Ted Cruz, the Republican U.S. senator for Texas, said he wants the Lone Star State to be an “oasis on planet Earth for bitcoin [BTC] and crypto.” He said that, reiterating previous support for the state’s mining industry, during a keynote address at a Heritage Foundation event.
The Block reported that several speakers harshly criticized “the left side of the political aisle,” at this “Bitcoin and the American Experiment” conference. Cruz singled out Massachusetts senator Elizabeth Warren, a Democrat:
“Why does bitcoin make Elizabeth Warren toss and turn and twitch at night? Because she wants her sticky little socialist fingers to be able to control every penny in every one of our bank accounts.”
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Yet, bitcoin and the larger crypto industry could largely be described as an experiment with liberalism. That’s the “lowercase l” variety, or the political philosophy that takes an expansive view of individual rights and equality.
Open-source and open-access blockchains enable anyone to participate in or use the monetary, governmental and social tools built on top of them. Just as the U.S. Constitution codifies rules meant to foster the “consent of the governed and equality before the law,” crypto uses code to enforce similar rights.
Still, considering the particularities of this day and age, it seems increasingly that bitcoin belongs to the right, politically. That’s why we keep seeing politicians like Cruz calling for crypto “oases” and Warren for the industry to be tamped down.
It might seem disadvantageous for “the Left” to assume this position, considering how it shares the highest aims that crypto professes. Murtaza Hussain, a reporter at left-leaning publication The Intercept, recently wrote about “Liz Warren’s bitcoin blind spot,” noting that crypto could be a tool for financial inclusion to counter corporate power and mitigate governmental overreach.
“[A] future world of such currencies, in which bitcoin has been regulated out of existence by righteous progressives, will also be a world in which mass surveillance and social control is possible on a scale unprecedented in human history,” Hussain said, adding that the industry should not be above critique.
Crypto-holding political progressives often take a similar view that elected officials should participate in making this unique, emergent industry better for all – possibly through thoughtful regulation, supportive programs to expand blockchain use or education and constructive dialogue with industry leaders – rather than trying to quash it.
Part of a culture war
To some extent, that is happening (and it often happens across the aisle). However, I predict that as this industry grows and becomes more relevant to elections, partisan opinions about crypto will likely solidify around the thoughts professed by a few influential political leaders. The “culture war” between Republicans and Democrats seems unavoidable.
This is, of course, a travesty – just as it always is when political infighting prevents governmental action on issues where people (rather than elephants or donkeys, the symbols of the two largest U.S. political parties) should be the primary concern. It’s all the more upsetting considering there’s a convincing case that bitcoin, a non-state, private money, is above politics or even “apolitical.”
But it’s also a pragmatic view. In representative democracies like the U.S., citizens delegate responsibility over simple and tough issues to elected officials to write the rules and hire enforcers (regulators). Crypto is a particularly complex issue from which many people likely feel disconnected (a growing number hold these assets but that’s still a minority, and the technology is not yet widespread).
It’s well established why the political Left has concerns about crypto. These are primarily the same “narratives” in the mainstream discourse around crypto: its environmental impact, consumer safety issues and the negative sentiment around tax avoidance, wealth hoarding and capitalism generally.
As mentioned, there are many “progressive cases” for crypto, but it would be valuable to quickly say why crypto belongs to the Right. Both parties at times push for universalist agendas – there’s a populist argument for state-run health care, education and environmental action among the right and left.
Current and future impact
Crypto, in time, might impact various governmental concerns, including health care, voting and human rights, among other issues and so might be seen as another universalist project. But it’s important to think about the actual things it affects now. That is to say, money.
There are distinct political issues involving money – and therefore crypto – today. There’s the question about what to do with billionaires, the question of how to fairly levy taxes and the questions around how to best regulate markets. The Right and Left often diverge on these issues.
Crypto, as a financial technology, offers individuals strong protections over their wealth relating to how to spend it, save it and shield it. If leftists sometimes ask whether billionaires should exist, crypto presents a way to negate that question. How do you tax or confiscate wealth (ill-gotten gains or not) if you don’t have the keys?
The Right, broadly speaking, is also more favorable to free markets. Crypto, because of its censorship-resistant attributes, can support the most open markets: All participants can engage in economic activity as they see fit. This can range from capital formation to building markets around social media.
Regulatory agencies like the Food and Drug Administration, Environmental Protection Agency and Securities and Exchange Commission – many rooted in the Progressive Era of U.S. history – operate from the position that unfettered capitalism causes social harm and must be overseen and contained.
Many crypto projects have their inception in a founder identifying some market inefficiency – sometimes the result of governmental or corporate interference – and offering a token to widen trade and rebalance the scales. This method hasn’t always been successful, as seen by the body count of failed initial coin offerings (ICO).
Crypto, like politics itself, is often future-oriented in that it presents a way to reach a radically different, potential world. The solution crypto offers is to expand individual authority over their economic activity (sometimes called “sovereignty” in the industry), hoping that the right combination of tools, money and people can collectively act for the better by doing right for themselves.
Progressives take a different approach. They may be concerned with fostering and maintaining individual rights, but the solutions they offer are through a stronger, more sovereign state. This is seen by observing the mandates on offer like enabling a well-endowed state to be the single competitor in the health care industry. Or enforcing rules that might make firms less competitive to support what’s called environmental or social justice.
This distinction is often why observers call crypto libertarian. None of this is to say that crypto cannot be put to use for even socialist aims, to use Cruz’s bugbear. Or that crypto cannot or will not be reincorporated into the state, as we’ve seen. Crypto has become a source for tax revenue and is not always as “non confiscatable” as sometimes claimed. That reality presents a tough question for the industry: What, then, is all this for?
Last week, bitcoin philosopher, erudite author and associate professor at Yale-NUS College Andrew M. Bailey wrote a Twitter thread outlining how the common belief that bitcoin “was borne from right wing or libertarian conspiracy theories” is incorrect. (Bailey, though ideological, is genuinely interested in ideas, loves debate and his research/book project, “Resistance Money,” with a number of similarly honest, self-declared progressive bitcoiners, is informative.)
Indeed, cryptocurrency shares a history and agenda with the radical, pro-privacy and civil rights cryptographers called the “cypherpunks.” These men and women non-conforming coders were staunchly anti-authoritarian, and “opposed institutional overreach (corporate and state alike)” by promoting the use of open source and open access technologies,” Bailey argued.
No disagreement there. However, although the cypherpunks and crypto offer apolitical solutions to state or corporate supremacy in digital realms, politicians are increasingly interested in crypto. Lines will be drawn, even if they shouldn’t be. And as a simple fact it’s clear how partisans – informed or ignorant of crypto’s history – will see crypto as fitting into their agenda or not. Crypto and progressives share many aims, but they differ radically in how to get there.
It’s fair to say that the industry, which is increasingly politically engaged, may be bringing this on itself. To give Bailey the last word, perhaps crypto should be a little less pragmatic and return to its intellectual roots.
“Digital authoritarianism – the use of computers to surveil and control – is on the rise. You needn’t be on the right or left to see it,” Bailey said.