> That last move, the digital yuan, constitutes a revolution: when fully-fledged, it will equip every resident in China, but also anyone from around the world who wants to trade with China, with a digital wallet – a basic digital bank account. In one move, therefore, the commercial banks will have been ‘dis-intermediated’; or, in plain English, they will have lost their monopoly over the payments system. This is genuinely a radical break from finance as we have known it. And, yes, it is one that we should emulate in Europe and in the United States – which is, of course, why Wall Street and the rest of the West’s financiers will do their best to stop it, preferring to blow up the world rather than allow themselves to be… dis-intermediated.
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.
Not sure what his problem is, a bank account is cheap, has great features etc.
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.
aside: Varoufakis used to be economist-in-residence at Valve
> 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.
He was also the finance minister of Greece. You may or may not agree with his ideas or not but I think you'd be hard pressed to find someone with more nuanced takes on politics, tech, and crypto. Unusual combo. Interesting person.
> You may or may not agree with his ideas or not but I think you'd be hard pressed to find someone with more nuanced takes on politics, tech, and crypto.
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.
You are correct, he resigned, following pressure on Tsipras government to get rid of him.
Some details are provided in the link in the comment you are responding to.
> Was he fired? I thought he quit after Tsipras sold out the Greek people?
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.
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.
If by rational you mean neo-liberal and that this policy crushed the weaken economy of Greece and created a decade of poverty for the people then yes he was forced out to put "rational" policies in place.
Mind you this is roughly about the same time that mainstream global media were trying to push the whole "Greeks are lazy/scammy creatures by DNA" narrative in response to Grexit.
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.
Completely aside, but those specific events is when I personally started to see Europe as problematic. ( I'm a European citizen, pay taxes there.
Also : I'm the 'right' kind of European, because clearly and unfortunately: there is two kind, we started to see that in 2008 )
> Mind you this is roughly about the same time that mainstream global media were trying to push the whole "Greeks are lazy/scammy creatures by DNA" narrative in response to Grexit.
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.
He resigned, following pressure from the Eurogroup on the greek government.
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.
It's built on a bunch of education and theory that's not at all covered in the article. The man is sufficiently credentialed to suggest that this is at least a well considered position of his based on his experiences as an economist and finance minister.
The man is sufficiently credentialed to suggest that this is at least a well considered position of his based on his experiences as an economist and finance minister.
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
Reputation is a short cut. And it's super common in every human discussion. Whether it is the HN heroes of pg and Musk, or this guy, we can look at someone's reputation and get a sense for their abilities.
Also, credentialed doesn't just mean academic credentials.
I know yanis' thoughts well enough to tell what he was saying, but I really wish he would define capitalism more narrowly there. The thrust of his argument lies somewhat far away from the broad brushes the vocabulary he uses has been painted with.
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 immediately thought of Uber - widely considered to be a successful market leader, yet not profitable, and funded by VC money which ultimately comes from the central bank money printing.
There might be many factors involved in this. Not least of them, the influence of capitalist countries over alternative societies.
Chile for example was crushed internally and externally when it tried to move away from the system they had at the time. Though inflation did raise there was a huge campaign against the government to purposefully make it fail. Is this a failure of socialism?
Any new system will naturally find resistance because it has to break the old one and make the new one work. Though, in reality, these experiments even if they fail change perspectives of people. When Germany had to be put back together they didn't get rid of everything that east Germany was. And these ideas then spread through out the rest of Europe. And the world.
And finally, it might be misleading to look at things from the perspective of a person in a developed society and go "yes this system is great!" When on the other hand, this very same system, is producing and reproducing extreme global inequality. El Congo and other extremely poor and unstable countries in Africa, as well as in central and south america are all capitalist countries... theyre just the other side of the coin.
And don't get me started on other externalities! I'm sure if birds and monkeys in the amazon could talk they would say they would rather see humans go back to primitivism. Though that's really a question about progress and industrialisation; but it's a question that capitalism has a really hard time dealing with.
So, I guess I simply dont think the statement "opposition to capitalism consistently produces less free societies." is a statement that should be done so freely. When something doesn't work we should ask why and what can be done better, not simply shrug and keep ourselves covered in mud.
I think the future will look closer to socialism than capitalism, but ofc, that's just my opinion. If you want to read more on global inequality I recommend pikettys book "capital and ideology".
The tyranny imposed in societies where socialist doctrines became dominant was simply staggering, and beyond anything that could be blamed on foreign meddling.
This tyranny was all-encompassing because socialism demonizes entire classes of voluntary interaction on the basis that they are inherently exploitative, and thus despite all appears to the contrary, nonconsensual. Socialism is an ideological dogma instead of a sober commentary on reality.
Because of this shoddy foundation, socialism ends up promoting subordination to the state and top-down order, and this is fundamentally less functional and more tyrannical than a society based on the principle of individual rights and emergent order.
This is an undeniable fact, not some "undergrad-tier bromide" as left-wing grifters dismiss it as.
Even now, after a century of failure, some dogmatic utopianists won't admit that their ideas don't work.
What is most tragic in all this is that it takes experimenting obviously bad ideas - whether it be socialism, or lockdowns - on billions of people, and producing hell on Earth, before a certain class of individuals will admit they are wrong.
You're really doing not much more than a correlation equals causation thing. The rise of capitalism in certain countries has occured during an increase in the enjoyment of some specific kinds of liberty. But was that caused by capitalism, or was it caused by the parallel adoption of classical liberal political thought (which by itself has nothing to say about capitalism)? Was it caused by the rise of empire and the exploitation of natural resources across large parts of the world, exploitation that is not in any real sense dependent upon capitalism itself? Was it caused by scientific and medical advances that could conceivably have occured in different economic and political systems?
And then ... what are we to make of the freedoms that capitalism does not enhance? Current capitalist societies do a (historically) good job on what has been called "freedom to", but a fairly poor job on "freedom from". There is a coherent philosophical argument that the latter are at least as important as the former, in part because you cannot exercise the "freedom to <X>" if you are forced to trade your own labor in order to live, or because you are sick with no means of accessing health care. Capitalist societies certainly do very well at ensuring that those who control capital enjoy freedom; it's not so clear that they are anywhere nearly as accomplished at ensuring and amplifying the freedom(s) of those who do not.
There's no question that capitalism has proven very effective at driving the discovery and adoption of highly efficient means of production. This has created a world of material comforts that has never been seen before, accessible in most senses to all but the absolute poorest in capitalist countries. The problem is that while material comforts may be a wonderful thing, and perhaps even in some senses a necessary component of freedom, they are also insufficient.
