Crypto, the Left and Technofeudalism
yanisvaroufakis.eu
yanisvaroufakis.eu
"The Gold Standard is, indeed, a great source of insight into how dangerously primitive Bitcoin maximalist thinking is. Suppose Bitcoin were to take over from fiat currencies. What would banks do? They would lend in Bitcoin, of course. This means that overdraft facilities would emerge allowing lenders to buy goods and services with Bitcoins that do not yet exist. What would governments do? At moments of stress, they would have to issue units of account linked to Bitcoin (as they did under the Gold Exchange Standard during the interwar period)."
The reason governments could do this with gold is that gold is easy to counterfeit, hard to store securely, and expensive to transact with at a distance. So it makes sense to keep it all in a giant vault (a bank, or central bank) and trust the vaultkeeper to issue ious and transact in those.
But bitcoin does not suffer from these defects.
I don't think Yanis understands this.
The characteristics of the underlying asset would probably modulate the degree of trust people can put in a government’s IOUs, but considering e.g. the extent of people’s trust in the US (with no underlying), I think it’s fair to say if Bitcoin became this currency, governments would have no problem issuing IOUs for it that people would trust.
If you are willing to trust your bitcoin to an exchange, as many people are, you should certainly be willing to trust your government.
But a lot of people hold their bitcoin offline, in hardware wallets, in cold storage. It's not that hard.
Another feature that bitcoin has, that gold does not, is proof of reserves. Barely any exchanges do this, but this will change with time.
Proof of reserves pretty much makes bitcoin IOUs for the government useless. You can't cheat by printing more.
I think far fewer people will trust their government with bitcoin under a bitcoin standard, than trusted their government with gold under a gold standard.
Particularly after a few governments default.
I discuss this more in depth at
https://web.archive.org/web/20210116135412/https://taaalk.co... (long)
I don't expect governments to cater to the mistrustful, so I don't anticipate governments adopting BTC as their core currency in my lifetime.
Without force, will the government have enough credit?
This is what allows the big re-armaments before / during a war, btw. See for instance Hjalmar Schacht's mefo bills in
https://en.wikipedia.org/wiki/German_rearmament
In this case stealth rather than force but same principle. It's also a lot harder to do stealth with a non-inflating currency that has proof of reserves.
Lending in Bitcoin can happen in two ways: the first is through imaginary Bitcoin (“borrowed from future installments”) in a layer 2, which is what he was describing, although I agree that, unless the government mandates accepting money from that layer, it is hard to make it systemically used.
The second one is to only lend coins that you have. In a deflationary monetary policy, lending is strongly disincentivized, as it would need to beat both the rate you would gain from the value of your coins increasing, and the default risk.
Much of monetary policy is about finding a balance where financial institutions will be incentivized to lend despite the risk (which is already a hard sell even under inflation!) without nudging prices.
It is plausible that a Bitcoin economy in stablestate (once coinbase transactions are no longer) would have very little lending. Is it outside of the realm of possibilities that, in such a world, innovation may decrease, and legacy becomes a more relevant factor for wealth?
https://en.wikipedia.org/wiki/Gold_standard
These times weren't perfect, but no time ever is.
In short there would be less lending than under fiat with MMT, but certainly not zero lending. On the plus side, much more stability, and no hyperinflations, ever.
Seems worth it to me.
Why would it reach more stability?
Historically, cryptocurrencies have been significantly more volatile, not less. Arguments were made back in 2013[0] that:
> this volatility will decrease as Bitcoin markets and the technology matures
But volatility has remained consistent over the past 10 years[1], seemingly uncorrelated to its adoption, market cap, and coin supply. In the same period, USD was an order of magnitude better[2].
[0]: https://web.archive.org/web/20130916231759/https://bitcoin.o...
[1]: https://vlab.stern.nyu.edu/volatility/VOL.BTCUSD%3AFOREX-R.G...
[2]: https://vlab.stern.nyu.edu/volatility/VOL.DXY%3AFOREX-R.GARC...
I don't particularly love the USD, but if I don't pay my taxes in USD, I'll go to jail.
Ok. So you're a nation whose official currency is backed by Bitcoin. Suppose that years of economic depression have left your country's Bitcoin reserves relatively sparse. Suddenly, your neighboring country Fiatland is starting to mobilize for war thanks to their freshly printed money. Meanwhile, your nation is only able to raise Bitcoin bonds that must be paid with interest from your already tight Bitcoin reserves. Due to the uncertainty caused by the looming threat of war, Bitcoin interest rates skyrocket, so you're even further limited by the how much you're able to finance. The very obvious solution to this problem is to switch to fiat currency, so you're no longer constrained by some arbitrary limit defined in 2008.
Countries with free speech and no capital controls, ie the west, bitcoinize.
Countries with controlled internet and capital controls, ie china, act like fiatland.
Who wins the war. It's not an easy question. It's not an obvious answer.
But it's true. You can't have both.
*****
One reason to hope for the west over fiatland in a conflict is, defense contractors and soldiers and police would rather get paid in a hard currency.
So at some point fiatland may just collapse.
That doesn't mean no more wars.
Bitcoin country 1 can tax and borrow, and wage war against Bitcoin country 2, who can do the same.
I never subscribed to bitcoin equals forever peace. Bitcoin doesn't cure cancer either, or wash your car.
But the extent of the taxing and borrowing is at least constrained.
But only one cryptocurrency can have the greatest proof of work. Unlike with counterfeit gold, this is easy and cheap to verify. And the cryptocurrency with the greatest proof of work is most secure (against 51% attack) from those who would seek to weaken, control, or destroy it. By its definition, proof of work crypto is a winner-take-almost-all market.
Capital controls are not necessary for a bitcoin dominated world.
I understand why gold got centralized into USA during WW2 (physical security, costly to assay). Why does increasing BTC difficulty lead to miner centralization?
Unless there's some other angle to convince miners to continue mining unprofitably, which feels like defeats the whole purpose of a crypto-maximal economy to me.
