pull down to refresh
2 sats \ 16 replies \ @Solomonsatoshi 5 Sep \ parent \ on: The Risk of Reality Distortion Fields BooksAndArticles
The most successful eras of 'western style capitalism' actually looked a lot more like the model now being applied by China than what you see in the west today.
Today the west has been captured by bankers and rentseeking corporate cronies who now direct our governments.
The British Empire rose by combining the governments military and diplomatic power projection with the ingenuity and cunning of the private sector in a powerful collaboration of wealth creation.
This is how the Chinese are now operating.
The wealth of nations is always built via a combination of state led strategy and private sector innovation.
Today it is the US military who are mired in outdated military thinking and equipment and the axis of China and its tributaries who are innovating, developing and increasingly applying asymmetric technologies and tactics.
Rare earths are essential to so many of the high tech and military products of modern technology especially military equipment that without assured and reliable access to them the west is completely fucked.
China knows this and so does Trump.
Trump is now begging China to resume shipments to US military sector manufacturers and China is still saying fuck you- we will only supply orders where it is clearly proven the end destination/application is not military.
WW3 is already well underway and its not mostly on a direct military conflict level but much more at the mercantile supply chain control level- and that is where China enjoys a significant advantage. China has won the trade war and is now progressing toward capturing tertiary institutional and protocols control.
Rare earths are not the only strategic supply chain now absolutely dominated by China- China dominates price competitive manufacture of multiple strategic technologies including PV solar, robotics, nanotech, EVs, drones, batteries and much more.
The west has been blinded by its obsession with financialisation- the strategy which relies upon the wests legacy control over and hegemony in banking and finance.
That legacy hegemony is very swiftly lost if China builds alternative protocols and others who want to/need to trade with China adopt them.
And this is already happening.
Virtually every nation on earth now must trade with China or suffer considerable economic disadvantage.
The west forgot that trade is the basis of wealth creation and that financialisation is a layer above physical productivity that ultimately still relies upon physical products, supply chains and markets.
Bitcoin has been captured by this corrupt financialisation narrative in the west and is now almost exclusively seen as and used as a speculative commodity- not a MoE for the trade and payment for real goods and services.
As a speculative commodity Bitcoin is isolated from the real economy and poses no challenge and provides no alternative to the MoE hegemony upon which fiat money derives its strategic leverage and power.
The west forgot that trade is the basis of wealth creation and that financialisation is a layer above physical productivity that ultimately still relies upon physical products, supply chains and markets. Bitcoin has been captured by this corrupt financialisation narrative in the west and is now almost exclusively seen as and used as a speculative commodity- not a MoE for the trade and payment for real goods and services. As a speculative commodity Bitcoin is isolated from the real economy and poses no challenge and provides no alternative to the MoE hegemony upon which fiat money derives its strategic leverage and power.
This reveals a few misunderstandings you have about Bitcoin. First, perception doesn't matter. The way anyone "sees" it doesn't matter. If 2 out of 10 individuals/corporations/countries make an effort to hoard as much Bitcoin as possible, while the rest reject it, the rejection by the majority doesn't negate the economic benefits that are accruing to the minority. It actually exacerbates the minority's advantage.
Yes, physical wealth creation is a crucial layer below BTC, but you need at least one abstract layer of financialization to organize and trade that wealth, and to coordinate incentives for exactly how much of each product and service to produce. You can see from Latin America that the amount of resources a country holds within its territory doesn't matter much compared to whether the government respects property rights. If it doesn't, it's going to become poorer until it collapses.
If the PRC really wanted to make China a global hegemon, they would follow El Salvador's example. That would set them up for a near-total monopoly on international trade for centuries. Like any country, the longer they wait, the more painful the inevitable transition.
reply
Bitcoin provides an individual with a superior form of money compared to fiat because Bitcoin treats all participants in the protocol equally.
But in the case of the nation state Bitcoin is less desirable because Bitcoin removes their privileged position of issuance. It is the ability of the state to debase fiat and to dictate the price of money via fiat that delivers the state with immense power. Combined with the monopoly over MoE fiat is a potent power projection tool for the nation state.
Hyperbitcoinisation would remove that power from any nation state that adopts Bitcoin.
Thus in the contest for military, territorial and power projection fiat delivers the state advantage compared to Bitcoin- precisely because fiat gives the nation state and its government significant privileges over the individual holder of the currency.
In times of peace and times of war fiat money is a potent lever for governments.
In the west since at least the 1970s neoliberal governments have abused that lever- allowing the issuance of fiat debt for use to pump up speculative non productive asset prices- that is outright misuse of fiat monetary leverage but has happened because western governments have been taken over by the bankers.
China in contrast has mostly used fiat leverage to build productive capacity and infrastructure.
That is why China has won the trade war already.
Bitcoin is better, from my point of view than holding fiat money in western nations where the fiat leverage is being so abused.
