Tag Archives: agorism

The Tiny Dot


Bitcoin and the underground economy

Article by Jon Matonis at Forbes:

Could Bitcoin Become the Currency of System D?

If zeros and ones are outlawed, only outlaws will use zeros and ones.

Cryptography shall always have a place in securing our digital future and most especially in securing our digital value. Advanced public-key encryption for the masses cannot be eliminated nor denied — the genie is out of the bottle and mankind is the better for it. The unintended consequence of regulating or restricting decentralized cryptocurrencies such as bitcoin is that their use as a currency will have been ‘recognized’ officially and that usage will be driven largely underground.

However, underground may not be so bad anymore as Robert Neuwirth points out in his brilliant Foreign Policy article, “The Shadow Superpower”. If aggregated, this $10 trillion global black market is the world’s second largest economy after the United States and it is also the world’s fastest growing economy. The OECD (Organisation for Economic Co-operation and Development) projects that, by the year 2020, fully two-thirds of the world’s workers will inhabit this shadow economy, or “System D.” As Neuwirth elaborates, it refers to the entire untaxed, unlicensed, and unregulated cash-based economy:

System D is a slang phrase pirated from French-speaking Africa and the Caribbean. The French have a word that they often use to describe particularly effective and motivated people. They call them débrouillards. To say a man is a débrouillard is to tell people how resourceful and ingenious he is. The former French colonies have sculpted this word to their own social and economic reality. They say that inventive, self-starting, entrepreneurial merchants who are doing business on their own, without registering or being regulated by the bureaucracy and, for the most part, without paying taxes, are part of “l’economie de la débrouillardise.” Or, sweetened for street use, “Systeme D.” This essentially translates as the ingenuity economy, the economy of improvisation and self-reliance, the do-it-yourself, or DIY, economy.

Enter bitcoin. All kind of vibrant economic activity is occurring in this informal economy, which in some regions is between 20-60% of GDP or more, and every economy needs a currency. Essentially, bitcoin is the ‘System D’ of currencies — global, decentralized, and non-state sanctioned. It is still early days but as bitcoin bypasses traditional banking and financial institutions, it is a currency off-the-grid just as System D. To deny the existence of System D is to deny the fact that economic participants find ways to survive even during prolonged times of hardship. According to Neuwirth “it asserts an important truth: what happens in all the unregistered markets and roadside kiosks of the world is not simply haphazard. It is a product of intelligence, resilience, self-organization and group solidarity.”

It is inconceivable to think of those in under-developed countries and the developed economies of the eurozone coping without System D activity given the recurring recessions that are exacerbated by the violent central bank-induced business cycles. Despite increasing consumption taxes like VAT (value-added tax), the informal economy can still provide relief through various markets and bazaars. Americans too will need black markets to survive. System D represents the future.

Continue reading…


Quote of the day

“Waving the constitution around as a symbol of your liberty is like a dog who has learned to carry his leash in his mouth.” -Butler Shaffer

Advice from Snuffy Smith

Smuggler’s Creed

“Every new law is another business opportunity.”

– The Smuggler

Who Is “We”?

One of the beliefs that most distinguished the fascists, Nazis, and communists of the 20th century was their organic view of society. Proponents of all three ideologies thought of society as an organism – and of each of you, dear readers, as simply a cell in some part of the organism. And just as our cells have no importance outside their ability to serve our whole body, in the aforementioned three ideologies, our whole beings had no importance aside from their ability to serve the whole society. So, of what value was the individual? He was simply a tool for the ends of others, none of whom have importance either because they, also, were tools. And if society was an organism, then it made sense for the head to run things, right? Government was thought to be the head. And, of course, because there were many people within government, the true head was leader of the government – Mussolini, Hitler, and Lenin or Stalin.

Why is all this relevant to an article by “The Wartime Economist?” Because the organic view of society, though hostile to the basic principles of individual rights on which the United States of America were founded (I use “were” on purpose; “states” is plural) has crept into our language and has distorted much thinking on the issues of the day, including war. It is particularly important in discussions of war because people are more likely to fall into the trap of seeing war as a conflict between two organisms rather than what it is, a conflict between two governments that, in most cases, have dragooned their countries’ resources with little or no consent from their citizens. So, for example, most people who discuss U.S. foreign policy, including, distressingly, most libertarians, talk about what “we” did when it was, in fact, not you or I, but specific government officials, who took the actions they’re describing. They say, “We dropped the bomb on Hiroshima,” not “Harry Truman decided to send a small number of people in the military to drop a bomb on Hiroshima.” “The Japanese [or, more commonly, “the Japs”] bombed Pearl Harbor,” rather than “The Japanese government decided to send hundreds of pilots in airplanes to bomb Pearl Harbor.” Etc.

