Monday, June 7, 2021
El Salvador in movement…, Ideas in movement…, History in movement…, Economies in movement…
[I know nothing about Bitcoin, and my last attempt – this last weekend - to try to understand (by reading an article on it) resulted in my bailing out. But that’s not the point : A day later, I see this article, and the part that interests me is the social (and political) basis on which E; Salvador’s President is selling his move : That it will “include” the “70% of El Salvador’s population does not have a bank account and works in the informal economy”. Any comments, from those who understand this field ? Because it seems to me that the implications, and repercussions, of this step are huge, for economies – and rulers - across the world :
“Next week I will send to Congress a bill that will make Bitcoin a legal tender in El Salvador,” Bukele said in the message Saturday. “In the short term this will generate jobs and help provide financial inclusion to thousands outside the formal economy and in the medium and long term we hope that this small decision can help us push humanity at least a tiny bit into the right direction.”
The U.S. dollar is El Salvador’s official currency. About one quarter of El Salvador’s citizens live in the United States and last year, despite the pandemic, they sent home more than $6 billion in remittances.
Stephen McKeon, a finance professor at the University of Oregon who studies cryptocurrencies, said Bitcoin is legal to own in most countries but has never been designated as legal tender, which would mean it could be used to to settle financial obligations, including taxes.
But, he added, “It is unclear whether anyone desires to pay their taxes in Bitcoin.”
Additional details of the plan were not released. But Bukele in subsequent messages on Twitter noted that Bitcoin could be “the fastest growing way to transfer six billion dollars a year in remittances.” He said that a big chunk of those money transfers were currently lost to intermediaries and with Bitcoin more than a million low-income families could benefit.
He also said 70% of El Salvador’s population does not have a bank account and works in the informal economy. Bitcoin could improve financial inclusion, he said.
El Salvador looks to become first country in the world to adopt bitcoin as legal tender
Associated Press
El Salvador President Nayib Bukele, pictured after a news conference in San Salvador on June 6, 2021, wants to make Bitcoin legal tender in his country. (JOSE CABEZAS/Reuters)
El Salvador President Nayib Bukele announced in a recorded message played at a Bitcoin conference in Miami that next week he will send proposed legislation to the country’s congress that would make the cryptocurrency legal tender in the Central American nation.
The 39-year-old president, who has maintained approval ratings above 90% and made Twitter his preferred way of communicating, characterized it as an idea that could help El Salvador move forward.
“Next week I will send to Congress a bill that will make Bitcoin a legal tender in El Salvador,” Bukele said in the message Saturday. “In the short term this will generate jobs and help provide financial inclusion to thousands outside the formal economy and in the medium and long term we hope that this small decision can help us push humanity at least a tiny bit into the right direction.”
The U.S. dollar is El Salvador’s official currency. About one quarter of El Salvador’s citizens live in the United States and last year, despite the pandemic, they sent home more than $6 billion in remittances.
Stephen McKeon, a finance professor at the University of Oregon who studies cryptocurrencies, said Bitcoin is legal to own in most countries but has never been designated as legal tender, which would mean it could be used to to settle financial obligations, including taxes.
But, he added, “It is unclear whether anyone desires to pay their taxes in Bitcoin.”
Bukele’s New Ideas party holds a supermajority in the new congress seated May 1, giving any legislative proposal from the president a strong likelihood of passage.
Additional details of the plan were not released. But Bukele in subsequent messages on Twitter noted that Bitcoin could be “the fastest growing way to transfer six billion dollars a year in remittances.” He said that a big chunk of those money transfers were currently lost to intermediaries and with Bitcoin more than a million low-income families could benefit.
He also said 70% of El Salvador’s population does not have a bank account and works in the informal economy. Bitcoin could improve financial inclusion, he said.
Riding his high popularity and his party’s dominance performance in Feb. 28 elections, Bukele has concentrated power. His party’s supermajority in congress ousted the justices of the Constitutional Chamber of the Supreme Court May 1. They then replaced the attorney general.
They had been critical of some of Bukele’s more drastic measures during the pandemic, including a mandatory stay-at-home order and containment centres where those caught violating the policy were detained.