Also, hash rate and reward value don't always correlate - mining difficulty can increase during periods of flat or declining coin price.
"Since the start of organized warfare, the crucial sinew of war had been “endless streams of money.”
> its current version, in spite of the hype, bitcoin failed to satisfy the notion of "currency without govern- ment" (it proved to not even be a currency at all), can be neither a short nor long term store of value (its expected value is no higher than 0), cannot operate as a reliable inflation hedge, and, worst of all, does not constitute, not even remotely, a safe haven for one’s investments, a shield against government tyranny, or a tail protection vehicle for catastrophic episodes.
> When ‘Bitcoin maximalists’, as you call them, wax lyrical about the inability to print money (and celebrate this inability as Bitcoin’s feature, rather than its bug), they are being terribly unoriginal – banal, I dare say. Capitalism nearly died in 1929, and tens of millions did die in the war that ensued, because of this toxic fallacy that underpinned the Gold Standard then and Bitcoin now. Which fallacy? The fallacy of composition, as John Maynard Keynes called it.
Regarding your specific points on the differences between gold and Bitcoin:
* easy to counterfeit - Point to Bitcoin
* hard to store securely - I'd class this as a point for Gold.
* expensive to transact with at a distance - As opposed to Bitcoin, which is just expensive to transact; and gets more expensive the more people use it, as there is a finite amount of transactions per unit time.
In practice, most people dealing with Bitcoin are dealing with it through ~banks~ exchanges which gave them a Bitcoin denominated IOU; and which may or may not be engaging in fractional reserve banking.
You're not wrong. Most people do it with IOUs, ie exchanges. But most people, don't have most of the bitcoin.
"Crypto Exchanges Hold 6.6% of Bitcoin Supply – One of the Lowest in History"
https://bitcoinke.io/2021/09/percentage-of-bitcoins-on-excha...
I'd like this number to be even lower. And as more exchanges (and governments) default, I expect it will be.
"* hard to store securely - I'd class this as a point for Gold."
fair to debate, a lot does get lost because people lose paper backups. but is this really harder than gold? I think it's largely unfamiliarity that will improve with time.
"* expensive to transact with at a distance - As opposed to Bitcoin, which is just expensive to transact; and gets more expensive the more people use it, as there is a finite amount of transactions per unit time."
if you don't understand how lightning works, of course you will believe this. lots of fud right now. encourage you to kick the tires here, and actually install a lightning wallet and see. as a retail guy, you can start selling slurpees via lightning, today.
https://medium.com/coinmonks/strike-partners-with-shopify-bl...
no it's not perfect, but it is non custodial. now imagine you are in venezuela or weimar germany.
Yes, I did read the full answer. And yes, (according to him) it is.
Yanis is a marxist, as others in this thread point out. Point 10 in communist manifesto, calling for a state central bank, is incompatible with both gold and bitcoin, and pretty much any other form of personal money beyond maybe some petty cash.
""10. A state bank, whose paper issues are legal tender, shall replace all private banks. This measure will make it possible to regulate the credit system in the interest of the people as a whole, and will thus undermine the dominion of the big financial magnates. Further, by gradually substituting paper money for gold and silver coin, the universal means of exchange (that indispensable prerequisite of bourgeois trade and commerce) will be cheapened, and gold and silver will be set free for use in foreign trade. Finally, this measure is necessary in order to bind the interests of the conservative bourgeoisie to the Government."
https://www.marxists.org/archive/marx/works/download/pdf/Man...
Communist Manifesto, Demands of the Communist Party in Germany / 10 Demands
"Given all this, you may be puzzled to hear me call myself a Marxist. But, in truth, Karl Marx was responsible for framing my perspective of the world we live in, from my childhood to this day. This is not something that I often volunteer to talk about in “polite society” because the very mention of the M-word switches audiences off. But I never deny it either. After a few years of addressing audiences with whom I do not share an ideology, a need has crept up on me to talk about Marx’s imprint on my thinking. To explain why, while an unapologetic Marxist, I think it is important to resist him passionately in a variety of ways. To be, in other words, erratic in one’s Marxism."
https://www.theguardian.com/news/2015/feb/18/yanis-varoufaki...
Lots of weasel room here. But basically, Varoufakis doesn't believe people should have personal financial freedom. And he makes a good case for it!
But no thanks.
In his own words, he believes those who love personal freedom shouldn't tolerate capitalism, from first principles (from TFA). Later, he states that personal digital wallets would benefit individuals and increase freedom by cutting off banks and their rent-seeking using exclusive central bank accounts.
His position is that Bitcoin and the current state of cryptocurrency are incapable of defeating the ills of capitalism, contrary to pro-crypto boosters claims.
Hard money is the least bad option. The universe is still cruel, and life is unfair.
The irony is that communist states love gold, and bitcoin.
Venezuela, like usual for marxist states, confiscates valuables from individuals that manage to squirrel some. Bitcoin, bitcoin miners, whatever can be confiscated and operated to provide hard currency for the government.
Beware those who will help you, by denying you freedom.
An untracable, unstoppable & untaxable cryptocurrency might be developed if we get lucky with the research into Zero-Knowledge proofs or a related field. That would be revolutionary in a profound sense.
No, this will never happen and it makes no sense to actually want this, not only is it physically impossible but it's a total misunderstanding of threat modeling. The main thing these comments always miss is that these transactions only exist to serve a purpose in the real world. You can come up with all the cryptographic solutions that you want to hide communications but it means very little when someone can walk into your basement and suddenly see the hundreds of mysterious suitcases that weren't there the day before.
The only way any of these things could realistically approach being "untraceable" is if not a single person using it ever cashed out and they only spent the money on NFTs and other non-tangible items, and additionally nobody ever conducted physical barter with the NFTs. So basically if it becomes a very restricted and useless and inefficient version of a video game economy, except without the video game.