George Orwell wrote a famous essay, “Politics and the English Language,” and a famous novel, 1984, making the point that language really does affect thinking. In 1984, he focused on the fact that, without certain words, certain thoughts could not be expressed – thus the importance of the government’s “memory hole,” down which certain words went. In his “Politics” essay, Orwell also pointed out the other side: using words can affect how we think. And that is my point here. Specifically, if we use the word “we” to refer to what specific governments have done and will do in the future, we are adopting the organic view of society, which most definitely will affect how we think.

I saw this in a conversation my wife and I had recently with a well-traveled man we met while in San Antonio. In response to an innocent question about what his favorite place in the world was, he lit into an attack on George Bush and Bush’s foreign policy. At some points in his rant, he personalized the issue – for example, when he talked about “Bush’s war.” There’s nothing wrong with speaking that way: it is Bush’s war. But then he went on to say that the Sept. 11 attack was “self-inflicted.” It was a predictable result of the U.S. government’s meddling in the affairs of other countries, he said. Now, as it happens, I agree with this last statement. But he then went on to minimize the loss of 3,000 people on Sept. 11: what did the lives of 3,000 people matter when millions have been murdered throughout the world? That I don’t agree with. I thought then, and still think, that the loss was horrific and that the people who did it were among the most evil people in history. But that’s because I see each of the 3,000-plus people as an individual who matters. He doesn’t. Why? Because he has the organic view of society. Go back to his statement that the Sept. 11 attacks were “self-inflicted.” How did the young kid and the 40-something businessman on one of the flights inflict it on themselves? They didn’t. So, what did this man really mean? He meant that the U.S. government had helped to bring on the Sept. 11 attacks. But his organic view of society – society is an organism with government as the head – led him to say that the killings were “self-inflicted.”

The great tragedy of collectivism, the organic view of society, is that it makes people heartless – they become incapable of seeing the real losses and hurts inflicted on innocent people because they stop seeing them as individuals. The example above is one of someone who couldn’t see the hurt that individual innocent Americans suffered in the Sept. 11 attacks. Another example is how hard it is for Americans to see the hurt that the U.S. government inflicts on many foreigners. Two instances come to mind.

While reading a draft of one of my students’ thesis chapters a few years ago, I came across the statement, “Fewer than 150 people were killed in the 1991 Gulf war.” I wrote in the margin that the number killed was likely in excess of 100,000 people, three orders of magnitude higher than the number he mentioned. When we went over his chapter together, he said that when he wrote “people,” he had meant “Americans.” His mistake was an innocent one, but it was an innocent consequence of a selective collectivism: seeing Americans as individuals, but people of other societies – particularly ones living in countries on which the U.S. government had made war – as part of an organism.

My second example is like that of the man who thought Sept. 11 was “self-inflicted.” Kevin S., a Navy officer and former colleague of mine at the Naval Postgraduate School, was burned by fuel from the airplane that flew into the Pentagon on Sept. 11. It looked as if he wouldn’t live, but he did. It was a heroic story that was written up in his local Virginia newspaper. The article talked about his recovery and had me cheering for him and his spirit. But then the article stated that Kevin had contacted some of his buddies in the Air Force and asked them to write on one of the bombs to be dropped on people in Afghanistan, “Kevin sends.” As much as I sympathized with Kevin, I was equally sympathetic toward some of the people whom “Kevin’s” bomb would injure or kill, who were at least as innocent as he was. Unfortunately, Kevin’s collectivist thinking prevented him from distinguishing between those who had hurt him and those who had not.

Collectivism is the ugliest ideology in the world. It has been directly responsible for well over 100 million deaths in the 20th century. Let’s do our part by not participating in it, even – maybe especially – in our language. The only hope we have for a peaceful world is to hold guilty people responsible for their actions and to treat the innocent people in all countries as innocent. Let’s quit talking about governments whose horrific actions we detest as “we.”

Copyright © 2005 by David R. Henderson. Permission automatically granted to use in whole or in part as long as publication, author, and title are attributed.

System D – The Informal Economy

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