wealth distribution

What Would Karl Marx Think About Crypto? – Decrypt

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Last year, in an article titled “The Left Should Talk About Cryptocurrency,” the left-wing culture writer Hussein Kesvani argued that Web3 and Ethereum-adjacent cryptocurrencies would “inevitably” change the world—for good or ill. As such, he said, it was up to leftists to reclaim the technology from libertarians and anarcho-capitalists appropriating socialist terms and ideals. Such appropriators include crypto influencer Li Jin, who, despite being a venture capitalist, claims to be a student of Marx and tweeted last year that DAOs were the “next step forward in the labor movement.” 

The left, as you can imagine, abhors this kind of thing.

In his article, Kesvani called on the left to come to grips with crypto’s rudiments so as to make a more compelling case than the VCs. “I believe that imagining different futures requires some understanding of crypto and blockchain technologies,” Kesvani wrote. “Not just for functional reasons, but to also interrogate the language and terms of reference in which the new internet is being built.”

As Web3 received a boom in mainstream attention, this all played out, with something of a rift emerging among the left—that is, among the old-school, strictly anticapitalist left—over whether cryptocurrencies are fit for purpose as a technology. Many of the more old-school thinkers, who have only recently discovered Web3, spurned it as a kind of endgame financialization of everything, an expression of a rent-seeking class that would put a market price on oxygen molecules, albeit cloaked in the language of cooperatives and equality. Others, however, took a more conciliatory view, reckoning with the reality of scams and greed and all that, while looking to things like DAOs with a degree of hope.

There has also been debate within Ethereum and its adjacent communities over whether the ideology they subscribe too is inadvertently leftist—though in spirit Ethereum adherents are considerably more left-leaning than the rigidly libertarian Bitcoin clan, and have produced innumerable writings on good governance and the fair distribution of wealth, they are not always happy to identify themselves with “socialism” and are not strictly aligned with classical leftists.

‘Quite simply, bullshit’

The negative coverage can be found most prominently in Marxist stalwart Jacobin, which had previously tried its best to ignore Web3 (which I’ll lazily use interchangeably with “crypto”) and has since treated the industry as something irritable but necessary to counter. Over the past months it has especially focused on deflating glib talking points about crypto “democratizing wealth” and so on, with one article arguing, “The utopian rhetoric around freedom, decentralization, and an ownership economy might help investors sleep at night. But at its core, it’s just a way of selling a new generation of products to the public.”

Similarly, another recent polemic lamented the deluge of “crypto snake oil” in the football (soccer) world, particularly those “fan tokens” which purport to give fans a “voice” but really just monetize ephemeral nonsense like stickers and “victory songs.” Another rejected the notion that NFTs could benefit creators, casting the hype-driven glut of funding sustaining them as a betrayal of the post-pandemic opportunity to better distribute wealth. “NFTs,” the magazine sulked, “Are, Quite Simply, Bullshit.”

On the surface, it makes sense for the left to instinctively hate cryptocurrencies in all their forms. What else, they ask, is blockchain technology but a mechanism for extending the reach of pernicious mass capitalism into every depth and as-yet-unmonetized reach of modern life? Marx’s prevailing antipathy was toward capitalism’s misallocation of capital and the extraction of mindless profit for profit’s sake–what greater concession to bourgeois greed is there than the technology underlying Dogecoin? The “user-ownership” as enshrined by, say, Ethereum mining, they would add, is illusory: The workers do not exactly hold the levers of industry but rather strings of digits and JPEGs of cats. 

Plus, half of it’s bankrolled by VCs. 

“It seems to me to be very fake and unwholesome,” David Broder, a Jacobin editor, told me. “Like I can’t see how it has any social use.” 

This kind of sentiment has been echoed far and wide, most notably in a richly researched, two-hour-long YouTube video on NFTs by the channel Folding Ideas, released last month. There has also been endless criticism from the center-left, those the left-left would call “milquetoast wet centrists” with more than a hint of contempt. These are the critics who have largely ignored the social issues inherent in Web3’s design and have focused on lowest-common-denominator environmental critiques (trading a single NFT uses the same amount of electricity as Norway/Peru/Turkmenistan/Tatooine/[insert middling-GDP regional power here]) and entirely specious conspiracy theories about, I don’t know, Bored Apes being subliminal Nazi propaganda.

‘Good, hopeful people’

Elsewhere on the left, however, people have embraced at least aspects of the technology, if often from a cautious distance that aims not to ignore its many shortcomings. Some argue that the tech, with its anti-authoritarian potential, distrust of big banks and focus on democratic ownership of online platforms, does make for a natural, if not entirely trustworthy, bedfellow for the left.

Left-wing tech writers Ali Breland and Max Read, for instance, have both observed that investing in cryptocurrencies is as viable as any money making strategy in the wildly unequal modern economy; that is, if investment bankers should be able to mint ludicrous sums of money out of practical thin air, why shouldn’t everyone else get in on the grift? But this isn’t so much an argument in crypto’s favor as a concession to its strategic sense.

Does anyone on the left actually like crypto? 

The most promising leftist discourse in crypto’s favor has revolved around DAOs (decentralized autonomous organizations). DAOs are basically common enterprises accessible to holders of certain crypto tokens–who also gain voting rights over a kind of treasury—and there has been a lot of talk on the left (and, as we saw, the VC clique) about their capacity to, you know, emancipate the working man. 

Among many left-leaning DAO advocates (even Jacobin pronounces them “interesting,” with the inevitable caveat) is Austin Robey. Robey has been heavily involved with the movement around platform cooperatives, user-owned digital services, and in a recent article he argued that the DAO token-model could be a useful tool for these cooperatives as they seek efficiency and scale. He added that DAOs, likewise, could learn from traditional cooperatives how to avoid their usual pitfalls, such as the unequal distribution of token-wealth (and votes), vapid self-serving “communities” and the tendency to deteriorate very quickly into obnoxious investment flashmobs, to name a few. 

Robey has been unsurprised to see other left-wingers trash crypto on environmental and social grounds, and he often agrees. “But if you’re interested in cooperatives I don’t see why you wouldn’t be interested in DAOs,” he said. “We need good, hopeful people to try and reshape and reimagine these technologies toward better ends, and not concede the tools to people we disagree with.” 

Robey takes as another example the contentious issue of NFTs. “I see a lot of people get stuck on NFTs, like conflating them with crypto art on specific networks with an environmental impact lens,” Robey added. “They don’t realize that NFTs are like a general purpose computing primitive. They’re not necessarily ugly art made by annoying people; they can represent membership, a platformless form of membership that gives you freedom from corporate tech…

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