It's sort of the same problem as email with pgp. You not only have to secure your email, you also have to secure your counterparty and anyone he forwards your email to. Money is like that as well.
So even if monero wins, or bitcoin becomes like monero, there'd still be tax.
There was tax under gold. Bitcoin isn't about ending tax.
Lot of your fancy words in English come from Roman roots. And we have the same effect with greek roots in our own language.
Several times I rolled my eye at Yanis picks of words. “How greek of you sir.”
I actually enjoy that.
He says money-printing and QE will continue? He says Tech will rule everything?
That was believable a year ago.
But today, we have for the first time seen enough inflation from all that QE for it to now be a mainstream political issue (and not just something ranted about on RT). We have central banks raising rates for the first time in decades. We have Tech stocks now doing far worse than they were just a year ago.
And -- Yanis does touch on this -- we have also seen China systematically destroy its Tech industry in favor of more materially-productive enterprises.
So -- maybe it's just a short-term hiccup, but -- my feeling is that the winds are now blowing differently. More towards fiscal policy and away from monetary (i.e., government spending), more towards industrial policy, and more towards old 20th century type enterprises.
I could be wrong though.
Could you elaborate more on China destroying it's tech industry?
My understanding would suggest it's better phrased as the US is destroying it's tech industry by doubling-down on unproductive enterprises. Too much of our tech industry is focused on building walled gardens and inventing new ways to be a middle-man or nickel and dime people.
China is actually taking a strong stance against the current wild west of getting children addicted to gambling with microtransactions.
For a reference, here's a Bloomberg article:
This quote is amazing, and describes most of crypto.
I know I am being a dirty productivist here.
Maybe we can zoom out and say all work is basically psychological: It makes people happy. Including useless things, like overpaying another person to make you a coffee, or to give you a blowjob. So why not pay someone to win a virtual hat you can wear in TF2, if it makes you happy? And why not trade in opium or oxycodone if it changes your customers' mental states in ways that they value? Why not?
It just seems pointless, is the problem. I know I have no way to justify the idea that building a house (which will make someone feel good) is different from sucking a cock (which will make someone feel good) or giving them a rare NFT (same). But building the house somehow seems more meaningful and lasting. It is not just the manipulation of mental states.
The choice is between a family in the Philippines facing severe hunger during the lockdown, and that family being able to sell virtual goods to wealthier people in the developed world, to put food on the table.
More generally, allowing web users to assume genuine ownership - secured by provable scarcity and public key cryptography - over virtual goods, means the profit that the internet generates will not be monopolized by a few internet giants.
Consider, the Ethereum Name Service airdrop rewarded over 100,000 accounts with its ENS tokens. This is a degree of diffusion in the distribution of ownership over critical protocols that was totally impossible before blockchain-based assets and networks.
"Not your keys, not your coins" is the opposite of genuine ownership. Actual ownership is not lost by losing possession of the thing being owned. That's the whole point of ownership.
I alone have complete ownership of my Bitcoin and Ethereum, there are no trusted third parties and no one can take it away from me. That is real digital ownership.
Also the idea that no one can steal or somehow gain control over someone else's crypto-currency balances has been thoroughly invalidated by experience, and therefore is a very silly point to make.
Adding another trusted third party, like a gaming company, to the mix, to act as the custodian of who owns what, creates a much less-reliable / more-fragile private property system, as that custodian, at their own behest or that of a political faction who holds the reigns to the govenment, can deprive you of your control over the virtual asset.
So to put it another way, trusted third parties can also be a threat to private property. The right balance between being protected by a trusted third party from theft and robbery, and being protected against a trusted third party stealing and robbing you, is the "not your keys, not your coins" setup, where the trusted third party only enforces rules against others trespassing your person or home, without having custody of your property on your behalf, so as to not have intimate knowledge of and control over everything you own.
Of course, a corrupt government is a threat to private property, but it's also true that a non-corrupt government (or some other form of authority) is necessary to enforce property rights. Crypto-currency enthusiasts mistakenly believe that by preventing any authority from interfering with the blockchain they eliminate the threat to private property. Instead, by doing that, they make property rights impossible.
It strikes the right balance between being protected against the state stealing and robbing people, and people being protected by a state from theft and robbery.
Unfortunately, anti-libertarian ideology, which is the dominant ideology in society now, cannot conceive of a need to maintain non-political checks on the power of the state, so the adoption of cryptocurrency, which imposes such checks, is very unsettling to its adherents.
But there are other cases where the state is not able to intervene, because of the immutability of the blockchain protocol.
The limits placed on the state's power is a beneficial trade-off, where the state loses some power to protect people's private property, while losing even more power to rob people's private property.
In other words, it's not a simple binary proposition, between the state being able to seize assets and not being able to. The power of the state to seize assets exists on a spectrum, with less power in the context of blockchains. I contend that this spot on the spectrum, that the blockchain places the state's power to confiscate and surveil on, is better for society at large.
To some extent that's true, but it could still be true that certain limits on the state's power to seize private property make private property rights more secure overall, because:
1. You can increase the cost for the state to seize private property, which would make it less likely that the state does so in cases where there is less justification, i.e. when doing so violates private property rights.
2. You can make it so that the state can only seize private property when a person reports a theft, by denying the state the ability to engage in mass-surveillance over who owns what. This limits when the state can seize private property to when private property has been stolen, and largely prevents it from seizing private property when it has not.
Cryptocurrency has both of these effects.
So, you have "both of these effects through cryptocurrency", but when you arrive at your house, it's taken over by someone else. What now?
The state being able to confiscate things is the opposite of property rights. The universe enforcing it through math is a more natural state.
I don’t parrot others, I am the Bitcoin influencer. Folks are parroting me.
It’s a silly question. I didn’t say all things, including your house are protected by math, I said Bitcoin was the first thing ever that didn’t need state violence to enforce the money.
Again, a non-answer
> It’s a silly question
It's not. You're telling us that, quote, "The state being able to confiscate things is the opposite of property rights. The universe enforcing it through math is a more natural state."
