The latest Jacobin magazine article entitled “The Dumb Money: The definitive explanation of why Bitcoin is stupid” is a truly lovely bit of leftist-statist propaganda. For your enlightenment and entertainment, let’s dig into Mike Beggs’i opus :
For the Left, there is no reason to regret Bitcoin’s failure.
Ahem. Excuse me. Failure ? Admittedly, we’re starting this analysis-therapyii session on the last four paragraphs of the article, but it basically concludes that “PayPal is just fine mkay”iii from the premises that Bitcoin is hard,iv mean, and generally confusing… which it is! It’s true! But just because a technology doesn’t succeed in terms of merchant adoption, much less the wholesale replacement of all fiat currency in all places and times henceforth and forevermore, it doesn’t so follow that it’s an out-and-out failure, regardless of what the visionary Satoshi scribbled on some forum page a decade ago or what mouth-breathing redditors espouse today. The disruption of gold markets, diamond markets, collectible markets, and fine art markets is more than sufficient to call Bitcoin a success. And so it is. Whether this is readily apparent to all and sundry or nigh on impossible to discern for all but a select few doesn’t change the fact of the matter. Bitcoin is here, it’s here to stay, and it’s the single most important cultural and technological innovation since the Internet itself. But I suppose if I’ve gone hoarse repeating this point for the past 5 years, what’s another 25 ?
Its critique of the monetary system is not our critique. There is a view that since banks and central banks are no friends of ours, anything that threatens them must be at least a little welcome. But Bitcoin does not threaten the establishment because it is a pathetic competitor with the establishment’s money, which still offers security, liquidity, and relatively low transaction costs.
Pathetic! PATHETIC!!!1 You know a critique of Bitcoin is playing its highfalutin’ trump cardv when it uses slander it wouldn’t deign use on retarded african transgenders on crutches.vi Doubly so when it comes from the iNazi camp.vii But brush aside the ad hominem attacks and there’s more! Security, liquidity, and relatively low transaction costs are not objective truths ; they’re not the same for you as they are for me, nor are the same for Bob as they are for Alice. Security is a subjective perception based on trust, liquidity is a subjective perception based on interpersonal connections and personal ingenuity, and “relatively” low transaction costs depend entirely on whether you’re comparing Bitcoin to USD or to fine art. So just because Bitcoin doesn’t empower you to threaten the establishment, it doesn’t so follow that I’m similarly hamstrung, or that Bob the Baker is, or Fanny the Florist, and it may well be quite the opposite. Furthermore, since when do “pathetic” competitors to anything so utterly trounce the field year-in and year-out ? That’s like saying Usain Bolt is a pathetic competitor in the 100m dash because he’s too friggin’ tall and doesn’t fit the archetypal mold of what a sprinter “should” be. If only Bolt fit the same size 9s that Tyson Gay did then we could trust him more!!
Bitcoin has little to offer anyone except its enthusiasts, and speculators will only hang around so long as it is plausible that its value might keep rising.
While the same criticism could be convincingly made against the variously scammy listings populating the NASDAQ, it’s still true enough. Bitcoin isn’t for the masses. Never has been and it never will be. So what, that makes it useless now ? Please to tell Ferrari and Greubel Forsey how useless they are because neither of them sells cars or watches, respectively, for anything less than $300k and Mike Beggs said so.viii MIKE BEGGS SAID SO, capiche ? Because that’s how the world works now and if you only appeal to hardcore enthusiasts with your technology/brand, and perhaps the occasional speculator, apparently you’re doomed to the sin bin, except even then only if you’re outside of the “normal” markets. In what parallel universe is this again ? Anyways, there’s a word for speculators who hang around, they’re called “investors,” and Bitcoin’s ranks in this department continue to grow apace as evidenced by the monumental influx of yuan etc in 2017. While this unprecedented influx may have lent the superficial appearance of Bitcoin’s value “rising” last year, the phenomenon was really anything but. BTC is BTC is BTC and it’s in fact the dollar that’s wavering in the breeze like so many daffodils. Bitcoin is following a highly predictable inflation curve. Everyone else is heading for the exits.
Conservatives and libertarians are obsessed with managed money because they need a scapegoat. Capitalism has problems? It’s because the state has interfered with the natural order, or repressed our freedom to transact. Socialists understand that the state’s monetary architecture is designed to maintain the stability of a system marked by inequality and alienation, but is not itself the cause of those things.
