Fireside this week! I am still working on “Decline and Fall?” Part III and should have that ready for you all next week. Part III is going to deal with economics and demographics (and also briefly, the question of non-elite literacy), which will hopefully make a lot of you happy since questions about those issues have kept coming up in the comments. Never fear, we will discuss them!
For this week’s musing, I hope you will all permit me to indulge in something I generally avoid: opining on something outside of the narrow realm of the historical or that touches on current security policy. In this case, I have been reading and watching quite a bit lately about the various applications of blockchain technology (cryptocurrency, NFTs, etc) and the related push towards developing a ‘metaverse.’ I’m not qualified to offer much of an opinion as to the technical aspects of these technologies, but fortunately that’s precisely what most of the writing about them has been: discussions of their technical aspects (with Dan Olsen’s recent feature length documentary being an unusual exception to this rule). That makes sense, as it is a technical subject, but to me that often seems to blinker the discussion, putting the focus on the technical issues or, at the broadest, the issues that would fit within the functioning of a tech company. Instead, I want to look at the question with a historian’s eye, thinking about how these technologies might fit into a broader social framework.
Really, this is less about the technologies themselves and more about the nature of states.
Because while I can offer no real opinion as to if any of these new technologies will succeed in their technical objectives (though it seems many people with that expertise have been expressing some serious doubts and the negative externalities of this technology when implemented at scale are considerable), proponents of these technologies typically envisage them eventually producing large social effects, in particular they imagine that blockchain technology will create an economic and social space outside of the control of the state, traditional banking institutions or society at large. And here is a space where a historian’s expertise is valuable and also almost completely lacking among blockchain enthusiasts.
So can they do it? To be blunt, no. On this, I am fairly confident, even as I do not claim to be an expert on the technology – because even if the technology does everything its proponents say it will do, I still would expect it to largely fail to circumvent the state. Doubtless that it an answer that upsets at least some of my readers, so let me explain.
This is hardly the first time that individuals or a group has aimed to withdraw from society like this. In non-state contexts, groups fission all of the time – large hunter-gatherer tribes that grow too large split into smaller ones. Large communities of farmers send farmers into the next valley over to push out whoever is there and set up their own farms. The new societies, under the same pressures as the old ones and with the same social norms, typically end up with similar if not identical institutions. People have likewise been trying to flee the state for a long time; the United States is, in part, a product of the efforts of many, many people to flee the stifling control of the state. They fled from England all the way to the East Coast and then all the way to the West Coast and yet the state (albeit a different state) chased them and their descendants all the way to the Pacific Ocean (and in some cases, beyond it).
This is because that societies in general and especially the states they create are fiercely jealous creatures by nature. I think we forget this sometimes because the modern liberal model of the state is in essence ‘chained’ – intentionally limited in what it can do to create free space for the individual. But as a rule human societies have historically had few qualms telling individuals how to run basically every part of their life, not only by placing some individuals under the total control of others but also by wrapping even the leaders and elites in narrow and confining social norms, all of which are an expression of the community’s perceived claims on the individual. The United States is, arguably, the most individualistic society ever to have existed and yet still functions this way, though it is perhaps not a surprise that it is in the context of American society in particular that the dreams of a techno-individualist future seem most promising (and perhaps least morally concerning). It seems fair to say that human societies have always recognized a fairly vast claim by the society over the individual and are thus unlikely to stop anytime soon.
In short, the state (and its society) will not willingly cede their power to legislate and regulate. This is something we touched on with megacorporations as well.
To which proponents respond that the power of the blockchain is that it puts you and your assets beyond the reach of ‘the man.’ It does no such thing. Your NFTs, ethereum and metaverse avatar may all well exist in cyberspace, but you exist in meatspace, as does the food you eat, the utility bills you need to pay and crucially the servers that all of your digital ‘assets’ exist on.1 If the state is unable to exert its claims over you in cyberspace, it will simply do so in meatspace and as far as I can tell, very little if any of this technology connected to the blockchain does anything to harden these systems against meatspace attack. Indeed, to the contrary, the massive server complexes required to maintain the blockchain and their proof-of-work system make for fairly obvious meatspace targets, as do the companies that manage crypto-wallets. For instance, MetaMask is run by ConsenSys, which is headquartered in New York; it would be fairly trivial for the United States government to thus acquire a quite complete inventory of all of the blockchain assets of anyone using MetaMask by pointing metaphorical legal guns or, failing that, very literal actual guns at ConsenSys.
To take an ancient historical analogy, starting in the last decade of the second century BC, Mediterranean piracy became a big problem for the Romans (mostly because the Romans had spent the previous century systematically removing every other naval power on the sea). The sea was then exactly as some proponents of crypto suggest cyberspace is now: a vast common where anyone could hide or disguise themselves, impossible to really search with the technology of the day. Roman efforts to suppress piracy – begun in 102 – failed again and again: the sea was too vast to find the pirates in when they were sailing and any time Rome targeted a given region for hosting pirates in their ports, the pirates would just move to some other region.
At last, in 67, the Romans had enough; a tribune, Aulus Gabinius proposed a law giving Gnaeus Pompeius (Pompey the Great) a command to exterminate the pirates, extending his command over the whole Mediterranean (and up to 50 miles inland) and the ability to name a number of lieutenants (legati) who could operate independently to do it. Pompey was given three years to fix the difficult problem. He crushed the pirates in three months (Plut. Pomp. 28.2). Pompey’s method was simple: he targeted the home ports of the pirates instead of their ships and his vast command left them nowhere to hide. He also offered comfortable terms to those who switched sides, taking advantage of Rome’s power to co-opt some leaders against others and forcibly resettling them inland, away from the coast so they couldn’t take to the sea. It was, if you will pardon the analogy, a ‘meatspace strategy.’
In my experience, blockchain proponents will respond that the legal structures of modern western states prevent this sort of thing, but that sort of code-is-law thinking is deeply flawed when transplanted to the realm of actual social institutions. Laws change and if blockchain-related technologies ever become as widespread as they hope, the rules will change. Again, the state is a jealous creature, and it already has a good sense of what the rules of property are supposed to be. Indeed, in the above example, the Lex Gabinia was itself a shocking breach of Roman law and tradition – the scale and duration of Pompey’s command was effectively unprecedented and arguably ‘unconstitutional’ in as much as the Roman Republic had an (unwritten) constitution – but the pirates were a crisis and so it got done anyway.
In the context of the United States, at least, such extreme action probably wouldn’t be necessary, given the broad Commerce Clause authority to regulate interstate and international commerce – individuals in Texas or Tanzania transferring money through a server in New York or the Netherlands certainly would seem to count.
Offshoring the servers also seems unlikely to work in the long-run. For one, you haven’t offshored yourself, so the same meatspace-strategy still applies, particularly for tax assessment: they can’t arrest your OpenSea wallet, but they can arrest you. At the same time, offshoring catches the companies running the platforms (OpenSea, Metamask, etc.) and the server farms running mining on the horns of a dilemma: a small country might impose few restrictions, but ask the Dey of Algiers what can go wrong if a small state disrupts the economics of major powers. On the flip-side, the sort of state strong enough to protect the servers is also likely to be the sort of state looking to impose its own conditions on them and use the technology and its community to their own strategic ends. Escaping US or EU regulation only to end up as a geostrategic tool of China or Russia or whatever other great power might be in play is not likely to be much of a victory in the long run (and just as likely to get them legally shut out of the economies of the countries they’ve just departed).
In this sense, any cryptocurrency faces the same problem all non-governmental actors face: the larger you become and the more you appear to threaten the state, the more the state becomes hostile – and the state’s resources are massively, overwhelmingly greater. If crypto as a whole ever does ‘go to the moon’ it is likely to find the tax-man there, already waiting with the bill.
On to recommendations:
Over at Archaeology (which, by the by, is a fantastic publication for those of you interested in the study of the ancient world via archaeology), we have some new analysis of a 13,400-year old burial site at Jebel Sahaba. I actually talk about this site early on in the Global History of Warfare survey I teach. As the article notes, quoting Christopher Knüsel, “There was a long period when archaeologists said warfare didn’t happen in prehistory” and indeed there are still some archaeologists and anthropologists who insist that early hunter-gatherers didn’t do war. Jebel Sahaba is one of the key data-points that refute this view: 61 human remains with clear signs of violence. New analysis shows that many of these remains had wounds that healed, leading to the conclusion that this wasn’t the first conflict for many of these people. That the remains are disproportionately shifted to the very old and very young suggests that most of the lethality was focused in ambushes rather than battles, a pattern of warfare – what we’ve termed the ‘first system’ of war – seen in many non-state societies.
Over at ISAW (hat tip to Tom Elliott who is on twitter as @paregorios), there is a fascinating online exhibit focused on the elite houses of Pompeii, including a ‘fly through’ video through a digital reconstruction of the ‘House of the Tragic Poet’ along with a discussion of the banquet fresco (which you may recall from its appearance in “The Queen’s Latin”) and some good diagrams showing the shape of the elite Roman domus. It’s a great online exhibit, though I’d love to see it paired with a similarly careful look at a non-elite Roman insula, the cramped apartment blocks where most non-elite Romans who lived in cities lived.
Via this week’s Pasts Imperfect, Sebastian Heath has updated his map of Roman amphitheaters. It is a particularly interesting map in light of some of what we’ve discussed in terms of the spread of Roman identity in the Roman Empire – in particular a good reminder that ‘Roman culture’ didn’t look the same everywhere. As you can see on the map, there were relatively few amphitheaters (which unlike regular theaters, were pretty distinctly ‘Roman’ as compared to Greek) in the East, even in relatively late periods where the people living in those Eastern provinces might have self-identified as Romaioi – Romans. Their version of Romanness2 wasn’t the same as the version on offer in Gaul, but I’d argue neither region has a superior ‘claim’ to the ‘true’ Romanness. Rather Roman identity largely came to encompass all of it.
Meanwhile, Spencer McDaniel over at Tales of Time Forgotten has a thorough and well-put-together piece pushing back on the notion that Sparta was particularly special to Ares or vice versa. I frequently use Ares and Mars as examples of how Greek and Roman gods were not equivalents, noting that Mars receives a lot of extensive state cult in Rome and is revered as an ancestor of the Roman people. He can have positive associations, such as when he is Mars Ultor, Mars the Avenger (where, presumably, he hangs out with Thor). Meanwhile Ares, understood by the Greeks to represent almost exclusively the negative aspects of war (as opposed to Athena or even Apollo who might stand for victory, strategy, and aristocratic virtue) was a god one only worshiped to keep him at bay. As a result, Ares recieves relatively little cult in the Greek work, though he did have a shrine at Sparta (albeit, like everything in Sparta, an unusual one). But, as McDaniel notes, even this shrine was not a big cult center the way that, say, the Parthenon in Athens or the Temple of Apollo at Delphi was. To my knowledge, in the Greek world, Ares had no such major center. McDaniel’s essay is a great overview of Ares’ place in Greek religion and mythology, with lots of primary source quotations at some length, and well worth a read!
For this week’s book recommendation, I want to recommend M. Gabriele and D.M. Perry, The Bright Ages: A New History of Medieval Europe (2021), a book that came up briefly towards the beginning of “Decline and Fall?” The Bright Ages is a brilliant – you will have to pardon the pun – effort to bring a great deal of the progress of the study of medieval Europe to a broad readership in an engaging way and to reposition the way that the European Middle Ages are understood.
As the authors note, the popular imagination of the Middle Ages is generally trapped in two versions of the ‘Dark Ages’ – the first, a dark, poor, unpleasant past that modernity has allowed us to climb out of and the second a dark, savage past pointed to by 18th and 19th century nationalists (and the modern continuations of their ideologies) which supposedly provided the roots of the ‘races’ of Europe. Those two visions of the Middle Ages and the flaws in them should not be new to long time readers – we’ve discussed both here already. These twin notions of the Dark Ages serve as the target of the book. It is difficult to summarize it any other way, but let me now try.
Rather than directly debunk these notions (though the book does a fair bit of that too), the authors instead present in a series of historical vignettes, a different vision of the Middle Ages. Each chapter (there are 17) is largely self-contained, built around literal visual brightness: a brilliant painted ceiling, a glowing vision, the gleam of an elephant’s tusk (in Aachen!), even the burning of a city. The brightness here is at times quite literal, a contrast between the drab, grey-brown vision of the medieval past and the actual, brightly colored medieval world.
But the book isn’t just a discussion of the visual aspect of the Middle Ages and the brightness here isn’t just visual but a cultural vibrancy as well. Each of these visual moments is a jumping off point for a historical narrative and discussion, framed around an individual or an event. What binds each of these vignettes together is their emphasis on the vibrancy of the Middle Ages they portray – this is a medieval Europe where people from distant places mix, where learning and writing are happening, where brilliant art is produced, and religious devotion practiced. That is not to say this is a white-wash; this Middle Ages is also messy and violent, with war, plague and the Inquisition all making appearances. It is vibrant, for better and for worse, in a way that the popular imagination of this period – all cold stone (despite the fact that actual medieval people liked to paint a lot of that stone nice bright colors) – is not.
I particularly like the degree to which the authors take the religious devotion of the period seriously, in both its positive and negative aspects. Medieval Christianity, in particular, tends to be portrayed in popular culture as uniformly xenophobic, blinkered, unlearned and frankly stupid – it is a vision of the medieval Church adopted uncritically from Renaissance writers and one which most (functionally all?) modern medievalists reject. The Church was an object of intense, serious and meaningful devotion in the Middle Ages, for both good and ill; that devotion produced exceptional works of learning and art and created a vibrant, rich religious culture, while also, of course, leading its adherents to some of their worst acts. By way of example, Gabriele and Perry’s closing vignette is the famous debate in 1550 between Juan Ginés de Sepúlveda – a humanist and a man of the Renaissance – and Bartolomé de las Casas, a Dominican friar, over what rights and legal status the peoples of the New World – finding themselves newly subjugated by the Spanish crown – might have. As the authors note, it was Sepúlveda, arguing from Aristotle, who contended that the Native Americans had no rights and should be converted by force, while the most traditional, ecclesiastical de las Casas argued from Christian religious tradition (and simple humanity) that this was wrong and unjust. It was Sepúlveda, the monster, who was the man of the modern age and de las Casas, speaking from a deep and fundamentally medieval religious conviction who was the man out of time.
In a sense this sort of treatment – attempting (and largely succeeding) to breath the humanity and vibrancy back into medieval Christianity – is the book’s approach to the whole of the European Middle Ages. I have my quibbles to be sure, mostly in its treatment of Late Antiquity and my sense that it speaks from the ‘Change and Continuity’ school with too great a degree of doctrinal certainty, when the issue is in fact correct. But in its broader aims the book holds together very well; its vision of Bright Ages will be a shock to many readers but is not so much a bolt from the blue as it is a compilation of how our understanding of this period has been changing over the past several decades. That it will be surprising to many readers is more a comment of how sorely out of date the public perception – and frankly, quite a lot of teaching outside of universities – still is.
The book itself is very engaging written and extremely accessible: one can read this with no prior knowledge at all and not feel lost. There are no footnotes (this is a popular-oriented book) but each chapter has a good ‘further reading’ paragraph at the book’s conclusion, packed with recent (often very recent) treatments of the topic for readers that want more and more scholarly treatments. A set of glossy color plates provide images to go with the vivid descriptions and there is a map at the front placing the major locations of each chapter. An engaging read and a remarkable achievement, this is a book that I really do hope redefines how we imagine the Middle Ages.
- This has always been something in broader cyberpunk fiction I found amusing: it tends to treat cyberspace as a physical space that things can live in. Most recently, Cyberpunk 2077 indulges in this, with the internet including a ‘no man’s land’ of rogue AIs. But the internet doesn’t exist in some alternate universe, it is exists on real world servers. If you took a hatchet to those servers in the real world, the AIs hiding on them would cease to exist. Sure, one could distribute functions widely and use consensus algorithms to decentralize those sorts of processes, but then the state also controls the physical infrastructure that connects those decentralized nodes.
- I avoid the word romanitas in these contexts because it isn’t an ancient coining as far as I can tell.