So. You bought your house with bitcoin, and now you have your property rights through universe and math. You arrive at your property that you have rights to, and it's occupied by someone else. For example, by the person who sold you the house. That person doesn't want to move out.
Now what.
As always, crypto-proponents dismiss this as a "silly question". Because, of course, you're only focused on "state can seize your property", completely forgetting all the other things that state does. Like enforcing the property rights. Without this, your universe can enforce exactly zero through math.
Weaker animals get chased out, and their habitat destroyed or taken over by stronger animals. So your "answer" is violence?
What a great world you want us to live in. And one that we already have lived in, and a world in which some countries still live. Good luck finding money for protection rackets.
I think you are advocating for violence by the state in this question. We are just animals who have invented state violence. Bitcoin et al is another way.
Arguably YouTube has enabled thousands of new entertainers, making many of them (but well, a small percentage of all) filthy rich and/or famous, by making entertainment products. Funnily, OnlyFans also fits in the category.
The answer to capitalism's problems is more capitalism? We are just no doing it hard enough?
Why is the family is the Philippines facing severe hunger in the first place? Capitalism.
https://www.youtube.com/watch?v=wax7wyWwnAU
You know the same Filipinos have been fighting capitalism for the longest any people have ever fought it?
https://www.scmp.com/week-asia/politics/article/3027414/expl...
I do not have an answer for any of this, but I know it is not crypto. If you think money can can save people you know nothing about money or people.
Capitalism, i.e. the right to freely exchange, was restricted during the lockdown, with jeepney drivers, restaurant cashiers and almost every other sort of worker prohibited from going to work.
Had the fight against capitalism succeeded in the Philippines, the result would have been every bit as disastrous as it was in Venezuela.
https://www.reuters.com/article/us-venezuela-food-idUSKCN1G5...
I suspect this strongly depends on local culture, farming skills, and environment, however. The (admittedly not-unbiased) stories of land reform in e.g. Uganda (and the outcomes) are very different from those in Vietnam.
In a tropical place like the Philippines, however, I am more than willing to believe that unaccounted "ecosystem services" could provide a comfortable lifestyle for many people, if the environment were unharnessed from plantation cash-crop production. Largely because the carrying capacity is so high.
https://www.ted.com/talks/paul_romer
http://www.economist.com/news/leaders/21578665-nearly-1-bill...
http://www.csmonitor.com/World/2016/0207/Progress-in-the-glo...
The massive decline seen in poverty over the last 50 years is a matter of fact, with broad consensus that it has occurred.
It's just inconvenient to your victimhood narrative.
It's not due to pure capitalism which did nothing to lift people out of poverty in countries where it originated until governments stepped in and reigned it in. Now this is exactly the narrative you chose to ignore because it's inconvenient to your narrative.
There is no evidence at all to support the idea that redistributive social programs, or regulations, accelerated poverty reduction. The exact opposite is indicated by the data.
I'm happy to compare actual data and case studies with you, but it appears that you are not willing to have a meaningful debate on this.
That is why there is a strong and persistent negative correlation between government spending, as a percentage of GDP, and the rate of economic growth:
https://web.archive.org/web/20170821004405/http://ime.bg/upl...
The government limiting its role to vigorously defending people's security of person and private property, and enforcing contracts, is the best way we have come up with to facilitate economic development.
We already had unlimited capitalism. It had child labor, literally poison as "medicine" [1] etc.
In modern times unrestricted capitalism keeps doing the same: from sweatshops all over Asia to things like Nestle literally dissuading mothers from breastfeeding in developing nations which led to widespread problems like, you know, children dying.
[1] See, for example, https://en.wikipedia.org/wiki/Jim_(horse)?wprov=sfti1
I am not. Economists specifically cite the liberalization of the economy as a major contributor to the decline in poverty, through its positive impact on the rate of economic development.
>>In modern times unrestricted capitalism keeps doing the same: from sweatshops all over Asia
Before sweatshops, the quality of life in those countries was much worse.
>>Nestle literally dissuading mothers from breastfeeding in developing nations which led to widespread problems like, you know, children dying
That can be dealt with perfectly well within the rules of capitalism, which encourages prosecution of fraud, and impartial civil courts where bad actors can be sued.
This is also an anecdote, and says nothing about the broader impact on capitalism, which is captured by statistical evidence like the rate of poverty.
Yes. Yes, you are. There's nothing more liberal than no regulations and no state involvement at all, see 19th century as an example. Nothing more liberal than the government turning a blind eye on child labor, or poisoning water supplies, or company stores, or literally all the examples of unfettered capitalism we literally had many, many, many examples of in history.
> That can be dealt with perfectly well within the rules of capitalism, which encourages prosecution of fraud, and impartial civil courts where bad actors can be sued.
Right... Who exactly is going to "prosecute fraud" and where will those "impartial civil courts" appear from? That never happened to child labor until it was expressly forbidden by the government, for example.
What incentive does capitalism have to "prosecute fraud" and have "impartial courts"? Literally none.
Example from very recent times:
"From 1952 to 1966, Pacific Gas and Electric Company (PG&E) dumped about 370 million gallons (1,400 million litres) of chromium-tainted wastewater into unlined wastewater spreading ponds around the town of Hinkley, California, located in the Mojave Desert about 120 miles north-northeast of Los Angeles... Although the dumping took place from 1952 to 1966 (when Hinkley was a remote desert community with one school and a general store),[1] PG&E did not inform the local water board about the contamination until December 7, 1987"
This is capitalism. They did that. Where were all the capitalists with "fraud prosecution" and "independent civil courts"? I mean, capitalism is everywhere around the world in all its forms. We have a well-documented history of capitalism. The claims you make should be validated, right?
The total global surveillance and all the issues we have with Facebook and Twitter are also the result of capitalism, where are the "market instruments" that surely should've come into play by now?
> says nothing about the broader impact on capitalism, which is captured by statistical evidence like the rate of poverty.