While enjoying a positive relationship with former U.S. President Donald Trump, Bukele has had a much more tense relationship with the administration of President Joe Biden.
Last month, the White House Special Envoy for the Northern Triangle Ricardo Zuniga said during a visit to El Salvador that the U.S. government would like to see El Salvador reverse the moves against the court and the attorney general. Bukele said that would not happen.
Bukele’s concentration of power, attacks on critics and open disdain for checks on his power have raised concerns about El Salvador’s path. However, Bukele has a wide base of support in part due to the utter failure of the country’s traditional parties who ruled during the past 30 years to improve people’s lives and to his ability to provide short-term benefits.
Bukele has been praised for aggressively obtaining COVID-19 vaccines and running an efficient vaccination program far more successful than El Salvador’s neighbours.
____________________________
Jai Sen
Independent researcher, editor; Senior Fellow at the School of International Development and Globalisation Studies at the University of Ottawa
jai...@cacim.net & js...@uottawa.ca
Now based in Ottawa, Canada, on unsurrendered Anishinaabe territory (+1-613-282 2900) and in New Delhi, India (+91-98189 11325)
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But what about this? (and there are many more such reports):
Democracy that comes at a huge ecological cost is not, well,
democracy! But, like Jai, then I don't understand much about all
this, so perhaps someoen can enlighten.
Also, are all cryptocurrencies likely to cause such ecological
impacts, or are some different ...and if so, how?
I also did not understand this, James: "blockchain is a network
of millions of computers .... makes decentralisation possible" ...
and then "authoritarian regimes don't want to let in existing
cryptos ... would ratehr create their own Blockchain & crypto
currency" ... now is blockchain/cryptos are inherently
decentralised, would not authoritarian regimes risk their own
power by setting up their own?
Finally, do any of these fundamentally challenge capitalism (and
in the above qs, statism), or are they 'reforms' within the
existing structures?
thanks to anyone, who can respond to these qs.
ashish
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Also these:
'The Environmental Case Against Bitcoin'
https://newrepublic.com/article/146099/environmental-case-bitcoin
'Bitcoin provides entree to a wildcat market dominated by fraudsters. The ex-president clearly recognizes his milieu.'
'This Is What Happens When Bitcoin Miners Take Over Your Town'
Alex
To view this discussion on the web, visit https://groups.google.com/d/msgid/radical_ecological_democracy/65d72abb-99fc-7117-fbee-1b50f14a447a%40riseup.net.
Subject: | Re: [REDlistserve] El Salvador looks to become first country in the world to adopt bitcoin as legal tender |
---|---|
Date: | Thu, 10 Jun 2021 18:27:19 +0530 |
From: | Ashish Kothari <ashish...@riseup.net> |
To: | Larry Lohmann <larryl...@gn.apc.org> |
thanks! can you post on the RED list?
ashish
http://www.thecornerhouse.org.uk/resource/labour-justice-and-mechanization-interpretationBitcoin and related topix:
http://www.thecornerhouse.org.uk/resource/interpretation-machines
http://www.thecornerhouse.org.uk/resource/heat-colonialism-and-geography-artificial-intelligence
Larry
On 08/06/2021 11:00, Rosamma Thomas wrote:
On Tue, Jun 8, 2021 at 3:27 PM helena <h.p...@gn.apc.org> wrote:
Just quick thoughts:I would call cryptocurrencies ultimate capitalism. Currencies in markets change value all the time. The changes with crypto are so much bigger.'Blockchain makes decentralisation possible….' Yes for those who are in, not for those who are outside that blockchain.I think Iran found its electricity supply seriously depleted because crypto-operators had moved in – this is a real problem.El Salvador is a fearsome regime, isn’t it, with people fleeing from it constantly?Helena
From: <radical_ecolog...@googlegroups.com> on behalf of Ashish Kothari <ashish...@riseup.net>
Date: Tuesday, 8 June 2021 at 10:46
To: James Pochury <jame...@gmail.com>
Cc: Post WSMDiscuss <wsm-d...@lists.openspaceforum.net>, Post RED <radical_ecolog...@googlegroups.com>
To view this discussion on the web, visit https://groups.google.com/d/msgid/radical_ecological_democracy/DCE4FC4F.164488%25h.paul%40gn.apc.org.
