The Art of Monetary War
nplusonemag.com
nplusonemag.com
What worries me with talk of "Monetary war" is the transition of money as means of peace into a weapon.
Mark this, much as I detest Russia today and believe brutal sanctions are the way, we will all reap tyranny if banks are militarised.
First the central digital currencies will be used to cut-off "terrorists", then companies who won't play games, and eventually individuals with inconvenient things to say. Without some form of "bitcoin" [1] that evades authoritarian control, or a diverse basket of payments backed by legislation to prevent "cashless hellholes", you'd better realise your wealth exists only at the whim of some unseen power.
[1] we _must_ evolve past PoW
Sure I get it. Arguments against my "bad things will happen" is "don't worry they are already happening" :)
That doesn't lessen the case that we can and should work on resilient money systems that protect the interests of ordinary people.
When the boot is on the other foot, maybe in 10 years when China is "turning-off the dollar", we'll all be glad we built robust and democratically controlled means of exchange.
Fair summary :)
> That doesn't lessen the case that we can and should work on resilient money systems that protect the interests of ordinary people. > > When the boot is on the other foot, maybe in 10 years when China is "turning-off the dollar", we'll all be glad we built robust and democratically controlled means of exchange.
I believe that I understand your point.
However, my gut feeling is that "protecting the interests of ordinary people" is what rich oligarchs (from whichever nationality) will eventually tell ordinary people to sell us on the idea of a trans-national, untraceable, currency, but that such a beast will be much more in their interest (tax fraud? money laundering? milking clients with online casinos? good ideas!) than in anybody else's (pay for a X that I'll be buying from a black-market salesperson without attracting the state's attention? not something I do every day, but probably good idea in a dictatorship? – on the other hand, exposing myself to frauds without any recourse because of anonymity? not something I want to deal with on a daily basis).
That's in addition to the issues with PoW (looks like we already agree on this point) and the practical issues with actual decentralization, anonymity, stealth and resilience.
It is incredibly complex isn't it. Those are solid fears you offer.
Perhaps it's a question (formula of moral arithmetic) that extends beyond money - that given a magic wand that offers equal gains to good and evil, do you wave it? Do the wrongs of elite corruption cancel out the freedoms of the working majority?
> buying from a black-market salesperson without attracting the state's attention?
That's a severe example. But I would just like my 5 year old kid to be able to buy an ice-cream with the pocket money I give her. That is _literally_ the reality of how this affects me in real life. And if this is just the early days of digital economics I really do not want to see where this road leads. We already have cash, a perfectly fungible, widely accepted and non-traceable (actually slightly traceable) peoples' coin. Oligarchs don't trade in bags of cash. So attacks on cash seem nothing but spite against common economic life.
> frauds without any recourse because of anonymity? not something I want to deal with on a daily basis).
Don't forget that digital transactions can give recourse against fraud without actually having to break client anonymity (Taler) or even vendor anonymity (underwritten/insured escrow systems). Most of take that risk everyday for smallish sums < $100 when we use cash.
I realize that this is a problem that needs to be solve by cryptocurrencies to reach mainstream status, but unless I'm missing something, that is not a problem that needs to be solved by established currencies.
Right now, my example of buying things from a black market in case of dictatorship is the only case I can think of from the top of my mind in which I could see myself needing untraceable money. Arguably, making donations to an unpopular political party or to help a persecuted minority may be better examples in dictatorships or near-dictatorships.
While all of these examples sound useful, I'm not convinced yet that it would be terribly difficult for a technologically-oriented dictatorship (or one with a $5 wrench) to obtain all the data through side-channels or to block transactions.
> Don't forget that digital transactions can give recourse against fraud without actually having to break client anonymity (Taler) or even vendor anonymity (underwritten/insured escrow systems).
Good to know. I should take a look at these.
> Most of take that risk everyday for smallish sums < $100 when we use cash.
Indeed, I was thinking of larger sums.
Monetary war is just a way to put pressure on an antagonist stating that it have less value than most people think.
Money is debt. Having a dollar literally means that the abstract they owe you one. One what? That's for the market to decide when you decide to cash in the favor.
It's all based on trust that what you are owed will be paid back in the future. If the US says "hey, I know you thought you had 100 billion favors you could cash in from us at any time, but actually you don't unless you start behaving how we tell you to", then money becomes a mechanism of control.
Sovereigns don't like being controlled by outside forces and will start to look for ways to ascend beyond the control structure, like they always have for all of history.
I think this monetary war is going to get messier than most people want to believe.