What was that quote about lies and statistics? Statistics show:
- the shift from totalitarian states to democracies
- the spread of widely available healthcare and education (note: neither are provided by capitalism)
And then it's capitalism, but again: not unrestricted capitalism.
And to remind ourselves that we're in a topic on crypto, crypto is about unrestricted capitalism which is "you pay at the company store with the tokens barely provided to you by the company". And we all (well, some of us) know, how well that works.
In short: a currency is a symbol, a unit of measure, a cohort of people accept in place of something tangible. It reason is that we can exchange goods one counter another in the classic barter BUT sometimes two party have something to exchange that mach sometimes no, the general symbolic unit of measure solve that issue.
Having understood that we can comprehend that actual issue is not the banking systems with a central bank but the fact that such bank is private and do not generate unit of measure for the public according to current public needs, they loan them treating money as the substrate of anything instead of the inverse.
Understood that we comprehend that the solution is not finding new unit of measure of some kind but made central banks public and private banking without any seigniorage or power in the central bank.
Cryptos are surely the ideas Big of IT have to ingest banking sector under their control, and banking sector understand that well, see for instance https://voxeu.org/content/banking-disrupted-financial-interm... and https://voxeu.org/article/digitalisation-and-future-banking they are even worst for the public because with physical cash limits are artificial, with cryptos the need of iron and connection are practical.
What is V. referring to?
Quote of the article, imo.
The framing of these questions is interesting in their bias, but the answers do a great job navigating them.
Capitalism has plenty of flaws but alternative mechanisms for allocating labour seem far more against freedom.
There is no reason for the government to decide for you what your job is. Even the USSR since the 60s didn't have such a system. You would have to work for a set amount of years for a set job if you wanted to get an advanced education. After that, you were able to go look for available jobs and choose which one you wanted. Which is just a price-controlled labour market.
I doubt very much that the market socialist Varoufakis would want a more restrictive labour market than that of the USSR, so your accusation really seems to be a strawman.
He pretty much stated it in one of his answers: he'd want to get rid of tradable shares and replace ownership with 1 job = 1 share. The same open job market that's used today can remain in place, just with labor - not capital - owning the shares.
if you squint a bit, that's what has been happening in the past 4 or so years considering the the amount of money the feds pumped into money markets that filtered through venture capital funds. This is one of Yanis' postulation: that businesses that require capital don't have to rely on profits, and can instead benefit from money printing; and I'll put up Uber as exhibit A.
Whatever system you use needs to somehow resolve the issue that 53% of the youth population wants to be a social media influencer yet far fewer than 1% of jobs are that. Permitting price gets you this but it seems to be a very weak form of socialism if you adopt a system in which some people will make millions and others will make peanuts.
Well nobody is saying that this possible short of a post-scarcity society. The Soviets themselves were certainly not making the claim that was how they were operating, simply that it was their goal and they were getting closer to it.
> Whatever system you use needs to somehow resolve the issue that 53% of the youth population wants to be a social media influencer yet far fewer than 1% of jobs are that. Permitting price gets you this but it seems to be a very weak form of socialism if you adopt a system in which some people will make millions and others will make peanuts.
The basic issue Marx-inspired people have with capitalism (I think Marxist is far too strong of a term) isn't necessarily with the fact that income inequality exists. Marx did write about how perfect egalitarianism is not a realistic nor desirable goal, and I don't think Varoufakis disagrees.
The issue that is seen with capitalism is rather the unfair social relations that capital forms against which society is inevitably structured, which leads to people making billions simply from being an owner, and having debilitating control over society.
As far as people making hundreds of thousands or even in the low millions because their work is particularly necessary to society's needs and few other people can fulfill those needs, there is nothing necessarily wrong with that. As long they don't get undue control and get to set up biased relations that are then independent of their ongoing contribution to society, I don't think this is a weak form of socialism at all, it would actually be a much stronger form of socialism than most that have been successful, and I think that this is also the kind of socialism Varoufakis would prefer. Short of a post-scarcity society in any case, I don't think any reasonable socialist, Marxist, or Communist has hopes for anything better.
As far as the people making peanuts, if it is because what their productive output is not useful to society and they can't adapt to produce anything useful, we can use redistribution and de-commodify necessities in order to make it so that at least richer people do not have too problematic a power differential. And of course, we should strive to make opportunities as absolutely equal as possible.
But what I'm trying to get at is that really socialists are fine with some degree of inequality if it simply comes from differences in productivity. The issue is not from the distribution of resources, but really the process of production and its impact on society.
Of course, from each according to his ability to each according to his need is on a spectrum. The more our abilities increase relative to our needs, the closer we can get to the ideal.
Capitalism is private ownership of the means of production, nothing more, nothing less. If someone really is able to produce 20x more than their peers, there's nothing wrong with them have a before tax income of 20x more.
Profitability no longer drives the system-as-a-whole, even though it remains the be-all and end-all for individual entrepreneurs. Consider what happened in London on August 12, 2020. It was the day markets learned that the British economy shrank disastrously – and by far more than analysts had expected (more than 20% of national income had been lost in the first seven months of 2020). Upon hearing the grim news, financiers thought: ‘Great! The Bank of England, panicking, will print even more pounds and channel them to us to buy shares. Time to buy shares!’I sincerely doubt he's talking about a moneyless, classless, stateless society - what Communism is.
After all, there's (crypto)currencies and private (as opposed to personal) ownership rights. Sprinkle in some representative Democratic State that can build structures to isolate itself from the will of the people? And that's Liberalism, the thing Communists rebel against, critiquing to this day.
Platonically-Synthesizing these two opposites would prove challenging without undermining the premise of one or both halves.
While such a "Left" exists in more authoritarian contexts of international relations? They serve as examples of the failure of the previous "synthesis". Down here in the neighborhoods where life happens? Leftist action is often about showing each other that we're all we need.
