Trump, Clinton, and the Electoral Politics of Bitcoin

My new book, The Politics of Bitcoin, is not directly about electoral politics, but rather the political and political-economic theories that inform the development of Bitcoin and its underlying blockchain software. My argument does not require that there be direct connections between promoting Bitcoin and supporting one candidate or party or another.

Rather, what concerns me about Bitcoin is how it contributes to the spread of deeply right-wing ideas in economics and political philosophy without those right-wing associations being made at all explicit.  Call it, “moving the Overton window to the right” (although I find the concept of the “Overton window” troubling, not least for its own origins on the political right) especially along some axes that may not even be altogether legible to many in the general public. So many people have heard of Bitcoin and the blockchain as technologies that promote “freedom” and “democratization,” and resist interference by “central authorities”; many fewer understand what those words mean in relation to Bitcoin and the blockchain, where the words are used almost identically to the way extremists like Alex Jones and the John Birch Society use them.

Nevertheless, these foundational politics do at times intersect with ordinary electoral politics. Though this isn’t really what The Politics of Bitcoin is about, when people in social media saw the title they quickly presumed that was what I meant, and some of those comments prompted me to reflect a bit on how the politics of Bitcoin and the blockchain are intersecting with the current US presidential election.

* * *

First, the GOP. A Bitcoin supporter responded to some positive comments about the book by others on Twitter by writing:

There are several interesting ways that this comment strikes me as symptomatic. First, it tries to manage the narrative—defining the critique I’m offering, despite the fact that the tweet writer admits not to having read the book—by suggesting what the book does not, that right wing ideologues like Trump directly promote Bitcoin, or vice-versa. Second, it offers the very familiar story being promulgated by Google and others that we need to be very worried now about a superpowerful AI, which itself is a product of what thinkers like Dale Carrico and I think is already a profoundly conservative discourse, for reasons I won’t go into here.

The Trump comment is particularly interesting. There is certainly a fair amount of support for Trump among Bitcoin enthusiasts, though I’m not aware of any polling that would allow us to break that down into numbers. But it is pretty funny to be told that I shouldn’t be worried about Trump right now, because I am very worried, and I think anyone with a remote interest in politics and the—to put a point on it—fate of democracy itself should be worried about Trump. And to the degree that Bitcoin helps to spread the right-wing economic ideology that my book is really about, then I do think that there are connections between Bitcoin and Trump. Of course Bitcoin didn’t cause Trump—but the kinds of false, angry, other-targeting ideologies on which the Trump phenomenon depends can be readily found in all the kinds of online communities that create and promote the frightening range of right-wing political action we see everywhere today. We should be very worried about Trump, and we should be worried about how Bitcoin and other parts of online discourse feed the hate and studied ignorance that make so many people support him.

This site might be a parody but I don’t think it is.

It’s also fascinating that as we get down to the wire, Trump is sounding more and more like his ardent supporter Alex Jones, propagating the same falsehoods about “global financial powers” that we see in Bitcoin discourse (and, not unironically, being himself an incredibly wealthy person who made most of his money by cheating the system). In an October 13 speech in West Palm Beach, Florida, Trump stated that  “Hillary Clinton meets in secret with international banks to plot the destruction of U.S. sovereignty in order to enrich these global financial powers, her special interest friends, and her donors.”

* * *

So that’s the ostensibly mainstream right. What about the mainstream left? Here the story is even more interesting. Daniel Latorre, a Twitter friend and civic technologist, tweeted the following:


which links to an excellent piece Latorre wrote in 2015 called “Why Our Tech Talk Needs A Values Talk.”

Dan pointed me to video of the “Connectivity” session at the Clinton Global Initiative (CGI) 2016 conference (yes, the annual conference sponsored by the famous foundation), where around minute 32 two speakers appear talking about the blockchain. The first is Jamie Smith, Global Chief Communications Officer of the Bitfury Group, “your leading full service Blockchain technology company,” who gives a very brief introduction that is full of some very serious imploring of the audience, quite a few buzzwords that don’t really seem to go together, and graphics like this one:

blockchain transformation CGI

It is really an insult to the intelligence of the audience of a charitable organization to distribute venture capital promotional materials like these as if they mean something very concrete and beneficent—let alone the fact that the putative top benefit of the blockchain, distributed control of a verifiable ledger that all users can examine—has not even been mooted for phones of any sort, let alone inexpensive phones, so that whatever Smith is advertising here is at best a derivative of blockchain technology.

Like so many Bitcoin and blockchain promoters (and, to be fair, digital utopians and salespeople everywhere) Smith, too, engages in some serious management of the narrative via rhetorical sleight-of-hand: “the missing piece of the internet,” “the blockchain is the most transformational technology since the internet,” “without going through a trusted emissary.” Words like these are deployed to mystify, or to mislead, or both, but not to explain.

Managing the narrative: Smith says, “I can see why you think that [Bitcoin isn’t promising] because the coverage has not been great”: that is, because the coverage has in part accurately focused on the most popular uses of Bitcoin in Dark Web markets for illegal products like the long-shuttered Silk Road, and on the almost shocking frequency with which individuals lose the money they put into Bitcoin—which would be shocking even if one of the major advertised benefits of Bitcoin wasn’t its supposed superior safety vs. other forms of payment.

It’s worth dwelling on one statement Smith makes: “the Bitcoin Blockchain has never been hacked.”

Really? Remember that her talk is focused on the blockchain, not Bitcoin per se. But are blockchains unhackable? Does the CGI audience notice that the vital word in that construction is not “blockchain” but “Bitcoin,” because other blockchains most certainly have been hacked—most famously the first “autonomous” “smart contract” blockchain, TheDAO—which was very famously hacked no more than four months ago.