Dismissing human striving for something better has rarely been productive in the long run. Yes, we know that the experiments during the 20th century in the Soviet Union, Cambodia, Mao's China, and elsewhere should make us very cautious about any similar proposals. But to act as if this (both capitalism, and those particular sorts of responses to it) are the only options, as though this is just the best we can do and there will never be anything better ... this is just uselessly pessimistic and almost certainly wrong.
> You can either work for capitalists or die from various causes(starvation, lac of medical help, etc)
This is a straw man of capitalism. The idea that in capitalist countries citizens would be left to die and starve requires a great exercise of imagination.
> it was replaced by socialism/capitalism hybrid.
I agree with most of your comment actually. My point is there hasn't existed a free society without capitalism.
> So does capitalism, in the end pure capitalism failed (but not before taking lives of many people, child labour, unsafe work conditions, no health care, starvation and more)
What country society do you have in mind? I'm genuinely curious.
Opiod-related ODs have increased as the market has become more regulated and since the war against poverty started. I don't see evidence of these being caused by capitalism, if anything I see a correlation with socialism.
Oh yeah, I forgot the Sacklers and their marketing department were dyed in the wool commies, committed to handing over the means of production to the proletariat.
>This is a straw man of capitalism. The idea that in capitalist countries citizens would be left to die and starve requires a great exercise of imagination.
Just don't search how many people die due to lack of healthcare or how many people freeze to death(mostly homeless, but also people who can't afford to properly heat their homes), how many people were executed because they didn't have money for a good lawyer.
>I agree with most of your comment actually. My point is there hasn't existed a free society without capitalism.
On the other hand, capitalism can work perfectly well without free society. There is another problem with capitalism and democracy, capitalists compete with workers(non capitalists) for access to elected(or not) officials. They use power(money,connections, etc) to influence officials, which erodes democracy, in some cases, to the point where democracy is in name only. Normal people have a little influence on policies, while capitalists reap benefits of captured democracy.
>What country society do you have in mind? I'm genuinely curious.
I really don't know, but I believe that world without homeless people, starving children, sick without access to medicine is possible. I hope that socialism/capitalism hybrid(with democracy having control over capitalism, not other way around https://en.wikipedia.org/wiki/Codetermination_in_Germany) will help in making it possible, but there are no guarantees it will. But I know that I don't really want to LARP Mad Max in real life.
> Just don't search how many people die due to lack of healthcare or how many people freeze to death(mostly homeless ...
Do you have proof that there would be less of these without capitalism. If anything the homeless population has increased in the USA as the market has become more regulated, so I don't see the proof that more capitalism produces more homelessness.
> >What country society do you have in mind? I'm genuinely curious.
> I really don't know
I think you should inform yourself a little bit more before claiming something and then coming empty handed when specific examples are asked. The capitalism you're thinking of exists mostly in your imagination if you can't provide examples.
>Do you have proof that there would be less of these without capitalism. If anything the homeless population has increased in the USA as the market has become more regulated, so I don't see the proof that more capitalism produces more homelessness.
In socialist countries (eg European ones, I have less familiarity with others) number of homeless people is lower, number of people without healthcare is also lower. I'm an example, when I was unemployed, living with my family, government paid for my healthcare. Stuff even people with private insurance might not have (in US). Also rises in number of homeless people correlated with decline in mental health services. Greyhound therapy?
>I think you should inform yourself a little bit more before claiming something and then coming empty handed when specific examples are asked. The capitalism you're thinking of exists mostly in your imagination if you can't provide examples.
First of, when talking about future, you just don't know what consequences our actions will have. As I said, I would like to see what socialism/capitalism hybrid(democracy controling capitalism, including German example, wiki link). That includes Nordic social democracies or European ones in general. So I mentioned example after saying that I don't know. You just ignored it, with a bonus of "forgetting" to copy-paste my full argument.
I’ve always found these quotes a tad ridiculous. The two ways we’ve discovered to allocate jobs are labour markets and central planning. People arguing that capitalism is antithetical to freedom have to make the case that a government deciding for you what your job should be is more free than the status quo. They fail to even attempt to do so, possibly because most people would find such arguments ridiculous when it’s explicitly spelled out.
Capitalism has plenty of flaws but alternative mechanisms for allocating labour seem far more against freedom.
Labour markets != Capitalism. I suspect Varoufakis would be more amenable to labour markets regulated so that labour without ownership is not legal, which would not be capitalism.
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.
Price-controlled labour market implies that price is actually a mechanism which is complicated to do if you’re operating on something akin to “from each according to ability and to each according to need”.
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.
>if you’re operating on something akin to “from each according to ability and to each according to need”.
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.
My how the goalposts have moved. Millionaires are the new proletariat. Socialism needs to borrow almost all of capitalism from capitalism. Fairly soon socialists will be advocating for (partial) investor ownership of the means of production because once you accept price mechanisms in labour markets you have almost no good alternatives for new business formation.
No goalposts have been moved. The proletariat has never been defined by income level, rather simply if they sell their labour without owning capital. A vanishingly small percentage of the proletariat has been a millionaire or equivalent basically forever.
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.
> I suspect Varoufakis would be more amenable to labour markets regulated so that labour without ownership is not legal, which would not be capitalism
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.
The problem with this is businesses require capital and you can’t expect labour to be able to provide it. A system that compensates the investment in business with nothing at all won’t get that investment in business. If we’re trying to use something akin to the current job market we have to ask how companies are created within it. The best answer I can come up with is some sort of dystopian form of government picked winners where tax money replaced investment capital.
You can have the government act as venture capital if that is truly necessary. Otherwise labour does provide capital through the surplus, and loans can fill in the blanks.
Labour can potentially provide some capital but the mechanism by which it has to do so in the socialist system would be the wildly impractical an equal amount from each labourer. Anything that causes investment to break one worker, one share for the ownership structure of the business is not allowed. This means if some workers have enough capital to invest they aren't going to do so since it doesn't give them any practical returns. Only if all workers can agree on what to invest and all workers can and will do so will the required ownership structure work with investment from workers.
> The best answer I can come up with is some sort of dystopian form of government picked winners where tax money replaced investment capital
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.
You don't have a right to personal property though, because you can't use your property to make a profit from someone else's labour, which is the difference with capitalism.
When he said the words "liberal techno-communism" in seriousness, as something NFTs could help? He lost me.
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.
You can use NFT's as decentralized permission tokens for access to decentralized databases.
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.
Imagine when they can limit the trade of crypto to people who have certain ideas. Or limit the percentage of your wealth you can spend on certain items (games, movies, ... food).
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.
That’s the whole idea behind tax cuts and increasing income share for rich people and stagnating wages for everybody else. Only rich people can use money in a productive way. Giving it to the rest is just wasted.
I'm assuming this is a positive statement, not a normative one.
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.
