The overthrow of crony capitalism
If Karl Marx and Friedrich Engels were somehow transported to the present day and given a newspaper, the apparent absence of class conflict would probably make revolutionaries believe they had won. They would see a society divided on all sorts of issues – from identity politics to the right COVID-19 strategy – but virtually silent on the eternal struggle between labor and capital, oppressor and exploited.
How different it would be if they had returned to just 10 years ago, when the Occupy movement was in full swing, with tent cities springing up in protest against crony capitalism, corporate greed and an out-of-control, out-of-control financial sector. A decade later, the same issues persist, but they have become barely perceptible background noise amid the raging and raging culture wars.
The 1% may sleep easier these days, but any complacency they feel is deeply misplaced. The rage never really dissipated, and as inequality became even more pronounced, the discontents of capitalism are no longer confined to the left. Basically, these proto-revolutionaries now have access to the most powerful economic weapon ordinary citizens have ever had.
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Well-being for the rich
Why is the revolution preparing? Because people aren’t stupid. They see governments spending trillions of dollars to prop up the too-big-to-fail while the poor continue to struggle paycheck to paycheck. What most don’t realize, however, is that governments to know that the welfare of the rich hits the poor hardest. Indeed, they have known it for almost 300 years.
First described in the early 18th century, the Cantillon effect describes how money printing makes the rich richer and the poor poorer. When large amounts of new money are injected into an economy, the first beneficiaries can spend the money before prices rise. If they are cautious – as the wealthy tend to be – they will invest in assets such as real estate, precious metals, art or fine wine.
As this money “trickles off” to the poor (if it ever does), it becomes massively devalued by the inflationary effects of printing it in the first place. As prices rise, the rich double their gains as the value of their assets increases, while the poor lose twice as the cost of living soars.
You don’t have to be a socialist to rage against an economic machine that makes life harder for the poorest in society while rewarding reckless corporate behavior. What is rarely understood, however, is that this is not a bug in our so-called capitalist economic system – it is a feature.
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Crony capitalism and “soft socialism”
It is common to blame “capitalism” for the economic and societal problems facing the world today. In fact, if Marx were alive today, he would find a lot to like about our financial system, including concepts straight out of The communist manifesto. For example, Marx’s Fifth Principle of Communism argues for the “centralization of credit in the hands of the state, by means of a national bank with state capital and an exclusive monopoly.” Sound familiar?
The truth is that we live, in many ways, in a “soft socialist” utopia, where regulations, subsidies and other state interventions are aimed at protecting corporate giants and those whose wealth resides in assets rather than in savings accounts. It is difficult to see how a further turn to the left will solve the structural failings of an economic system that already sees printing money as the solution to all problems. Again, short of a real bloody and thunderous revolution, it is hard to see what we can against such powerful interest groups and their political supporters. To borrow a favorite phrasing by Vladimir Lenin: What is there to do?
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Whether you’re left or right, the answer is to avoid fighting the rich on their own terms. There is only one way for the poorest in society to seize power from the hands of the 1%, and that is by removing their ability to manipulate fiat money.
A bloodless revolution
Can Bitcoin (BTC) really challenge millennial asset-holding class hegemony (and without bloodshed)? You can say I’m a dreamer but I’m not the only one. Ask the Salvadorans.
Before Bitcoin, Salvadorans receiving remittances from abroad had to pay hefty fees to money transfer companies like Western Union or MoneyGram – money that would be much better spent on food or medicine. With Bitcoin now adopted as legal tender, these businesses are valued losing $400 million a year. It’s money that goes straight back into the pockets of the world’s poorest.
This is how the revolution will happen – not by violence but by choice. Show people how the fiat system makes them poorer, give them the opportunity to grow their non-inflatable bitcoin wealth, and they will vote with their feet. Rather than being overthrown by a lightning coup, fiat currency will simply decline in importance as more and more people use Bitcoin to hedge against inflation. This will accelerate as the “inner center” is hit harder, with history providing countless evidence that revolutions only happen when middle classes and political moderates embrace the radical ideas of revolution.
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That same whiff of rebellion is in the air today. People have long since lost faith in their politicians, but now they are beginning to question long-established economic and monetary narratives. What’s so compelling about Bitcoin is that it doesn’t have to preach its own gospel or attack the other side: the more people learn about Bitcoin, the more they understand how they are being tricked into the current system.
Bitcoin critics like to argue that it is too complex for mass adoption. But which is harder to grasp, a digital currency with a strict cap of 21 million coins or the baffling sleight of hand employed by central banks and finance ministers to mask the inflationary policies that reward the rich while harming the poor?
While revolutionary France had the guillotine and Soviet Russia the gulag, we don’t need to use terror to fight the tyranny of bad money. Ours is a real velvet revolution: our only weapon is an alternative currency that cannot be inflated, censored or otherwise manipulated, and the only “victims” are those who kill a system that hurts everyone.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
The views, thoughts and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Nik Oraevsky is co-founder of Bitcoin Reserve. Nik has been in Bitcoin since 2012 and has worked with wallet and exchange startups across North America, helping to develop and direct their strategic visions. He was also involved in international finance and fund management in Liechtenstein before going into brokerage with Bitcoin Reserve, with the aim of bringing smart Bitcoin buying to all of Europe.