Such "defaults" are just scam skirmish from some who want to say his opponent are not worth what they seems to be, nothing practical. The main point is exactly what people want to believe: if enough people decide that's time to erase private central bank putting monetary control under state control yes that will be a big step toward Democracy all over the world, but that's utopia, most people do not even know that debt it's money, not real debt.
1.Weaponizing money could never happen if the money were still backed by something valuable such as gold or goods
2.The value of money is now based solely on thrust. If FED confiscated Russia's money, this is a major blow to the dollar. Probably China and other countries are beginning to search for alternatives for US dollar for both trade and keeping their reserves. That would diminish again the trust in the value of the US dollar.
While weaponizing money may not be so easy, that doesn't mean economic warfare would stop.
Currently the US has declared what amounts to unrestricted warfare against the Russians, including violating our own laws, and the laws of our allies, to effect damage to them. Specifically I am talking about seizing of private property by fiat for no crime. The logical Russian response is to nationalize every Western asset in their territory
Economic warfare may get much worse, since there is power in buying, power in selling, power in being an intermediary, or having the currency of exchange, or the system used for exchange.
Has any property been seized? I thought that it was only locked down pending investigations?
That's already borderline (possibly illegal? ianal) but very different.
That does not appear to be true, 2019 statistics [0] put it at 13%.
[0] https://en.wikipedia.org/wiki/International_wheat_production...
So, not quite a third, but not much of an exaggeration.
They achieved what they were meant to achieve.
Of course Trump tore up that deal, which made the sanctions mostly worthless in the end, but that's on Trump.
That is copium to the highest degree. The sanctions were meant to prevent Iran from building a nuclear bomb, they were about one year away from having one when the sanctions hit, nowadays I read somewhere (maybe the Economist) that they're maybe one month away only from being able to build one. The sanctions failed.
Later edit: Article from November 2021 about the one-month thing: "Iran one month away from achieving nuclear weapon". [1] As recently as January 2020 the West still thought that Iran was "one or two years" from building a bomb [2]
[1] https://www.jpost.com/breaking-news/iran-one-month-away-from...
[2] https://www.france24.com/en/20200110-iran-nuclear-weapons-de...
The sanctions were to stop Iran from building a bomb.
the actual capabilities of creating one already existed and as you pointed out can be easily ramped up in relatively no time.
The deal is to avoid an all out confrontation with a quid pro quo so iran doesn't finish; it doesn't erase the knowledge & capabilities they now have.
I would guess if the deal fails Isreal would probably attack again and this time I'm not sure it would be with the US and only digital (and probably more than targeted assassinates too).
No, it's not on Trump. It's on US since Trump was the president of the US and the US withdraw from the agreement, not Trump as a person.
First, we tried deterrence. Touch a hair on my brother's chin, and I'm going to give you a haircut you won't forget. That didn't work. Blew up in our faces, WW1.
Then we tried appeasement. That didn't work. Blew up in our faces, WW2.
Finally we tried economic cooperation. Make everyone rich and interdependent, and they won't want to go war. That worked spectacularly, and ever since we've been milking that successful strategy for everything it's worth.
People are very eager to talk about how that strategy failed with Putin, but what they forget is that this is the only winning strategy there is.
We are switching over to deterrence now, but we're doing it for lack of a better choice, not because it's a winning strategy. If we had switched over to deterrence (or appeasement) earlier, it would not have fixed anything, it would only have changed the manner in which things went wrong.
"But doux commerce—the notion that money talks, walks, and wants peace—is well and truly buried." I'm hearing the words of an American who's still at step 1, deterrence.
It may be a long time, but eventually we will need to get back to the winning strategy.
Economic cooperation only makes a country rich if it is not too corrupted internally. When a country is governed by thieves, all wealth ends up in their pockets, and the average citizen remains poor.
Interdependence does not mean dependence on everyone. A big country can keep doing business with other big countries, while it attacks its smaller neighbors who only provide a negligible fraction of the trade.
But those are small nations. The fate of Russia over the next few years could easily determine the next hundred of geopolitics.
I am not trying to justify Putin's crimes, I am just wondering why you are not condemning the crimes of the West with the same fermity?
A human life is a human life. A child killed by US bombs matters as such as child killed by Russian bombs.
And how do you know that GP isn't? Why do you think that when one wants to condemn something he has to condemn, in the same breath, everything similar that has happened through whole human history?
I see you are from Tunisia. Did you mean that it is taboo in Tunisia, North Africa, the Mediterranean fringe, or somewhere bigger?
I agree that assassination as an instrument of war is certainly not to be considered. But perhaps a Brutus style assassination would have different consequences than one committed by an external actor.
Topple Russia backed authoritarian regimes while they’re at it.