That attitude has always existed in an economy to some degree, but you still retain the option to move to something else and get away from it.
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.
> Imagine when they can limit the trade of crypto to people who have certain ideas.
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.
He said Bitcoin is not good at the macro-level, where it has catastrophic effects for society at large. That's quite a long way from "good for the invidivuals, but not for the governments".
> Even Varoufakis understands that Bitcoin is good for the individuals
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.
Bitcoin value is what it currently is because it's traded against fiat, so holders can cash it out for currency they can actually use to buy things the real world.
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.
Every asset would lose most of its value if it couldn't be exchanged for fiat. From gold to Google stocks. The intrinsic value of gold is negligible in comparison to its actual value. It would just be another rock.
Except gold is not just a means of financial speculation, but it's also a precious metal highly sought after for it's uses in the electronics, medical, semiconductor, aerospace and other industries due to its very good electrical and thermal properties.
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.
Note I acknowledge this in my previous comment by saying gold has intrinsic value. My point is that gold would still lose most of its value, since there's a highly speculative component to it.
The state could ban on/off ramps, and ban ownership of it like they did with gold in 1933. Certainly this would crash the price as most people wouldn't want to be involved with it and risk committing crimes. It probably wouldn't kill it, but it might kill demand for a while and in any case investing now with this potential outcome crashing price in future is a risk.
This already happened to Canadians and Russians earlier this year with traditional banks & payment systems. How would this be achieved in the world of Bitcoin and Lightning Network?
This could happen by public consensus if it's widely agreed (for instance) that certain coins are tainted by their use for some atrocious thing. Your coins could be cancelled.
It doesn't have to be widely agreed to be painful.
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)
>Imagine when they can limit the trade of crypto to people who have certain ideas. Or limit the percentage of your wealth you can spend on certain items (games, movies, ... food).
Do you think this can't be done already with credit cards?
No because you can (almost) always use cash. This is one of the reasons people push back on the cashless trend, and bitcoin obviously goes way further than that.
The choice is not between some communist utopia that Varoufakis alludes to, and people grinding in virtual worlds to make a living.
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.
> 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.
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.
Fascism is anathema to capitalism. Capitalism means free markets, for which you need free market actors, free speech, freedom of association, freedom of movement.
Capitalism means trusting other adults to be able to use their own intelligence to make the best choices for them.
Fascism and other authoritarian systems like communism is, at heart, pompous, arrogant, and disrespectful because it presumes to dictate what the people must do.
>>Funny that people will say this with a straight face and then walk into their jobs and have their pompous, arrogant, and disrespectful boss tell them what to do for eight hours.
Your boss has no power to restrict
your choices. They can only offer you an option, and compel you to choose it by making it better than any other offer available to you.
There is no comparison between this, and the government mandates that characterize fascist and socialist societies.
You’re missing the point. You choose every day when you work, to work under a fascist authoritarian regime. You choose that. Why do you choose that? Why does anyone choose it? It’s because they don’t choose it, they’re forced into it. Why are they forced into it? Because of private property.
>>You choose every day when you work, to work under a fascist authoritarian regime. You choose that
If you're choosing it, it's not a fascist authoritarian regime.
And yes, people need resources to live, and unless they've already accumulated great wealth, that means they have to either work (via the free market), or steal (via fascism/socialism).
As Frédéric Bastiat wrote 170 years ago, the need to acquire resources is the nature of reality, not a circumstance that exists only because some authoritarian force imposes it.
"Man recoils from trouble, from suffering; and yet he is condemned by nature to the suffering of privation, if he does not take the trouble to work. He has to choose, then, between these two evils. What means can he adopt to avoid both? There remains now, and there will remain, only one way, which is, to enjoy the labor of others. Such a course of conduct prevents the trouble and the satisfaction from preserving their natural proportion, and causes all the trouble to become the lot of one set of persons, and all the satisfaction that of another. This is the origin of slavery and of plunder, whatever its form may be - whether that of wars, imposition, violence, restrictions, frauds, etc. - monstrous abuses, but consistent with the thought which has given them birth. Oppressors should be detested and resisted - they can hardly be called absurd."
>>Myself? I know I would rather live in pre-historic state, foraging with a bunch of my relatives and friends, instead of in the current day Philippines.
Pre-historic life was brutal. Every one had ring worms. Every one had intestinal parasites. People were hungry almost all the time.
A broken leg led to shock and death, and half of children died before the age of five.
You need to study pre-history, or remote tribes that live in pre-historic modes of life. You're yet another person who underestimates the challenge of living, and takes for granted what modern civilization had to overcome.
When you recklessly abolish the innovations, like private property rights, that led to industrial civilization, you create shortages, massive inflation, etc, and quickly see how fragile the economic system was.
If you’re not afraid to die, and to be uncomfortable, you’ll never be free. They’ll always be someone controlling you because of your fear. And right now you know who’s doing it? All these crypto people. They’re using the fear are you so eloquently detailed above to make you buy into a scam.
The argument is private property is a nearly necessary ingredient to innovation. It may not be exclusively true but boy it sure helps! Even things like city planning greatly benefits form the taxes siphoned off healthy private commercial activity.
>>The innovations that help people live longer aren't private property, they're medical science and city planning.
Private property is what generated the massive gains in productivity that allow society to allocate resources to employing specialists like doctors, researchers and water sanitation engineers.
Even over the last 50 years, it's abundantly evident that private property rights facilitated the unprecedented gains in wages and quality of life seen globally;
I might believe it. The Philippines is today dominated by large plantations. One thesis of How Asia Works is that, although these plantations are a labor-efficient way to produce wealth for their owners, they are, net, less ecologically/biologically productive than smallholdings are (which are farmed by labor-intensive "gardening"). So the nearby countries, like Vietnam, that had land reform, which put land back into the hands of smallholders, were able to produce more food and provide more reliable subsistence to their people (if less measurable wealth).
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.
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.
The economists, who study this, overwhelmingly disagree. There are numerous examples given in the three articles I cited of a transition to greater capitalism being associated with more rapid economic development and poverty reduction, and you made the unsubstantiated claim that these are cherry-picking.
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.
The data you linked isn't about unrestricted unlimited capitalism. Everywhere "capitalism" lifted people out of poverty you'll find it only happened after limitations, checks and balances, and regulations were placed on capitalism.
If you read the articles linked, and look at the other studies done on global development, you see that the places that did the most to lift those limitations and regulations, that disrupt the natural checks and balances of the market, saw the greatest improvement in quality of life.
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:
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.
You're confusing authoritarian governments with limitations on capitalism.
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.
>>You're confusing authoritarian governments with limitations on capitalism.
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.
> I am not. Economists specifically cite the liberalization of the economy
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.
