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It’s very rare when a socialist speaks about blockchain and even more rare when they speak of it positively so I was extremely delighted when I learned former Greek Minister of Finance, current Secretary-General of DiEM25, erratic Marxist, and bald Spock lookalike Yanis Varoufakis had come out with a new essay “Why Bitcoin is not a socialist’s ally – Reply to Ben Arc” on July 27th, 2020.
At first sight of the title it may seem that Yanis wouldn’t be so keen on blockchain but he has some well-thought opinions on bitcoin and even very positive things to say about blockchain. This is not so much a surprise considering that during his tenure in the Greek government during the crisis, Yanis had considered using bitcoin or something inspired from it to help the struggling Greek working class from austerity measures and has proposed use cases for how peripheral countries in the Eurozone could use blockchain to gain more influence in Europe before.
DiEM25 is a pan-European political movement associated with the Progressive International supported by people like Noam Chomsky, Slavoj Zizek, John McDonnell, and Julian Assange
In the past I’ve written about the thoughts of other prominent leftists like Noam Chomsky and Richard Wolff which could be crudely summarized as “bitcoin bad but blockchain good maybe?” They have a couple misconceived notions, which is understandable considering all the propaganda that surrounds the space. They’ve probably not had an extensive amount of time to study its inner-workings like other academics have to analyze blockchain in a left wing, cooperative, or democratic context (Example 1, Example 2, Example 3). Thanks to Yanis’ background in governing during a financial crisis and potentially his relationship with Wikileaks founder Julian Assange, he’s in a particular position to have a more complete view.
Yanis’ Propositions
The original open letter in Bitcoin Magazine was written by Ben Arc (@BTCSocialist), who was also the first person I ever interviewed on the podcast, where he tries to address Yanis’ previously mentioned concerns about Bitcoin so that he my consider it as a tool for the Left. In Yanis’ reply to Ben he summarizes his overall conclusion as this:
“In other words, I shall argue that Bitcoin is not fit for purpose under capitalism, or as a vehicle toward transcending capitalism, but something like Bitcoin will characterise monetary systems in a future world free of private banks and share markets.”
He then gives two propositions n which he expands in the essay to support his view.
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Proposition 1: Bitcoin lacks the shock absorbers necessary to prevent capitalist crises from doing untold damage to the working class
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Proposition 2: Under capitalism, Bitcoin’s dominance will not democratise economic life – or give socialism a chance
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Even bitcoin benefited from open source cryptography (SHA-256) developed by the NSA
Although Yanis uses largely imagined scenarios for his justifications, his logic is sound from a historical perspective. Bitcoin currently does not have any built-in counter mechanism during economic stress besides users pushing miners to make changes to the protocol. This would likely lead to depressions and does nothing against the unequal distribution of wealth unless there was a large movement to change the protocol, but this is not so different from traditional systems.
Removing central banks also does not guarantee a future filled with more socialism as there was a time when central banks did not exist yet we had the same inequalities and injustices through the different actors which benefit from capitalism. A monetary commons alone, whether bitcoin or otherwise does not necessarily change the perverse incentive structures within capitalism, i.e., constant growth and profit-seeking.
This may lead some to say “See! Yanis says Blockchain is bad! Now crawl back to the bourgeois depths from whence you came!” But what many blockchain critics that read the title of his essay failed to do is actually read the end where he states this:
“Having said all this, a monetary commons (that may very well rely on something like the blockchain underpinning Bitcoin) will, I have no doubt, be an essential aspect of a democratised economy; of socialism.”
Not so fast malakas
So what does this mean for blockchain and the Left?
As it stands today, there isn’t a particularly open relationship with DLTs (decentralized ledger technologies) like blockchain and the abstract conglomeration of the political Left. This can likely be attributed to the early appeal of bitcoin to people obsessed with returning to the gold standard who largely identified with the Right, who then loudly marketed bitcoin using explicitly right wing economic and political slogans about freedom. This of course leaves a bad taste in any leftist’s mouth when they try to do their own research. This then cascaded into to the point where figures on the Left have largely ignored it or balk at most mentions of it due to the association.
This has left the Left in the dark and away from exerting much influence on the blockchain space at what I would say to be its own expense. Meanwhile, those associated with the Right have been building YouTube alternatives using cryptocurrency for creators to monetize and create fascistic content(Gab) with the aim of getting largely alienated and disaffected young men on board with their more extreme ideas.
Although Yanis’ positive comments are buried within the essay, they are a glimmer of hope that the political status quo of Blockchain World will not hold. Yanis’essay even sparked the interest of the founder of Ethereum (the usual second largest cryptocurrency by market cap), Vitalik Buterin to respond and want to hear more from him.
P S. If you guys can, I think it would be great to have Yanis on as a guest to discuss blockchain and the Left in more detail so it would be great to bug him on Twitter or if you have a contact let me know. I’m shameless.
As much as maybe some bitcoin maximalists would want you to believe, Vitalik is very likely not a socialist, however he clearly does have some sympathies and is definitely not the Anarcho-Capitalist weirdo that some people like to imagine all figures in Blockchain World to be. So it is very interesting to see Vitalik go out of his way to create discourse with such a prominent figure on the Left. Whether or not he would like what the Left would say or propose of course is a different story but I think Vitalik’s interest in public goods can be used as an opportunity. I think it’s also interesting to note that Vitalik made an inquiry on Twitter about the Public Ownership of Housing blockchain use case I presented during the Blockchain 101 for Socialists livestream.
The point I want to get to is this: The Left has incredible potential to exert influence on the blockchain and cryptocurrency space if it wanted to. Just like other online spaces, whether we like it or not, this is another battlefield for political and economic influence because what blockchain represents is an alternative to the neoliberal status quo and the space is filled with plenty of disaffected people who hunger for revolutionary change by imagining a post-capitalist future. It’s up to us to show that the post-capitalist alternative they’re looking for is socialism, a system where we allocate resources based on needs and democratic input rather than profit. We have a Blockchain World to win.
Now let’s create the Star Trek FALC future we deserve so Yanis can play Spock in real life
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