211 thoughts on “Fireside Friday, February 4, 2022”
Ollie deserves a fan club!! Apart from that, I want to pose this question about the blockchain/techno/crypto stuff — one scenario not discussed by the good Doctor is what happens when those techno-corporatists simply BUY the state? Co-opting the elected and appointed officials? As they seek to do constantly anyway, like other vested interests. What is the answer for that proverbial “fox guarding the henhouse” problem? If the techno-corporatists take over the government to serve their own narrow needs, what’s to stop them subjecting the rest of us to techno-helotry?
In that case the techno-corporatists have used their dominance of these technologies to become the state, and therefore there isn’t “an economic and social space outside of the control of the state, traditional banking institutions or society at large.”
Which will be nice for the techno-corporatists who have become the new political elite, but for everyone else it is “here comes the new boss, same as the old boss, except with more cool names and animated AI logos.”
So, more generally I would be interested in discussion on successful and unsuccessful attempts to remove corruption from governments.
Fiction tends to be pretty static (or one way ratchet) with governments either being corrupt, or not, or being corrupted. There are some minor exceptions (e.g. the Untouchables).
But the obvious mechanism for pushback, revolution, doesn’t actually seem to produce superior, non-corrupt results. So what does?
I think the answer to this is at least in part what might cynically be called “moving the goalposts.”
States exist to redirect resources; and any redirection of resources (any *allocation* of resources really) creates winners and losers. Usually a “legitimate state” is distinguished from “successful banditry” in that those subject to the state’s power get *some* kind of benefit from this redirection; but historically speaking it’s only *very* recently that anyone has latched on to the idea that the majority of those subjects should have any voice whatsoever in how those resources are redirected.
Anyway. The state apparatus is almost always operated by people drawn from a certain social class: there’s a lot more people who are *qualified* to be in the Senate than are actually holding seats at any particular time; a lot more feudal nobility than are directly administering manors, a lot more scholar-elite taking the imperial examinations than are actually holding office, etc. etc. Naturally the state’s redirection of resources benefits (first and foremost) the elite–whatever class the decision-makers are drawn from. But it will be legitimate to the rest of society if it’s conducted with consistency within some official structures, usually including some level of restraint on the overall level of resource redirection (i.e. don’t starve the peasants).
What we call “non-corrupt government” is a government wherein the benefits accruing to the actual administrators do not exceed a certain ratio of the benefits accruing to the class from which those administrators are drawn. That’s all. If you serve the whole ruling class, you’re legitimate; if you take too much for yourself without serving your class (or outside the structures your class will tolerate), you’re corrupt. If you take a bribe to ignore EPA violations, you’re corrupt; if you auction off a permit to emit such-and-such amount of dioxin into the river, you’re just an administrator doing your job. The difference between a bribe and taxes is whether the money makes its way to the public coffers.
In this framework, the “revolution” mechanism usually consists of changing the class from which the state’s administrators are drawn–probably more dramatically than a dynastic change, but likely similar to the effects of a foreign invasion.
This is why we don’t really think of describing e.g. feudal aristocracy as “corrupt” exactly, even though the benefits are obviously lopsided toward the nobles–it’s unfair, it’s inefficient, it’s unjust, etc. but it isn’t exactly *corrupt*, that just isn’t quite the word (unless *other members of the ruling class within that society* indicate that someone isn’t following the proscribed limits).
We can call this Corruption Type A: violating ruling-class norms about within-class redistribution of resources.
But there’s another kind of corruption possible here, which I’ll call Corruption Type B, which is caused by a mismatch between public expectations (“discourse,” “ideology”) and reality. This happens when the official definition of the class from which government is drawn (e.g. “all citizens” for modern elective democracy) is different from the actual class from which government personnel are drawn/to whom they are beholden (e.g. in the American or Russian context, “the super-wealthy”). Or to get even closer to home, the nominal governing class might be “the professors” and the practical governing class might be “administrators beholden principally to donors.” In both cases, the administrators are doing the same thing they’ve always done–benefiting their class/the class that gives them authority–but people describe this as corruption because the group that benefits is narrower than/different from the group that’s supposed to benefit.
This suggests two approaches. The traditional approach to Type A Corruption is to redouble the administrative effort spent on monitoring other administrators; sometimes it works, but it crashes against the who-watches-the-watchmen problem, as the inquisitors are themselves bought off. To the extent that people have had some success with Type A, it’s usually by state administration intentionally breaking down other identity/patronage networks within the administrative class–e.g. by insisting that bureaucrats never be assigned to govern their home provinces, or swapping administrators around every few years. There’s also some improvement when the ruling class feels especially put-upon to establish its legitimacy–e.g. rule by an ethnic minority which has a collective need to not provoke hostile action from the subject population–though this is usually very hard to disentangle from the outright oppression and explicit cultural pressure going on at the same time from the other hand.
For Type B Corruption–I don’t know that anybody ever thinks about it as much. I suppose one might try to ensure that administrators are drawn from a broader class, but done piecemeal this can easily lead to them being co-opted. I think it’s usually more effective just to distract people from the contradictions by introducing an outside enemy, or trying to convince the on-paper-represented-but-practically-disenfranchised that they also benefit from actions that favor the ruling class.
Well, this is all a thought experiment anyway–I’m not completely convinced it’s true, and I certainly don’t know that there’s conclusive evidence that could be established for it–but I think it might have legs, or be interesting anyway!
This is, at least to my naive reading, a very interesting characterisation. So thanks for that. Do you have any works that you would recommend reading? Or do you know any institution that tries to gauge these corruption levels in the real world?
Chile allegedly achieved a mostly non-corrupt police force, especially by comparison with the rest of Latin America. I have no idea how.
The story of corruption elimination is a function usually of two things (1) sufficiently high pay for public servants as to fear loss of job and or demotion; and (2) sufficiently competitive political environment so that an out of power political faction has an entrenched interest in exposing the corruption of the current governing faction.
If you lack either of these then corruption is endemic.
Notably, to meet condition (2), you need a certain kind of environment. If someone with power is revealed to be corrupt (that is, acting to use public resources or their own personal power to benefit themselves or those who bribe them)…
…You need this to cause the supporters of the corrupt person, those who chose to give that person authority, to turn against them. If it doesn’t, you can’t eliminate corruption.
If you can reveal that the Secretary of Whozit gave ten-billion-dollar kickbacks to a combine of wealthy businessmen led by their cousin and the people who have the power to fire the Secretary of Whozit, or to pressure politicians into firing the Secretary, just shrug… Then you have a corruption problem that’s unlikely to go away, for as long as the balance of political power remains more or less the same.
You mean the murderers that shot into the eyes of the protesters a few years ago?
The US had Kent State, but we didn’t call the National Guard *corrupt*. I’m talking about whether it’s accepted that the police take bribes. One travel guide some years back emphasized “don’t try this in Chile! you’ll just get into more trouble”.
For any formal reified institution, like a government department, incoming employees are going to have an official training process and an informal mentorship process that they go through that makes them a part of the institution. Think of it like two separate teaching streams, you get taught e.g. how to be a police officer but you also have a few old hands who teach you how to act like a cop in your jurisdiction–socialization.
This means that there are chains of mentorship in institutions that transmit methods of corruption and values of anti-corruption. If a supervisory institution monitors, disrupts, and controls those chains of mentorship you can see significant changes over time to the values of the supervised institution, including a loss of endemic corruption. That is hard to do with an existing organization, but it does happen.
More commonly, the supervisory organization (and this can mean ‘society as a whole’ but usually means a higher level of government or corporation) will find or create a small subdivision of the corrupt institution that is not (as) corrupt (in the specific way that is being addressed) and grow that subdivision into a competing organization…and then liquidate the corrupt institution. Of course, memories of “the good old days” persist and make it very easy to subsequently corrupt the new organization, so you have to keep active anti-corruption monitoring in place on the new organization or on any organization that was actually cleaned up instead of replaced.
It is also the case that corruption is to some extent culturally- or socially-defined, and that definitions can change. This in turn means that the process of mentorship disruption described above is sometimes deliberately used to inculcate practices that might seem corrupt in other times or places.
I want to sign up for the Pedant Cat fan club, because Percy is pretty tool
The only reason I disagree that wealthy capitalists could buy the state is that I don’t think the state needs to be bought. Historically, societies often made little distinction between their ruling class and the state itself; King Louis XIV (possibly) claimed to be the state as late as the 17th century.
Modern states, even dictatorships like North Korea, generally make a greater distinction between rulers and the state itself…but that doesn’t mean the link is gone. For one thing, most politicians come from wealthy families; it should go without saying that they have a personal interest in the interests of the upper class.
For another, the capital-holding class can finance the increasingly-expensive electioneering that most politicians need to win any office; obviously, if they start to go against the interests of capital, the capitalists will stop donating.
And, of course, even if corporations can’t replace governments, the largest have the power to inflict critical irritation on them (most often by moving jobs overseas, but more extreme measures are possible in theory); the state would win the ensuing conflict, but if they’re seen as initiating or escalating the conflict, a lot of politicians would lose their seats. This might be a small factor
As to the techno-helotry: Masters have too many obligations to their slaves—in particular, feeding/housing all of them when there’s not much work to do. It’s much more efficient to make us all “independent contractors,” legally responsible for our own wellbeing.
A little late, but I’d like to note that companies can much more easily influence small, poor, or otherwise weak states than, say, the USA. In particular, their ability to directly irritate a government becomes a much more meaningful tool, and in extreme cases might even be able to go beyond mere irritation.
A quote from the SF novel I mentioned, “The Space Merchants”:
“Do you know what the annual budget of Costa Rica is, by any chance?”
“No,” I mumbled
“It’s about a hundred and eighty-three billion dollars. And do you happen to know what the annual taxes of Chlorella Corporation are?”
“No. Damn it, man-”
He broke in: “About a hundred eighty billion dollars. From that, a bright fellow like you will conclude that the government- and courts- of Costa Rica do just about what Chlorella wants done.”
Of course, paying a hundred eighty billion dollars in taxes annually implies a multitrillion-dollar annual revenue—and more, if that’s specifically the taxes paid to Costa Rica and Chlorella has substantial operations elsewhere, as “he” implies. That’s at least one order of magnitude larger than the largest modern corporations, which have revenues in the hundreds of billions of dollars.
So we’ve got a fair bit to go before any one corporation can bankrupt a government by refusing to pay its taxes. They have to be a bit more strategic and subtle to make countries do what they want done.
I think the novel anticipated “outsourcing”; basing the most exploitive jobs in the the Third World. The novel mentions “Indiastries”, the entire subcontinent organized as a “spherical trust”, and planning to repeat that on a planetary scale with the colonization of Venus. It also mentions that the biggest and most powerful of the megacorporations is capitalized at “7×10^13 shares”.
“The Space Merchants” is a good read, but reflects a complete lack of understanding of how corporate finance (or public finance, for that matter) works.
If only Chlorella pays much in the way of taxes, either they have a lot less power than everyone else in Costa Rica, or they really like paying taxes.
“If only Chlorella pays much in the way of taxes, either they have a lot less power than everyone else in Costa Rica, or they really like paying taxes.”
I believe the point to be that in exchange for an amount that’s only a budget line-item to a global megacorporation but the difference between life and death for an impoverished third-world government, Chlorella gets a sovereign government- complete with courts, police and army- in it’s pocket, and on Costa Rican soil can do damn near anything.
P.S. it turns out Chlorella isn’t even bearing the cost. Our hapless protagonist goes on to say: “Besides the various assignments I had made, there were the Employee Welfare Fund (as closely as I could figure that one out, it meant that I was paying Chlorella’s taxes);”
Despite what pop culture often claims, most states aren’t for sale. Nor are most legislators. Money is nice and all, but there’s money on both sides of any important issue. They’ll follow their own conscience and their voters, in one order or the other, before they’ll worry too much about money.
Money only really comes into play when nobody (including the legislator themselves) really cares about an issue, but someone with a checkbook does. That happens, but it’s not especially common in the grand scheme of things.
I’ve also heard that it is often cheaper to donate to the campaign of someone who agrees with you, than to pay someone with the opposite opinion enough that they decide to vote with you. Why pay a climate activist billions so they pretend to agree for a day when you could pay a million to elect a guy who doesn’t care about the climate and only cares about the economy and jobs.
Also, the big financial lobbies tend to be powerful not because they are rich, but because they represent a lot of people.
Do you know who the most trusted political actor in the United States is? Planned Parenthood. Do you know who the second most trusted political actor in the United States is? the NRA.
Politicians don’t listen to Planned Parenthood and the NRA because they have money. Politicians listen to Planned Parenthood and the NRA because voters listen to Planned Parenthood and the NRA.
American politicians, presumably also non-American politicians in elective governments, attack ‘big money special interests’ as a rhetorical device to hide the fact they don’t particulary like the voters that make up the particular ‘big money special interest’.
No, because they speak for a lot of voters.
I don’t think it’s that simple.
There are organizations that have large numbers of supporters and money to throw around for donations- but whose ability to have the money hinges on having the supporters. Both Planned Parenthood and the NRA are examples. If those were fringe causes only 5% of the population actually cared about, those groups wouldn’t have much political power and they wouldn’t have much money, either.
But there are also organizations (and individuals) that have a lot of money whether other people approve of them or not. Their funding does not come from such sources. And such groups assuredly can exert pressure to change public policy in unpopular directions. Most people don’t have multi-million dollar estates, and thus no incentive to care personally about how high taxes on such an estate are… But we observe that this doesn’t necessarily translate into high estate taxes, and it is worthwhile to speculate on why.
The existence of groups that blur the lines between “having people-power” and “having money-power” doesn’t mean that the two things are the same. And it doesn’t mean that it isn’t possible to parlay money-power into political influence that doesn’t come from people-power.
Tangentially, I think advertising is usually similar. If you really care (and have critical research and thinking skills that I take for granted), you’ll read reviews, calculate unit prices, read ingredient lists, etc., and the main power of an ad will be to get you to know that something exists for consideration; if you *already* know that, no power at all.
OTOH if you’re mostly indifferent among various options, then you might well get something because you heard of it most recently or it has vague positive associations.
On the other hand there’s the https://en.wikipedia.org/wiki/Rent-seeking#Tullock_paradox, which notes that considering how much profit bribing a politician can produce, the politicians usually sell themselves surprisingly cheap.
But doesn’t that suggest that the politicians are not “selling themselves,” they are voting their beliefs, then collecting what they can from those who have benefitted from their actions? It’s well-established that regulation creates winners and losers among businesses, but I doubt that many politicians have been bought by the businesses that will benefit from their regulation. Government actors favor regulation for their own reasons, but when they need campaign contributions, or post-government jobs, the most receptive audience will be from the businesses helped by their actions.
So to take a concrete example, the Trump administration implemented a rule that pension investors could not be steered into ESG funds. Obviously, if you are selling ESG funds, or ESG consulting, or whatever, that rule is bad news. The Biden administration duly reversed the rule. But it’s not the case that the Biden administration was bought by the sellers of ESG-related financial services. The Biden staffers believe that ESG investing is good, and those who benefit from their actions reward them, but not to the tune of 100% of their profits, which is what Tullock thinks they should pay.
Notably, the idea that politicians sincerely vote their beliefs doesn’t mean that an interest group can’t buy out a government. It just means they have to think long-term in order to do it.
Don’t think in terms of offering a politician a big sack of $100 bills to make him vote against their beliefs after they’ve already been elected.
Think in terms of using your big sacks of money to do some or all of the following:
1) Fund the lobbyists who provide briefings and presentations to the legislature, increasing your power over the legislature’s access to information and how legislators perceive the world. Look up the OTA in the US, and what happened after it was disbanded in the 1990s, for an example.
2) Fund the “leadership organizations” that identify promising up-and-coming young proto-politicians, that help them network, and that gain them access to positions of power and authority.
3) Fund “grassroots” organizations to influence primary elections, determining which kinds of politicians can and cannot rise to power within a given political party.
All of these tactics, and more, can be used to ensure that eventually, when the time comes, the politicians who have actually succeeded in gaining office are the ones who believe what you want them to believe.