Why pay for a plow to scrape the apartment building's lot when we can do it? Why submit to draconian rent hikes from Slumlords when we can form a Tenant's Union? Why let people go hungry when we can throw in on a professional kitchen and the food we need to held our neighbors?
There's plenty of work to do, even when there's no money. So damn the cash, full speed ahead! We have a better world to build. State be damned. Needless Social hierarchy be damned. Just do the things your neighbors need. And never act alone.
Learn from Rojava. Learn from the Zapatistas. Learn from Cospaia.
We don't need some magical thinking about how the Masters' Tools will dismantle the Masters' palace in the hands of some "great man". That same great man who, inevitably seeks - or is forced by necessity - to rise to dictatorship to keep the State together and potentially in line.
And somehow, this whole State apparatus is supposed to wither away on its own? When it is our crutch against "external threats" and the State's own internal corruption? Color me skeptical.
Abstract all the world's resources and how they're converted between each other into one big linked excel table. Everyone wants to know how resources are moving around, but nobody can be trusted to host "the diagram of everything". Different parts of the excel table correspond to different resources in different places, and have notions of data sovereignty over their resources in the table, with areas of joined access between separate entities along boundaries where they exchange resources.
Obviously you'd use something like soulbound NFT's, so its harder for people to sell off write permissions. But you could use all sorts of Sybil protection techniques.
It seems like one possible starting point for a decentralized communism.
He was fired from finance minister of Greece after only a few months on the job for the less-than-braggable achievement of completely sabotaging Greece's recovery and ensuring Greece was the only European country which failed to recover during their bailout process.
He resigned and for good reason and he proved to be correct in all his assessments. You clearly don't know what you're talking about, at least get your facts straight.
Who thinks this way? Credential-ism isn't a substitute for clearly stated arguments.
If he presents an argument reflecting his credentials that's great, but some useless platitude doesn't get a pass because he went to college or some nonsense
Also, credentialed doesn't just mean academic credentials.
It's amazing how few people realize the massive wealth growth this would cause. The internet did this with free flow of information, blockchains can do it with the free flow of capital to wherever to makes most sense.
But they're all going to settle to Ethereum anyway. It's already more decentralized and secure than Bitcoin and can support any smart contracts they need.
I dont have any candidates. But without a convenient alternative to describe the thing, change will be extremely slow.
Somewhat similarly, I like to use quotation as the noun, and quote as the verb and never the noun, but it's a totally lost cause, not even worth mentally noting when others use quote as the noun, never mind "correcting" them. Measured by usage, the consensus has shifted.
It was an interesting interview, Yanis Varoufakis is quite thoughtful.
A money system where currencies are printable by anyone and where they compete with each other on open markets looks a lot like a decentralized, libertarian version of MMT.
What are you talking about? Bitcoin Maximalism is about no one having the ability to control the money supply.
My point is that advocating for the collective freedom to print/burn digital money that competes with government issued money is very similar to MMT in a key way.
In my mind MMT is basically the idea that making modifications to money supplies (including both inflating and deflating them) is an appropriate way of getting beneficial civic, geopolitical and socioeconomic change. But of course most MMT assumes centralized and coordinated changes and relies on a premise that the administrators of those changes are trustworthy.
By advocating for the freedom of anybody to create a new currency for freedom of choice over what currencies they use, the situation that emerges is effectively a kind of decentralized MMT, where the entirety of the money supply is being modified collectively by peoples' choices, according to their needs and values.
A lot of cryptocurrency people seem to have this imaginary ideal scenario where at some point everything will "switch over" to just a handful of the thousands of existing cryptocurrency/blockchain projects and all of the others will just magically die out... but as long as people advocate for the collective freedom to be able to create and use cryptocurrencies it's gonna effectively be a situation where every single project with a token is literally printing/burning/modifying money and stuff that acts like money, based on their needs and governance structures.
And that includes Bitcoin miners. If Bitcoin can be called money they're printing money.
Bitcoin maximalists hate all other cryptos for the same reason, most are just giving money printers to a different group of people.
Creating new Bitcoin is more analagous to digging gold than printing, because no one gets to decide how much gets created. The amount that will ever exist is already set and most likely will never change, you just need to invest electricity in fetching it from the ether.
there is no way to constrain the economy to availing itself of only the fixed supply of one cryptocurrency like BTC.
It is basically impossible to change bitcoins supply because to change it you have to get at least 50% of the community to agree and that's not happening any time soon, if ever. You can fork Bitcoin but that doesn't create any additional wealth, it's just making more bits that aren't Bitcoin. Some people may value them but they won't have the value of Bitcoin.
> Beginning in March 2012, Varoufakis became economist-in-residence at video game publisher, Valve. He researched exchange rates within the virtual economy on the Steam digital delivery platform, specifically looking at exchange rates and trade deficits. In June 2012, he began a blog about his research at Valve. In February 2013 his function at Valve was to work on a game for predicting trends in gaming.
https://en.wikipedia.org/wiki/Yanis_Varoufakis#Academic_care...
His very short and tumultuous tenure as the finance minister of Greece's Coalition of the Radical Left government (SYRIZA) was also between less-than-stellar and totally catastrophic, which culminated with being fired from his position.
https://en.wikipedia.org/wiki/First_Cabinet_of_Alexis_Tsipra...
Appeals to authority aside, in this case "nuanced" doesn't exactly refer to insightfulness.
It doesn't surprise me that he's pivoting to crypto, as his short-lived political career was saturated with self-promotion schemes.
It's interesting he had to resign after effectively 'winning' a referedum. ( "Should greece accept the bailout? yes/no" )
He was a prominent "No" to that question. And apparently the Eurogroup preferred continuing the conversation without him in the picture and effected pressure in that direction.
IIRC the guy after him also resigned, leaving the position vacant. I think it speaks to the level of agency that this position or minister of finance in 2008 Greece had to begin with. Either be a Europe yes-man, or git.
I'd take any "tumultuousness" with a large grain of salt and focus on the man's careful and nuanced arguments instead. Particularly since much of what he warned about during his "tumultuous" term has in fact come true.