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Thursday, June 10, 2021
Hello, to all those who have replied to / otherwise engaged with my post back on Monday, June 7
(Just to make this clear, though I’m replying here immediately to a post and exchange that took place only on WSMDiscuss, till three posts ago the exchange on this issue was vigorously taking place both on WSMDiscuss and on RED – and with some very useful points made by RED subscribers cc to WSMDiscuss; and I'm therefore ccing RED back in here.)
In some ways, and in particular, and speaking only for myself of course, thanks to all those who have posted links towards better understanding just what Bitcoins are and what the Bitcoin economy is about, and also raising associated issues such as energy related. (And even if I openly admit that I haven’t been able to look at all of them – this overload being one of the problems of the ease of giving links ! : -) )
This said, and while I appreciate that it is of course important to know what Bitcoins are and what the Bitcoin economy is about – including its wider implications -, my sense is that we’ve not yet addressed the (other) fundamental issue that I tried to raise in my original post :
“… the part that interests me is the social (and political) basis on which El Salvador’s President is selling his move : That it will “include” the “70% of El Salvador’s population does not have a bank account and works in the informal economy”. [And specifically, the president Nayib Bukele arguing that what he’s doing is ‘all about and for the majority that is poor / the migrant workers / etc’.] Any comments, from those who understand this field ? Because the implications, and repercussions, of this step are huge, for economies – and rulers - across the world.”
As I see it, this is an argument in favour of bitcoin I’ve not heard before, but is of course a populist rationale that I’m sure will now be picked up widely, by leaders of government and public opinion elsewhere, from the right and the left, and citing this case. Just as, say, so-called ‘demonetisation’ was enacted and sold in India, a few years ago, in the name of breaking the so-called ‘black market’ economy, and through this, ‘saving the poor’. (And was therefore actually a massive assault on the poor and on the so-called ‘informal sector’, and especially on women in this sector.)
And so where we who are critical of this, and who are alive to the dangers of populist policies, therefore need now to engage with this aspect – and try and take positions on what ‘we’ want to do about this within the contexts we live and work in.
Any comments ?
Jai
On Jun 8, 2021, at 1:51 PM, Brian <br...@radicalroad.com> wrote:Indeed. And consider as well the qualities of the Bukele regime in El Salvador, and whose interests such a policy actually intends to serve...Roman Gressier, The Baffler, May 20, 2021New Problems, Old Ideas Nayib Bukele dismantles El Salvador’s fledgling democracy
BrianOn 8 Jun 2021, at 10:33 am, francine mestrum via WSM-Discuss <wsm-d...@lists.openspaceforum.net> wrote:please do not ignore the gigantic energy consumption it requires.
Francine
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Dear Frank,
You seem to understand bitcoin, and see it as a positive development overall.
This Is What Happens When Bitcoin Miners Take Over Your Town'
https://www.politico.com/magazine/story/2018/03/09/bitcoin-mining-energy-prices-smalltown-feature-217230/
i also read this article, which Alex posted - truly a horrifying picture, and somewhat incomprehensible to someone like me who is far removed from the site of action. going by this, it seems to be just another gold rush, one that makes fortunes for some, and leaves behind a lot of wreckage, socially and materially [that is also to say, ecologically]. its net effect seems to me destructive on all these counts - despite the gas it keeps from flaring [surely an unintended grace].
People who understand technology tend to be technophiles (as with everything else, there are exceptions), and seem to always concentrate on its positive side. That is to say, technology shapes their attitude, as invariably happens when you engage with something much bigger than you.
On the other hand, those who don't understand it are likely to be technophobic at some level, focusing on the negative aspect [i'll admit to being one of these. that is to say, my attitude to technology is shaped by my ignorance of it, just as yours is shaped by your knowledge of it]. So this may be a dialogue between two people with no common language, held across a chasm that possibly cannot be bridged.
Jai, I replied to post earlier but made the mistake of changing the topic. I hope this gets to the list. Thanks, FrankBitcoin creation, aka mining, is an energy intensive process that secures a secure, worldwide, decentralized network. When mining energy comes from coal, it is as polluting as any other coal electrical generation. When the energy comes from otherwise unused hydroelectric, solar, or gas that would otherwise be flared, it is energy saving.