You still have to spend money to maintain the system, of course, but importantly, you’ve not only created a cadre of supportive politicians, you have created the machinery to replace them at will. This last part is important, because it forces the politicians to “stay bribed.”
Note that all of this is completely separate from any efforts to use money to influence public opinion (or just opinion among the slice of the public that votes for your favored politicians) directly via money. I’m talking only about how to buy control of the politicians themselves.
Indeed, if you look at people who are commonly accused of using their money to improperly influence government policy — George Soros, the Koch brothers, et al. — the accusations generally revolve around them doing some combination of things 1-3, rather than just firehosing money directly at politicians.
Processes this large and complex are indistinguishable from what we call “public debate in a pluralistic and democratic society.” No corporation could undertake this sort of effort for its own narrow economic interests. You may believe that the Koch brothers think that libertarianism is good for their business, and that George Soros thinks that soft-on-crime prosecutors are good for his business, but it’s clear to me that both of them are sincere and disinterested believers, along with the thousands of others hosting seminars, writing blogs, editing magazines, etc. They’re not all working for General Motors and Microsoft.
These processes are indistinguishable from “public debate in a pluralistic democracy,” in some ways, but not in others.
A “public debate” between a man who has a megaphone and a man who does not is apt to prove a bit lopsided.
As is a “public debate” where one side has quietly suborned the nominally neutral umpires and arbiters, such that they will consistently switch off one speaker’s microphone while enabling the other to speak without interruption.
There is also the broader anthropological/historical question of approach. Do societies consist entirely of isolated individuals acting independently? Or are there such things as “classes” and other interest groups, and are these groups relevant to the analysis in their own right?
Because when you analyze the actions of individuals, you often find them acting with apparent sincerity and out of one set of motives… But when you analyze a society as an interlocking set of interest groups, you see other processes at work, with other motives strongly implied, and the grounds on which the individuals act often seem very convenient in light of the collective interest of the group they are a part of.
As Upton Sinclair put it, “It is difficult to get a man to understand something when his salary depends upon his not understanding it.”
I think a lot of people overestimate the chances of corporate control. We’ve bought into the idea that states can and morally should be as powerful as they are today, and, since we see it as normal, see outside forces influencing the state’s decisions as unjust as unacceptable.
But the state is incredibly, massive, almost incomprehensibly powerful. Compared to even a relatively weak state all but the most powerful companies in the world have no ability to do anything. If it wanted to Bhutan could shut down Facebook and force it to remain forever outside, Facebook, on the other hand, can neither harm nor hurt Bhutan.
Corporate dystopias consistently misread the winds of the time. We are heading into a period of ever stronger state control, and big business will have no choice but to try and influence the state’s decision in order to survive. They literally cannot ignore the state- how could they, when the state can casually and even accidently shut them down?- so they will seek to bargain and corrupt small parts of it.
I think I overstated my case here: I am not saying that overly powerful corporations don’t corrupt the state and/or aren’t a danger to a healthy society. They are! Absolutely. But I believe an overly powerful state is a significantly greater risk to modern society, and that many people are focused on the wrong threat.
The problem is that creating a powerful state that is more or less responsive to the desires and hopes of the people as a whole is more or less a solved problem with modern “social technology,” as it were. We’ve pretty well identified which rights a government needs to respect for that to happen, and which rights the state needs to enforce upon powerful private actors whose power would otherwise become oppressive in its own right.
By contrast, we have no idea how to make a powerful corporation be responsive to the desires and hopes of the people as a whole, other than “sic the state on them.” And arguably this is by design- corporations are legal constructs explicitly designed for the sole purpose of benefiting and enlarging a small number of investors, and there is nothing whatsoever in their construction that exists for the purpose of making them responsive to the masses.
It’s like saying that starvation is a greater risk to modern developed societies than global warming. In the sense that famine is greatly deadly and immediately dangerous whenever it happens, it’s true. In the sense that famine is a realistic threat given the nature of the tools available to keep it at bay… not so true.
Indeed, it’s to the point where the only way that starvation would be likely to present a threat in developed nations is if global warming makes it a threat. And analogously, I think the state is mainly a threat in developed (democratic) nations if organized groups of private actors make it a threat to the general welfare.
The problem is that creating a powerful state that is more or less responsive to the desires and hopes of the people as a whole is more or less a solved problem with modern “social technology,” as it were.
Invade the capital with trucks and honk their horns?
We have a lot more “less” than “more” nowadays.
It is, to put it mildly, contentious whether the guys driving into national capitals and blasting away with 130-decibel truck horns are:
1) Acting on behalf of the hopes and desires of the majority of the people, in order to force the government to do what everyone wants and needs the government to do, or
2) Acting on behalf of a minority who see themselves as the ones who truly matter, in order to force the government to do what lots and lots of others don’t want or need the government to do.
Precisely because this subject is contentious, we shouldn’t expect a responsive government to automatically take a hardline stance to one side or the other.
A typical nonresponsive government from any given point in history, the kind that really isn’t responsive to its populace, would be responding to the trucker protests by shooting the drivers. There’s a reason you don’t see things like that happening in, say, China.
2) Acting on behalf of a minority who see themselves as the ones who truly matter, in order to force the government to do what lots and lots of others don’t want or need the government to do.
This is a very tendentious way of putting things. “Minority try to get their grievances addressed in the face of majority hostility or indifference” =/= “Minority see themselves as the ones who truly matter”.
I certainly agree that the states of the world could rein in crypto if they wanted – but states don’t have to do what makes sense. They can choose to succeed or fail. The US has grossly underfunded the IRS for decades for frankly irrational reasons, and the EU has enabled tax avoidance shenanigans from places that SHOULD be tiny and powerless like Jersey (never mind Netherlands & Ireland) for decades. I can certainly see a future where the merest action by states could rein in crypto, but it’s not taken because you don’t have to do the sensible thing.
The other possibility is that crypto successfully convinces some states that while it might be a scam, it’s THEIR scam, in the same way that Nigerian 419 scams, Russian ransomware, or Indian fake tech support scams work with tacit approval. There’s a subplot in Charles Stross novel “Rule 34” that might be instructive here (written in 2011, so theoretically out of date for near-future fiction, but actually holds up mostly fine).
I strongly doubt that the states would omit to rein in crypto in the same way they “failed” to do so with tax havens. The latter “failure”, I would argue, is not a bug but a feature – the legislators and/or powerful people who influence them need a place to store THEIR money low-tax, after all, but these options are largely unavailable to the common man because the value needs to be high enough for the savings to exceed the costs. Or, in other words, it pays off to put a million $ in a Liechtenstein foundation, but not $ 10,000. Crypto, on the contrary, threatens to allow this for a common citizen without substantial political power, so there’s nothing to stop states to rein it in.
«Crypto, on the contrary, threatens to allow this for a common citizen »
The common citizen who can control large chunks of infrastructure, whether Meta, OpenSea or whoever. Congratulations, you’d replace banks with more inscrutable banks.
Or, in cyberpunk fashion, they could take over the power of the state, and offer no democratic control whatsoever. What a utopia.
I’m inclined to be rather pessimistic, at least in the near term, about the United States doing much to reign in crypto, not for any reason having to do with the “common citizen” but because a whole bunch of rich people have bought into crypto and they have the ability to fight back *very* hard if the government does anything that threatens their interests. Combine this with our gridlock-prone institutions, and it’s hard to see much being done in the foreseeable future.
I’d say Dan Olsen put it best when he said (paraphrasing to fit this context better) that it lets the 5% challenge the 1%. You don’t need to be truly rich to profit off crypto, but you can’t do it if you’re truly common.
All markets become regulated eventually, the states that make the baffling decisions will fail. Those that make the sensible ones (regulating crypto) will survive.
“To which proponents respond that the power of the blockchain is that it puts you and your assets beyond the reach of ‘the man.’ It does no such thing. Your NFTs, ethereum and metaverse avatar may all well exist in cyberspace, but you exist in meatspace,”
Totally in agreement here! When blockchain started getting “big” in the legal scene a few years ago, there were a lot of promises in the same sense: such as, rendering contracts and even courts unnecessary. I was always highly skeptical about this because, no matter how much of the transaction you shift to cyberspace, at some point, if it concerns assets in meatspace, you HAVE to have he possibility to affect the meatspace. As in, if you purchase a thing and the seller doesn’t want to hand it over, it’s nice and cool to have an “automatic” judgement based on a smart contract, but at some point some kind of enforcer will have to go and take the damn thing from the bugger. On that note, a great analogy with the Roman anti-piracy (heh) action.
Also – looking forward very much to Part III and the question of non-elite literacy in particular!
As a law-talking guy who drafts a lot of contracts, I find the “smart contracts” terminology used in the crypto world to be utterly infuriating. A “smart contract” is just a piece of code that does X upon the occurrence of event Y, i.e., it’s just another program. There are no concepts of consideration, offer and acceptance, breach, damages; you can’t amend a “smart contract” to change the terms or correct an error or ambiguity; and because blockchain transactions can’t be reversed, you can’t even unwind a “smart contract” in the event of some particularly egregious breach or illegal behavior by one party or the other.
As far as I can tell, the terminology was devised by someone who has only the loosest concept of what a contract is, and they used it to make the whole thing sound more “legitimate”.
I am not a lawyer, but every time I read descriptions of these smart contracts, it sounds like the sort of thing that would be hell to actually enforce in a court, but also the kind of thing where a court might end up deciding and issuing an order to do things the software is not actually capable of doing.
And “Your honor, my software is incapable of obeying your court order” is not likely to be a good defense in court, I’d think?
Yeah, that list of things a “smart contract” lacks pretty much ensures a court wouldn’t consider one to be a “contract” in the legal sense. There likely *is* a contract (either written or implied) governing the circumstances by which the acquirer purchased the token containing the “smart contract” code, That “real contract” is what a court would look to in deciding any disputes over the token transaction–and to the extent the “smart contract” makes a particular remedy impossible, then cash money becomes the next-best remedy.
I think telling a court “Your honor, I can’t return the money because I don’t control the wallet that I sent it to” would be the equivalent of saying “Your honor, I can’t return the money because I turned it into cash, gave it to a friend, and he ran off to Honduras with it.” Probably not going to get you any sympathy from the judge.
I suppose as a computer thing it’s an infinitely-complexifiable tool, but every actual example of a ‘smart contract’ I’ve seen described just sounds like simple escrow.
There’s a simple reason for that: If you make a program more complicated than “Hello World,” the first draft is gonna have bugs, and once you put the smart contract on the chain it’s horribly expensive to edit/replace. (As a bonus, any program complicated enough to require multiple blocks gets proportionally more expensive to implement, because as I understand, each block of code needs to be minted separately to be added to the chain.)
So you either need to spend a lot of time trying to find every bug before you can actually test how the program works on the chain, or inflate your programming costs, or accept bugs…or just keep as much of your programming off-chain as possible, and use the smart contracts as little more than an interface between that and the blockchain (and, of course, as a hype-generating gimmick).
“Self-executing contract” would be a better name, but trying to change language is like trying to stop the tides.
I think the most apt comparison for crypto is tulip mania or the dotcom bubble, prices inflated by speculation will collapse the minute a greater fool doesn’t come along.
I still love a description I once saw of Bitcoin as “the platonic ideal of a tech stock”. This is, of course, in the sense of tech startups which have some sort of valuation which is completely disconnected from any actual business prospects. Bitcoin is the platonic ideal, by this construction, because there is no product which is not the asset itself.
What saves crypto from the ‘bigger fool’ problem is infinite divisability. When tulips start trading for the average annual wages of a worker, well there are few people that can exchange assets at that level. But as long as the transaction fee doesn’t climb to high, you can always buy .00000000000001% of a bitcoin or etherum. So the pool of potentially ‘bigger fools’ never narrows.
…not really? I mean, if you want to make a profit on the one bitcoin you bought, there still have to be people willing to pay .00000000000002% of what you paid to buy only.00000000000001% of the bitcoin. Infinite divisibility doesn’t solve the greater fool problem, it just allows you to divide the greater-foolishness among a number of small fools without as much buy-in.
Also, “if the transaction fee doesn’t climb too high” seems like a bold thing to assume when Gas Wars are a thing so common there’s a recognized term for them in the ethereum community. Also also, I notice that you aren’t really disagreeing with the notion that anyone you’re selling your .00000000000001% of a bitcoin to is still a “greater fool” for buying into it.
Yeah, the only legitimate use I can think of for crypto from which it derives value is use by citizens of countries with a fundementally unstable financial system. Turkey, Venezuela, Zimbabwe, etc. Of course if you were to draw a ven diagram of ‘places where crypto makes sense’ and ‘places where states are likely to use their meat space power to influence transactions’, you probably are not far off from a perfect circle.
On Hacker News, the most upvoted article says “NFTs are like MLMs for tech elites”
(MLM stands for Multi-Level Marketing; so something like Amway – borderline pyramid scheme). The link to the article is on the top of the page, I’m linking to the comments section because these are often valuable on HN.
It seems to me like private actors can become very powerful if they work within the bounds of the state (by lobbying/corruption) rather than outside/in opposition to it
States are unrpofitable, hence why corporations don’t try to be them. The east india company for all it’s power had to be subsidized by the empire.
Both private actors generally and demographics of private actors as a whole. As a Twitter mutual of mine is fond of putting it, “The state is the bureaucratic and coercive arm of the capital class.”
Which I think is a bit of a generalization, but it’s applicable to the situations he comments on—most recently, police confiscating unsold food that climate activists had taken from supermarket garbage bins and throwing it away again. (And no, it wasn’t rancid meat or dangerous stuff like that.) This doesn’t defend the specific interests of the grocery store and the private actors running it, but the interests of the capital class as a whole, who feel threatened by letting large numbers of people potentially have access to food without having to work for them.
The state in North Korea isn’t exactly an arm of the capital [sic; sc. capitalist] class. Nor was the state in Plantagenet England. If you wanted to say that the state is the coercive (and often bureaucratic) arm of the ruling class, that would be true, as are all tautologies.
Like I said, it’s a bit of a generalization.
I think most modern socialists would describe North Korea and for that matter the Soviet Union as- not as a communist state, but as a “state capitalist” state. That is to say, in effect the governing elite (a family, a bureaucratic class of apparatchiks) has set themselves up as the owners of all property, but the general public (which is supposed to collectively control the means of production) has no real influence over how property is handled or distributed.
So the kind of person who says “the state is the bureaucratic and coercive arm of the capitalist class” seriously is also the kind of person who says “in a place like North Korea, the bureaucratic and coercive personnel and the capitalist class have merged into one single united entity, which is weird but whatever.”
> If you wanted to say that the state is
> the coercive (and often bureaucratic)
> arm of the ruling class, that would be
> true, as are all tautologies.
Suffice to say that this is only obviously true if you accept as obvious that the capitalist class rules our society, which is something a lot of people like to push back against when it is stated baldly.
If by capitalist you mean people who own machines and factories, they are hemmed in by a hundred other actors (people who teach in universities, people who practice law, people who write for newspapers, etc.), so it’s a stretch to say that capitalists are the ruling class. The state serves the interests of all these people, and other besides. Sometimes they fight among themselves, and the state serves the winner.
As someone who had some experience with state capacity in this area – the notion that corporations or individuals can keep governments out of techno-space is laughable. It’s like saying you can keep the Red Army out of your house with this cool armoury you bought from a Survival catalogue. They are already in any space they want to be in.
Note that most of the tax havens around the world are creations of states. For example, the British Treasury encouraged the small Caribbean dependencies to go into this area as otherwise they would be drains on the British exchequer.
The key point about cryptoassets not practically evading the state is good. The specific points about metamask don’t make as much sense to me – the blockchains that metamask connect to already are exactly a public ledger of all the assets owned by all addresses, so there’s not really any need to attack metamask to work this out. You can also use metamask without connecting to ConsenSys servers, so it’s not really as if ConsenSys even know who has what. Of course, the government could pass a law saying that ConsenSys were offering banking services and needed to do KYC on anyone using the metamask wallet, although people wanting to evade such a law would certainly still be able to in a way that would be very difficult to track.