This scapegoat has no credibility. At the same time all countries submitted to a bailout program (Portugal, Ireland, and also Spain and Italy) were actually recovering, and only Varoufakis's Greece insisted on purposely sabotaging their recovery process.
We're talking about the same mastermind who thought it was a good idea to at the same time demand free money from Germany while throwing around references to Nazi Germany.
And it was particularly disgusting because Greeks and Poles worked (and work) more hours per year than anyone else in Europe.
His less-than-transparent scapegoat of "the referendum didn't went my way" doesn't hide the fact that Varoufakis was forced out of SYRIZA's government after pushing disastrous policies designed to derail Greece's recovery.
https://www.businessinsider.com/report-yanis-varoufakis-got-...
Unsurprisingly, once Varoufakis was forced out and his successors reintroduced a rational approach to Greece's finance ministry, Greece ended up getting back on track.
Also, this is the same Varoufakis known for at the time pushing Greece both out of the European Union and into Russia's sphere of influence.
Really? Because there are some heavy-handed quotes in the article.
First of all, I have the impression that he's incredibly vain. Maybe that's not entirely his fault, because parts of the left in Europe celebrate him like a rock star. But when he retells the story of how he negotiated with other leaders of the EU about the Greek debt crisis, the framing is always that he was the only wise person in a room full of idiots, and they wouldn't agree to the rational course of action because they were intimidated by his superior intelligence. This is of course just my observation, and I don't have a good source ready, so I'm curious if others have the same impression.
Second, although he downplays it somewhat when asked directly, he is a full-on radical marxist. This includes the view that anytime someone makes any money anywhere whatsoever, that can only mean somebody else is being exploited. I don't know how marxists square their conviction that no trade is ever beneficial to both sides with the reality that nobody is held at gunpoint to make those trades, but here's an example quote from the interview:
> So, when a recession hits, and the central bank decides to stimulate the economy, the central bank lowers the interest rate of the overdraft it grants commercial bankers – who then exploit this to profit from arbitrage (by lending the money on to customers at a higher interest rate).
I find this incredibly disingenuous because as an economist, he knows better. Lending is a service that banks provide that many (arguably perhaps too many) people choose to make use of. And Varoufakis is fully aware of the difference between risk-free and risk-adjusted interest rates. But of course, "banks bad", that's what his audience wants to hear. I think there, he agrees with the crypto people to a much larger extend than he would admit.
TL;DR: I think Varoufakis is overrated, although I somewhat agree with him on crypto.
Re CBDC, he's referring to current accounts. There is a big debate at the Bank of England about how to offer these accounts via intermediaries, the idea being that they will add value in some way. The idea of the bank offering basic (read: deliberately rubbish) accounts vs not offering then at all is a key part of that debate. Underwriting for loans is different, but it is a fair thing to say that most banks don't bother investing in SMEs or the real economy more broadly. The fact is, banks lend to virtually risk free borrowers in the form of mortgages - the risks being mitigated by persistent property price inflation. As such, why charge above the base rate?
It doesn't seem as though he is advocating replacing the lending function of banks, though in the broad sense I'd guess he would prefer savings and loan cooperatives like building societies and credit unions.
To put it more clearly: if I create one unit of value a day, it follows that for a profit to be accrued, it is not possible for me to be paid one unit of value. I'll be paid less. This is why the labour share of national income is still very important to some on the left, and it is the natural flip side to the idea of value add.
The goal of the "program" was to bring down the Greek national debt. Judging by the result, well, I'd say he nailed it :-)
> But of course, "banks bad", that's what his audience wants to hear.
I believe you're oversimplifying. But there are ppl less educated that can't express themselves so eloquently. The problem with the current banking system at least has been recently ELI5 - https://www.youtube.com/watch?v=3r76KkcJaTE (see Yelen's response, it's fine if you're the banker, less than ideal if you're a random tax payer).
There is no view that when anyone makes money someone is exploited. The view is that whenever you make money purely from investment, someone somewhere is being exploited to pay for part of it. The vast majority of people make money from selling their labour, so clearly that wouldn't be exploitative in any way in such a framework.
It would help your critique a lot if you weren't simply factually wrong on most of your points, especially if you want to call him overrated.
In fact, I realize most Marxists never read Das Kapital, but Marx himself is very clear that he doesn't believe trade creates value:
> Turn and twist then as we may, the fact remains unaltered. If equivalents are exchanged, no surplus-value results, and if non-equivalents are exchanged, still no surplus-value. Circulation, or the exchange of commodities, begets no value.
Source: https://www.marxists.org/archive/marx/works/1867-c1/ch05.htm
>In fact, I realize most Marxists never read Das Kapital, but Marx himself is very clear that he doesn't believe trade creates value:
>> Turn and twist then as we may, the fact remains unaltered. If equivalents are exchanged, no surplus-value results, and if non-equivalents are exchanged, still no surplus-value. Circulation, or the exchange of commodities, begets no value.
As I have said before, Marxists make a difference between different types of value. A better distribution of goods in the Marxist framework (implemented by a mutually beneficial trade of goods) allows more use-value to be realized.
It's easy to get confused - Marx never says that trade is entirely useless or that there is no mutually beneficial trade possible. All he says is that exchange of objects of equivalent value does not create any surplus, which is true. It can, in some cases, allow the use-value to be better realized, in which case it is mutually beneficial.
It's absolutely crucial to keep in mind the multiple different definitions of value if you want to engage with such arguments.
I know Marx says that, and it’s false. Trade can raise both utility and price. The reason is that price is highly context dependent; a shoe in a shoe shop is worth more than a shoe in a shoe factory. And it’s not the “labour of transportation” that makes it so, only part of that is location: Having a selection of products to choose from makes each individual one worth more, because you know you get to pick the one you want.