For China, the question of shutting down coal reliant bitcoin mines overlaps their use of coal in general, including building new coal burning plants. China also overbuilt many hydroelectric plants, anticipating population growth in the future. Bitcoin miners at those plants were supplanted by the plant operators themselves, who support entire communities by mining otherwise wasted capacity. Nigeria is leading Africa in peer to peer adoption.
Every regime, especially the US, as the owner of the world’s reserve currency, must decide how they will respond to bitcoin, a decentralized and deflationary currency over which they have little control. Many countries are considering issuing their own national “coin”, that is, a digital dollar, or yuan, or Euro which they would control. The only thing these coins have in common with Bitcoin is that they are digital. Venezuela already issued one which was a flop.
Whether bitcoin challenges capitalism is like asking, did electricity end feudalism? The advancement of democracy has a relationship to technological progress, but seldom in a straight line. At a time of great ideological debate, Woody Guthrie famously said, “Don't like dictators not much, myself, But I think the whole country ought to be run. By electricity!”
Everyone on this list should become familiar with Bitcoin. It will be considered as important an invention as the Internet itself. While it does not change the distribution of wealth at the top, it offers people at the middle and bottom ways to send money home quickly and cheaply, a “banking system” that does not require banks, and, for those who can save anything, a way to escape hyper-inflation. When the Venezuelan military confiscates mining equipment, they then re-install and operate it themselves.
At minimum, Bitcoin is replacing gold as a store of value, despite its wild price fluctuations. Coupled with the Lightning network, it will offer a world wide disintermediated payment system. It is a cryptographic, mathematical, and programmatic advancement. Julian Assange argues that cryptography is a most important tool for anyone who wants ways to be independent of surveillance states, which now include almost every government in the world.
It is being used by countries under US sanctions to continue economic activity, and by individuals around the world to exchange value with others within and outside of their own country. Iran suspended bitcoin mining only for a few peak energy months and will resume after that. It is entirely different from India’s demonetization policy which was a vehicle to steal billions from the people of India.
While many people associated with Bitcoin can be characterized as Libertarian Conservatives, there is room and need for Libertarian Socialists to find ideological footing.
A couple of comments. First, the dilemma is put well by Sajai:
the anti-environmental, anti-social and anti-sovereignty features
of Bitcoin and so many other 4th Industrial Revo strategies and
tactics by tech capital seem to overwhelm movements for justice.
I do find some solace in the fightback, and in South Africa
we are fortunate to have several fronts in which activists are
actually winning against 4IR hucksters like Schwab, Musk,
financial-inclusion predators, social-media bot PR firms,
surveillance-state road privatisers, etc etc. Here
is the huckster line, in a little teaching video for my
masters students; and here are my favourite 4th
Industrial Counter Revos.
... People who understand technology tend to be technophiles (as with everything else, there are exceptions), and seem to always concentrate on its positive side. That is to say, technology shapes their attitude, as invariably happens when you engage with something much bigger than you. On the other hand, those who don't understand it are likely to be technophobic at some level, focusing on the negative aspect [i'll admit to being one of these. that is to say, my attitude to technology is shaped by my ignorance of it, just as yours is shaped by your knowledge of it]. So this may be a dialogue between two people with no common language, held across a chasm that possibly cannot be bridged.
In such a situation, is there a dialectic possible between the
thesis and anti-thesis? This isn't about a bridge, but a different
way of positing the use of technology that's not rejectionist.
That sort of solution would also attempt to end the
late-capitalist distinction between the financialised and 'real'
economies, grounding monetary representations - 'fictitous
capital' in its paper or ether versions - of value properly, on
the solid terrain of production. I'm not sure what such a
socialist financial and monetary dialectic would like like. But
with the world's stock markets still soaring - South Africa's to
the world's highest-ever Buffett Indicator, of market
capitalisation/GDP - while real economies like ours suffer
enormously, this contradiction remains among the most potent.
The same dilemma confronts anyone seeking to find ways to
address planetary ecocide beyond the banal call for "climate
action now!" - which leads so many ecological modernisationists
into tech "false solutions" and zany market schemes distorted
beyond recognition by banksters. The classical rebuttals are from
the "climate justice!" camp, and of course are generally correct.