I’m not too sure why conservatives or libertarians think capitalism is broken – I can’t say I’ve ever heard this argument from them but then again I don’t exactly fall into either campix so maybe I’m blissfully sheltered – but it doesn’t ring particularly true either. They might think that the current social safety net is overkill to the point of asphyxiation, or that the state should mind its own beeswax when it comes to financial affairs between private citizens, or that legally promoted diversity boards are a travesty against all that is right and good in humanity, or a great many other things, but I sincerely doubt either conservatives or libertarians have much in the way of qualms with capitalism. Socialists, on the other hand, can’t help but be irked by the manifest discrepancy that capitalism reveals between man and his fellows. They similarly can’t help but be confused by markets and money in general. These are the kids, recall, that run around setting “fair” prices on everything from food to wages on up.x Diocletian made the mistake in 301 AD, not for the first time even then, but the dorks in Venezuela are currently repeating these errors all the same, thinking that they’re special snowflakes for whom the rhymes of history and rules of market forces needn’t or shan’t apply. This little bubble of ignorance lasts only momentarily, of course, just until the shelves are cleared and the popular rebellion redoubles its strength, but that it ever popped into existence in the first place demonstrates a considerable lack of scholarship on the part of those aiming to appease the populace with anything other than tank divisions leveling the villages of malcontents.xi
Were Bitcoin to somehow replace fiat currency and the banking system — forgetting for a moment all the reasons that is not going to happen — it would leave capitalist social relations intact, but blinder and harsher. The gold standard ultimately fell because it ran up against a rising labor movement; our present arrangements are a tenuous compromise that emerged in its wake.
I’m not exactly sure what it means to have “blinder” and “harsher” social relations, but one can only imagine (perhaps even hope) that it means social relations that aren’t squeezed three-quarters to death at the altar of redistributive and coercive taxation, which is also true! Bitcoin will indeed, if only hopefully in my lifetime, lead to a world when taxation is largely voluntary, as in Ancient Greece, where liturgy is the name of the game. Such a system doesn’t replace fiat currency but rather provides a tangible local value to fiat currency rather than weaponising it at the national level so that inflation can be exported to the poorest people in the world, who also ain’t never hurt nobody and don’t much care for being used in World Vision campaigns and related iatrogenicisms.
Our solution leads in the opposite direction to Bitcoin: not less management but more — socialized and under democratic control. That cannot be coded. Ultimately, Bitcoin is one of those disruptive technologies that mostly disrupts its own users. We should leave them to it.
While it’s not entirely true that socialisation and democratic control cannot be coded – see Chinese experiments with “social credit” scoresxii and even the Cambridge Analytica rahrah – the broader point remains : the world of code is the world of the truly sovereign individual, like it or not. It’s a world of toxically powerful new technologies, many of which will explode in your hands if you’re not careful, intelligent, and more than a bit lucky. And if you’re not so blessed, you’re indeed best to leave us to do what we do. Jacobins love their paper promises from their stumpy Corsican Emperors just as much as we love our maths, and never the twain shall meet.
That’s about as close as we’ll get to consensus.
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- Mike is a frequent twitterist as well as a non-tenured lecturer in political economy at the University of Sydney. He clearly didn’t read Nathan Schneider in The New Republic in 2015 or else he wouldn’t have rehashed so much of the same fallacious reasoning, but repetition is the father of learning and all that, so we won’t let that get in our way here. [↩]
- Aka analrapy, obviously. [↩]
- Even though Paypal is never explicitly mentioned, for all intents and purposes, USD === PP at this point. I mean, do you even ca$h, brah ? Hell, even bank robbers are only taking home $1`600 at a time these days! You think that’s gonna impress the ladies ? Ha, think again. [↩]
- Bitcoin is mostly “hard” in the sense that you have to know who to trust, when to trust them, and how much to trust them. This brings us neatly to discussions of the WoT, of course, but that’s Bitcoin 401, which you can’t take until you’ve passed 101 (history of debt and money), 201 (asymmetric cryptography and basic probability theory), and 301 (bitcoin techne). [↩]
- Not the Donald Trump card, mind you. That one’s persona non grata in the Jacobin community. [↩]
- Not that I have anything against retarded african transgenders on crutches, they never did anything to me. [↩]
- “iNazi,” that has a ring to it! Take one part iPhone wielding SJW, one part Nazi (who are national socialists first and foremost, recall), and one part internationalism/globalism et voila! iNazism!! I think I’ll keep it. [↩]
- Or tell Domaine de la Romanée-Conti if you’re more of a wine guy, but you get the point. [↩]
- You might think I sound like a libertarian, but you need only read “The thing Libertarians get wrong about property rights, or why I’m not a Libertarian” to be wholly disavowed of this notion. If you think I’m a conservative, that may be, but not in the pro-army, pro-traditional-marriage way you’re probably thinking of either. If anything (and I try not to pigeon-hole myself because seriously wtf happened to thinking for yourself), I’m more on the diagonal :
via NN Taleb’s Skin In The Game (2018). [↩]
- “Carbon” is but their latest. As if putting a price on things somehow made a market. I mean, don’t all markets work best when they’re top-down ? Certainly seemed to work for the Soviets and their shoe manufacturing, what with all the size 7 women’s shoes they made exclusively to fill their quotas because they hadn’t the material for larger (and actually needed) sizes. [↩]
- It worked for Stalin, who was a wonderful socialist, so why aren’t his blueprints being followed by socialists today ? [↩]
- “WoT” by any other name. [↩]