Hunger in the Philippines is NOT due to capitalism. Hunger massively declined in the Philippines due to capitalism.
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.
I'm happy to show you data on the development of the Philippines economy over the last 50 years. Had your narrative won out, the people would have fared much worse, like the people in Venezuela, or North Korea, or pre-1978 China.
"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.
This is the only genuine ownership that exists in the digital realm. Digital assets that use a ledger run by a trusted third party can always be seized or frozen by that party.
A trusted party is required to enforce ownership rights. If somebody steals your digital assets, the trusted party will seize the stolen assets and return them to their rightful owner. Without a trusted party that has the power to seize assets ownership cannot be enforced, in other words there cannot be ownership.
In the "not your keys, not your coins" setup, that trusted third party is the government, which gives you security against theft, kidnapping, burglary, etc, so you can keep your keys safe.
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.
> So to put it another way, trusted third parties can also be a threat to private property.
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.
I just explained how the blockchain far from "preventing any authority from interfering", relies on authorities to protect individuals from theft, kidnapping, burglary, etc, for people to be secure in their control of their keys.
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.
You have not explained how the state enforces property rights on a blockchain. Consider this scenario: you forget your keys at a restaurant, where a stranger finds them and uses them to transfer your funds to their address. Since the transaction was not authorised by the rightful owner of the funds (you), the transaction isn't lawful. It violates your property rights as the owner of the funds. However there's nothing the state can do to reverse the transaction. Explain how the government enforces your property rights in these circumstances.
In the example you provided, the state can compel the thief to forfeit his private key, under pain of imprisonment.
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.
If the state can seize the thief's assets, it can also seize anybody else's assets. There's no way around it. And there's no trade-off. What are you talking about? Either the government can seize the assets or it cannot. The power that is needed to enforce property rights can also be used to violate these same rights.
The state first needs to be informed of the theft, by the victim, to be able to seize the thief's assets. Moreover, there is a significant possibility that the state will fail in its attempt to seize the thief's assets. Both of these qualities of these respective situations are significantly different than a case of a virtual good held by a large trusted third party custodian. The latter means the state by default can easily discover who owns what, and is guaranteed to be able seize whatever it sets out to seize, at minimal enforcement and political cost.
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.
Okay... the thing is that you can't give the state the ability to enforce property rights and simultaneously not give the state the ability to confiscate assets arbitrarily, because it's the same ability in both instances. If you restrict the state's ability to confiscate assets, then you're also restricting its ability to enforce property rights. And that's precisely what blockchains do, they make it very difficult for any authority to be able to confiscate assets, but this also means property rights are largely unenforceable. Which has been my point all along—blockchains do not allow its users to exert "genuine ownership" over anything. On the contrary, they prevent ownership rights from being exerted.
It changes our understanding of property rights from one of violence (state confiscation) to one of knowledge (knowledge of the private key). It is the biggest switch in your lifetime, yet you fail to see it. You keep falling back to governments enforcing ownership through violence.
The state being able to confiscate things is the opposite of property rights. The universe enforcing it through math is a more natural state.
Property rights are legal claims that are independent of possession. If I lend you my car, you don't become the owner of the car. Being in possession of the car keys doesn't make you the owner either. If it would, it would mean that a thief could steal the keys, and become the new owner. That's the complete absence of property rights, because it would mean theft is legal. If you don't understand the difference between ownership and possession you need to go back to elementary school.
What if you didn’t need the state to enforce those rights? And everyone agreed the ledger was ownership. That is what we have today, and 13 years and counting. You are free to ignore that ledger.
What if everyone agreed that pigs fly? They still wouldn't fly. Just because you repeat like a parrot what the bitcoin influencers tell you, it doesn't mean it's true.
I’d probably just burn it down and build another one.
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.
> I’d probably just burn it down and build another one.
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.
The answer is not violence from me. I do not wish any harm on anyone.
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.
>>Okay... the thing is that you can't give the state the ability to enforce property rights and simultaneously not give the state the ability to confiscate assets arbitrarily, because it's the same ability in both instances.
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.
"you need a trusted third party to save you from yourself and enforce the rules" is the complete antethis of what blockchains are all about. Some real doublethink there that you think there can't be ownership without that.
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.
Double-think why? To be clear, my position is that blockchains don't allow (or make very difficult) enforcing ownership rights.
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.
> 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.
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 problem, to me, is that this "work" is useless. These Filipinos could be doing something materially useful, but the vagueries of money mean they're doing this instead.
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.
Maybe slightly out of topic, but I'm incredibly impressed by the intelligence of this man, and how easily he can communicate on complex topics in such a simple language even a teenager without most of the context could grasp.
I'm genuinely not sure what you're trying to say by that, since that's not at all the vibe I get from Yanis. Or are you saying that since Yanis is deeply skeptical of crypto, this implies he thinks everybody in the space is "an idiot", and hence you think he's actually the idiot here?
> Tolerate the right of people to sell their labor for wages? Tolerate the right of people to offer wages for other people's labor?
No, tolerate a system that works as hard as possible to ensure that selling one's labor for wages is the only option, rather than a right. Tolerate a system in which increases in productivity accrue benefits mostly to capital rather than society as a whole. Tolerate a system in which profit is preferentially distributed to the capital that partially enabled it rather than the labor that also enabled it.
It's all very well to point to some historical societies in which a person was not even free to sell their own labor. But to insist that this is the yardstick by which we measure our own society is devastatingly narrow-minded.
> Tolerate a system in which increases in productivity accrue benefits mostly to capital rather than society as a whole.
Let's take the information revolution. Is that really true? Sure, we can point to examples of tech billionaires and multinational companies. But those advances in computing and communications did make it to the masses. Now over 90% of the world owns a smartphone with some access to the internet. Same with almost all technological breakthroughs since the industrial revolution and rise of capitalism.
"Increases in productivity accrue benefits" refers not the material benefits of new technology, but the increased profits that arise from reducing the amount of labor (and/or other forms of energy) required to make something.
I'm not saying that it's not better to be more efficient at how we make things - it absolutely is. But the benefits of this process ought to accrue to a whole society, because ultimate that's supposed to be the point (for most of us). That might mean working less hours for the same salary, or it might mean UBI or both or something else. But what it shouldn't mean is that a larger and larger fraction of GDP goes to capital, and everybody gets a nice toy.
>>No, tolerate a system that works as hard as possible to ensure that selling one's labor for wages is the only option, rather than a right
So you propose the government provide an alternative, by doing what I described, which is effectively to steal from the Ant to give to the Grasshopper, i.e. tax the more productive to provide resources to the less productive.
And the absence of this non-consensual redistribution is what you and Varoufakis absurdly enough, find intolerant to those who value freedom.