What I'm curious, though, is whether a dialectical strategy can
get us through this oppositional framing onto a new plane, by
"radicalising the theses of ecological modernisation," as David
Harvey suggested should be the strategic objective (in a book, Justice,
Nature and the Geography of Difference written 25 years
ago), e.g. by internalising externalities properly, e.g. for the
purposes of full-cost accounting to prevent extractivism, or for
demanding environmental reparations such as climate debt payments.
An appeal along these lines is here.
To Frank:
On Fri, Jun 11, 2021 at 3:44 AM Frank Kashner via WSM-Discuss <wsm-d...@lists.openspaceforum.net> wrote:
...
Everyone on this list should become familiar with Bitcoin. It will be considered as important an invention as the Internet itself. While it does not change the distribution of wealth at the top, it offers people at the middle and bottom ways to send money home quickly and cheaply, a “banking system” that does not require banks, and, for those who can save anything, a way to escape hyper-inflation. When the Venezuelan military confiscates mining equipment, they then re-install and operate it themselves. At minimum, Bitcoin is replacing gold as a store of value, despite its wild price fluctuations... While many people associated with Bitcoin can be characterized as Libertarian Conservatives, there is room and need for Libertarian Socialists to find ideological footing.
These features are worrying. If progressives do ever get hold of
a wretched state - Peru?! - that must immediately impose capital
controls to prevent the unpatriotic bourgeoisie's drainage of
wealth, then Bitcoin holders will be at the vanguard of our
enemies' economic sabotage. The prospect of a left takeover of a
state seems very remote in my neck of the woods, Southern Africa;
only for brief moments have radicals had any influence on any
post-colonial economic policies before neo-colonialism set in. But
we did learn something from a recent - late-2017 - encounter with
Bitcoin under circumstances of a coup next door in Zimbabwe, below.
Maybe for "libertarian" socialists - perhaps Chomsky is the best known to self-describe like this - that's just no big deal, a "whatever." But if you want to halt an immediate destruction of an economy - and a society that has become dependent on a capitalist currency - while one engages in some form of state reform or state smashing or whatever you see fit in the circumstances, then Bitcoin will be a serious barrier to your success, not so?
Here's how I tried to work this through on another list:
-------- Forwarded Message --------
On 5/27/2021 4:59 PM, Michael
Meeropol wrote:
With you on the critique Michael. But there's more to it,
including a dematerialized "hedge" function for this bogus
money, which is relatively unique as far as I can tell: cyber-currencies
as vehicles for international capital flight. We got a sense of how serious this can be in November
2017 when in Harare, Zimbabwe, Robert Mugabe was
overthrown in a coup. Bitcoin
activity soared as the local rich folk (very nervous
as many had gotten wealthy through his patronage
corruption) took record amounts of their local funding
into the ether - and out of Harare. Here in South Africa - considered in 2019 to be the world's main cybercurrency casino - we have one of the world's most corrupt, unpatriotic bourgeoisies, with profound deep-racist/patriarchal sources of profit such as the migrant labor system, running an incredibly carbon-addicted economy (behind only Kazakhstan and the Czech Republic in emissions/GDP/person). So none of these elites give a damn about the terrible ecological implications of cyber-currency gambling, given how much energy is utilised in Bitcoin mining and blockchain computations. There is, though, the notable recent case of Elon Musk -
raised in Johannesburg - becoming aware of the hypocrisy
of the CO2-guzzling Bitcoin paying for Teslas, so he
canceled that offer, crashing the Bitcoin price by more
than a third. Ah, I see that two days ago he
tried to rescue his dogecoin by pretending it's ok
to keep the mining going but with a bit more renewable
power. |
Dear comrades,I'm having a little trouble taking this otherwise fascinating and cogent exchange seriously when the otherwise insightful Brother Sajai appears to get Woody Guthrie's magical words a bit wrong! Of course Woody understood that "this land" didn't literally belong to you and me...that's the whole point of the song! It is a revolutionary aspirational vision based on what should be and perhaps could be with a massive shift in consciousness and subsequent political action! If we all truly believed that the land was yours and mine - not the thieves who stole and occupy it - we might make the kind of revolution (there's that word again!) which Woody was trying to fight for and build.Could there be parallels here to cryptocurrency? In reality, it is still tied too closely to the power brokers who control all currency, wealth, and related economic power. Aspirationaly, however, might it have the potential to envision the shifts which Frank writes about?MattM
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Because technology has achieved many wonders it is assumed that it will come up with the required solutions, somehow. This is as rational as someone saying, “I have a very serious lung disease, but I still smoke five packs of cigarettes a day, because technical advance could come up with a cure for my disease.” This argument is perfectly true… and perfectly idiotic. If you are on a path that is clearly leading to disaster the sensible thing is to get off it. If technology does come up with solutions then it might make sense to get back on that path again.
