It’s time to depoliticize our financial infrastructure.
Online Money, Money Online
If money is power, the digital world is vulnerable to abuse.
The coronavirus pandemic throws into sharp relief many longstanding underlying trends that were headed anyway toward an inflection point. Unquestionably, one of these concerns money—how much America has, how it is spent, what we expect of it, and even what, in our everyday usage, it is. Over the past several years, criticism of America’s financial system has intensified and mutated into several different strains. Despite their differences few give much credence or ascribe much authority to the main schools of macroeconomics dominant in the 20th century. Theories of money are becoming more “extreme.”
One effect of this shift is that “just as fiscal policy is being monetized, monetary policy is being politicized,” as Charles Lehman recently observed. That is, monetary policy is “becoming increasingly explicitly understood as a medium of power.”
Exponents of modern monetary theory, or MMT, insist “money has always been this way—money is a means by which the state gets people to do stuff,” Lehman continues. “MMT sees this as an underused benefit of money. Bitcoiners, on the other hand, see this same power nature of money as a danger.” As the monetization of fiscal policy continues, “the question of money as a form of power—and whether and how much that power should be exercised by who—becomes an increasingly potent debate.”
At the regime level, as a question of justice, the key to understanding the use of money as a form of power is understanding what money is. If money is a form of power, Stephen Pimentel suggests, it is all the more essential to understand that power is not a form of money. Because money is a real social technology, not a shared illusion, those with power cannot simply “make up” more money without disastrous results. “It is magical thinking to suppose that social technologies can be freely moved in the space of imagined possibilities,” Pimentel writes. “It is most tempting to attempt such manipulation in times of stress. Alas, social technologies tend to break when manipulated contrary to their logic.”
Nic Carter argues that the use of money as a medium of power has dangerously politicized money. Influential policymakers, perhaps now including some in the Federal Reserve, are attracted to the idea of a “hyper-efficient system for payments, as well as the financial infrastructure fit to support a future UBI initiative…enticed (although this is said more quietly) by the promise of super-granular control over the money supply, a privilege currently impaired by the existence of cash. The zero lower bound on interest rates does not exist when you have the nation’s bank account balances under your direct purview.” Faced with the prospect of a full-blown finance-controlled social credit system, says Carter, some form of bitcoin is the best, most apolitical monetary structure adapted to American needs and wants.
Of course, the oldest form of money power is the one exercised by those who physically control precious metals. Today, writes Roy Sebag, our detachment from the primal value of gold has allowed those in control of money power to debase our currency as a policy default. “To establish real social equity and collective prosperity,” he concludes, “we must re-establish what money truly is and how it must properly function.”
All of which heightens the importance of a question even broader than money itself—the relationship between value, force, and thought. For Americans, the use of money as a level of power is especially pernicious when used to punish and prevent people from sharing thoughts that violate the preferences of self-appointed ethics masters.
Roiling debates about the proper response to big-tech censorship, deplatforming, and cancellation have been limited to a degree by the practicable options available to those targeted—or those simply worried about one day being targeted. One does not simply build one’s own Google, homespun mythologies around the likes of garage-bound whizzes like Bill Gates notwithstanding.
But new applications of digital technology to the problem show promise. “Away from the public eye, something far more substantive and independent has been quietly built. It’s called Urbit, and it is both an operating system and peer-to-peer network—a secure personal cloud computer, accessible anywhere,” as Will Duffield explains. “Urbit ID provides a digital identity independent of any verifying platform. Facebook may take your account away if it disagrees with your use of it, but your Urbit identity, recorded on the Ethereum blockchain, is yours and yours alone. It functions as both a digital passport, wallet, and sort of land-title to your unique Urbit OS.”
These are early days, but the significance of Urbit and related enterprises is clear. What is at stake in the debates over thought and communication control by massive firms or government bodies goes well beyond “free speech” or “free expression” as we understood them in pre-digital times. At stake is whether our recognizably human anthropology is forcibly stripped away from us when we enter digital space. If we can’t behave online roughly the way we do offline in the most precious basics—owning the space wherein we communicate and exchange, where we produce, consume, and save—then the internet will become a fundamentally unjust realm. Perhaps, some might say, certain areas of online life have become so already.
Over relatively very few ensuing years, the relationship between who we are and what money is will be renegotiated in the digital environment. Ensuring that relationship remains pro-human and pro-nature will be one of the most serious challenges—and achievements—of our time.
The American Mind presents a range of perspectives. Views are writers’ own and do not necessarily represent those of The Claremont Institute.
Decentralized protocols are the way out.