Marxism is deliberately obfuscated, to hide what it really advocates.
>>Tolerate a system in which increases in productivity accrue benefits mostly to capital rather than society as a whole. Tolerate a system in which profit is preferentially distributed to the capital that partially enabled it rather than the labor that also enabled it.
Increases in productivity accrue benefits to society at large right now. In the US, there was a small increase in capital's share of national income, but labor's share remains significant:
It's frankly hilarious that you would jump directly to Marxism as if that was the only alternative. There's that great quote that has been floating around for a decade or two now: people find it easier to imagine the end of the world than the end of capitalism. It has been normalized to the point where even reasonably intelligent and educated people have a difficult time imagining or even being aware of any alternative. That appears to include yourself.
Labor compensation as percentage of GDP since 1950:
That shows a near 16% drop in labor compensation as a percentage of GDP since its high in 1970.
The CSMonitor article you linked to cites 3 reasons for the dramatic drop in world poverty, with a move to "more market-based economic systems" about the closest thing they offer to "capitalism". Even that is really only half of that particular reason, since they also cite more democratic political systems.
The article is about the global war on poverty - it's about developments in countries far from the US economic order of things. So sure, at some point during the development of a capitalist economy, you will see a stronger correlation between productivity gains and wages. However, that's not the case in the USA since sometime in the late 20th century.
Labor's share of compensation dropped from 0.63 to just under 0.60. That's not 15%.
>>people find it easier to imagine the end of the world than the end of capitalism.
Because capitalism is literally people being secure to own and exchange what they produce. The end of capitalism would require pervasive government control to deny that right, and of course I'll assume it's Marxism that's motivating these calls, because it almost always is, and the economist who's being fawned over by leftists in the comments under this post is a Marxist.
>>The CSMonitor article you linked to cites 3 reasons for the dramatic drop in world poverty, with a move to "more market-based economic systems" about the closest thing they offer to "capitalism".
1. "more market-based economic systems" is 100% "more capitalism".
2. Here are two other sources that echo the widely held conclusion that the spread of market institutions, like private property rights, played a pivotal role in the decline in poverty:
>>So sure, at some point during the development of a capitalist economy, you will see a stronger correlation between productivity gains and wages. However, that's not the case in the USA since sometime in the late 20th century.
If you look at advanced economies, you see Hong Kong and Singapore ranking number 1 and 2 in economic freedom indices, and having social welfare spending as a percentage of GDP far below the OECD average.
And they massively closed the gap with the Nordic countries in per capita GDP, while leapfrogging them in quality of life metrics like life expectancy.
You see the advanced economies massively increase social welfare spending over the last 60 years:
And you see both per GDP capita growth and wage growth stagnate over that period.
By all indications, capitalism is the best ruleset for facilitating economic growth, and the experience of advanced economies like the US confirms that.
"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.
No, the reason governments can do this is because people trust their IOUs. That’s why they can do the same thing with or without any underlying asset with any characteristics.
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.
Why would people accept bitcoin IOUs when the real thing is more interoperable, saleable, private etc.etc. and of course doesn't require trust in the issuer. The answer is force [0]
The same reason people accept IOUs for literally anything else: credit. It is actually extremely useful to be able to borrow productivity from the future and use it today.
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?
I think a bitcoin economy in stablestate would have about the same amount of lending as a gold economy under the gold standard. There is enough history during gold standard periods to have some idea how this would be.
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.
> [Bitcoin will have] much more stability [than fiat]
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].
The IOUs would be more private since your transactions aren't public. Likely faster with better user experiences too, per Moxie's argument for why blockchain systems already look more like that.
This was clearly a due process violation by the same man who set up concentration camps for Japanese Americans. He packed the Supreme Court so he could get away with it.
Governments certainly will attempt to issue IOUs backed by bitcoin. And some people will accept them.
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.
In the hypothetical future world where Bitcoin has replaced other currency, trust in the central bank is probably gone already (due to hyperinflation or devaluation most likely).
If you read the full answer, you would see that his position is that doing that is better than not doing it. If you are correct that it is even more difficult to do so, then his position is that bitcoin is even worse than gold in this regard.
> 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.
"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"
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.
"If you read the full answer, you would see that his position is that doing that is better than not doing it. If you are correct that it is even more difficult to do so, then his position is that bitcoin is even worse than gold in this regard."
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."
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."
> But basically, Varoufakis doesn't believe people should have personal financial freedom.
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.
I don't think most bitcoin maxis would claim bitcoin can fix capitalism. Any more than gold could fix capitalism.
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.
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.
But if it enables war for fiat countries and constrains it for BTC countries, doesn't they imply a significant likelihood that the fiat countries will conquer the others?
Two generations from now when new generations fight for scraps of deflationary money, those who amassed wealth early in the crypto cycle will definitely finance wars.
Aren’t you basically repeating the same thing as the person you’re replying to? If the nation with a Bitcoin economy is threatened by the nation with a fiat economy and in the process of armament, what should they do?
Except the extent of the taxing and borrowing is not constrained because you can just mint new cryptocurrencies. The world you're talking about is wholly imaginary. The only way this works is if you ban all other cryptocurrencies and enforce some kind of capital controls...
You can mint new fiat currencies. You can mint new cryptocurrencies. You can issue gold coins diluted with base metals.
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.
No, your comment is completely wrong in basically every aspect. The difficulty of proof of work (for the most part) only determines the profit margins of the miners and the volume of transactions on the network, and is also not set in stone and can be changed at any time. It's literally just another form of capital control. Also by dramatically increasing the difficulty you actually make the network much more susceptible to takeovers because that leads to consolidation amongst the miners.
>>> by dramatically increasing the difficulty you actually make the network much more susceptible to takeovers because that leads to consolidation amongst the miners.
I understand why gold got centralized into USA during WW2 (physical security, costly to assay). Why does increasing BTC difficulty lead to miner centralization?
Mining difficulty roughly maps to a financial incentive for a miner to operate. As that line rises, the number of miners who can afford to mine in any significant amount would naturally decrease, right?
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.
I'm confident in my guess - both you & Yanis will be proven wrong in time. So far nobody in history has taken the complex heaving mass of the global economy and boiled it down to a simple forecast about what it will do when confronted with a new technology. We cannot foresee what is about to hit us. Roughly every possible outcome has been forecast by someone.
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.
Even if this untraceability / unstoppability was possible, it might not be as revolutionary as you'd think.
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.
>An untracable, unstoppable & untaxable cryptocurrency might be developed
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.
Since you cite N N Taleb, you might be interested in his assessment of Bitcoin:
> 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.
I've seen interviews with Varoufakis before, there are several on YouTube. I find him very hard two bear for two (unrelated?) reasons.