I had a similar thought. Because the blockchain is inherently public, criminals *already* change their wallet addresses frequently. If blockchain-enabled crime becomes a crisis like the Mediterranean piracy crisis described above, an adequate response probably looks like rigorous reporting requirements for anyone who has anything to do with crypto, combined with actually throwing people in jail for failing to observe those requirements. At a minimum. Possibly you’d just ban it outright.
The threat to crypto holders is even greater than that. State capacity includes the development of vast computing resources. The government could just take over the block chain on a whim.
It’s interesting just how many recent multi-million fortunes have been made on these weird technological solutions to what are essentially legal barriers. This isn’t just a crypto/NFT thing–which I guess can serve as a solution to some problems but in practice seems to exist as a tax evasion scheme/ponzi-scam–but it’s also true of unicorn companies like Uber or Deliveroo. They mostly make their money either by using algorithms to circumvent legal monopolies and/or inventing a new category of employee that cost the company a lot less. I guess I can admire their brazenness to go against the state quite so blatantly, but I don’t understand how anyone thinks these companies will continue to be profitable once the legislative system catches up.
This is true for the big dogs of the internet as well; Amazon was eventually forced to start handling sales taxes, but if a consumer finds a work-around like having multiple locations they don’t do anything about it; Facebook is constantly shifting in and out of being a news media company in order to always have the most favorable regulatory profile.
Google is made to look relatively good by Microsoft, but both are significantly boosted by their capacity to outmaneuver anti-trust rules. Apple probably wouldn’t exist anymore if not for their significant innovations in the area of using contracting to avoid labor protections (although that’s less a tech thing, your typical American snack food company wouldn’t either).
The basic bet by Uber/Lyft/ridehail is that too many consumers will appreciate the cheaper fares and better service, and thus won’t let the state re-establish taxi medallion monopolies.
(Their other bet is that they can make the model profitable and sustainable, which has yet to be demonstrated.)
One of them (Uber IIRC) is also working on self-driving cars so they won’t need to pay drivers.
That was more of an advanced bet, and Uber sold off their rather dubious division in Dec 2020 anyway.
While I do admire your sense on the value of cryptocurrencies and their infrastructure, you seem to be lacking imagination in the radical difference between the internet and the servers they live on.
But first let me congratulate (we Dutch would say “felicitate”, it would be more appropriate in this case) you on seeing blockchain for what it is, a wasteful solution looking for a problem. As a computer scientist with some expertise within distributed computing (written a paper or 3), let me tell you that all of my colleagues have a collective sigh when the umpteenth paper promises to revolutionize whatever with blockchain. Also, while for many problems a distributed approach is a good idea, 99 out of 100 times, there are better solutions than the blockchain. Want high availability? Use a distributed hash table or BitTorrent. Want anonymity that even China can’t fully crack? Use Tor. Want distributed trust? Use a PKI and trusted roots, rather than dodgy coins, vulnerable to 50% attacks.
There are rumors of an anti-blockchain league, or perhaps even a block anti-chain league in the halls of the ivory tower. Membership is simple: never use nor recommend blockchain, even in the rare event that it is a good idea. No gas fees required. Membership data is stored in a distributed ledger, not on computers, but in the minds of their members. Trust is granted according to tradition, merit, and social standing. Truly, a secret society parallel to the ordinary one, their grasp transcends nations, yet can never beat the nations at their own game, the monopolization of power. Nor does it try.
Now, I do believe you rather overestimate state power on the internet, and in particular are underestimating the power of encryption. Yes, they can catch novices like you and 80% of civilization (The Dutch police even managed to catch a lot of criminals by convincing them to use a “secure” messaging service that was secretly controlled by the police. Note that you almost never hear stories about the police breaking into the HQ of well known secure services like Signal, I will soon explain why), but thing is, the few that know what they’re doing can easily pave the way for others, just look at the success of BitTorrent. Speaking of BitTorrent, did you know that the Pirate Bay, though not so popular nowadays, is still alive, despite states trying to kill it for years. Oh, and the reason it is less popular is that the attempts to kill it did harm it somewhat, so many people went to different torrent list sites (which still lists the same torrents as can be found on the Pirate Bay), as well as commercial digital distribution of media providing better services than the torrents, albeit at a fee. But many people are willing to pay a reasonable price to avoid illegal practices if it does not give them inconvenience! (here we see: you can’t beat them by trying to block them, but you can by simply providing a better service. Capitalism!)
Oh, and as for the “State seizes the servers” scenario, consider why the US doesn’t just send some black ops team into Russia(I think that’s where they are?) to e.g. seize the servers of Signal. 1. there is nothing for them to take. Yes, that’s right, while Signal’s servers provide the service, there is no unencrypted user data on them, not even useful meta-data. All is encrypted. 2. They can only stop them temporarily, at best. Signal’s server code is open source, so many people can and do create “mirrors” of their service, which could take over in the event that the real servers are compromised. 3. Impersonating the servers also doesn’t work. Roughly speaking, the client gets to audit all computations that the server makes on their behalf, and can tell and abort when it sees the server is attempting to preform an illegal operation.
Really, the only way for the state to kill even a single service like Signal (though admittedly, Signal has much more advanced security than most services. Still, most services do not need this security) is to kill the entire internet, at which point it would be much easier to make it a criminal offense to use the service. Of course, this is not something the should expect to be able to do without major riots. So, as long as the state does not seize complete control over the internet, it will remain a relatively stateless aspect of life, simply because state intervention is far too costly, even though they control most of the physical objects, the problem is that they destroy their own economy if they shut it all down.
I have no technical knowledge so I can’t comment on those aspects, but isn’t China a rather obvious counter-example to the idea that the state can’t control the internet?
“Major riots”, “costly” and “destroy their own economy” are all prices that states have historically paid (and survived) in order to defeat challenges to their power.
This is a good point. The Great Firewall of China used to be rather porous, but my understanding is that the Chinese crackdown on VPNs was fairly effective? I don’t know all the details of how they pulled it off, however.
What about Starlink and direct up/download using a system China has no control over?
China’s control over the internet isn’t absolute, but those things are both harder than just subscribing to a VPN service.
Starlink requires a satellite dish, a physical asset about the size of a table that AFAIK has to be out in the open because almost anything will block the high frequency wavelength. Much easier for the state to detect and do something about than a mobile phone.
(Apparently in colder climates, eg Russia or northern China, just look for the cats sleeping on the dish because it has a built in heater.)
Starlink still exists at the mercy of states, it’s just that it’s USA, not China. If it does become a meaningful threat to Chinese power and Starlink refuses to cooperate, the Chinese state has all kinds of interesting options – first, it can ask USA to force Starlink to cooperate, and second, if it fails, it certainly has proven capacity to blow Starlink out of the sky. It would violate the Outer Space Treaty, but if it’s a threat, China can and will quit the treaty and/or get the other states to agree to a new Space Treaty which would ensure that non-state actors get properly limited.
Not to mention that Starlink is owned by a certain E Musk, whose other little venture (an electric car manufacturer) makes over half its vehicles and a quarter of its profits in China.
The state always has levers.
Caveat: even if China’s control over the internet has tightened in recent years, it’s still far from perfect. Case in point: the runaway popularity of an anti-authoritarian pornographic Chinese webnovel: https://en.wikipedia.org/wiki/Mo_Dao_Zu_Shi
I’d be careful of leaning too heavily into that example–there’s less effort put into cultural-issues censorship than political censorship, but it hasn’t stopped the arrest & imprisonment of other danmei authors (e.g. Tianyi, see https://en.wikipedia.org/wiki/Danmei) & the main communities engage in a lot of self-censorship since they know they’re rolling the dice.
It’s also hard not to point out in this context that one of the stars of The Untamed was (unwillingly) at the center of a fracas that has resulted in basically Chinese KYC laws for *fanfiction authors.* Yes, to sign up for a fanfic site, you have to use your verified real name. (https://www.npr.org/transcripts/913689551)
Anyway, I suspect the uneven practice of censorship of Chinese BL reflects more of a strategic choice on the part of Chinese censors–to avoid seeming too heavy-handed–than a matter of them not being able to stop it if they could. Plus, frankly, a level of indecision within the political apparatus about what exactly they’ll tolerate. The Chinese state (despite leadership’s best efforts) is not actually monolithic, and there’s a lot of positives to having some degree of tolerance in front of the international community (and discouraging the organization of authentic civil-society protest), while still retaining the prerogative to censor anybody at any time, *and* blaming intermediaries when censorship does occur (e.g. “It wasn’t an official position, just the [state-owned] TV company voluntarily censoring!” etc.) And allowing some leniency for companies that will seem transgressive (but still play ball) is an excellent way to establish a new generation of captive self-censoring media apparatus.
The Chinese state is less concerned with *exactly* what is said, than with ensuring that it has control over public self-expression and that there never be any private agglomeration of power/influence that could compete with Party authority–essentially with ensuring the Party stays dominant over any civil society. A certain amount of selective tolerance may help it achieve those goals.
Anyway, I’m not really connected with the danmei scene, so I am pretty curious why The Untamed/Mo Dao Zu Shi was allowed to get as popular as it’s become, but it’s got a lot of things going for it–the historical/fantasy setting and wuxia/xianxia genre make it less threatening to modern culture; and also set it up as a potential cultural export to compete with Japanese/Korean media. Plus Tencent stood to make a lot of money & gain international stature from the (censored) animated & live-action adaptations, so maybe they pulled some strings once it got popular enough? But really, why this one survived when so many others have been reined in.
Internet censorship in China is not like it’s great wall. Most of their blockades can be circumvented by Tor, though one has to run through a few hoops. And it is not a total blockade, it is very much a tool for local political maneuvering.
The thing is, while the state is certainly a mighty and powerful human organizational force, it is not powerful enough to crack well-made encryption methods. This is why the likes of NSA instead try to get NIST make backdoors for them, because they can’t break it otherwise.
Well, is a few people getting heretical ideas really worse than massive rioting? The state’s hands are tied, because the cure is worse than the disease.
The reason the US doesn’t send a black ops team into Russia to seize Signal’s servers is the Russian Army. Hollywood has given a rather unrealistic expectation of what is and isn’t practical in this regard; non-failed states in peacetime are largely immune to any sort of “black op” that goes beyond non-violent information-gathering. There are some edge cases where that doesn’t strictly hold, e.g, abduction or assassination of your *own* citizens who have fled to a foreign country, but nothing that is likely relevant here.
Signal will continue to exist and function, so long as its doing so is perceived to serve the interests of the Russian government; it is a tool of Russian state power. What that says about Western users of Signal, is an interesting question. Yes, if your own government is meddling too much in your personal affairs for your taste, you can seek the assistance of a foreign government that only notices you as a useful nuisance to your own government, but that’s not the same thing as escaping the influence of governments.
Yeah, the style of argument where the internet is claimed to be stateless because Russia is a *different* state is somewhat unconvincing
My argument is slightly different. I claim the internet can be nearly stateless, because services can hop between 5 continents within less than a second. Or just run simultaneously on this server. Or more insidiously, coattail on other connections, so that the state cannot distinguish valid and important economic transactions from heretical information sharing. Unless the globalists are further than we thought, this seems to be a major barrier for action.
I do understand that historians try to judge these things extrapolating continuously from the past. But at some point you’re going to need to accept that things have changed, that the function is discontinuous, that there is a “radical novelty”, as Dijkstra would call it. (see https://www.cs.utexas.edu/%7EEWD/ewd10xx/EWD1036.PDF, for those with an interest for recent history )
But these things takes advantage of state competition to jump between competing jurisdictions; They are existing outside the state but inside competing states. And individual states can still shut them down by finding the people responsible and (in the worst case) shooting them in the head.They do not do this precisely because the effect is thus far, fairly mariginal, and not worth the trouble. These kind of services can exist precisely because they are not a major challenge.
The reason the US doesn’t send a black ops team into Russia to seize Signal’s servers is that Signal, AFAICT, live on AWS in US regions.
This is incorrect in several ways. First, Signal’s servers aren’t in Russia; they use AWS. Perhaps you’re thinking of telegram.
Second, the reason signal can avoid giving out information is that they don’t need any to run their service. Notably, this requires not doing many things where personal information would be needed, such as charging people money.
Yep. Signal app is owned by the Signal foundation, which is an American entity, and funded by an American billionaire. The actual information security problem is that the app needs access to your phone book and to know your phone number, which has a huge intelligence value. It allows understanding the networks of people, which can be utilosed for all kinds of intelligence and poloce work.
On the other hand, Signal uses a point-to-point protocol which doesn’t route the messages via a server and uses keys specific for that connection. This means that your message can’t be opened by the owner of the app (at least, if it is working as it is claimed to work, which is probable, as the code is public). Thus, confiscating the servers makes little sense?
The easiest way around this is the good, old rubber-hose cryptoanalysis. The state controls the real life, and can easily confiscate your phone, get it open and check your phone book and messages. That opens a window into the social network you are investigating, and allows further work.
Of course, if you would want better security, you would run your own signal app, with your own servers routed via a Tor and/or a VPN. In any case, the weakest point is the user end.
Concerning “No war in prehistory”. Again, it’s been a long time since I was an undergraduate, but I had a professor assert that when I was a sophmore. But he was very quick to clarify exactly what he meant with that. It wasn’t that there was no violence. It wasn’t that there was no organized violence. It wasn’t even that there was no organized “political” violence. That had been going on for as long as we can dimply peer back into the past.
Rather, I was at least taught that phrase in a more sociological context. There wasn’t war, because there wasn’t really peace either. The social structures of prehistory and pre-state organization didn’t really lend themselves to a conception of “war” that we’re more comfortable with and relate to in a modern, Westphalian sense: That of stopping of normal business to direct massive amounts of resources towards some martial end, and after the success or failure of achieving that end, it stops and things go back to normal. At least in the context we were discussing (mostly pre-state northern Europe), you more or less had constant fighting between different groups, but that it was more “Hey let’s go kill someone from that tribe over there since the hunt went well and we have some spare time” done whenever and wherever convenient and largely assumed to be viewed as a perennial part of life.
I hadn’t given much thought to outside academic contexts in those days, and I just assumed that was the normal understanding of the phrase “there was no war in prehistory”. Was my professor in a minority there?
War Before Civilization: The Myth of the Peaceful Savage by Lawrence H. Keeley is good. Discusses what it takes for civilizations to stop tribal raiding, if they can.
Basically human beings have been walking the guys over the hill and taking their stuff forever.
I remember reading the account of a hunter-gatherer woman of her supposedly violence free life in which she explained why she was on her third husband. Her second killed the first ‘because he wanted me’. The third killed the second to avenge the first. She gives no sign of how she felt about any of it. Did she grieve for her first and was she grateful to her third for rescuing her from the killer? Or did she want the second and resent the third? Or was she pretty much indifferent to them all?
That sounds more like intraband murder than war, to be sure.
As Azar Gat makes clear–Prof. Devereux kind of skated over this in his discussions of the history of warfare, because it’s a little politically incorrect–women are a major source of intra-male violence, from murder to feud to war, in primitive societies.
(Just to be clear, discussing the issue is politically incorrect because it deprives women of agency, and presents them as passive pawns. Which is apparently an accurate description, at least from a modern perspective. Of course, a modern perspective is itself a white male perspective, so we are can never find an Archimedean point.)
You’re right. But there are claims h-gs are just generally less violent then us nasty civilized folk.
Women were loot and pawns but no necessarily passive. There’s plenty of evidence in mythology of them working to make the best of their situation. The Sabine women memorably intervened between their Roman husbands and the very belated rescue by their fathers. Briseis in the Illiad is all set to marry Achilles, the man who killed her former husband.
Pushing back on “there was no war in prehistory” is useful, because while an academic may understand your meaning of “there was no war because there was no peace” the popular version of this will be Rousseau’s “noble savage” idiocy.
“Rather, I was at least taught that phrase in a more sociological context. There wasn’t war, because there wasn’t really peace either.”
Shades of Orwell!
Really more Hobbes.
“no organized violence.”