But China has much less indulged in that corrupt abuse- in China the CCP is highly motivate to deliver real economic advancement or they would likely be removed by force. And they have delivered.
Western governments are just fronts for the wealthy bankers and capital who now direct them in a corrupt and diseased process of crony capitalism that is leading to the decline of western hegemony.
reply
Hyperbitcoinization isn't optional. The nation-state loses its ability to print money because individuals and other organizations, international and domestic, stop buying into the fake, debasing currency.
Think about when gold and silver were used as money. A state could chip away or dilute the coinage, but the merchant class who traveled between states would recognize immediately that it didn't hold the same value anymore. The gold standard was never voluntarily adopted by a state. The state was forced by the private sector to reckon with it.
Your assessment that CCP fiat is somehow different Western fiat is disproven by the price. Measured in either one, BTC still doubled in price from last year. No individual or organization has an incentive to hold USD or CNY over Bitcoin, because all fiat currencies function as a tax on the holders. You could say the CCP spends its deception-tax in more efficient ways than the US government, and in that you might be correct (though it still doesn't mean Chinese citizens themselves couldn't have spent it better), but it's still a tax that people are volunteering to pay, and now have an option to opt-out of.
The state's money-printer privileges are already on shaky ground because a simple A/B test shows that fiat currency and bonds are losing investment propositions compared to Bitcoin. Once the state starts buying BTC directly, as some states like Texas already are, then the states with a money-printer who rely on grift and intimidation are competing with states who hold hard money that is universally accepted as a store of value and medium of exchange.
Buying Bitcoin would actually allow a state to preserve its legacy advantage. Just like I can convert my USD to Bitcoin and carry over my advantages as a US citizen into a post-US world, the US government itself could buy into BTC now while it still has money-printer privileges so that it can carry that advantage into a hyperbitcoinized world. But no state can expect to forever ban their citizens from owning money.
I don't think fiat is even the most efficient tool for military management. Individuals can pay for their own security. There's nothing inherent about a gun, a jet, or a tank that says they can't be built by the private sector if it sees a need for one. The US military is already outgunned by civilians, and it puts a serious check on the government's options.
reply
You clearly do not believe the state is an important if not the most important factor in the wealth of nations. I in contrast believe that it is.
Bitcoin delivers the individual superior monetary integrity because it deletes the states ability to issue and thus debase...but that ability that comes with fiat is today a huge factor in the power projection capacity of nation states.
China is rising because it exercises its fiat monetary leverage more responsibly than the corrupt western governments who have been captured by parasitic rentseeking private capital interests.
The real problem is that so few citizens even where they can buy Bitcoin and achieve the monetary integrity it delivers do so- perhaps 1% of citizens in the liberal democracies where bitcoin is legally available do so. Most people are lazy ignorant sheep and will remain hostage to the state- perhaps because they understand the inherent role of the state in wealth creation.
The CCP is only tolerated by Chinese because it has and is creating unprecedented wealth for the modern Chinese citizens. Their prospects are looking brighter than before while the future prospects for citizens of wests liberal democracies look increasingly bleak- but in the west which ever party wins elections it is still the same shadowy bankers who pull the strings.
Bitcoin is not and is unlikely to be used much in international trade- historically the dominant global trader has issued to currency upon which most trade is settled.
Once that was Britain, then the USA, when post WW2 USA was the largest producer of manufactured goods in the world.
Today China is and it is probable that the historical precedent will be followed and China will issue and control the denomination and settlement of international trade- they are already doing this with CIPS and mBridge as USD declines in volume held and used for trade settlement as the US is increasingly seen as a corrupt and declining rogue state that has lost its leadership role and mandate.
Central banks now hold more gold than USDs for the first time since the 1980s.
Gold and Bitcoin will play a role on the margins as SoV/speculative commodities but Bitcoins use as a MoE for international trade is very unlikely to increase to any significant degree - I would love to be proven wrong by this but I am simply applying logic and historical precedent rather than NGU / wishful thinking / hopium.
reply
The thing about NGU is that it's a real technology with serious real-world implications. It demands an adaptive response from legacy institutions and it doesn't care about historical precedent. That'll be proven with time. It doesn't matter how many transactions are processed through CIPS if all the participants eventually scramble to store their money in BTC. What does any bank or cross-border payment system offer that Bitcoin doesn't do better?
No political party creates wealth. The best thing they can do for a country is be quiet and tolerate the wealth creation that civilians work for. That might never be definitively proven in this lifetime, but I think it will be very revealing that the currency which enables the best life for civilians is one which was not issued by any government.
reply
The primary utility of money is MoE.
SoV is an important but secondary quality.
If you control trade in manufactured goods and commodities as dominant trade blocs do then you can 'prefer' or demand that settlement is in your currency, as the USA has done with its 'petrodollar' and as all empires have done- because they can.
