The bougies take sides over crypto
- The Great Mogul
- Mar 6, 2018
- 5 min read
Sometimes, you can learn a lot about a thing by finding out who its enemies are. Cryptocurrency is no different. It's not a secret that the People's Bank of China has come out against crypto, but this is one hell of a (pun fully intended and you're welcome in advance) money quote: “As Keynes has taught us, ‘the market can remain irrational longer than you can remain solvent.’ There is only one thing left to do: Sit by the river bank and see Bitcoin’s body pass by one day."
The rest of that article explains the motivations behind that decision for the Chinese: they mistakenly believed the internal Chinese cryptocurrency market represented around 90% of the global market, when it only represented around 8%, and the fluctuations in price were believed to hold serious social repercussions if left unchecked. So now all trading in China operates out of Hong Kong, which has a separate legal and economic regime from the mainland. Even if the threat was exaggerated, it is perfectly rational behavior for a socialist government (or an authoritarian one) to wish to contain the possibilities for unchecked capitalist speculation to threaten its rule. Russia followed suit as well, comparing crypto to a pyramid scheme. And who can blame them? Crypto was born out of a libertarian pipedream, and a libertarian is someone who is too utopian for liberal utopians to take seriously. The histories of Russia and China are littered with utopians leading them into disaster; they need no more headaches on this front.
The bourgeoisie that rule Russia and China will brook no threat to their rule. And neither will the bourgeoisie that rule Omaha; Warren Buffett is a noted opponent of cryptocurrencies as well. One suspects this is more to do with a desire to snuff out potential competition than a desire for crypto not to burn the proletariat. A bougie who doesn't believe in the wisdom of a particular investment doesn't make that investment. A bougie who believes a particular investment is a threat to their holdings dismisses the possibility of investing in that market, offers to get into put options to suggest a willingness to short, and then insists repeatedly they wouldn't short the market only because it's too unknowable, much the same way the local mafioso sympathizes that it'd be a shame if your house burned down. But we can know that Buffett and his creatures consider crypto a threat by this: "Munger has been a persistent critic of cryptocurrencies, which have soared in value in recent months. Last year he said the soaring values of the currencies was “total insanity”.He told an audience at the University of Michigan’s Ross School of Business: “I think it is perfectly asinine to even pause to think about them. It’s bad people, crazy bubble, bad idea, luring people into the concept of easy wealth without much insight or work.”" If Charlie Munger, hired man of Warren Buffett, is dissing "easy wealth without much insight or work," it can't be because he actually believes that, or he'd burn Berkshire Hathaway down tomorrow while he still had access to the building. It can only be because Buffett, as the master of easy wealth without much insight or work, doesn't understand crypto, knows he doesn't understand crypto, and is fully aware of the power of a rival center of finance to undo his business empire. Easy wealth is fine so long as it flows to him or people he approves of. Let it flow to us little people, and then he has a problem. That doesn't mean crypto is inherently good, or inherently bad; it's just an unpredictable tool. The governors of the central banks of the UK and Canada are getting behind crypto as a concept, as is the besieged revolutionary government of Venezuela. What unites them is hope, because hope is behind every roll of the dice.
The UK is governed by Tories who saw a doubling in homelessness, a slashing of the welfare state, yet no real debt reduction on their watch; they need a rabbit pulled out of a hat and they need it yesterday. Crypto's a long gamble but anything that keeps Corbyn out of No. 10 is fine by them. If it works, they may just keep their seats; if it doesn't, they were doomed politicians shambling behind a zombie government anyway.
Canada is in no real predicament, at least not an obvious one. Justin Trudeau is an insufferable caricature of liberalism who can dress up like an Indian for likes and shares but can't stop ignoring the oppression his government visits upon First Nations. His economy is working for the settlers and colonists it was meant to work for (and not all peoplekind); they're quietly and unobtrusively siphoning off the natural wealth of the New World while America draws all opprobrium for doing the same thing but noisily. But they hope for more, and as Canada's utopian-in-chief, something like crypto is right up the alley of Trudeau's government.
Venezuela has been ransacked by their local bougies, who've set food on fire like kulaks and are openly begging the United States for an invasion like the fake democrats they are. The duly-elected Constituent Assembly is desperate, but desperation is its own kind of hope. They hope by their release of the petro that they will be able to nullify the effects of economic sanctions. I hope so too.
Finally, the EU, unable to reach consensus about anything as of late, has some voices in its financial regulatory institutions that wish to regulate (but not ban) cryptocurrency. I strongly suspect that this will emerge as a sort of global consensus position, because this position is already constructed in the light of the views of 28 (soon 27) national governments who will have to sign off to give this proposal any teeth whatsoever. As this is our first glimpse of what happens when the future of crypto is decided by bourgeois committee, it tells us that enough of them are dedicated to it that they will fight to prevent it being banned altogether. But we already knew this. Neither Ripple nor Waltonchain would exist if the banks hadn't decided there was money in them thar servers. Perversely for someone like me, who sees the utopianism of cryptocurrency as an Achilles' heel for the bourgeoisie, the banks getting in was a good sign. It meant that a subset of them now had a class interest in cryptocurrency, meaning that this can't be shut down globally. Now that the bourgeoisie are making money off of crypto too, our investments in crypto are untouchable. That means this fragile institution remains ripe for a takeover by the working class. So that's the state of play right now, and examining crypto's enemies has told us a whole lot about the nature of crypto. It's bourgeois, utopian and unpredictable. The only people who could ever like it are utopian bougies, people who need to pull a miracle out of their asses, and people like me who actively embrace its destabilizing effects in order to blow up the entire system. I strongly advise you get into it, albeit with other people's money.
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