my lights, what might upset the Founders even more than Trumpism are two contemporary phenomena not yet discussed: one that the Framers anticipated but didn’t quite succeed in thwarting permanently, and a second they neither anticipated nor would have deemed possible given the vanishingly low level of outbound capital flows when the US came into being.
Taking the second malady first, I think America’s Founders as a group would be distressed by the ongoing accumulation by US-based investors of bonds issued by the People’s Republic of China, an authoritarian regime whose values, such as they are, are inimical to those for which so many Americans have fought and died. As some of you know, most such bond buying occurs voluntarily but indirectly, via bond index funds whose allocations to Chinese government debt tend to rise in percentage terms as the overall supply of such debt rises.
I don’t know for sure what commerce-focused Framers such as Hamilton and Franklin would think of such practices but I suspect they’d be quite miffed by them. They’d be even more miffed by the ongoing flow of capital from US-based investors into Chinese companies that honor US patents more in the breach than the observance, intellectual property and the protection of same having been important enough to the Framers to receive specific and forceful mention in the first of the Constitution’s seven articles or sections.
The other and purely domestic malady that’d likely rile my favorite Founders no end is the continuing failure of members of the bar like me to upgrade the ecosystem that the Founders themselves devised—the software if you will that the Framers released initially on this date in 1787 as the logical compliment to America’s uniquely handsome hardware: its vast expanse of topographically diverse territory isolated from would-be invaders by forbiddingly wide oceans to the east and west.
Putting the point more sharply, if Hamilton were alive today and could address members of the bar as a group, he’d likely give us a scolding harsher than any Mrs. Hamilton rightly gave her husband when she learned he’d been cheating on her. More specifically, with US senators representing less than a third of Americans exercising at will a de facto veto over legislation governing all Americans, Hamilton would demand to know why many or indeed any otherwise self-respecting members of the bar are letting this imbalance persist.
How did the imbalance just described become so acute? You’ll recall my discussing earlier the tendency for humans’ virtues to become vices when taken to extremes. That’s true of human constructs also, including constitutional frameworks like the one promulgated initially on this date in 1787.
In my view, checks and balances designed to prevent what Tocqueville described memorably as “tyranny of the majority” have fostered paradoxically but perhaps inevitably the converse evil: tyranny of the minority. They’ve done so for reasons alluded to a minute ago: the generally happy fact that the democratic republic the Framers devised has magnetized or produced naturally roughly 80 times as many current citizens as the republic comprised at its founding, most of whom live in heavily populated states whose representation in the US senate equals precisely that of America’s least populous states.
I don’t have a foolproof solution to the problem just described. But I’d bet a tidy sum my favorite Founders would take swift and likely effective steps to address it if they were on the scene today, using weapons they’d eagerly employ to combat a related malady afflicting America at present: the tacit if not explicit endorsement by many politicians of so-called alternative facts—presumptions about natural or man-made phenomena whose obvious falsity elected officials in well-functioning republics are ethically obliged and rightly expected to rebut.
How precisely would my dream team pursue the seemingly impossible mission of restoring truth-based majority rule in Washington? Dunno. What I do know or rather surmise is that Hamilton and Franklin in particular would deploy every weapon legally available to them to make so-called alternative facts repugnant to American voters as a group, including the modern epitomes of pseudonymous words and deeds: super-PACs and DAOs.
Why might Hamilton and Franklin deploy both super-PACs and DAOs to combat contemporary political ills? Why not? Both were as crafty and creative as the world’s richest person today, Jeff Bezos, and both would likely have both the money and passion to do even more than Bezos has done and continues doing to ensure that American democracy doesn’t die in darkness. Despite or perhaps owing to the fact that super-PACs are an uber-efficient means of shaping public opinion in a pseudonymous or otherwise stealthy manner, my dream-teamers surely wouldn’t hesitate to use them to do exactly that.
Ditto for DAOs—an ultra-modern and truly ingenuous means of doing what Hamilton, Franklin and other star founders did so effectively back in the day: catalyze, coordinate and underwrite collective action while cloaking as needed or desired the identities of people or organizations engaged in it.
Part 3—Opportunities and Perils
Indeed, DAOs or Decentralized Autonomous Organizations are so uniquely equipped to effect disruptive changes in commerce and culture that they and the virtual foundations underpinning them, blockchains, would be absolutely top of mind for me if I were a collegian pondering career options.
More specifically, I’d be asking myself and people more expert in such matters than myself whether and to what extent any field I might consider entering after college will be disrupted by blockchain technologies broadly defined, including DAOs.
If, as the saying goes, the arc of history bends toward justice—and I believe firmly that it does—then the arc of commerce bends inexorably and increasingly toward four mutually reinforcing values: transparency, ease of use, shared economies of scale, and a sustainable and hence tolerably fair balance between rewards to labor and rewards to capital. These are core values of blockchains and DAOs, I’d argue—values inconsistent with the ongoing profitability if not viability of industries and professions playing primarily middleman roles or providing services primarily to economic actors playing such roles.
Which industries and professions are most imperiled by blockchains and DAOs? My answer to this question comprises obvious as well as unobvious nominees, with retailers, accountants and bankers among other manifestly endangered species falling into the former group and a diverse array of such species falling into the latter group, including attorneys specializing in corporate law and folks whose primary labors entail the curation or administration as distinct from creation of visual or performing arts.