If a tribe’s warriors systematically raid another tribe, is that not organized violence?
I’m sorry if I wasn’t clear what with the double negative and all. But yes, there was organized and “political” violence for as long as we can dimly peer into prehistory.
In the interest of unmitigated pedantry, Aachen, at least the Aachen that was Charlemagne’s center, is not on the Rhine. There may be an Aachen am Rhein that I am unaware of.
The Sebastian Heath link is bad. Try this one:
Regarding state power in meatspace, there is always a relevant XKCD: https://xkcd.com/538/
I think your argument about the state ultimately having primacy over extra-state actors is solid (though one might quibble with specific details, as Discrete Lizard has done above). However, I think there’s another angle that’s also equally valid and that deserves consideration: if blockchain, smart contracts, etc. ever became sufficiently powerful, they would simply *reinvent* or *reproduce* the state within themselves.
Ultimately, these are all complex rule-systems for what behavior is allowed and what is punished. And a system of rules only exists within a community that collectively agrees to honor those rules.
The only real distinction between a state’s laws and the rules of a non-state system are that state-based laws claim a monopoly over using physical compulsion to enforce compliance. There are complications: the monopoly is *claimed* but not universally *enforced*: numerous shortened Yakuza fingers will attest to the persistence of extra-state corporal consequences, and differential treatment between left- and right-wing protesters demonstrates that the state is by no means punctilious about equal enforcement over its own citizens. And members of a community may use binding arbitration agreements to borrow the power of the state to enforce decisions of a private rule set, as in the case of binding arbitration agreements among members of the Orthodox Jewish diaspora to refer certain matters to religious courts.
But setting those aside, for non-state rule systems, the “punishment” is sort of limited to being excluded from the community where those rules apply. If this is, say, a game of soccer, then no big deal. But if membership in that community is sufficiently important, that is *enough* to grant the private community power over its members equal to that of the state. In the US, legally, if your employer is abusive, you can always “just quit”–but the threat of losing a job, and the power of supervisors within that private hierarchy, is acknowledged to be so great that it actually requires state regulation. If you’re an Orthodox woman whose husband refuses you the *get* needed to allow you to remarry, sure you *could* just leave your religious community and marry someone outside it, but for anyone who sincerely believes in their own religious beliefs this is an obvious nonstarter. And if Bitcoin et al. were ever ubiquitous to the point that merchants felt compelled to actually accept it, then they would be bound by the rules established by that network–the way they already are bound by “purely voluntarily” accepting the rules of credit card networks. Merchants would be bound to Bitcoin’s destructively deflationary structure. And if large miners decided to jack up transaction fees, or alter the underlying protocol, merchants would have no recourse; and if the blockchain forked, every merchant would be compelled to choose sides.
– Every system of rules ultimately governs membership in a community.
– As community membership grows in importance, so its rules gain more and more coercive force.
– Any sufficiently important community’s rules are indistinguishable from state coercion.
(And if you think about it, the converse of this is pretty much a basic anarchist stance: even the state’s rules are just a system you can choose to opt out of. Strangely, not many people choose to…)
 okay, not always, sometimes people have specific contracts, but mostly always
> However, I think there’s another angle that’s also equally valid and that deserves consideration: if blockchain, smart contracts, etc. ever became sufficiently powerful, they would simply *reinvent* or *reproduce* the state within themselves.
See also: the silk road and dread pirate roberts
> The brightness here is at times quite literal, a contrast between the drab, grey-brown vision of the medieval past and the actual, brightly colored medieval world.
The grey-brown vision isn’t always the default, I’ve been playing the adventure game Chains of Satinav recently: In itself it’s standard medieval fantasy (though leaning much more on medieval than fantasy unlike, say, Baldur’s Gate or Dragon Age) but I was surprised by how colorful the first area of the game, set in a city, is.
Not surprised to see you hating on crypto in the same post as you glorify the dark ages lol.
You just hate the future because you live in the past.
True, as the operator of a blog, I live sometime in 2004 or 2005.
It’s pretty rad here, honestly. Halo 2, Half-Life 2, the Burnout franchise is still running and no COVID. The Lord of the Rings films exist, but the only Hobbit film is a quirky but lovable cartoon. You should try it.
Dan Olson has a great video explaining why crypto is bad. And it is bad. And, by the way, I am not a historian who glorifies the Dark Ages, I’m a computer scientist.
Come join us in 2022. Half-Life 3 is pretty rad.
Apologies to those who have already seen this too many times:
I’ve been thinking about how to characterize Mars in Roman religion. To be, he always seemed more like a deity whose associations were manhood and citizenship rather than war per se. (*Every* Roman god was a war god!) But I’m frankly not exactly well-posted in ancient sources, and it’s not like a hold any relevant degrees nor can I even speak Latin.
Of course, both manhood and citizenship were inherently linked to warfare in Roman society until sometimes in the early-to-mid Imperial Era.
Also as a somewhat random aside, was Mars also Silvanus, or do scholars think that they were two separate deities who just got conflated once or twice4? The Roman trend of deifying concepts obscures this to me.
Mars was not just the god of war. He was also an agricultural deity, and Cato wrote up the proper formula for celebrating the private purification with suovetaurilia:
I don’t disagree with your take on crypto per-se. If crypto ever actually threatened to topple all the world’s governments and replace them with an anarcho-capitalist cyberpunk future, states would take whatever drastic measures were necessary to prevent that. That said, there are real difficulties in taming the internet in general and crypto in particular without drastic measures.
While centralization has been a major theme in the evolution of the internet, the physical infrastructure still isn’t as centralized as you might think, which is one challenge. Another is that some of the things policymakers talk about wanting to have are borderline incoherent. For example, some people say the government should have a master password that lets them decrypt any encrypted communication anywhere, and if you ask them questions like, “what happens if criminals or foreign spies steal the password?” they will just insist that the nerds could solve this problem if they really tried which is frankly idiotic.
China keeps a tight grip on its country’s internet, but many of the things it does to achieve this sound completely bonkers to Western audiences and I can’t imagine them being adopted in the US absent an extraordinary crisis. Even then, stuff slips through the cracks—like the insanely popular pornographic (not to mention anti-authoritarian) web novel Mo Dao Zu Shi. Controlling the internet is hard, it turns out.
Mo Dao Zu Shi hasn’t been accessible in China since 2019, so this is not a strong argument for the porosity of Chinese internet censorship.
“Another is that some of the things policymakers talk about wanting to have are borderline incoherent. ”
People often have mutually incompatible desires. They have to make trade-offs. Not everyone can have tanks with impenetrable armour and irresistible guns, much though every states’ army would like to. But the state can probably have tanks that are much better than those of any non-state actor within it. That’s good enough to be getting on with. Perfection is unattainable, but it always has been, and it’s always been unnecessary.
Yes, trade-offs are a thing. But when it comes to regulating the internet, many non-technical folks are hopelessly confused about what the tradeoffs even are. They try to reason by analogies from things that are not very much like computers at all, like tanks, or nuclear weapons.
(Seriously, I wish I knew how to convince policy makers that “Manhattan Project” is not a magic phrase that will make possible things experts generally agree are impossible.)
All that is true, but policy makers have leverage and crypto bros… don’t. Much fo the ostensible wealth they have is, quite frankly, pitiful compared to the really powerful industries out there. It shows big headline numbers, but often that’s on very thinly-traded quasi-securities with little paper trail. This makes prices very vulnerable to things like wash trading to inflate the nominal value of assets that would simply lack that value when marketed in the “real world” It’s not even a “meatspace vs cyberspace” since of course much of the real economy works directly in and with the internet.
basically, in one tiny corner of the goblin kingdom, the goblins in their grubby holes have gotten a bunch of lead, shaped into rough facsimiles of coins, and declared it gold. And they say nobody can question that it’s gold. But even on their own numbers it’s really small potatoes compared to the goblins in the really big kingdoms who do, in fact, have large stocks of verified gold even though they’re prone to exaggerating the size of the hoards.
If the government is for sale, the crypto bros are basically going to be the last in line to buy it, and even if they somehow do, they now face much more entrenched, intelligent, and ruthless adversaries. Banks, internet companies, all other financial groups, and even industries such as food service and trucking. And that’s without getting into the international markets that would burn down a country before dealing with crypto nonsense. They’re not really interested in making this stuff work for the convenience of crypto bros. And they all have better products.
This is also leaving out the fact that the technology, quite frankly, is a complete joke. It’s a pile of insecure padlocks built atop an inherently dodgy concept; the reality can never get beyond that. Even though their responses have generally been very different levels of indifference, irritation, or hostility, basically all major powers functionally agree on the useless of crypto. To the extent it may be used in the future, it’s really just a different way to exchange existing money. Which is fine, but the decentralized networks ended up being centralized anyway, so this ultimately accomplishes literally nothing that your credit card lacked decades ago.
I want to believe you when you say it’s wonderful, but The Bright Ages is such an unimaginable bad title for a book on the middle ages I find it very difficult to do so. Unless the publisher had a demented fixation on humiliating the authors, it’s hard to see how a title choice that bad doesn’t denote a worthless piece of crap written by halfwits.
Disagree. It’s a great title that puts its intended intervention front and center: the reader knows exactly the argument it is going to present and the frame through which it is going to present it.
Of course that is, to a degree, subjective, but I think the title is great and I know the authors are not halfwits. The historical knowledge and learning on display in the book is considerable.
Was in a terrible mood about something unconnected when I wrote this comment. Would delete if I could work out how to; very unfair, very much hope neither author ever sees it, and as you know them there’s a non zero chance that they might. Even nasty comments from halfwits on the internet who haven’t read your book can wound. Feel free to delete mine if you are able to.
You’re not you when you’re hungry, grab a snickers.
While I agree with your overall argument that blockchains will not allow users to escape the control of the state insofar as avoiding taxes, there are a couple arguments here that are incorrect. States can’t really stop blockchains without getting rid of the free Internet and general purpose computing; the *best they can do* short of this is to tax cryptocurrency revenues.
> Indeed, to the contrary, the massive server complexes required to maintain the blockchain and their proof-of-work system make for fairly obvious meatspace targets […]
While this is true, this by itself does not mean that a state can take control of the PoW blockchain on a whim. In fact, the *whole point* of PoW is to make this *very hard,* no matter how totalitarian the state may be. To do this, the state(s) would need to implement and maintain permanent majority control over all of the means of producing the bespoke hardware for mining that its residents can access. Otherwise, residents would be able to collectively out-mine the state-controlled massive server complexes. This means regulating what kinds of chips foundries would be able to build and sell in their jurisdictions.
While this by itself could be done without too much fuss, users (and developers) could retaliate by changing the blockchain’s PoW algorithm through a coordinated upgrade (a “hard fork”), which would render any existing bespoke mining hardware useless. In this outcome, the new PoW algorithm would be something that runs on commodity hardware, meaning that anyone with a computer and Internet connection could participate in mining. To disrupt *this*, the state would need to severely constrain public access to general-purpose computing, which would be a very tall order. In addition, they would need to severely constrain access to the Internet in order to prevent nodes from propagating blocks and transactions (another very tall order).
While states could prevent blockchains from operating in their jurisdictions (China already has), the means to do so are so disruptive and resource-intensive that in many places, the state actors would lose their legitimacy in doing so. Even in places where mining is illegal, large-scale mining can still happen simply because the miners can bribe the agents of the state into looking the other way, meaning that a ban on mining would *also* require the state to compensate its agents above the profitability of taking bribes. This effectively means that the only states who are capable of enforcing an effective ban on blockchain activity are states that are *already* good at being totalitarian.
So while it is true that the means of block production all exist in meatspace, they are so widely distributed and so readily available that stopping block production is tantamount to getting rid of general-purpose computers and networking wholesale, and replacing it with state-sanctioned equivalents. This is not something any state — even China — can easily do.
What would happen instead, as you point out, is that states would “control” blockchains by policing the on/off-ramps to other national currencies. This is effectively what the US and EU do — they tax your cryptocurrency earnings and sales, and they require exchanges doing business in their jurisdictions to perform KYC/AML measures to ensure broad compliance with the law. But this is far cry from eradicating the system; on the contrary, passing laws and writing legal memos clarifying how exactly to do this serves to *legitimize* cryptocurrencies as a viable money-making industry. This will likely be the end-game for cryptocurrencies in non-totalitarian states — it becomes an accepted and regulated part of the tech and financial industries. The users won’t escape the state; they’ll co-opt it.
> For instance, MetaMask is run by ConsenSys, which is headquartered in New York; it would be fairly trivial for the United States government to thus acquire a quite complete inventory of all of the blockchain assets of anyone using MetaMask by pointing metaphorical legal guns or, failing that, very literal actual guns at ConsenSys.
MetaMask is a client that reads some blockchains and produces transactions to append to them. Taking control of MetaMask and ConsenSys would not be sufficient to take control of the digital assets that the users’ private keys controlled. The state would instead need to either (1) wage an eternal 51% attack on the underlying blockchains, (2) steal the users’ private keys en masse, or (3) prevent users from buying and selling crypto assets with national currencies if they wanted to take control of their digital assets. None of these are easy or straightforward.
You’ve missed the point – you are assuming the state needs to control the blockchain. It doesn’t. The state is never going to try to control the blockchain because the blockchain isn’t real and its just much, much easier to control the link between the blockchain and meatspace because everything everyone actually wants is in meatspace.
So the state is going to control you instead. As this article notes (https://moxie.org/2022/01/07/web3-first-impressions.html) because most actual users only interact with blockchains through a platform and indeed *can* only interact with them through platforms, the platforms are the obvious point of attack – using the threat of legal action to compel those platforms to change the displayed state of the chain to differ from the *actual* state of the chain. Since most users can’t access the actual chain directly, its contents are meaningless – what matters is what MetaMask or OpenSea *says* the blockchain is.
And those companies will say that the blockchain says whatever it needs to say to keep them out of jail. At which point, the blockchain says whatever the SDNY says it does and the whole idea collapses. Likewise, the state doesn’t need to take control of your digital assets – it can just assess taxes or fines on you (in dollars) and then put you in prison if you fail to pay. ‘Getting your crypto’ is a pointless extra step, they have YOU, who the hell needs your bitcoin?
The most the state will ever do to the blockchain is read it to correlate users and accounts with real people it can fine or arrest. It is never going to be necessary for the state to do anything so silly as a 51% attack.
I’m not 100% sure of the details, but I think the way platforms work is that if MetaMask behaves in a way contrary to your interest, you can keep your wallet and go find another platform to do your transactions at. And the nature of the Internet has a tendency to guarantee that, as long as the Internet exists, a platform that agrees with your interests will exist.
The government, could however still have a law that makes Bitcoin illegal, or that requires you to pay taxes on it, and enforce it. And it’s possible that they’ll get 99% of the population to obey such a law.
The first important difference here is that the US actually has to pass a *law* that explicitly makes you pay these taxes, and that’s going to require much more support within the government than simply requesting help from banks.
The second difference a small country whose leaders have read too much Marx and want to make some people more equal than others might have more difficulties with that, especially when there’s always the threat of people running away with their Bitcoins.
Moxie’s post is good but I don’t think it quite means what you think it means. He’s absolutely right that people don’t want to run their own servers and never will. But setting up a web server is nevertheless a lot easier, say, creating a pirate haven in the classical Mediterranean. Just because a few websites dominate the internet doesn’t mean you can shut down the internet by shutting down those websites, because shutting down those websites just gives people a reason to come up with alternatives.
The blockchain case is a bit special because it’s not clear to me blockchain technology has any practical applications beyond moving large sums of money illicitly. (Transaction costs mean it’s not even that great for moving small sums of money illicitly.) Therefore, even if a relatively small number of individuals within a state benefit from blockchain technology, the state qua state has nothing to gain from keeping it around and might in theory just ban it. But the internet as a whole has far more applications than the blockchain does, which makes banning it outright much more costly. So states are forced to confront the much harder problem of how to allow the uses of the internet they like while disallowing the uses they don’t like.
Hi, thank you for the reply.
> The state is never going to try to control the blockchain because the blockchain isn’t real and its just much, much easier to control the link between the blockchain and meatspace because everything everyone actually wants is in meatspace.
