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Re: <nettime> Live Your Models
Florian Cramer on Tue, 3 May 2016 23:04:08 +0200 (CEST)

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Re: <nettime> Live Your Models

   Sure, global currencies like Bitcoin address urgent practical issues
   that national currencies create in a migrant world - an issue now
   embodied by each Western Union logo in big city neighborhoods. My issue
   with Bitcoin in particular (aside from the fact that it has ended up as
   a speculative investment Ponzi scheme where the first got rich) is that
   it is based on the economics of Friedrich Hayek and his advocacy of the
   gold standard for currencies.
   If applied to macroeconomic scale, this is the same recipe for disaster
   that the Euro currency spelled for Southern Europe. Actually, the Euro
   and Bitcoin were founded on the same principles/teachings of
   market-liberal macroeconomics that advocate strict autonomy of
   currencies and exchange rates from governmental politics.
   If Bitcoin would become the global currency, the story of Northern and
   Southern Europe (or, in short: Germany and Greece) would repeat itself
   for the global North and the global South.  Without the instrument of
   exchange rates and interest - i.e.: control over their own currency -,
   poorer communities would no longer have the possibility to rid
   themselves of debt through devaluing their currencies. And in the case
   of Bitcoin, the picture is actually much worse.
   Since mining of Bitcoins is artificially capped (when the predetermined
   number of Bitcoins has been reached and can no longer be extended),
   deflation is hard-wired into Bitcoin. If Bitcoin was the global
   currency, and some people would have assets in Bitcoin while others
   would have debt in it (since on a macroeconomic scale, every monetary
   asset of someone is someone else's debt), automatic deflation would mean
   that the richer get automatically richer while the poorer are drowned in
   automatically increasing, never repayable debt.
   It is the same yet worse story as with the Euro, which for Northern
   Europe meant inflation and hence economic stimulus for exports, while
   for Southern Europe, it meant deflation and hence the collapse of
   economies after a short consumerist boom. (This is also what happened to
   East Germany, btw., after the reunification and the introduction of the
   West German Mark as a unified currency.) Even without the mining cap,
   Bitcoin as a crypto-ensured gold standard currency is poisonous because
   it removes every possibility of saving communities from bankruptcy and
   debt slavery through monetary politics.
   Iceland wouldn't have been able to recover as well and fend off foreign
   financial claims if it hadn't been in control of its own currency, and
   if that currency didn't inflate with up to 18% after the collapse of the
   Icelandic banking system. Eastern Europe currently faces a crisis
   because many home owners have their mortgage debt in Swiss Francs; if
   Bitcoin were the world currency, _everyone_ would have their mortgage or
   study loan, figuratively, in Swiss Francs.
   Bitcoin repeats the history of so-called "neoliberalism" precisely
   because it _is_ neoliberalism (in the sense we understand the word
   today), in its most extreme form of libertarian anarcho-capitalism. In
   fact, it is based on the very same economic theories and theorists. All
   of it can be read up in Hayek's books.
   > > Too few people question prophecies like the "Singularity", too few
   > > activists ever got their hands dirty with hardware and software development
   > > - and manufacturing - to really grasp their complications.
   > This also doesn't computes for me. There are many today who understood that
   > trans-humanism is just a plain new declination of fascism, but we have other
   > channels and even the most kosher of all cultural funded EU events can't
   > catch anymore such crowds.

   I was referring to Srnicek/Williams, Graeber (and implicitly: Bob
   Black, the Situationists and other leftist thinkers) who still believe
   that automation will abolish work and hence capitalism. From my
   perspective, this expectation is based on naive cyber utopias; the same
   naive cyber utopias that are nowadays propagated by the
   'Singularity'/transhumanist movement and popular figures like Jeremy
   Rifkin. Among the hackers and artists who get their hands dirty with
   software and hardware, actually knowing their material constraints,
   hardly anyone would subscribe to these naive utopias.
   I am not against bottom-up electronic currencies at all, but only
   against their current political-economic design. Accepting this design
   amounts to yet another pact with the devil, repeating all the fatal
   alliances of 1990s Internet culture against the common enemy of
   governments and corporations - which only yielded new monsters that
   operate outside any political and social control. In that regard, the
   accelerationists do have a point with their critique of "Folk Politics".

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