And at least one aspect of his argument is also uncontroversial in modern economics. Take the metric of GDP, and the example of a neighborhood of a ring of 5 houses, each with a mother and child. If mother 1 pays mother 2 for day care to raise child 1, and so on in a circle, then each mother is paying and being paid the same amount to raise a child (just not their own), and each child is being cared for. There is no economic benefit to this shuffling arrangement (in practice there would be downsides like taxes, but ignore all that), however GDP is increased by 5 times the cost to care for a child. But nothing is profited and nothing is lost, and the system cares for no more/fewer children.
So while I'm no expert (I'm not a Marxist and I've barely read any Marx or other political economists in their source works), but from what I know, such a strong claim isn't justified, and it reads like a misunderstanding based on the use of "value", which Marx often though not always makes pains to disentangle from notions of exchange value, use value, sometimes ethical and intellectual value (of ideas, etc.), and probably more besides.
The EU finance ministers wouldn't agree to his rational course of action because:
1. They wanted to make a visible example out of Greece, pour encourager les autres.
2. They didn't care about the social consequences of austerity and the economic depression it caused in Greece.
3. It was actually good for domestic political consumption to be tough on the Greeks. In Germany, for example, the powerful right-wing tabloids were pushing for the government to punish the "lazy" Greeks.
Varoufakis had a very strong economic argument. Massively contracting government spending while massively increasing taxes would obviously cause a severe depression in Greece. Besides the social consequences of that policy, it would also make Greece less capable of paying off its debts. This is obvious, but for the reasons I've listed above, the argument went nowhere. If you listen to Varoufakis' recordings of the ministers' conferences, they treated Greece like a vassal state, rather than as a member of a close, "value-based" union.
The way that the EU dealt with Greece is very different with how such an economic crisis would play out in the US. The common social safety net and the wider Federal budget mean that states that are in trouble automatically get increased support. The EU took the opposite approach, and induced a depression in Greece.
This isn’t a theoretical position even remotely attributable to Marxists.
If it's actually possible to eliminate exploitation, then great, we can work towards that.
I'm not sure what's difficult to square away about that.
On the other hand, there's also differences of opinion on how consent works. Most anti-Marxists just declare any transaction without a gun as fully consential, therefore it can't be exploitation. I find that harder to square away with, it's straight up denial of harm instead of minimization of harm.
What's contended is "the premise that all enterprise is exploitation", not reducing exploitation.
> Most anti-Marxists just declare any transaction without a gun as fully consential, therefore it can't be exploitation.
This isn't a helpful projection.
> Turn and twist then as we may, the fact remains unaltered. If equivalents are exchanged, no surplus-value results, and if non-equivalents are exchanged, still no surplus-value. Circulation, or the exchange of commodities, begets no value.
Source: https://www.marxists.org/archive/marx/works/1867-c1/ch05.htm
Marx is just saying that exchange of goods in itself does not create new value. He believed in the labor theory of value, which means that human labor is the ultimate source of value creation.
The idea that trade is never beneficial does not follow from that theory.
Many experts, including in this article, are describing that future. It’s why crypto and what not are a highly risky long-terms solution. If it can be abused, it will by a political actor at some point.
Do you think this can't be done already with credit cards?
I love how this undermines the basic functioning of the market via supply/demand. If demand is artificially restricted by taking money out of the pockets of consumers, how is "what to produce" decided? I think increasingly that decision is pseudo-centralized in VCs and other large investors who decide what businesses to fund.
A digital centrally controlled currency means you never get to escape it.
Even if you switch landlords for example, it would be inescapable, you have the masters of the universe doing it to you, not just one person you can move away from.
You're referring to projects other than for example Bitcoin right? Since the whole purpose of Bitcoin is that it shouldn't be possible to control it centrally. Or are you saying Bitcoin will inevitably be controlled by a single entity? If that happens I expect its value to be zero.
If the world's biggest economies were to hypothetically legally ban crypto holding and exchanging for fiat, then bitcoin's value in relationships to fiat would tank overnight as it would become useless binary data nobody would want anymore.
Bitcoin on the other hand, if you were to remove its capability for financial speculation, then it would serve no other purpose and would just be some useless bits of data, just like NFTs.
Even Varoufakis understands that Bitcoin is good for the individuals, but not for the governments because it can't be controlled.
He is not saying that. He states that individuals that own a lot of it are incentivized to like its fixed monetary policy, at the expense of the safety of the majority.
> If you have gold, it is good for you if its supply is limited, fixed if possible. Same with Bitcoin, silver, dollars. (Nb. It is why the rich and powerful traditionally opposed expansionary monetary policy, crying ‘hyperinflation’ at the drop of a hat.)
> A fixed money supply translates into a deflationary dynamic which, in a system prone to under-employing its people and under-investing in things society needs (i.e. capitalism), is a catastrophe in the making.
Like say the US government accepted some coin for tax payments but tainted some of them. Lots of people wouldn't want the tainted coins if they couldn't use them for a payment like that.
(taxes are just one example, say a payment processor did the same thing, or whatever)
It's the same system we have today at the large scale - wealthy folks extracting money from the poor and middle class.
So is that why Stellar is still being used for a CBDC trial in Ukraine then? [0][1] Or even a Bhutan CBDC [2] using XRPL being trialed as well? Perhaps that is where we are going then.
It also doesn't surprise me at all that Bitcoin has been a total failure in being useful for any of its original purpose and Ethereum has propagated and accelerated scam tokens with 'DeFi', ICOs and JPEG NFTs so quickly that it has become unusably expensive to almost everyone except millionaires spending $1k to send $100k hence the layer-2 contraptions that it needs to 'scale' up.
[0] https://cryptobriefing.com/ukraine-cbdc-is-progressing-durin...
[1] https://www.prnewswire.com/news-releases/ukraine-electronic-...
[2] https://ripple.com/insights/bhutan-advances-financial-inclus...
And hedge fonds can play there game anywhere.
The same thing with the argument from people that the normal suppressed people can get money through it. Dictators / evil actors can use the same system and still have the high ground.