> So the state is going to control you instead.
Yes, I believe we are in agreement there. The state isn’t going to try and make the blockchain go away; it’s going to regulate the on/off-ramps between blockchain-based digital assets and the physical goods and services it can be traded for (such as money), which it already does today. My quibble was that the means of “control[ling] you instead” won’t be to seize the “massive server complexes” or compel MetaMask or ConsenSys to subvert the system. They don’t need to, and it wouldn’t work anyway.
> As this article notes (https://moxie.org/2022/01/07/web3-first-impressions.html) because most actual users only interact with blockchains through a platform and indeed *can* only interact with them through platforms, the platforms are the obvious point of attack
Sure. But — and I’m not trying to split hairs or argue semantics here; this is a widely understood distinction — if you’re not running your own blockchain node with a full replica of the chainstate, then you aren’t a user. You are not using the blockchain the way it was intended; in fact, you are not interacting with the blockchain at all! The *whole point* of implementing *anything* on a blockchain — which is otherwise the worst-possible least-scalable database that the best minds of this generation have been able to come up with — is that you can maintain a replica of the chainstate yourself. In doing so, you remove the platform as a point of trust. OpenSea, MetaMask, a chain explorer, etc. can lie to you about your digital assets, but if you have a replica of the chainstate itself, you can avoid this by instead querying your blockchain node.
Also, Moxie’s example isn’t a very compelling one. The blockchain record of the NFT his public key to a *URL*, not the image itself. So, *of course* he can change the data the URL resolves to — he controls the server that resolves the URL! But, this behavior is due to the fact that this specific NFT smart contract is badly designed. A better-designed NFT system would bind your public key to the cryptographic hash of the NFT data, so that once you obtain the NFT data, you can authenticate it with the hash (so it doesn’t matter where you get it from — it either matches the hash or it doesn’t).
> Since most users can’t access the actual chain directly
Yes, they can. Making it so you can run a node easily is a design goal of most blockchain systems (including Ethereum). Running a local blockchain node is a much easier ask than running a Web server (which Moxie pooh-poohs as well), since they don’t need to be online 24/7 nor do they need bi-directional connectivity to the Internet (i.e. you can run them at home with no port forwarding or public IP addresses needed).
Moreover, there are other options in-between blindly trusting the likes of OpenSea and running a full node. For example, you can fetch the blockchain headers (which contain the PoW) and use those to authenticate Merkle proofs of your keys’ digital asset holdings. This isn’t quite as good as running a full node, but it’s much less resource-intensive and offers a much better security guarantee.
> And those companies will say that the blockchain says whatever it needs to say to keep them out of jail. At which point, the blockchain says whatever the SDNY says it does and the whole idea collapses.
Sure, but since users run nodes, this would be of no consequence to them. This is why a state that’s interested in controlling who owns which assets and who can trade them is going to have to do nothing less than control the on/off-ramps for digital assets. Compelling platforms to lie isn’t enough; it’s tantamount to going after the pirate ships instead of controlling the ports of call.
> Likewise, the state doesn’t need to take control of your digital assets – it can just assess taxes or fines on you (in dollars) and then put you in prison if you fail to pay. ‘Getting your crypto’ is a pointless extra step, they have YOU, who the hell needs your bitcoin?
We are in agreement on this point. My points of contention are the *means* by which the state would achieve this. They wouldn’t compel platforms to lie (they don’t need to); they won’t try and co-opt vendors like ConsenSys and MetaMask (they don’t need to); they wouldn’t try and break the blockchain itself (they don’t need to, and it’s very costly); they would simply apply existing KYC/AML mechanisms to prevent you from trading your digital assets for other goods or services.
Also, to address the main thrust of your musing:
> in particular they imagine that blockchain technology will create an economic and social space outside of the control of the state, traditional banking institutions or society at large
This probably isn’t the majority opinion of crypto users these days. It’s definitely the opinion of the OGs, but in the past three years or so, the influx of new users has significantly altered the character of the userbase. Like, 16% of all Americans report having traded crypto (https://www.pewresearch.org/fact-tank/2021/11/11/16-of-americans-say-they-have-ever-invested-in-traded-or-used-cryptocurrency/), and the data covers Americans from all walks of life. Would you have me believe that they *all* have this goal, even though they come from very diverse backgrounds and are likely to have similarly diverse value systems?
FWIW, as someone who has been designing and implementing blockchains for a living since 2016 as part of his PhD work, I’m gunning for a world where blockchains are simply another piece of boring nuts-and-bolts technology you’d consider using to build out your next online business. My biggest ask from the state is regulatory clarity on how users are supposed to report their crypto holdings on their tax returns.
In theory this is all correct, but I think you’re vastly over-estimating the extent to which blockchain offers benefits to individual users that will justify them running their own independent nodes. And under-estimating the extent to which blockchain systems are so cumbersome that all practical uses must end-run around them back through centralization.
Let’s be concrete. Suppose I want to use Bitcoin to pay for something. I’ll even spot us the assumption that I have enough Bitcoin to pay for it already. Today’s figures say it takes 23 minutes to confirm a Bitcoin transaction (https://ycharts.com/indicators/bitcoin_average_confirmation_time) and Coinbase recommends 3 confirmations to be certain a transaction has gone through (https://help.coinbase.com/en/coinbase/getting-started/crypto-education/bitcoin-glossary). So we’re looking at maybe 1h10m for a payment to go through. Sure, we can reduce that a lot if the seller is willing to take on a lot of risk–but why would they? There’s already a transaction fee (currently around $2.50, https://ycharts.com/indicators/bitcoin_average_transaction_fee) that somebody has to pay–how have they received any benefit over a credit card processor who charges them less than that and doesn’t take an hour? Sure, “chargebacks” and “the processor could cut them off”. But neither of those points matter if the solution to them renders your business unsustainable.
So naturally what happens is instead, actual users pull a MERS (https://en.wikipedia.org/wiki/Mortgage_Electronic_Registration_Systems)–you use Coinbase or whatever exchange as an intermediary. And they keep a central ledger, and internally mark whoever owns their bitcoins (though the blockchain itself probably says that the exchange owns them). They’ll probably commit those transactions eventually under the right circumstances, but as much as possible they’re going to clear them internally, to skip the delays and the fees. And now they are the target for SDNY–they can lie to you about their own ledger and you have no recourse; they can be seized, your assets frozen, etc.
You’ll complain, correctly, that in this situation, people aren’t actually using the blockchain. And that’s true, but irrelevant. This isn’t happening because People Are Lazy or whatever; it’s because an implementation of the idealized system is *unusable in practice*. You have to do an end-run around it so you can get on with your life. “People aren’t doing it right” for a system that can’t be done right is not a valid diagnosis, it’s a “No True Scotsman” fallacy.
Otherwise put–16% of the American population reports having bought crypto; but the suggestion that 16% of Americans have set up a node and downloaded the entire blockchain (what, 350 GB for Bitcoin? Nearly a terabyte for ethereum?) is transparently laughable. Really, what happened is 12% of Americans paid a bitcoin broker to earmark some of its bitcoins for them.
It becomes just like email–sure, you *could* set up your own mail server (although these days you really can’t, because service providers had to create a trust cabal to prevent spammers). But nobody does that. So everything is foolproof in theory, and very fool-friendly in practice.
Look, I know you know this, you did a PhD in this stuff. And I’ve tried to be concrete and look at Bitcoin, while you’re surely thinking of technologies beyond Bitcoin. Maybe you can get around these problems. But as a software engineer, I’ve yet to hear a significant problem where blockchain really is the best solution. I mean, maybe you could use it to run a trusted anonymous decentralized registry of people’s public encryption keys? Even then I expect someone would poison its data…
Regarding The State Will Always Find A Way: just as a hypothetical, what if some technology emerged that really could defeat, or at least severely push back against, the state? Since meatspace ultimately involves physical force, I presume it would have to be something in the realm of physical space. Perhaps something like the short story “Committee of the Whole” by Frank Herbert, in which a way to build a laser capable of blowing up a tank using components available at any hardware store becomes publicized. Or less dramatically, the efforts currently underway to devise a practical firearm that can be produced on a home 3-D printer. I’m reminded of George Orwell’s essay “You and the Atomic Bomb”, in which he contrasts weapons that favor decentralization vs. centralization and concludes “Had the atomic bomb turned out to be something as cheap and easily manufactured as a bicycle or an alarm clock, it might well have plunged us back into barbarism, but it might, on the other hand, have meant the end of national sovereignty and of the highly-centralized police state.”
We already have at least one super technology that can push back or defeat states: the printing press and literacy. Look at what Martin Luther and Karl Marx achieved. Whether good or bad, they achieved much more, faster, than the Internet dreamers.
I mean, the argument is that they didn’t: They managed to co-opt state structures, not defeat them.
The printing press is a gun, but the bullets are incredibly hard to make and only really work once. It’s like saying we already have a technology which anyone can use to get rich quick – we have lottery tickets! Oh dear, your example makes lottery look optimistic.
Making each bullet for the printing press gun is essentially a research project.
The most important duty of the state, from the viewpoint of the people living in it, is to protect them from attacks by others. So making it easier to kill people makes the state more important.
As Orwell also said, anarchism in England was an effect of the protection of Scotland Yard, as pacifism was an effect of the protection of the Navy.
I don’t see how something like “a laser that could blow up a tank built with parts from the department store” (to use this specific example, though the specifics seem less important) would let some entity (the common man or woman, I guess?) defeat the state. Because you know who else has access to that same technology? The state. And the state has the advantage of a pre-existing professional military to take advantage of it. If the atom bomb was as easy to make as a bicycle I’m guessing we’d be back in a radiated Stone Age by now, since states are jealous of their power and do not brook contenders to it lightly.
Regarding The State Will Always Find A Way: just as a hypothetical, what if some technology emerged that really could defeat, or at least severely push back against, the state?… Perhaps something like the short story “Committee of the Whole” by Frank Herbert, in which a way to build a laser capable of blowing up a tank using components available at any hardware store becomes publicized. Or less dramatically, the efforts currently underway to devise a practical firearm that can be produced on a home 3-D printer.
That’s basically the situation for most of the pre-gunpowder period, when the main weapons were generally spears and arrows, which could be made by the local blacksmith. If an analogous situation were to arise in the future, I expect it would have similar effects: the state would still have an advantage, but not as great, so states would still exist but probably be able to exert less control over their subjects than they currently can.
I think some people would find it helpful if they thought about just what a State actually is.
In general, a state would seem to be an organized group of people who have, throughout some region, a near monopoly of violence. Not an absolute monopoly – other people may still be able to beat their wife or rob a convenience store. But if they think the state will disapprove of their action, they will try to keep it a secret from the state, because if they have to fight it openly, they expect to lose.
So to “destroy the state” with something internet-related you have to do one of the following:
a) Destroy all people. I should think if you want to do that, you need something more like Skynet than Blockchain.
b) Destroy organisations of people. I suppose some organisations could be broken up via internet-mediated communications, but in general, new communication technologies do not make organisation harder. Rather the reverse.
c) Destroy the monopoly of the use of violence. This is how most state failures happen.
d) Destroy the possibility of using violence. I have some difficulty seeing how you could achieve that.
It would seem that d) is the only realistic possibility, and indeed it does happen from time to time. I note that whenever it does, everyone seems to regard it as a disaster for all concerned. Certainly, the worlds anarchists never seem to flock there to escape the tyranny of the state. They stay in some nice law-abiding area while telling everyone that laws are immoral or the police should be defunded.
The anarchists major problem, then, is that they are trying to work towards something which, when confronted directly, even they don’t want. If Blockchain actually could create a region of lawless anarchy, hardly anyone would want to go there.
Typo in the above: I should have said that c) is the only realistic possibility.
Naturally, if you get one letter wrong, it can only be the most critical one.
OK, that makes more sense.
I’ve never wanted an edit function more. It’s infuriating.
d) Destroy the possibility of using violence. I have some difficulty seeing how you could achieve that.
I think civil disobedience / martyrdom could in theory achieve this. States primarily use (the threat of) violence as a means of coercion. If enough people refuse to obey no matter what happens to them, there is little the state can do. At best it could try to replace them with people more willing to obey.
So if you could use the internet to convince a majority of the world population that living under a state is worse than being imprisoned/killed/tortured by a state, you might be able to destroy the state. But people have a rather strong aversion to suffering and death and states are normally willing to offer some concessions if necessary. So getting enough people to walk that way until the state is destroyed is very unlikely.
1. In practice, the most important people you would need to convince are states’ law enforcement and military personnel…who are kinda self-selecting for loyalty to the state. The only other way for this revolutionary unproductivity to work without a willingness to use violence against the state and/or capital class would be for the civilians to be all (or predominantly) drones who would willingly let the National Guard shoot them rather than stand down, but for the National Guard et al to be composed of actual humans who would eventually balk at having to kill literally everyone.
2. The effectiveness of civil disobedience on its own has been…debated. In particular, most successful civil disobedience movements were accompanied by less-civil (or at least violently self-defensive) movements aiming for the same goal. Of course, maybe this would change if civil disobedience was performed by people who didn’t care if the state imprisoned, tortured, or killed them?
3. Worse, as Ian Danskin has noted (“CO-VIDs: the gandhi trap,” 2020), the modern world has crippled civil disobedience. If enough people start questioning whether your civil disobedience was actually a riot, then the corporate media (seeing a lucrative story) will report “both sides” of the issue. (We see this in action with Black Lives Matter.)
Having a significant number of people tricked into seeing a peaceful movement as a violent one, and an even larger number who think the issue is ambiguous, kinda disconnects the pressure point that civil disobedience targets. So in addition to being willing to ignore government orders at any cost, your drones would also need access to sufficiently accurate information that they could recognize the possibility of disabling the government via mass disobedience.
Nobody needed to be tricked into thinking that there was violence performed by BLM protesters. The only trickery that was performed was on the people who think that the BLM protests didn’t get violent.
“In particular, most successful civil disobedience movements were accompanied by less-civil (or at least violently self-defensive) movements aiming for the same goal……Having a significant number of people tricked into seeing a peaceful movement as a violent one, and an even larger number who think the issue is ambiguous, kinda disconnects the pressure point that civil disobedience targets.”
The logic of your position would seem to be that the BLM protests were not violent enough. Perhaps. OTOH, I cannot help but think of this comment about violence at Civil Rights protests in 1960s America:
“I find that counties close to nonviolent protest between 1960 and 1972 see increased Democratic vote share. Conversely, counties close to violent protest vote more for the Republican Party. That’s likely because, following the 1964 Civil Rights Act, Democrats tend to be seen as the party of civil rights and Republicans as the party of law and order.”
First off, I have no idea why you would project that assumption onto me. Just because successful movements all have X doesn’t mean unsuccessful movements all lack it. Imagine that Alice says all cars need gas to run, and Bob accuses her of saying his totaled car just needs to be refueled.
Also, you’re confusing correlation and causation. I’d argue that areas likely to vote Republican (specifically after Republicans sided with the racists) are areas where protestors would need to get violent for their own protection. It wasn’t the Klu Klux Klan’s golden age, but lynchings were still a thing people needed to worry about. The mere fact that violent protests and Republicans are found in the same place does not mean the former causes the latter!
And when, exactly, do you claim that Republicans sided with the racists?
Remember that the last KKK member to be in Congress was not that long ago. And he wasn’t a Republican.
Sometime around 1970; a quick Google search says the Southern Strategy began in the presidential elections of ’68 and ’72.
Is claimed to have.
Anyway, the last KKK member was decades after that, and we all know what party he belonged to.
“In particular, most successful civil disobedience movements were accompanied by less-civil (or at least violently self-defensive) movements aiming for the same goal. ”
Are you taking that from Gederloos’ self-serving bullshit ?
I’ve never heard of Gederloos (Gelderloos?) but memory says MLK said something about people talking to him because the alternative was Malcolm X.
No. I don’t even know who or what Gederloos is/are.