The tech-fix optimist should be challenged to show in detail what are the grounds for us accepting that solutions will be found, to each and every one of the big problems we face. What precisely might solve the biodiversity loss problem, the water shortage, the scarcity of phosphorus, the collapse of fish stocks, etc., and how likely are these possible beak-throughs? Does it not make better sense to change from the lifestyles and systems that are causing these problems, at least until we can see that we can solve the resulting problems?
It should be stressed that the argument here is not to deny or undervalue the many astounding advances being made all the time in fields like medicine, astronomy, genetics, sub-atomic physics and IT, or to imply that these will not continue. The point is that technical advance is very unlikely to come up with ways that solve the resource and environmental problems being generated by affluent lifestyles. The argument is that when the magnitude of the task (above) and the evidence on the significance of technical advance for resource and ecological problems is considered (below), tech-fix faith is seen to be extremely unwarranted … and the solutions have to be sought in terms of shifting to a Simpler Way of some kind.
Alex and Sajai, thank you for your responses. I had not seen this article and I encourage people to read it.
This Is What Happens When Bitcoin Miners Take Over Your Town'
At first, it sounds like a horror story. So much (wasted?) energy. For what? Much of the discussion on this forum has focused on bitcoin mining and its ecological and social impact. Yes, it is like a gold rush, the gold being otherwise wasted, inexpensive electricity turned into bitcoin rather than, literally, water over the dam.
Notice that the amazing capacity of those hydroelectric dams was created for a now gone aluminium industry and a soon to be gone demand from California that is increasingly fulfilled by more local solar and wind generation. The author fails to account for the enormous economic benefit gained by the public power company through the sale of power to the miners, and its beneficial effects. (New road? Schools? Hospitals? - I don’t know)
Patrick, you point out that Bitcoin is a good vehicle for capital to flee a country. Prior to Bitcoin did capital ever have a problem fleeing any country? Something new is that Bitcoin is a good vehicle for capital to enter a country via millions of small dollar remittances, from first to third world countries, previously ripped off by Western Union and other vultures.
Matt, thank you for the defense of Woody. I am not going to use this forum to describe what I find amazing about Bitcoin and how it is developing. That information is readily available on the web, or, for some of you, from your children or others of that generation. It is a mistake to lump it together with the corporate and governmental arms of our surveillance states, or with AI or other “4th generation” labor and freedom undermining technologies.
Tom - on your two points:
whether one is pro growth, pro green growth, degrowth etc, GDP has become the "coin of the realm"...Until an alternative measure becomes accepted and not set up by making it convertable to GDP units we are in the same "boat". As long as we are tied to the financiers through leveraged borrowing (debt) the link can't be broken. An alternative needs to become accepted. Academics, for the most part have difficulty with a frame shift....
You're right on this. My own sense is that one way to shift
consciousness is alongside the rapidly-growing awareness of
reparations payments as a way to address structural inequality.
We've seen it this month with the German government recognising -
and making
a $1.3 billion downpayment for - its colonial genocide in
Namibia (after the $89 bn payment to Holocaust survivors), and Black
Lives Matter demands are now advancing into a
U.S. House of Representatives commission, though as one BLM
leader put
it, "'Reparations' makes people kind of uncomfortable, so we
can call it 'reinvestment' if you want to. Use whatever language
makes you happy inside."
One demand from BLM is "Reparations for the wealth extracted from
our communities through environmental racism," which is also
appropriate for North-South imperialist relations in which wealth
is extracted in the form of uncompensated, undercompensated and
generally unrecognised depletion of natural resources.