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.
Marxist exploitation occurs in the labour relation - it isn't really about consumers. The thing he was referring to was the price mechanism, for which Marxists have entertained quite a few alternatives based on the use value, labour costs to produce (labour value) etc.
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.
Since all labourers necessarily are consumers, a point that Marx hits home repeatedly, the question whether labour prices are too low or consumer prices too high is irrelevant, they are mathematically equivalent.
They aren't - that's the point Marx makes in describing the idea of alienation from the fruits of one's labour. Because labour is commodified, the rate of pay does not relate to the value at the point of consumption - the difference between the price of the labour (eg labour value) and the price paid (exchange value) is profit, which is generally quite well known to be what the capitalists are in it for..!
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.
> 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.
This isn’t a theoretical position even remotely attributable to Marxists.
> 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.
Yes, and? This does not imply that trade is not beneficial.
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.
If you accept the premise that all entreprise is exploitation, then your goal would be to minimize exploitation.
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.
> they wouldn't agree to the rational course of action because they were intimidated by his superior intelligence.
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.
Who the hell told you that Marxists think trade is never mutually beneficial? Marxists make a distinction between use-value and monetary value, so it's definitely possible for a trade to be mutually beneficial. The issue is within capital-labor transactions that are fundamentally different in the Marxist framework from trade of goods.
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.
I'm not even sure what you're disagreeing with. I gave a direct quote, from the very article we're discussing, that Varoufakis directly attributes a price difference to "profit". You may believe that, but it contradicts all (non-Marxist) economic theory, which is the only thing I'm pointing out.
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.
I don't see how that quotation, or the preceding example Marx uses to illustrate it, backs up your strong claim that Marx thinks "no trade is ever beneficial to both sides". He's making an economic argument about a certain notion of value. It's not a nihilistic "woe is everything" argument about how there's no point or no ethical way to do any kind of trade.
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.
You mixed up two things. You said he believes no one can make money without exploiting, which is false. If you said no one can extract a profit without exploiting was his view, you would be accurate.
>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.
> All he says is that exchange of objects of equivalent value does not create any surplus, which is true.
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.
No one is debating that trade can increase price and personal utility. The point of contention is that trade cannot create surplus value. Beyond the labour of transportation, it is only realising the use value of the good. Nothing is being produced, and indeed an economy where very little trade beyond transportatio is necessary is a better one, because it is simply and inefficiency.
As I said, transportation is a red herring, trade is mostly not about that. And just so I have this straight: you dispute the claim that Marxists think trade is not beneficial, and argue that they instead think it’s an inefficiency.
That is how he is seen in his country. He also tends to quote other people a lot in attempted osmosis . His views about ukraine is that basically they should surrender
> > [...] he was the only wise person in a room full of idiots [...]
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).
Lightning is not centralized, but tends towards centralization because of routing issues.
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.
Because it's a credibly neutral financial layer that countries can use to transfer value and we can have a global financial system that no one controls.
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.
Thank you! I always click on the HN articles with “crypto” in the title thinking I’m about to read about information manipulation using modular arithmetic and instead…
At this point it's a lost cause. Recently, I tried to search for details regarding a new release of the go x/crypto package, and unfortunately all the results were related to cryptocurrencies, etc.
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.
Language changes whether we like it or not. Before cryptocurrencies, "crypto" meant cryptography, but with mainstream adoption of cryptocurrencies, the popular meaning of "crypto" has shifted to cryptocurrencies. If cryptocurrencies fall out of use maybe it will shift back.
If we want to try to reclaim crypto (which feels like a moral cause to me, re-establishing a bigger idea over letting some ounk shit micro-corner of the big idea colonize the word), I'd suggest we need a new easy to use word to describe cryptocurrencies.
I dont have any candidates. But without a convenient alternative to describe the thing, change will be extremely slow.
I'd like to nominate "cryptoc", which I think is simple and just as easy to say, but I'm unsure to which internet-language standards board I should submit this proposal.
I feel Yanis is speaking to a previous era which is now ending.
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.
> we have also seen China systematically destroy its Tech industry in favor of more materially-productive enterprises.
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.
I meant "Tech" with a capital T -- analogues of Facebook, Netflix, and so on -- not real physical competencies like being able to fab a chip or make a high-temperature jet turbine. So I think we're in agreement.
Ray Dalios new book "Changing World Order" gives a good overview of how this crazy money printing / QE is the end game of a governments monetary policy before their demise. People think it can keep going forever before it collapses. Most people don't realize because the last time this happened was before our lifetimes.
I've always found it ironic that the Bitcoin maximalists are themselves advocating for the freedom to print money.
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.
Let me articulate cause I hear you in that the most hard core Bitcoin maximalists abhor all shitcoins and would probably be okay with a kind of mandate that Bitcoin and only Bitcoin be legally considered currency. My comment is more about people who say "MMT is bad, here is a list of cryptocurrencies that I consider to be real money."
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.
I see what you mean by it's a new money but it isn't really printing any more wealth, they're just saying "this is a better store of value because there isn't a special class of privileged people that get to print money while everyone else suffers".
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.
the money supply in crypto increases across all cryptocurrencies as more are created. so there is no fixed money supply. further, any cryptocurrency which at this moment is deflationary, can decide to become inflationary, and vice versa.
there is no way to constrain the economy to availing itself of only the fixed supply of one cryptocurrency like BTC.
Yea that's exactly the argument behind Bitcoin as a store of wealth - any other currency can change their inflation schedule, Bitcoin will not.
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.
IMVHO the issue is more on the mere understanding what money is. I suggest rediscover a small scene from a Colombian movie (witch is nothing really interesting IMO beside that small sketch): El Concursante, here the relevant part: https://youtu.be/WpGhcDg7IJ4 that's the more clear and simple compact explanation of the nature of money.
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.
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[ 3.4 ms ] story [ 279 ms ] threadSo 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.
> 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.
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.
https://euobserver.com/world/127475
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.
And it was particularly disgusting because Greeks and Poles worked (and work) more hours per year than anyone else in Europe.
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.
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.
Really? Because there are some heavy-handed quotes in the article.
Quote of the article, imo.
The framing of these questions is interesting in their bias, but the answers do a great job navigating them.
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.
Chile for example was crushed internally and externally when it tried to move away from the system they had at the time. Though inflation did raise there was a huge campaign against the government to purposefully make it fail. Is this a failure of socialism?
Any new system will naturally find resistance because it has to break the old one and make the new one work. Though, in reality, these experiments even if they fail change perspectives of people. When Germany had to be put back together they didn't get rid of everything that east Germany was. And these ideas then spread through out the rest of Europe. And the world.