I think you are thinking about civil disobedience as a means of non-violent protest, but that isn’t what I mean. Protests depend on convincing bystanders which then influence the state, instead the goal here is to make retaliation not achieve it’s aim. The state’s enforcers could be made up of drones as well, a dead tax resistors doesn’t start paying taxes and a dead conscious objector doesn’t join the military. (By the way, it isn’t even necessary that those people don’t engage in violence, only that they don’t react to it in the way the state wants.)
For smaller aims this principle is regularly applied against companies in strikes. Sure, the company can fire all strikers, but that wouldn’t make them go back to work. And states budging to general strikes is not unheard of. Strikes can be violent or non-violent, but that doesn’t determine if a strike is successful. The level of participation is the thing that matters.
Unfortunately Ian Danskin’s video doesn’t discuss forms of disobedience that aren’t linked to protests much. Strikes still work in the modern world and other forms of organized disobedience are at least thinkable.
Strikes absolutely work. But strikes against the government aren’t very effective, because A. the people residing within a country don’t generally have any means of organizing a strike (since their primary organizing body is the state they’re trying to resist) and B. the state has very effective strikebreakers called “police” (and, if the strike is big enough, “the military”).
“I think civil disobedience / martyrdom could in theory achieve this. ”
How would that work against, for example, the mafia? If you eliminate some peoples ability to employ violence, you have just guaranteed dominance by the people who are not so hindered.
More generally: Violence is the ability to hurt people. The distinction between Civil Disobedience and violence is therefore less distinct than people tend to think.
How would that work against, for example, the mafia? If you eliminate some peoples ability to employ violence, you have just guaranteed dominance by the people who are not so hindered.
If literally everybody (/the vast majority of people) refuse to pay protection money, what are the mafia going to do, burn down the entire town? I guess they could, but then they’d be left living in a smoking ruin, which I don’t think would really further their interests.
Of course, the problem is getting enough people to refuse to pay protection money. Most people don’t like seeing their homes and livelihoods go up in smoke, so absent some kind of greater coercive force — say, a state — the majority will probably pay up.
Politics would be so much easier if almost everyone were a perfect selfless angel. It would solve a lot of collective action problems.
The second-biggest problem with resisting the Mafia (after it outgunning you) is that if you’re a law-abiding citizen in a state where assault and murder are crimes, you don’t dare fight dirty. If you shoot the bone breaker who tried to shake you down, you get arrested by the police for murder. And if you try to say “They threatened me! Threatened my family! My home and business!”, the prosecutors will first ask if you have any proof of these allegations (“well… there weren’t any witnesses…”) and in the end will say “you can’t take the law into your own hands” – even in cases where the law has manifestly failed to protect you, and due process favors people with a greater capacity for underhandedness and plausible deniability. This was the point I was getting at in my comment about libertarian/an-cap fantasies where the absence of a state at least removes barriers to direct retaliation. Or as one person commenting on “anarcho-tyranny” put it, “In a state of outright anarchy, it is the Hobbesian war of all-against-all in which life is solitary, poor, nasty, brutish, and short. But at least you have carte blanche to protect yourself.”
Michael, your only hope of resisting the Mafia is that if you’re a law-abiding citizen in a state where assault and murder are crimes, the Mafia will face some danger from killing you in front of your family. Certainly more danger than they fear from you. They outnumber you.
ad (@ad98832376) , you’re confusing the hypothetical with real life. In the hypothetical either there wouldn’t be a Mafia because all of its potential victims would be anarchists with guns; or far more likely the well-organized bullies would have formed a proto-state with a king, army, laws and taxes. The point being that while an-cap utopias are probably an impossible fantasy, they do challenge us to think outside the box and contemplate the full consequences of a world in which everyone is armed and there’s an egalitarianism of force.
Never heard of Danilo Dolci ?
I don’t think this is wrong, but it’s worth pointing out that many of those same technologies have enabled the modern gig economy, which is designed to (among other things) weaken the workers’ ability to organize. So while communication technology enables more efficient organization, it can also allow the powerful to disrupt organizations more effectively.
I’d like to distinguish between anarcho-capitalists (the sorts of people who dream of cryptocurrency destroying governments as we know it) and actual anarchists (who are usually critical of cryptocurrency, though far from as universally as they are of anarcho-capitalists).
Functionally no anarchists actually want to create a lawless society, even if you include anarcho-capitalists; they just think centralized states are unfit to create such laws. Anarcho-capitalists instead think these laws should be codified in a individual contracts which individuals non-coercively agree to, while anarcho-capitalists…disagree a lot on the details, but seem to prefer democracy over might-makes-right.
One frequent feature of fictional libertarian/an-cap societies ala’ L. Neil Smith is that in the absence of a state enforcing laws against murder, the leaders of organizations that end up pissing off a lot of little people will end up finding themselves the targets of either personal vendetta or vigilante/mob justice. While for a dozen or more reasons this is almost certainly an unworkable fantasy, it does underscore the role of the state in forcing the masses to go along with a system that shields well-connected malefactors.
GreatWyrmGold, I didn’t see the need to distinguish between the different anti-State ideologies because the point I wanted to emphasise was that none of them ever endorse any real Stateless part of the world as approximating their ideal anyway. For some reason, they never seem to think much of any Actual Existing Anarchy.
They are like people who say how utopian the world would be if only we could fly, and refuse to admit the existence of balloons, gliders, helicopters, airplanes or airships.
So…because the modern world doesn’t have any societies like the ones anarchists talk about, they’re deluding themselves in thinking those societies could exist?
Anarchists and ancaps alike have specific ideas about what a good stateless society would look like. You can argue that those ideas wouldn’t work, but arguing that societies which don’t resemble their ideals are bad is pure non sequiter.
Depends on whether they ever get the societies they want, or end up with these societies instead.
It wasn’t anarchists who launched the coup that basically destroyed Somalia, and they weren’t behind any of the other lawless regions people point to when they say anarchism wouldn’t work.
They were, however, involved in establishing the Paris Commune, which was an excellent demonstration of the only empirically-demonstrable problem with anarchist movements: They don’t actually have the firepower to defend their ideals against the hierarchies they seek to overthrow.
On the contrary, many attempts at anarchism have shown their problems are many and not easily surmounted.
Moot point. If you admit they can’t actually survive because of their weakness, you admit there’s no point.
I once wrote an almost-essay length post about this very subject: how does a stateless society defend itself from the conquering armies of a state? Based on the historical evidence my conclusion was “very poorly”. Indeed the evidence seems to point to the very raison d’être for states is to support an army and large scale warfare. If a stateless society could find a way to defend itself, the details would sort themselves out; if it can’t all other questions are moot.
Regarding defining the state, I think you can just rely on Max Weber: “a human community that (successfully) claims the monopoly of the legitimate use of physical force within a given territory.” It allows the existence of other users of violence in a territory (i.e., criminals), but the key is that the state is generally seen as the only legitimate user of violence.
For those looking for some historical background on the revolutionary (or not) nature of the Internet and crypto, start with “A Declaration of the Independence of Cyberspace” by John Perry Barlow. It’s not a book so won’t take you long to read.
It’s a positive vision for the future. (No doubt you can find flaws and problems, since it was written by a human being.) It really did, or does, inspire a lot of Internet enthusiasts. You could probably test whether a cryptocurrency promoter is an idealist or a grifter by asking what they think of JPB’s Declaration of Independence: if they don’t have an opinion or haven’t heard of it, walk away.
Note that it was written in 1996. The proclamations about crypto and distributed systems freeing us from Oppression By The Man are not new.
For another view of how the Internet could revolutionise society, try “Assassination Politics” by Jim Bell. Also not too long, also from around that time.
Humans tend to systems in large numbers. At present those systems are mostly Westphalian states (though some of those are in strange interstices like the Vatican or the Seychelles). Invariably those systems start to evince methods of control ranging from social pressure (i.e. appropriate tipping percentages in a given locality) to totalitarian brutality (gulags).
I’m very interested in non-utopian ideas of how humans can form a viable system without the usual array of violent controls in groups of >200 people.
As it stands I think that every system of control breeds a subgroup that seeks to escape that control for various reasons. Sometimes it is social pressure and sometimes it can be done through internal change (i.e. gay marriage). I have sincere doubts that any attempts to escape the monetary control of the state will result in anything other than another form of state control.
Ne me stulte! Ollie investigationis adiutor non est! Cattus est anima fur!
Keep posting those cat pictures, please! They’re seriously adorable.
A few days ago, I had a new thought regarding Sparta and I just got an excuse to ask about it.
I find myself convinced by the arguments of Bret Deveraux about Sparta. However, if they were not even above average in terms of fighting prowess…
How did they end up becoming a major power in the peninsula?? Prof. Devereaux says they were even *worse* at strategy than tactics. The fact they fought so many battles as a part of an alliance and had a tremendous reputation suggests there *was* something they were doing exceptionally. At the very least, a very good PR department.
I just read the wikipedia article on them and it would seem most of their history is simply not known. They emerged from the dark ages already in a strong position.
Thing is, Devereaux isn’t quite right about Sparta. If you go back to his This ISN’T Sparta posts, and you look at his timeline of Sparta’s win/loss record, you’ll note three very distinct phases. Phase one is basically “Sparta before the big earthquake and the Peloponnesian Wars,” and this phase is when Sparta develops its rep for being frighteningly deadly on the battlefield. Phase Two is basically “The Peloponnesian Wars” and is where Sparta’s record becomes more mixed. Phase Three is “The rise of Thebes and its aftermath, during which the Spartans have an utterly miserable record–I don’t think they won a single victory after Leuctra.
The problem with the Spartan system isn’t that it didn’t produce what it was designed to produce–the problem is that what it was designed to produce was bad for the long-term prospects of the Spartan state, because the system was designed to keep the Spartiates on top and the riffraff out. And when things happened that reduced the number of Spartiates (like natural disasters and long, exhausting wars), the remainder saw no reason to replenish their numbers, and had drunk their own ink regarding how awesome they were. As a result, Sparta’s power declined over time.
As to how Sparta came to dominate the Peloponnesus while not being great at strategy, see the rise of Prussia. The only really good strategist there was Bismarck, but the unification of Germany happened at the operational, not strategic, scale. I suspect the same was true for Sparta, especially because, at the time, the agoge was producing sufficient numbers of impressive hoplites to make up for any such deficiencies.
I would also note that while Sparta ended up dominating the Peleponessus… Thats not exactly a large area. And even then they never quite managed to entirely subdue Argos, despite beating them up several times.
The argument in the series is that it was the biggest city with the best farming in the region, and skilled use of that size would have put it in a dominant regional position. Presumably they would turn to the agoge/very limited citizenship system during this time for whatever reason. Than Sparta develops techniques to fight better as hoplites than other city states, but reduced population and some other holes in their society would make them weaker over time as well.
this guy argues that sprtans weren’t that unusual in a lot of ways, that a lot of institutions would have been natural outgrowths of standard Greek ones.
Yes, I would be curious to hear Bret’s opinion on claims that Sparta was not very unusual. For example I have read that many other poleis had classes similar to helots (apparently Sicyon, Byzantium, Heraclea Pontica, Syracuse and even Corinth). Perhaps these were not as large part of the population as the helots?
They are unusual in that they are the subject of the myth making.
> [T]he broad Commerce Clause authority to regulate interstate and international commerce – individuals in Texas or Tanzania transferring money through a server in New York or the Netherlands certainly would seem to count.
Could you provide a citation for the legal opinion that the Commerce Clause gives the US the power to regulate commerce between notionally independent states like Tanzania and the Netherlands?
I am not doubting the fact that the US factually has some de facto power to regulate some aspects of commerce between these two (let’s say in case of a sale of uranium centrifuges or some such), nor any doubts that they would have no qualms about using what clout they may have (though they generally seem to believe in the free market). But any power the US has in that area is under direct control of the president, there is no need to get Congress involved.
To argue that the framers intended Congress to have the ability to regulate commerce between (e.g.) the PRC and North Korea seems far-fetched from me.
With regard to crypto-currencies, let me first state that I generally consider NFTs to be scams and crypto-currencies as an investment to be an unintentional side effect at best.
One value of the blockchain is that it acts as a public ledger resistant to latter revision. Blocks can be disappeared (to the degree that any widely distributed data on the internet can be disappeared), but retroactively changing them (a la 1984) is not feasible.
The other thing is quick transfer of funds, worldwide, without a single state being in the position to be the gate-keeper. Like passing on suitcases full of cash but without all the bulk.
Consider Wikileaks, an organisation which managed to piss off one of the most powerful governments in the world and was consequently cut off from the financial system. The seem to be funded mostly by bitcoin these days. The fact that the US has not found a way to cut this source of revenue seems to indicate some resilience of crypto-currencies as compared to the banking system.
Of course there are ways to crack down. If China announced tomorrow that trafficing in cryptocurrencies is treason an punishable by summary execution and that the mandatory (on pain of death) monitoring software on electronic device had been updated accordingly, they would probably be able to suppress bitcoin in the same way they suppressed COVID.
For western countries, this approach is not exactly feasible. Apart from most of them being internally democratic to some degree, they also rely to some degree on a mobile urban elite which is rather fond of what they consider to be their human rights. If Boris Johnson were to pull a Cromwell and then proceed to use Duterte-style death squads in a War on Bitcoin Users, he might be able to stamp out bitcoin in the UK. But the economic repercussions would be so tremendous that any borderline sane statesman would not even think about doing such a thing.
Most restrictions a liberal democracy could stomach are not all that effective.
Banning or restricting the miners would only work if you had the majority of them in your country and decided to co-opt them. Otherwise, you could mostly increase the median time until a transaction to a Known Enemy Address clears.
Functionally banning encryption has been on the agenda of any number of intelligence agencies for decades. All in all, they have mostly failed to achieve this, I am happy to say. Generally requiring government spyware is comfortably far from the overton window.
A more promising approach would be to go after exchanges for turning fiat into crypto currency. Make it hard for the drug user to acquire bitcoins to spend, and for the drug dealer to pay their rent from bitcoins. Eventually, you could drive this to the point where people would trade fiat cash on darknet platforms. Bonus points if you also ban cash. Still, I would argue that commerce, like life, finds a way.
Liberal democracies must seem like little more than a recent fad from a history point of view. Sometimes they elect Hitler as chancellor, sometimes they run circles around the USSR economically. A bit of a mixed bag, all in all. Still, I will keep my fingers crossed for them.
If the individuals in Tanzania are engaged in entirely legal activities using a server in the Netherlands, then the US has no legal power to regulate them, that is true. But if they are engaged in terrorism or drug trafficking in violation of US law, or evading US taxes or assisting others in doing so, then the US certainly has power to track them down, arrest them if it wishes to do so, seize their assets, and disrupt their business generally. El Chapo sits in a US prison now for offenses committed in Mexico, and Bin Laden was killed for offenses committed in Afghanistan.
Regarding the authority or otherwise of the Commerce Clause, this is precisely the “code is law” thinking that our host spends a few paragraphs pointing out doesn’t work. All laws are in a sense optional, in that the degree to which they are enforced is a human judgement. All laws can be changed if the state is determined to do so.
For the vast majority of the world’s population, including Tanzanians and Australians like me, it really doesn’t matter whether the USA is regulating financial transactions through Congress or the President or whatever. The USA has the commercial power to enforce certain regulations and controls, and quite often the other state (eg Australia) will agree and do so enthusiastically if they also perceive that there is a threat, or a possible threat, to themselves.
If you think that blockchains are a public ledger resistant to revision, you really need to read the Moxie Marlinspike article. At least one major cryptocurrency has *already* revised history, after a major fraud. Enough people agreed that the chain should be rewound (I’m probably getting the tech details wrong – doesn’t matter for this post) and the non-fraud transactions replayed to create a new chain. Not everyone agreed, but it was done anyway.
WikiLeaks and Julian Assange is not an example I’d choose for the power of crypto.
Julian Assange is not the shockwave rider. He’s not an underground revolutionary, supported by untraceable digital funding from fellow believers. He relies utterly on the power of a state to protect him from the wrath of the US government. The Australian state (yes I’m not that happy about it) was going to hand him over, so IIRC he tried to get the state of Ecuador to protect him, and last I heard the British state was holding him in prison while negotiating with the US state over whether they could execute him or not.