Indeed, undermining the (white-male-U.S.-economist-invented)
category GDP would allow us to better advance the cause of
reparations due for North-South
and inter-generational unequal ecological exchange
associated with capitalist markets, imperial power and
generational abuse. Call it an ecological debt, especially a
climate debt. On the other side, thanks to the U.S. State
Department and its allies in the EU and BRICS, the Paris Climate
Agreement bans signatory states from making this sort of claim -
but that certainly hasn't stopped it from emerging. Even South
Africa's latest Nationally Determined Contributions statement
requests “support by the international climate and development and
finance community for nonfossil-fuel development in Mpumalanga”
(very cheeky, as if SA doesn't owe the rest of Africa a vast
ecological debt, e.g. neighbour Mozambique, whose people we
overpolluters should be paying so as to halt ultra-destructive
fossil fuel development in Cabo Delgado province).
Meanwhile those reactionaries - especially white male Global-North economists - who cite GDP as a marker of progress consider pollution irrelevant and they calculate the extraction of non-renewable resources as purely a positive (credit) and not as a depletion of a society's wealth (a logically-corresponding GDP debit - as if you were selling the historic 'family silver' to get yourself a momentary income and to hell with descendants), along with ignoring (mainly women's) unpaid social reproduction and community work.
So raising this problem of GDP as often as possible is important
for decolonising our political economy debates and realities. (Here's
a South African effort to recognise and measure such modes of
super-exploitation drawing on Rosa Luxemburg's theory of
capitalism/non-capitalism relations.)
As many have noted, the switch from concentrated energy sources such as fossil fuels to renewables is faced with the following challenges:a) quantity that can be supplied given the impact on the planetary resourcesb) the rate at which these can be taken to scale given the problems with climatec) the variable demand for power and the ability to respond in a timely mannerd) only a concentrated power source that can't be met by a combination of production and storage in concert is required. At the moment that is nuclear, particularly the new technologies that are becoming commercially available
Second, it seems to me this is an impoverished way to look at
energy, since it is only supply side. Why are we not looking to
cut back dramatically on demand, especially where there is so much
electricity wasted on smelting and other high-carb activities -
e.g. to make tin cans for beverages - that could be readily
halted, were we to get a handle on energy demand. Then we would be
able to scale down nuclear, coal, gas, oil, the most destructive
of renewables and other objectionable technologies, and plan the
allocation of power where it is most rational and just.
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Friends
I have followed with interest the discussion on this list that began with the notion that El Salvador is moving toward replacing the U.S. dollar with bitcoin as its official currency. I am grateful to all who have participated in this – especially Sanjai and Tom. I am by no means an expert in this area but have been thinking about it for some time and decided to share some of what I have been thinking about
When we consider the importance of crypto currencies and what the IMF called “digital money,” it is important not to forget that all of these are different types of capitalist money. They mostly act as a measure of the value that capital extracts from labor. They make it possible to turn every social relationship into a commodity and to turn value itself into exchange value. Money is at the heart of capitalism. We want to abolish capitalism and the money forms that go with it. So we should be examining the current debates about money forms primarily as a sneak peek at what the ruling class is up to.
The different forms of money do, however, work in different ways. And some may hurt the working class more than others within the stricture of capitalist exploitation. What makes bitcoin and the other crypto currencies different is that they are also an instrument of unregulated speculation and up to now have been part of the playground of the super rich including criminals. They are similar in this respect to other “assets” like collateralized debt obligations (CDOs). Only CDOs are traded in quasi regulated exchanges while crypto currencies seem to be using the block chain technology so they are traded in one open market. The IMF places crypto currencies into the “asset” category as opposed to “digital money” which they favor because they can’t regulate the crypto currencies. But they are correct that they are likely too volatile to achieve the function of capitalist money. Like CDOs, crypto currencies have been the playthings of very wealthy individuals, the 1%, who won’t let just anybody onto their playground. So likely El Salvador and others are making a huge mistake to think they can benefit in any way by using crypto currencies as state money forms.
