Greece Taps Anti-Bitcoin Video Game Economist as Finance Minister

One piece of fallout from the recent SYRIZA win in Greece's election is the appointment of Yanis Varoufakis, most notable for tinkering with Valve's Steam video game marketplace to the position of Finance Minister. Yanis Varoufakis is much less notable for in the spring of 2013 writing one of the many essays naively assailing Bitcoin as some sort of impossible fantasy incapable of anything, an essay that safely could have remained entirely without note. Unfortunately someone decided to promote him from advising ways for an arcade could extract more money from chumps to managing the finances of a populated area that is still by some miracle, in some form a sovereign state with a government. Let us consider some excepts beginning with the title:

Bitcoin and the dangerous fantasy of ‘apolitical’ money

The Minister of Arcade finance already has it wrong from the outset. Bitcoin indeed is dangerous but the danger comes not from Bitcoin being a fantasy of any sort, but because Bitcoin exists. Because Bitcoin exists the United States Government and the heralds of Neoliberalism are doing everything they can to try embedding agents favorable to them into the circus surrounding Bitcoin. At the same time they subtly push agent less favorable to them into exile from their homeland or from Bitcoin, while sometimes displaying incredible subtlety in sending others to ruin.

Besides, even if the algorithm is safe, there is always the danger of waking up to the realisation that one’s bitcoin stash was e’looted during the night. And if one entrusts one’s stash to some company with better firewalls and computer security, what happens (in the absence of a bitcoin Central Bank) if that company goes broke or simply disappears into the Internet’s darker crevices (with its customers’ bitcoins)?

Yanis being ever the socialist rehashes "Bitcoin as the ultimate security bounty" into a condemnation of the personal responsibility not merely enabled, but compelled by Bitcoin. Where recklessness is can no longer be rewarded with private profits while the losses are socialized eliminating risk and creating the ultimate moral hazard. Where the question of trust compels highest order of honesty among businessmen who wish to survive, and persons who neglect to scrutinize the history of potential counterparties find themselves on the short road to poverty.

For all of the hacks and thefts by deception Bitcoin itself endures and retains value. The misfortunes of the incautious and abjectly reckless can unleash havock on the price signal, but Bitcoin endures indifferent and never taking from the prudent to reward the careless.

No, there are two insurmountable flaws that make bitcoin a highly problematic currency: First, the bitcoin social economy is bound to be typified by chronic deflation. Secondly, we have already seen the rise of a bitcoin aristocracy (a term ‘coined’ by Greek blogger @techiechan) which, besides the issues of distributive justice which it raises, evokes serious fears about the capacity of very few entities or persons to manipulate the currency in a manner that enriches them at the expense of financial instability.

Both of these virtuous points are indeed true. The first completely and the second to an extent. An aristocracy exists within Bitcoin that holds incredible sums of value and access to capital. This aristocracy is not ossified, but fluid accepting into its ranks person on the merits of personal history, ability, and resources. It resembles not the dying fixed aristocracy of feudalism as they were slain by capitalism, but the flexible aristocracy created by capitalism. Though the old aristocracy of capital was subverted and corrupted by socialist perversion, Bitcoin empowers the new aristocracy of capital to resist and overpower socialist attacks.

It is also true that this aristocracy can indeed wield the power of capital thwart to assaults on Bitcoin by exercising market power. When the forces of socialism threaten Bitcoin in the name of "inclusiveness" and giving people free stuff, market forces resist the attack. The technological merits of Bitcoin allow economics to be weaponized in ways the Federal Reserve or the Politburo could only have dreamed of.

On the issue of distributive justice, no other monetary system in history has ever been so just in its distribution. Early adopters who nurtured Bitcoin into viability has by and large managed to substantially increase their material security while cashing out their Bitcoin holding to those who would develop into an aristocracy. Coin further gets distributed to persons who work productively on problems determined to have value. Nothing at all could be more just. As the land rush phase closes and the ecosystem continues maturing things will only become more just.

The reason that money is and can only be political is that the only way of steering a course between the Scylla and Charybdis of dangerous ponzi growth and stagnation is to exercise a degree of rational, collective control over the supply of money. And since this control is bound to be political, in the sense that different monetary policies will affect different groups of people differently, the only decent manner in which such control can be exercised is through a democratic, collective agency.

Now we can walk back to the title's impression that Bitcoin is 'apolitcal money' and find that on the contrary. Bitcoin as money is extraordinarily political in that it discards the organized theft and poverty as cultured by socialism. The rational collective control of the monetary supply exists as consensus defined by computer code. Any action to change the definition of that consensus is political. The aristocracy created by the value of Bitcoin is political. Sure Bitcoin itself is apolitical, but in discarding the populism and idiot empowerment movements advanced by various socialists like Yanis through the 19th and 20th centuries the people who consider Bitcoin to be apolitical are the ones actually defining the politics of Bitcoin through their opposition to it.

Bitcoin is apolitical except to the extent it, by the harsh realities of mathematics and actual economics, finds itself in opposition to all forms of socialism necessarily. Which, arguably, are apolitical as well, inasmuch as politics is about the polis not the utopia. From Hitler's national socialism to Pol Pot's overt idiotarian socialism, by virtue of its mere existence and actual hardness Bitcoin stands in opposition to this form of theft. Bitcoin can only be an apolitical fantasy the dreams of Yanis Varoufakis. It reality though, Bitcoin exists.

7 thoughts on “Greece Taps Anti-Bitcoin Video Game Economist as Finance Minister

  1. I think this might be your best write-up yet, BB.

  2. Deeply insightful, beautiful and powerful writing. This piece is not only factually correct, but it is head and shoulders above the drivel scribbled by the subject; the man who is now Greece's "Minister of Economics" firmly put in his proper place by virtue of this most graceful refutation. Pure class from beginning to end.

    • To be fair I did not completely disassemble his piece and refute everything, largely because most of it was incredibly non-unique and lacked assertions to which any kind of warrant could be applied to his assertions.

      At least Yanis is honest in his positions and intentions unlike some who describe themselves as advocates and friends of Bitcoin yet would force socialism upon us if they had the ability.

      • In all honesty, there was no need for you to disassemble the entire piece; your refutation is of the essence of it, perfectly illustrated by pulled quotes that make the case against him completely.

        As for Yannis being honest about his violent intentions, he can keep his honesty. It is no concession of any kind, any more than a murderer admitting he is going to kill you is made any better by him warning you in advance of the time and method of your death.

        The friends of Bitcoin who are Socialists simply do not know any better, and can plead ignorance. Ignorance of the law is no excuse, but now we are not dealing with the arbitrary law of men any more; we are dealing with the law that is math.

        That is what is going to keep the socialists, the Statists, their dupes, apprentices, accomplices and the simple minded useful idiots that go so far as to obey laws that do not even exist at bay from now onwards.

      • Great piece, BB. Keep 'em coming! I called out Yanis also in 2012 in this piece for Forbes:

        "Virtual World Needs Laissez-faire Economists"

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