Agreed, Assange relies 100% on the cover of a strong state to protect him. If he was e.g. a Somali citizen in Somalia, in the best case he would have spent the last decade in gitmo, and no amount of blockchains would change that.
I was merely pointing out that for circumventing financial blockades specifically, cryptocurrencies seem to work to some degree. Other samples of transactions working despite state interests would be darknet purchases or ransomware payments, which are certainly more common than wikileaks donations, but obviously do not make good poster childs for the benefice of unregulated transactions.
Liberal democracies won’t stomach most restrictions? While I don’t believe they would be effective, the past two decades suggest to me that Western democracies are quite capable of cracking down violently on serious cryptocurrency threats.
The “mobile urban elite” are fond of human rights, but they’re also fond of the environment, and there is an increasing awareness at least in western countries of just how destructive crypto mining is. And if it hasn’t happened already, some unpleasant neo-nazi right wingers will eventually be largely or wholly funded by cryptocurrency.
I can imagine drone strikes on cryptocurrency miners being accepted, even applauded.
“too great a degree of doctrinal certainty, when the issue is in fact correct.”
Doesn’t seem right.
Thank you for giving my blog post about how Ares wasn’t the patron god of Sparta the link and the glowing recommendation! I very much appreciate it!
“The United States is, arguably, the most individualistic society ever to have existed” – that argument is provably WRONG.
Inhabitant of the USA rank somewhere about number 30 on the “Freedom Index”
There’s also the problem of blockchain-currencies – they are “Goldbugs” – a restriction on the amount of “Money” available for trade, which will automatically self-strangle them, eventually.
It may help to read the link on that line (https://freakonomics.com/podcast/the-pros-and-cons-of-americas-extreme-individualism-ep-470-2/) before declaring that the argument is provably wrong by mistaking ‘freedom’ for ‘individualism’ when these are connected but not identical concepts.
Beyond what Devereaux said, I’d also argue that American individualism is specifically leveraged to restrict our freedoms, particularly economic freedom. For instance, reducing/opposing measures to protect the marginalized from the privileged, which is defended by saying the individual freedom of the privileged would be impugned. (Or almost any response to systemic critique or welfare programs involving the phrase “individual responsibility”.)
Amazing how many of those measures turn out to handing the privileged another tool to use on the marginalized.
Oh boy, the crypto hot takes are gonna come fast. Time to get in my own!
It seems to me that the people pushing crypto aren’t generally the people who NEED protection from the state. A few of them are engineers (the dreaded Professional-Managerial Class), but most of them are executives, they’re already solidly in the 1%. Those people can get away with a lot already as long as they don’t threaten the state. In a lot of cases, these people are using their capital to facilitate state power!
For an example, Consider Peter Thiel, an alleged libertarian, investing in mass surveillance technology, and also promoting eugenics on the side. He’s a big crypto guy, right? What’s he got to say about freedom?
>>> Indeed, even more pessimistically, the trend has been going the wrong way for a long time. To return to finance, the last economic depression in the United States that did not result in massive government intervention was the collapse of 1920–21. It was sharp but short, and entailed the sort of Schumpeterian “creative destruction” that could lead to a real boom. The decade that followed — the roaring 1920s — was so strong that historians have forgotten the depression that started it. The 1920s were the last decade in American history during which one could be genuinely optimistic about politics. Since 1920, the vast increase in welfare beneficiaries and the extension of the franchise to women — two constituencies that are notoriously tough for libertarians — have rendered the notion of “capitalist democracy” into an oxymoron.
>>> In the face of these realities, one would despair if one limited one’s horizon to the world of politics. I do not despair because I no longer believe that politics encompasses all possible futures of our world. In our time, the great task for libertarians is to find an escape from politics in all its forms — from the totalitarian and fundamentalist catastrophes to the unthinking demos that guides so-called “social democracy.”
(SOurce: https://web.archive.org/web/20140416013533/http://www.cato-unbound.org/2009/04/13/peter-thiel/education-libertarian )
Thiel talks about government intervention destroying freedom, but notice what he thinks of as destructive interference: the welfare state, women voters (???), ‘the unthinking demos’. He’s not concerned about the use of force as such. No cop is going to bust down his door, or shoot his child, or seize his life savings. Yes, the state might restrain what he can do with his fortune, they might even take some of it away, but it’s hard to imagine him ever spending time in a cell. In practical terms, he is already more free than anyone who will ever read this comment.
The freedom Thiel wants, then, is the freedom to oppress others. When he says that the US is unfree, what he means is that it has been too kind, that it has been too willing to accommodate the poor, the marginalized. To the extent that he has a problem with state oppression and state control, his problem is that he wants to be the one oppressing and controlling. It’s telling that he claims the 1920s as the last good decade, that he claims that good things in the US ended with FDR. Not because of, say, the internment of Japanese Americans in World War 2, but because he led government intervention during the Great Depression. One wonders what he would have said about a fascist or communist revolution, both of which would have been very plausible in the 1930s without FDR saving capitalism from itself.
This strain of libertarianism, of wanting to be free to exploit those below you, explains a lot about how libertarians end up supporting crypto. The ideological and economic backbone of American libertarianism is wealthy people who want the state to allow them to be more exploitative, to do harsher and crueler capitalism, to get out of the way of them using their power. This is not to say there aren’t people who genuinely believe in libertarianism, or that there haven’t been discussions about using crypto to somehow push back on state or corporate power, but the beating heart of this ideology is wealthy people who want freedom for themselves, directly at the expense of you and me.
Or put it more bluntly, if you could actually attack the state with crypto, then it would have a lot more support from people who are being oppressed by the state and a lot less support from people whose problem with the state is that it’s not letting them oppress other people hard enough.
“As a result, Ares recieves relatively little cult in the Greek work, though he did have a shrine at Sparta (albeit, like everything in Sparta, an unusual one).”
The first thing that comes to mind between “Greek” and “Ares” to me is the Areopagus, the traditionally-but-confusingly translated “Mars Hill” in Athens mentioned in the book of Acts. I take it from the rest of the paragraph that this wasn’t anything special as far as places of worship in Athens went, though.
The myth was that the first trial held there was of Ares. Poseidon prosecuted him for killing one of his sons. Ares defended himself on the grounds that the son had raped his daughter, or had been trying to rape her when he killed him, and was acquited.
There is reason to think that the name was a coincidence and the myth an after-the-fact explanation of it.
Huh! Interesting, I didn’t know any of that.
Maybe your analogy, at least if you want to address what the cypherpunk project is, should be not with Roman-era piracy but with Roman-era Christianity ?
The important part being not the fanaticism of the crypto-enthusiasts, but the fact that their project is to progressively replace one system of beliefs by another (from one fiat to another), and it’s quite harder for a state to fight that – Roman persecution of Christianity doesn’t have a very good record.
You may argue that in the end, Roman State captured Christianity rather than the opposite (for the same reason you use, state control of “meatspace”), but that’s quite a hot take and you’d need to seriously argument it – and the result would probably have a lot of nuance.
Pedantic but necessary correction: some cypherpunks are or become cryptobros as well, but cypherpunks were a different movement. In the last decades of the 20th C the goal of the cypherpunks was to make high quality encryption generally available to everyone instead of restricted to military and governments. We don’t hear much about cypherpunks today because they succeeded. (Yes, eternal vigilance still needed to push back against governments from time to time.) Every https URL on the Internet represents tech that was once regulated, at least in theory, much like the blueprints and manuals for laser guided bombs.
I don’t think that the analogy between early Christianity and cryptocurrencies holds up, due to fundamental differences in how each interacts with the state. The ideology, incentives, and goals of Christianity are largely outside meatspace, and largely orthogonal to what the state can do. The ideology, incentives, and goals of cryptocurrencies are all firmly based in meatspace where the state operates.
Fun though it is to imagine Slaan being fed to lions in an ecological restoration project as punishment for excessive greenhouse gas emissions, I’m convinced the state won’t need to persecute cryptobros for their beliefs, nor will the cryptocurrency advocates show the same cohesion and resistance as the early Christians.
For example, apostasy among the early Christians, betraying fellow believers to the state. Within the Christian ideology, the outcomes don’t change. True believers get martyred, but they still end up in heaven, outside meatspace, so they still “win”. The apostate goes to hell.
Another example is a corrupt Church official skimming the charitable donations. In meatspace, that buys the official a better life. But while the believers who donated will be upset or angry, they don’t “lose” anything important. And within the Christian ideology, it won’t end well for the corrupt official.
By contrast, in cryptocurrencies treachery works! At time of writing the latest fraud story is some three hundred odd million dollars ripped off:
Read the heartfelt plea from a true believer who has lost all their savings. That’s all they can do, plead for mercy. In the cryptocurrency ideology (which is not necessarily reality, as our host points out) there’s nothing the state can do to stop this from happening, or take action to recover the stolen funds.
A project that seems custom made to encourage zero sum thinking and reward betrayal is IMNSHO not comparable to early Christianity, nor will it have the same success.
PS: actually some combination of transhumanism and artificial intelligence might be able to create conditions for cryptocurrencies to succeed in the same way as Christianity. If the only way to have your consciousness uploaded for immortality requires some form of cryptocurrency or blockchain, that might work.
“In the last decades of the 20th C the goal of the cypherpunks was to make high quality encryption generally available to everyone instead of restricted to military and governments”
Well, as much as the goal of the Weapon-makers of Isher was to build weapons…
You’re mixing the tools and the political project.
You’re also mixing the ignorant bunch of cryptobros hopping on the bandwagon in a hope of quick wealth and the cypherpunks who created the technology and devised its philosophy (Satoshi Nakamoto is clearly cypherpunk and afaik participated in cypherpunk forums for a while before starting Bitcoin).
I’m not saying that their project is realistic and I’m not even sure that it’s good, but any critic addressed at it should first understand what it is.
Sabu and many other LulzSec/Anonymous activists (yes, I know that they do not entirely intersect with cypherpunks and even less with cryptobros) indeed showed that they do not really have the same cohesion and resistance that earlier ideological movements, least so the early Catholic Church, you are definitely right to point that.
That actually shows that the comparison is a productive and worthy one, rather than a pointless one, though…
In the late 1980s and 1990s I was working as an Australian uni computer/network admin and while I was never a cypherpunk, we were directly affected by the US government restrictions on crypto and thus interested in what the cypherpunks were saying and doing.
(Example: at the time a US academic could write a book about crypto, including all the computer code, but not legally make the code directly available for download to Australia. Instead they’d tell you which European uni to FTP the files from if you didn’t want to type in hundreds of pages.)
I was careful to say that some cypherpunks were also cryptocurrency advocates, but not all. Some cypherpunks, for instance Jim Bell with “Assassination Politics” who I mentioned earlier, or the better known Tim May, certainly did have revolutionary social change in mind. Others, like Phil Zimmermann, didn’t want to overthrow the existing order, he just didn’t want anyone to be able to read his email.
So there were multiple cypherpunk projects, or “the project” would be different depending on who you asked. The one thing that all the cypherpunks agreed on was that high grade encryption needed to be available to everyone. The cypherpunks in those decades focused on tools not the political project because without the tools *none* of those projects could even start.
As for mixing the crypto bros with the originators like Satoshi Nakamoto, no I don’t think so. I gave examples of how the early Christian ‘project’ was largely unaffected by apostasy and fraud, because of how the incentives and goals work.
Cryptocurrency betrayal and fraud is rewarded *by design*. When a believer loses their savings to a rip-off and there is no way to undo the transaction, that’s the project working as intended!
If the creators of cryptocurrencies hadn’t intended to cause more CO2 emissions than many small countries, they could have designed something different. Or at least started yelling “stop!” when they realised what was happening.
And now I’m noticing crypto related articles everywhere. Paris Hilton is buying and promoting NFTs.
Would flags of convenience not be a counterexample to your crypto argument? Or would you say those are an example of something that just hasn’t gotten big enough to be a problem for the state to deal with?
Assuming you mean flags of convenience for current / past century or so shipping, not at all.
A flag of convenience is *all about* the power of the state to regulate commerce. A merchant ship flies the flag of Liberia or Panama so the owner can say to the governments of other countries “No we don’t have to pay you taxes, you have to respect different business laws and regulations.” Unless the provocation is extreme, even superpowers like the USA generally do.
Against pirates and similar non-state threats, a flag of convenience is useless. They only work when there is one very powerful state keeping the oceans safe through application of armed force. In the 19th and early 20th C that was the British Royal Navy, since the mid 20th C it has been the US Navy. (Yes in both cases there are significant contributions from allies and others.) A ship flying a flag of convenience is basically a freeloader, but since global safe shipping benefits everyone, not enough of a problem for other states to crack down on.
It seems a good match. It is a legal fiction/escaping state power, but as soon as it gets too irritating it can be stopped.
For example noncompliant shipping companies (or ships) can be banned from using USA/European ports.
Still, it allowed many people to earn piles of cash and evade many laws for a long, long time and still is an useful tool.
A quick bit of evidence in favor of Prof. Devereaux’s position:
It’s the Wall Street Journal, so it might be behind a paywall, but the TL;DR is that the government used the blockchain to track down some folks who are alleged to have helped launder money from a ransomware attack back in 2016. This helped them recover some of the funds and the alleged perpetrators are now in jail, presumably waiting to be charged and put on trial.
I don’t think this is the future blockchain enthusiasts were hoping for on any level, but it makes sense in terms of the ways the world actually works.
Exactly! Money/currency is a creation of a sovereign state. No state? Not a currency. I refuse to use the term “cryptocurrency” and refer to it as “crypto”. Aside from crypto being a Ponzi scheme, that depends on new entrants to keep the price above $0.00, and aside from it being a boon to organized crime (viz. ransomware), it just isn’t money. Transactions using it are barter. I’m a chartalist. The chartalism movement started with German economist Georg Friedrich Knapp and his great book The State Theory of Money. His thesis was that money derives its value from being issued by a government, and not through exchange transactions. Later economist Abba Lerner wrote an excellent book called Money as a Creature of the State. It’s even in the Bible: “Render unto Caesar….” And, yeah, if crypto ever threatens to become dominant, the large economies of the world will squash it like a bug. Good riddance.
You don’t need a state to have money. People who trade a lot will converge on some commodity for use as money, in the absence (furs in North American fur trade) or even opposition of a state (cigarettes and others commodities in prisons) You can call it barter if you want, but it’s not what most people mean by barter, and when one commodity is the medium of exchange, unit of account, and store of value, it’s money.
By your definitions the concept of money, well-attested through history in the form of silver or shells, would long pre-date the existence of ‘actual’ sovereign money.
You can have non-state issued fiat currencies too, though I don’t know of any that achieved wide circulation; the ones I know of are some local business issuing token money during shortages of small change (_The Big Problem of Small Change_); also company town scrip.
I’ve read Knapp. Several times. That’s not what he says. He says that any transactional hegemon can create money–not by issuing it, but by both paying with it and taking it in payments. He even offered a private-sector example: the Hamburg mark banco, which was a pure bank system. Georg Friedrich Knapp, The State Theory of Money (4th ed. 1923, transl. H.M. Lucas & J. Bonar 1924, Simon reprint 2003), at 148. Knapp’s big contribution was stressing transactional hegemony as the basis of money, rather than precious metal. I’ve also read Lerner. His “Money as a Creature of the State” was a journal article, not a book. 37(2) American Economic Review 312 (1947).
Knapp’s views were subsequently weaponized in the 1930’s by the fine folk who got rid of the gold standard. They had no incentive to discuss Knapp’s receptiveness to private money, and therefore did not. I’m quite a fan of state-issued money (fwiw), and don’t think much of private units of account. (Private media of exchange are as common as banks.) But private monies are conceptually possible, and Knapp contemplated them. I have no problem with calling Bitcoin money. But it is an operationally crappy money, suitable only for hucksters, chumps, and criminals.
The state might not be able to stop such moneys completely: criminals by definition seek to evade the state. But as our host argued, the state can easily keep these moneys in the shadows, away from decent folk.