And finally, it might be misleading to look at things from the perspective of a person in a developed society and go "yes this system is great!" When on the other hand, this very same system, is producing and reproducing extreme global inequality. El Congo and other extremely poor and unstable countries in Africa, as well as in central and south america are all capitalist countries... theyre just the other side of the coin.
And don't get me started on other externalities! I'm sure if birds and monkeys in the amazon could talk they would say they would rather see humans go back to primitivism. Though that's really a question about progress and industrialisation; but it's a question that capitalism has a really hard time dealing with.
So, I guess I simply dont think the statement "opposition to capitalism consistently produces less free societies." is a statement that should be done so freely. When something doesn't work we should ask why and what can be done better, not simply shrug and keep ourselves covered in mud.
I think the future will look closer to socialism than capitalism, but ofc, that's just my opinion. If you want to read more on global inequality I recommend pikettys book "capital and ideology".
This tyranny was all-encompassing because socialism demonizes entire classes of voluntary interaction on the basis that they are inherently exploitative, and thus despite all appears to the contrary, nonconsensual. Socialism is an ideological dogma instead of a sober commentary on reality.
Because of this shoddy foundation, socialism ends up promoting subordination to the state and top-down order, and this is fundamentally less functional and more tyrannical than a society based on the principle of individual rights and emergent order.
Even now, after a century of failure, some dogmatic utopianists won't admit that their ideas don't work.
What is most tragic in all this is that it takes experimenting obviously bad ideas - whether it be socialism, or lockdowns - on billions of people, and producing hell on Earth, before a certain class of individuals will admit they are wrong.
And then ... what are we to make of the freedoms that capitalism does not enhance? Current capitalist societies do a (historically) good job on what has been called "freedom to", but a fairly poor job on "freedom from". There is a coherent philosophical argument that the latter are at least as important as the former, in part because you cannot exercise the "freedom to <X>" if you are forced to trade your own labor in order to live, or because you are sick with no means of accessing health care. Capitalist societies certainly do very well at ensuring that those who control capital enjoy freedom; it's not so clear that they are anywhere nearly as accomplished at ensuring and amplifying the freedom(s) of those who do not.
There's no question that capitalism has proven very effective at driving the discovery and adoption of highly efficient means of production. This has created a world of material comforts that has never been seen before, accessible in most senses to all but the absolute poorest in capitalist countries. The problem is that while material comforts may be a wonderful thing, and perhaps even in some senses a necessary component of freedom, they are also insufficient.
Dismissing human striving for something better has rarely been productive in the long run. Yes, we know that the experiments during the 20th century in the Soviet Union, Cambodia, Mao's China, and elsewhere should make us very cautious about any similar proposals. But to act as if this (both capitalism, and those particular sorts of responses to it) are the only options, as though this is just the best we can do and there will never be anything better ... this is just uselessly pessimistic and almost certainly wrong.
This is a straw man of capitalism. The idea that in capitalist countries citizens would be left to die and starve requires a great exercise of imagination.
> it was replaced by socialism/capitalism hybrid.
I agree with most of your comment actually. My point is there hasn't existed a free society without capitalism.
> So does capitalism, in the end pure capitalism failed (but not before taking lives of many people, child labour, unsafe work conditions, no health care, starvation and more)
What country society do you have in mind? I'm genuinely curious.
How about dying from rare cancers due for living near superfund sites, or from opioid-related ODs?
Just don't search how many people die due to lack of healthcare or how many people freeze to death(mostly homeless, but also people who can't afford to properly heat their homes), how many people were executed because they didn't have money for a good lawyer.
>I agree with most of your comment actually. My point is there hasn't existed a free society without capitalism.
On the other hand, capitalism can work perfectly well without free society. There is another problem with capitalism and democracy, capitalists compete with workers(non capitalists) for access to elected(or not) officials. They use power(money,connections, etc) to influence officials, which erodes democracy, in some cases, to the point where democracy is in name only. Normal people have a little influence on policies, while capitalists reap benefits of captured democracy.
>What country society do you have in mind? I'm genuinely curious.
I really don't know, but I believe that world without homeless people, starving children, sick without access to medicine is possible. I hope that socialism/capitalism hybrid(with democracy having control over capitalism, not other way around https://en.wikipedia.org/wiki/Codetermination_in_Germany) will help in making it possible, but there are no guarantees it will. But I know that I don't really want to LARP Mad Max in real life.
Do you have proof that there would be less of these without capitalism. If anything the homeless population has increased in the USA as the market has become more regulated, so I don't see the proof that more capitalism produces more homelessness.
> >What country society do you have in mind? I'm genuinely curious.
> I really don't know
I think you should inform yourself a little bit more before claiming something and then coming empty handed when specific examples are asked. The capitalism you're thinking of exists mostly in your imagination if you can't provide examples.
In socialist countries (eg European ones, I have less familiarity with others) number of homeless people is lower, number of people without healthcare is also lower. I'm an example, when I was unemployed, living with my family, government paid for my healthcare. Stuff even people with private insurance might not have (in US). Also rises in number of homeless people correlated with decline in mental health services. Greyhound therapy?
>I think you should inform yourself a little bit more before claiming something and then coming empty handed when specific examples are asked. The capitalism you're thinking of exists mostly in your imagination if you can't provide examples.
First of, when talking about future, you just don't know what consequences our actions will have. As I said, I would like to see what socialism/capitalism hybrid(democracy controling capitalism, including German example, wiki link). That includes Nordic social democracies or European ones in general. So I mentioned example after saying that I don't know. You just ignored it, with a bonus of "forgetting" to copy-paste my full argument.
Your strawman sounds like "All possible technologies has already been tried"
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.
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.
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.
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.
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.
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.
It's the same system we have today at the large scale - wealthy folks extracting money from the poor and middle class.
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.
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.
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.
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)
Do you think this can't be done already with credit cards?
This quote is amazing, and describes most of crypto.
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.
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 means trusting other adults to be able to use their own intelligence to make the best choices for them.
Fascism and other authoritarian systems like communism is, at heart, pompous, arrogant, and disrespectful because it presumes to dictate what the people must do.
Your boss has no power to restrict your choices. They can only offer you an option, and compel you to choose it by making it better than any other offer available to you.
There is no comparison between this, and the government mandates that characterize fascist and socialist societies.
If you're choosing it, it's not a fascist authoritarian regime.
And yes, people need resources to live, and unless they've already accumulated great wealth, that means they have to either work (via the free market), or steal (via fascism/socialism).
As Frédéric Bastiat wrote 170 years ago, the need to acquire resources is the nature of reality, not a circumstance that exists only because some authoritarian force imposes it.