And of course, “hack” is used in a particular technical sense in the talk, since as I discuss in the book, putting money into Bitcoin is one of the riskiest things a person can do, both because of Bitcoin’s own wild volatility, and the ease with which Bitcoin exchanges can be and have been repeatedly hacked—by some estimates including up to a third of all exchanges—and millions of dollars vanished into thin air, or more often into the pockets of scam artists.

This is part of how political ideology gets promulgated—as opposed to actual political work getting done. Wildly contradictory sentiments are offered with outsize passion, imploring audiences to take action and support whatever scheme the speaker is suggesting, but not actually to research the question for themselves, not to ask whether what the speaker is promising actually makes sense.

* * *

Yet Smith is only the first speaker. At the end of her talk she introduces arguably the star of the blockchain panel, Peruvian economist Hernando de Soto.

Hernando de Soto.

Hernando de Soto, one of the world’s biggest blockchain promoters.

Hernando de Soto, one of the chief architects of the actual economic plans critics like Philip Mirowski call neoliberalism. And this is core, right-wing neoliberalism, meaning direct involvement with the most poisonous and influential figures and institutions of neoliberalism—the Mont Pelerin society, Friedrich Hayek, Milton Friedman, and many others—not simply the varieties of “outer shell” neoliberalism that does not always even know their own name. This is far-right, world-dominating economics.

Hernando de Soto. Vocal opponent of the highest-profile left economist in the last decade, Thomas Piketty. Author of two books, The Other Path: The Economic Answer to Terrorism (1989), which argues the solution to the problems that created Peru’s Shining Path was found in entrepreneurship and deregulation, and The Mystery of Capital (2000), described as “an elaborate smokescreen to hide the uglier truth” that corporations and wealthy individuals “run [developing] countries for the maximum extractive benefit of the west” which de Soto’s “solutions” may exacerbate much more than ameliorate.

Hernando de Soto. who talks glowingly about “reglobalizing the world.” Who lumps together ISIS and progressive anti-globalization protestors (though he is careful not to say they are the same–after he lumps them together in the first place). Who “spins the Arab Spring not as a populist opposition to dictators (most of whom are backed by the lynchpin of capitalism, the United States), but a scrappy revolt of entrepreneurs against state interference in commerce.” Who received the 2004 Milton Friedman prize for Advancing Liberty. Whose work in Peru was “the first and most successful outcome” (Mitchell 2009, 396) of the work of the Atlas Foundation for Economic Research, not just ideologically but historically directly connected to Hayek, the Cato Foundation, and the Mont Pelerin Society.

Being promoted at the charitable foundation of the Democratic candidate for President.

Under the name of blockchain.

Without anybody standing up and saying, “what is the ‘Friedrich Hayek of Latin America’ doing speaking for the Democratic candidate for president? And why is the Democratic party promoting it, without even noting who this person is and where his ideas come from?”

The product de Soto says he is making is one that uses the blockchain—the “public blockchain,” he and Bitfury call it, although the only current candidate for that is Bitcoin, and he does not explain whether or how the service he describes could run on the Bitcoin blockchain, or who would host the “public blockchain” he talks about. The product is one that will help to fulfill de Soto’s lifelong plan to record property rights for the poorest people in the world. (See “Hillary Clinton and the Blockchain” for what reads an awful like that a sales presentation of this and other blockchain projects the Clinton campaign has under consideration.)

That sounds noble, unless you are familiar with political science and political economy, in which the focus on property rights is precisely the hallmark of rightist politics going all the way back to what is now called the “classical liberalism” associated with Locke, although that term is now used to describe what is essentially right libertarianism and the relationship between these doctrines is profoundly fraught. Then it sounds like another version of the neoliberal, neo-colonial extractive development plans that have, in the opinion of many anti-globalization activists, been the cause of significant destruction to lives and property the world over, and contributed significantly to the poverty they claim to be helping (Gravois 2005, Johnson 2016, Mitchell 2009).

Here’s a bit on de Soto’s work from a piece by journalists Mark Ames and Yasha Levine (2013)

De Soto’s pitch essentially comes down to this: Give the poor masses a legal “stake” in whatever meager property they live in, and that will “unleash” their inner entrepreneurial spirit and all the national “hidden capital” lying dormant beneath their shanty floors. De Soto claimed that if the poor living in Lima’s vast shantytowns were given legal title ownership over their shacks, they could then use that legal title as collateral to take out microfinance loans, which would then be used to launch their micro-entrepreneurial careers. Newly-created property holders would also have a “stake” in the ruling political and economic system. It’s the sort of cant that makes perfect sense to the Davos set (where de Soto is a star) but that has absolutely zero relevance to problems of entrenched poverty around the world.

To be clear, de Soto could speak, and has spoken, to audiences from the center-left—the “left neoliberals,” the Tony Blairs and Bill and Hillary Clintons of the world—for a long time. Bill Clinton himself has called de Soto “the world’s greatest living economist,” and yet there he is the recipient of equally fulsome praise from figures like George HW Bush and Ronald Reagan. I don’t argue that Bitcoin is unique, or uniquely destructive; on the contrary part of the point is how easily and how transparently it fits into the shift toward the right we see in so many places today.

Still, when you listen to de Soto’s speech, it’s remarkable to hear him say things like “Western imperialism did a good job” or asking whether “blockchain can save globalization”—and that nobody in the audience raises objections to this sort of thing. You expect that on the right, not the left.

But, welcome to blockchain.

So yes, the politics of blockchain should make you worried about Trump, and the people who support Trump, and the rightward shift of all electoral politics today.

Works Cited


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