Trade is the primary driver of wealth.
China now enjoys annual trade surpluses of over One Trillion USD.
USA has suffered chronic trade (and fiscal) deficits for 6 decades.
If you control MoE in trade you have the ability to exclude/sanction opponents- as the USA has done with its SWIFT/Petrodollar hegemony it has enjoyed since the end of Breton Woods.
China naturally seeks to build independent trade payments from the US/USD SWIFT hegemony, and is...via Hong Kong, HSBC, CIPS and mBridge and a rapidly growing stack of gold.
Fiat powers are not much bothered by BTC as a SoV as long as it does not intrude upon their crucial strategic MoE hegemony.
In fact allowing SoV/speculative commodity status for Bitcoin in the west has allowed western bankers to capture a growing proportion of the total BTC issuance and freeze it from use as MoE p2p payments protocol and as time goes by the ability to justify a ban on private custody grows as they could say 'you can still enjoy BTC investment via ETFs'.
BTC moE is banned in most autocracies like China and in the west it is hugely obstructed via tax recording and reporting obligations that follow from its arbitrary classification as a speculative commodity rather than a payments protocol.
see this-
Governments absolutely are responsible for the creation of the conditions whereby private investment can thrive- without good law and order, security and property rights private enterprise is crippled- as you see in so many third world countries where the government is corrupt.
reply
Bitcoin itself is a more valuable commodity than anything else on the market. Owning Bitcoin is how an entity ensures it has negotiating power in international trade.
When a government tries to ban or regulate the use of BTC, what they're essentially doing is exerting energy to attack private wealth creation/storage among civilians, but it's that same wealth that the government is dependent on to enforce all the bans and regulations.
Imagine I have two sons, and I want to exploit their labor to secure my retirement without working. I tell my firstborn son that he's not allowed to have his own money. Everything he works for, he has to bring to me, and I choose how much I'll allow him to keep and how he can spend it. Meanwhile, I tell my second son that whatever money he earns will belong to him, and he can spend it however he wants.
With my first son, I can use "law an order" as an excuse and tell him it's for his own good, but it's not going to work. Whatever relationship I have with him is going to be a nasty win-lose fight. He's just going to resent me and maybe avoid working entirely out of spite. My second son will end up with more money, and I'll have a better chance getting financial help from him than my first, even though I didn't demand it with an iron fist. The government can't just handwave away the citizenry's desire for privately held wealth.
And yes, to some extent it's true that people are sheep who have varying thresholds of tolerance for abuse, but there's always a limit somewhere. In the case of Bitcoin, as people start to notice that the holders are getting significantly richer than the nocoiners, it's going to be a tough sell for governments to tell civilians that the bans and regulations are for their own good. I mean if I'm an average Beijinger holding Yuans instead of Bitcoin, did the government really make such incredible investments that I don't mind missing out on a 4x? What about a 10x or a 20x? Human nature is a mix of compromising agreeability as well as self-esteem, and I think as NGU keeps playing out, governments that insist on shutting civilians out of it are going to be using up a lot of legitimacy points.
Edit: except Europe. They're doomed, they have no fight. They're destined to be nocoiners. I think China might fight because their respect for the state is at least conditional on economic success. Europeans worship the state like it's a god.
reply
What you do not accept is that good governments create the conditions where private capital can thrive and invest.
Good governments can do this by -
1- Creating fair and enforced property rights and rule of law.
2- By supporting the development of infrastructure and markets that foster wealth creation while regulating against market capture and cartels and monopolies which otherwise will form.
Without this strategic leadership and provision of secure property rights there is little incentive for private capital to invest- and they will not invest.
It was the British governments strategic development with private interests that built the British Empire- the empire that USA inherited and succeeded when British imperialism became unviable due to the endless warring and division in Europe.
USA inherited the empire and for a time maintained hegemony but today faces the challenge from China where the CCP has built the most competitive productive mercantile economy on the planet.
They allow enterprise as long as it is subservient to the wider advancement of Chinese wealth and prosperity but private capital is kept subservient to the overall project of wealth creation and power projection which they understand is crucial to enduring wealth.
The USA is losing its global hegemony over markets and institutions and protocols and as that hegemony is lost so is the extraordinary wealth and privilege its citizens have enjoyed.
Musk cannot produce EV batteries at the same cost as BYD- BYD can produce EV batteries at almost half the cost Tesla faces- because BYD is operating within the Chinese production and supply chains. Musk was used to help the Chinese market develop and innovate and now he is no longer needed and China can and does produce the best value EVs- this process of cloning and adoption of western tech has been fine tuned over the last 4 decades to the point now where China can and does dominate global manufacturing and commodity supply chains.
Merchants and businesses operate within and behold to the governments and empires and are subject to changes in the structure and operation of empires.
The west has lost the trade war and look like probably losing its legacy advantage in tertiary protocols and institutions- to China.