Crypto and Web3 may help to bring us to a "fully political money" - one which we design and shape as citizens

Beeple, The First 5000 Days

We’re admiring what Evgeny Morozov is doing with his Crypto-Syllabus. He’s on the digital left, facing the rise of crypto and Web2, and trying heroically to see progressive and emancipatory possibilities in a field which can seem a playground for trivial, acquisitive tech-bros.

At the very least, this is a useful counter-balancing move - we’ll now see much more in the round what can be done with this new movement of decentralisation.

Below are some excerpts from Evgeny’s interview with the economic historian Adam Tooze. There’s some great contextualising here, but at the end there’s a really vital exchange between the discussants, around whether crypto is the instrument of a new localism - it’s nuanced and rich.

EM: Before we delve into the specifics, perhaps you could give us a short outline of how you read cryptocurrencies and their broader political and economic import. Are they money? Why or why not?

AT: In a simple functionalist way, you can define the role of money as consisting in some combination of three things: means of payment, store of value, unit of account.

Clearly, in certain circuits folks have begun to price things in cryptocurrencies – NFTs, digital art objects, etc. – so crypto is serving as some kind of unit of account.

But crypto is not a particularly useful unit of account because its value in terms of other units of account fluctuates so much, which also means that crypto is a bad store of value (unless you have a high preference for speculative gambles) and is unlikely to become widely accepted as means of payment.

(In an upswing, the risk is that, in using it, you undervalue your tokens. In a downswing in crypto prices, only a highly risk-tolerant merchant would accept payment in crypto, unless at a large discount.)

If we depart from such functionalist accounts of money and stress instead the role of money in constituting community, founding polities, etc., then crypto has clearly gained purchase in certain communities and helped to configure and constitute them.

The question then is, how stable, robust, and widespread are these social groupings that have organized themselves around this money and/or how powerful are their opponents?

EM: In one of your newsletters from March 2021 – your first public foray into analyzing crypto – you cite Gramsci and write that “crypto is the morbid symptom of an interregnum, an interregnum in which the gold standard is dead but a fully political money that dares to speak its name has not yet been born. Crypto is the libertarian spawn of neoliberalism’s ultimately doomed effort to depoliticize money.”

Could you expand a bit more on what this “fully political money” might look like, perhaps by contrasting it with the money that we have now?

AT: I should admit upfront that the idea of a “fully political money” is nothing more than an aspiration, a telos, a direction of travel.

Indeed, you might ask whether we can live with anything that is “fully political.” After all, our politics regularly lurches into anti-political foundational gestures, not dissimilar to the gestures that we make when we try to found money on gold, or central bank independence, or a mechanical monetary policy rule, or an algorithm.

In this sense I absolutely agree with my friend Stefan Eich when he says: “there [have] always been hysteric pronouncements about the fragility of fiat money, but… we might actually want to look at these voices as themselves part of the politics of money.” The politics of money includes an anti-political strain.

After all, the same goes for the law, which I would think of as the closest we have to a fully political architecture of social organization. In the limit, all too often, legal structures seek to anchor themselves in some more solid foundation than that provided by more or less widely accepted and deliberate societal agreement.

Constitutions reach for god, or nature, to do the work for them. Perhaps we cannot do without such gestures.

But that is what I am gesturing to: the possibility of organizing ourselves around money that is accepted for what it is, i.e. a conventional set of arrangements ultimately arising out a complex of social and political interactions, part of the material constitution of our society, warts and all.

EM: …For many decades now, the ideology of what we can call “localism” captured the imagination of the left, especially of those currents that look very favorably on the communitarian legacy of the early 1970s: these are people who celebrate cooperatives, time-banks, and, inevitably, alternative and complementary currencies (here I’m thinking especially of Peter North’s book Money and Liberation).

I wouldn’t say that these movements criticize the state the exact same way that the neoliberals do; they do complain about hierarchical, rigid, and bureaucratic structures – but it’s mostly a humanist rather than economic critique. A lot of this passes under the banner of “solidarity economy” or “alternative economy,” and it’s not very hard to see how this would fit into a conception of a post-capitalist society that is more decentralized, more autonomous, and, perhaps, more democratic.

To start with, most of these “alternative economies” operate on tokens – so a shift to crypto is quite natural. I myself am critical of such localist tendencies, as I find them unable to offer any counterpoint to the likes of BlackRock or Amazon. But I can easily see how the crypto allows them to revive many of those earlier utopian undertakings and package them in a much more innovative way.

What do you make of such efforts in general? Should this “fully political money” that you advocate be global rather than local in outlook? Are people trying to find localist uses to crypto mostly living in a fantasy world – not that different from, say, ethical consumption?

AT: Actually, I have a lot of sympathy for that kind of local money project. After all, it explicitly recognizes the societal project or counter-project it is involved in and I happen to be more sympathetic to its politics than that of the libertarian, anarcho-capitalists.

If we are trying to think through what a fully political money entails, then we cannot shrink from political judgment. That is what makes it so disconcerting as an idea. If money is a tool of collective organization then it is the purposes of the collective project that are first and foremost important.

What I regret about some localist visions is not the localism as such but the idea that localism should then be tied to a foundationalist move, i.e. to something which is in fact not part of the community at all, but outside it.

Furthermore, even local monies are going to need monetary policy. As a good Keynesian I can never forget Paul Krugman’s analysis of the babysitter community and the liquidity trap suffered by the Capitol Hill Babysitting Co-op. Small scope promises no escape from politics.

And that should not be regarded as a curse but rather the opposite, an opportunity for collective learning-by-doing and experimentation.

That is another way of putting the essential point. Monetary policy is not a curse to be driven out by some non-political binding mechanism, algorithmic or otherwise, but an opportunity to expand the range of our politics and collective self-organization.

More here. And explore the whole site - a really definitive resource.