The IMF paper is important because it does give us a look at the foundation of a new accumulation regime in the making. The IMF is more than “a creature of the private banking system as Tom argues. It is that but it is also under the control of the bloc of capital dominated by the U.S. and the U.S. government that serves it . This has been the case since its creation at the end of World War II. It was quite transformed in the late 70s and early 80s to allow this bloc of capital to adjust to a new accumulation regime in the form of neo liberal globalization. The IMF has 190 members who vote on all IMF policies on the basis of the amount of money each contributes. The U.S has about 17% of all votes cast. The next largest voting shares are with Japan 6.5% and China 6.4%. This gives the U.S. a virtual veto on all policy questions. The U.S. representative is the U.S. Secretary of Treasury and her backup is the chairperson of the U.S. Federal Reserve Bank.
The IMF seems to be in a process of transforming itself, contemplating a shift in the dominant accumulation regime. Regulating digital money may be a very big part of that.
Related to this is the changing role of the U.S. dollar in maintaining U.S. dominance over global capitalism. This revolves around the status of the U.S. dollar as the top international reserve currency. Nations now can use dollars to settle international trade transactions. This creates a practically unlimited demand for U.S. dollars. And it enables the U.S. to be able to sell government debt and to print new dollars without inflation. As such it is a major part of the political and economic power of the U.S. government. The dollar has, since World War II ended, enjoyed this status. But up to 1971 it did so by international treaty that fixed the value of the dollar at a set amount of gold. In 1971 Nixon was forced to take the dollar off the gold standard, effectively canceling the old Bretton Woods agreement. And he opened up a currency exchange that allowed the dollar to be traded against other currencies. But it has still maintained its status as the largest international reserve currency. But there are challenges being made by other blocs of capital for this status. The next largest bloc is represented by the Euro. In 1958 the dollar comprised 85% of all global reserves. It has had some ups and down since but has been dropping steadily since the year 2000. It is now at a historic low of 59%.
I believe this is an important part of the context of the IMF’s paper on digital money and struggles among blocs of capital world wide. And it is also a way to look at the potential of crypto currencies.
Sorry for the length of this. But these are the things I have been thinking about. I hope it contributes something to the conversation.
Dave Ranney
6-22-21
As others have observed, the United States has been able to use the dollar as a weapon to dominate the world. The most extreme expression of this are economic sanctions which cripple economies and cause extreme poverty, including starvation.
The rest of the world understands and resents the US power and domination. China, a major competitor, uses the Yuan to dominate other countries, forcing, for example, Ecuador, to drill for oil on previously protected Indeginous lands, to satisfy a debt to China.
China is close to issuing a digital Yuan. That may be one reason they are closing down Bitcoin mines. But once there is a digital Yuan, China will be unable to seal the digital spillway to Bitcoin, because there will be exchanges that will exchange any digital currency for any other digital currency.
El Salvador did not adopt Bitcoin as its national currency. They are allowing Bitcoin to exist alongside their real national currency, the US dollar. Bitcoin will have little impact on the national level. Far more interesting to me is the use of Bitcoin’s second layer, Lightning, as a means of currency transfer home, from millions of El Salvadorans abroad. They never see Bitcoin. It is a protocol layer that eviscerates exploitive Western Union.
Nations under US sanctions are using Bitcoin to avoid those sanctions. Meanwhile, people in many of those same countries are using Bitcoin to get past their own nation’s failing currencies and economies. When Iranian or Venezuelan authorities seize Bitcoin mining machines from individuals, they probably repurpose them for the government’s goals.
Please consider what it means to have a form of money that is not under any government’s control. Bitcoin is Internet money, controversial, unstable, poorly understood, environmentally contentious, even hated, that is growing in the gut of the world economy.
A pair of South African brothers have vanished, along with Bitcoin worth $3.6 billion from their cryptocurrency investment platform.
A Cape Town law firm hired by investors says they can’t locate the brothers and has reported the matter to the Hawks, an elite unit of the national police force. It’s also told crypto exchanges across the globe should any attempt be made to convert the digital coins.
Following a surge in Bitcoin’s value in the past year, the disappearance of about 69,000 coins — worth more than $4 billion at their April peak — would represent the biggest-ever dollar loss in a cryptocurrency scam. The incident could spur regulators’ efforts to impose order on the market amid rising cases of fraud.
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