"Man recoils from trouble, from suffering; and yet he is condemned by nature to the suffering of privation, if he does not take the trouble to work. He has to choose, then, between these two evils. What means can he adopt to avoid both? There remains now, and there will remain, only one way, which is, to enjoy the labor of others. Such a course of conduct prevents the trouble and the satisfaction from preserving their natural proportion, and causes all the trouble to become the lot of one set of persons, and all the satisfaction that of another. This is the origin of slavery and of plunder, whatever its form may be - whether that of wars, imposition, violence, restrictions, frauds, etc. - monstrous abuses, but consistent with the thought which has given them birth. Oppressors should be detested and resisted - they can hardly be called absurd."
Pre-historic life was brutal. Every one had ring worms. Every one had intestinal parasites. People were hungry almost all the time.
A broken leg led to shock and death, and half of children died before the age of five.
You need to study pre-history, or remote tribes that live in pre-historic modes of life. You're yet another person who underestimates the challenge of living, and takes for granted what modern civilization had to overcome.
When you recklessly abolish the innovations, like private property rights, that led to industrial civilization, you create shortages, massive inflation, etc, and quickly see how fragile the economic system was.
The innovations that help people live longer aren't private property, they're medical science and city planning.
They don't depend on private property to continue existing
Private property is what generated the massive gains in productivity that allow society to allocate resources to employing specialists like doctors, researchers and water sanitation engineers.
Even over the last 50 years, it's abundantly evident that private property rights facilitated the unprecedented gains in wages and quality of life seen globally;
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...
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.
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...
"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.
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.
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.
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?
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.
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.
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.
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.
No, tolerate a system that works as hard as possible to ensure that selling one's labor for wages is the only option, rather than a right. Tolerate a system in which increases in productivity accrue benefits mostly to capital rather than society as a whole. Tolerate a system in which profit is preferentially distributed to the capital that partially enabled it rather than the labor that also enabled it.
It's all very well to point to some historical societies in which a person was not even free to sell their own labor. But to insist that this is the yardstick by which we measure our own society is devastatingly narrow-minded.
Let's take the information revolution. Is that really true? Sure, we can point to examples of tech billionaires and multinational companies. But those advances in computing and communications did make it to the masses. Now over 90% of the world owns a smartphone with some access to the internet. Same with almost all technological breakthroughs since the industrial revolution and rise of capitalism.
I'm not saying that it's not better to be more efficient at how we make things - it absolutely is. But the benefits of this process ought to accrue to a whole society, because ultimate that's supposed to be the point (for most of us). That might mean working less hours for the same salary, or it might mean UBI or both or something else. But what it shouldn't mean is that a larger and larger fraction of GDP goes to capital, and everybody gets a nice toy.
So you propose the government provide an alternative, by doing what I described, which is effectively to steal from the Ant to give to the Grasshopper, i.e. tax the more productive to provide resources to the less productive.
And the absence of this non-consensual redistribution is what you and Varoufakis absurdly enough, find intolerant to those who value freedom.
Marxism is deliberately obfuscated, to hide what it really advocates.
>>Tolerate a system in which increases in productivity accrue benefits mostly to capital rather than society as a whole. Tolerate a system in which profit is preferentially distributed to the capital that partially enabled it rather than the labor that also enabled it.
Increases in productivity accrue benefits to society at large right now. In the US, there was a small increase in capital's share of national income, but labor's share remains significant:
https://www.brookings.edu/opinions/sources-of-real-wage-stag...
In those regions which witnessed significant productivity growth, wages increased substantially:
https://www.csmonitor.com/World/2016/0207/Progress-in-the-gl...
Labor compensation as percentage of GDP since 1950:
https://fred.stlouisfed.org/series/LABSHPUSA156NRUG
That shows a near 16% drop in labor compensation as a percentage of GDP since its high in 1970.
The CSMonitor article you linked to cites 3 reasons for the dramatic drop in world poverty, with a move to "more market-based economic systems" about the closest thing they offer to "capitalism". Even that is really only half of that particular reason, since they also cite more democratic political systems.
The article is about the global war on poverty - it's about developments in countries far from the US economic order of things. So sure, at some point during the development of a capitalist economy, you will see a stronger correlation between productivity gains and wages. However, that's not the case in the USA since sometime in the late 20th century.
>>people find it easier to imagine the end of the world than the end of capitalism.
Because capitalism is literally people being secure to own and exchange what they produce. The end of capitalism would require pervasive government control to deny that right, and of course I'll assume it's Marxism that's motivating these calls, because it almost always is, and the economist who's being fawned over by leftists in the comments under this post is a Marxist.
>>The CSMonitor article you linked to cites 3 reasons for the dramatic drop in world poverty, with a move to "more market-based economic systems" about the closest thing they offer to "capitalism".
1. "more market-based economic systems" is 100% "more capitalism".
2. Here are two other sources that echo the widely held conclusion that the spread of market institutions, like private property rights, played a pivotal role in the decline in poverty:
https://www.ted.com/talks/paul_romer
http://www.economist.com/news/leaders/21578665-nearly-1-bill...
>>So sure, at some point during the development of a capitalist economy, you will see a stronger correlation between productivity gains and wages. However, that's not the case in the USA since sometime in the late 20th century.
That is still the case with the US today:
https://www.brookings.edu/opinions/sources-of-real-wage-stag...
If you look at advanced economies, you see Hong Kong and Singapore ranking number 1 and 2 in economic freedom indices, and having social welfare spending as a percentage of GDP far below the OECD average.
And they massively closed the gap with the Nordic countries in per capita GDP, while leapfrogging them in quality of life metrics like life expectancy.
You see the advanced economies massively increase social welfare spending over the last 60 years:
https://ourworldindata.org/grapher/social-spending-oecd-long...
And you see both per GDP capita growth and wage growth stagnate over that period.
By all indications, capitalism is the best ruleset for facilitating economic growth, and the experience of advanced economies like the US confirms that.
"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.
https://nassimtaleb.org/2016/09/intellectual-yet-idiot/
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.
[0] https://en.m.wikipedia.org/wiki/Executive_Order_6102
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...
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.
I don't particularly love the USD, but if I don't pay my taxes in USD, I'll go to jail.
> 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.
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.
"Since the start of organized warfare, the crucial sinew of war had been “endless streams of money.”
https://publications.armywarcollege.edu/pubs/2339.pdf
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.
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.
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.
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.
> 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.
https://www.fooledbyrandomness.com/BTC-QF.pdf
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.
This isn’t a theoretical position even remotely attributable to Marxists.
> 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.
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.
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.
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
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.
>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.
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).
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.
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.
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.
I dont have any candidates. But without a convenient alternative to describe the thing, change will be extremely slow.
What is V. referring to?
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:
https://archive.ph/dyhKM
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.
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.