The second question I’d be pondering carefully if I were enrolled at Middlebury rather than merely visiting it for the day is whether the professional degrees that Baby Boomers like me pursued so commonly and lustily will prove as useful in the future as they have in the past. I doubt it, with MBA degrees in particular being decreasingly valued by many employers, including my one and only personal friend whose day job entails the manipulation of atoms as distinct from bits and bytes. He’s the president of a major manufacturer whose managerial ranks are devoid of MBAs, not because the company doesn’t pay well but rather because MBAs typically know less than we think while not always knowing what we don’t know.
As a member of the bar since Harvard kicked me into the real world many years ago, I’m entitled to make similarly snide comments about lawyers, and about the schools that persons hoping to join the bar remain legally compelled to attend.
As with business schools and other institutions of higher learning, law schools furnish essentially three things to people pocketing degrees from them: one, a credential of unknown and generally unknowable value; two, interactions with faculty, fellow students and others of varying but unquantifiable value; and three, a personal network of varying dimensions and future value depending on how one’s career unfolds.
The first deliverable just mentioned—the credential itself—remains vital in some but decreasingly few lines of work, while the second and third deliverables—personal interactions and networks—are typically easier and less costly to obtain in the real world than in school.
More to the point, the specific labors that have traditionally induced many bright and hard-working college grads to pursue careers as lawyers are increasingly being performed by folks who don’t have law degrees and have no intention of ever earning one. The poster children for this unhappy phenomenon—unhappy, that is, if you’re an underemployed lawyer or positioned to become one in due course—are the growing and generally happy band of technologists doing pathbreaking work in the design and administration of, you guessed it, blockchains and DAOs.
I hope and expect to get pushback on the yellow flags I’ve just raised, especially from those of you targeting law school after college, so I’m going to make just a few more points before opening the floor to questions.
The first two are in fulfillment of my pledge to flag what’d be top of mind for me if I were a Midd kid at present. Perhaps unsurprisingly, both such points or rather suggestions entail the recommended study of writings by two of the most original and incisive thinkers in the blockchain arena: one, Ben Hunt, founder of a campaign that has as much potential to mitigate global warming as any blockchain-based initiative known to me; and two, Vitalik Buterin, the wiz kid I mentioned earlier when highlighting Ethereum’s vast promise and the guy I’d pick if a reliable source told me that direct descendants of Madison and Hamilton had jointly conceived a child and asked me to name the living person known to me who most probably carries those two brainiacs’ combined genes.
Buterin’s labors merit study for reasons beyond their centrality to technologies likely to transform global commerce and culture in coming decades as materially as the Constitution transformed American commerce and culture following its adoption long ago. Dive into the ecosystem Buterin conceived and continues to shape through words and deeds and you’ll encounter something I’d urge all young adults to seek when choosing what to do for a living and with whom: civility.
Through conscious acts of both omission and commission, Buterin and Ethereum’s other leading lights have built a community whose most laudable virtue isn’t cutting edge technology but rather comity—a collective mindset of abundance rather than scarcity that’s increasingly rare in aging democracies and conspicuously absent from the ecosystem that Buterin inhabited during his first several years as a star cryptographer and pundit, namely Bitcoin.
If that sounds like a knock on bitcoin the cryptocurrency—bitcoin with a small “b” for the crypto-philes among you—it’s not intended as such. Rather, it’s a knock on Bitcoin with a capital B—an ecosystem whose opaque origins and radical decentralization appeal especially but by no means exclusively to folks with scarcity mindsets: peeps whose livelihoods or self-images are eroding due to societal changes unrelated to blockchains, including automation and the enhanced diversity of talent pools from which modern work forces are increasingly drawn.
Not knowing personally more than a handful of you, I’m unsure how many if any of you would enjoy spending time with such peeps. What I am sure of, however, is that picking the right pew so to speak does little good if you pick the wrong church. Differently put, taking a high-paying or otherwise prestigious job entailing constant interaction with covetous colleagues is a perilous path at best for most of us—as hazardous to our emotional if not also financial health as Hamilton’s path was to his physical health when he crossed the Hudson for his ill-fated duel with the reigning king of covetousness, Aaron Burr.
Speaking of Hamilton, I’ll close these prepared remarks by noting how much longer and more productive his remarkable yet tragically brief life would likely have been if he’d marched more faithfully to the tune sung by his equally remarkable wife. In making this observation, I’m thinking less of Liza’s melodious celebration of her and Alexander’s good luck to be living when and where they did than I am of Liza’s repeated pleas that her ever-ambitious husband let enough be enough.
That’s certainly what both Ben Hunt and Vitalik Buterin have done, foregoing or in Buterin’s case forfeiting proactively large financial gains in order to advance causes larger than themselves. As someone in my line of work purportedly observed about another investor vastly richer but manifestly less happy than himself, “I have what that guy will never have.” “What’s that?”, our keen observer was asked. “Enough.”
Enough … from me … for the moment. Questions?
 Buterin’s initial white paper on Ethereum plus a large and steadily expanding reservoir of materials about the Ethereum ecosystem are available at www.ethereum.org. Buterin’s personal and remarkably wide-ranging and insightful blog posts are available at www.vitalik.ca.
 Hunt’s initiative is The Green Protocol, introduced to the world via the note posted at www.epsilontheory.com/proof-of-plant-a-new-vision-for-crypto and discussed more fully in follow-up notes posted at www.epsilontheory.com/crypto-2.