From Bernie To Bitcoin: In Search Of The Revolution

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Logan Bolinger is a lawyer and the author of a free weekly newsletter about the intersection of Bitcoin, macroeconomics, geopolitics and law.

Part One: The Thing About Trust

“Political questions are far too serious to be left to the politicians.” – Hannah Arendt

“What good would politics be, if it didn’t give everyone the opportunity to make moral compromises?” – Thomas Mann

In mid- to late 2019, as the 2020 Democratic presidential primaries were heating up, I did something I’d never done before: I made my first contribution to a political candidate. For the remainder of this article, I will refer to him as “Bernie”, his avuncular mononym. I made a small contribution to his campaign and continued making additional contributions.

I was attracted to Bernie’s campaign by the fact that I believed, and still believe that, that this country has fundamental flaws that need to be addressed. Most importantly, trusted Bernie. His unwavering, long-standing commitment to his ideas was admirable and compelling. Bernie was a different kind of person in a world full of opportunists and charlatans, power-seekers, and grifters. One could point to a set principles that he held dear. This made me feel that I could trust Bernie to use all the tools available to bring about the change I desired.

I’ve always believed, perhaps naively that if we could elect the right person , and if we could install the right people , then we could seriously address, or at the very least confront, the many pressing and grave issues facing the country and the world. We could make real progress if we could trust not make harmful compromises, trust to have a solid working knowledge of all issues and trust to be able to steer an agenda through the complex machinery of the legislative process with its divergently interested parties. This notion of trust is essential and should be examined. Our politics in the United States is largely based on trust as a representative democracy. I don’t vote on legislation, and neither do you. Instead, we trust these decisions to our elected officials. These officials are supposedly empowered by our trust. This is why so much of political campaigning focuses upon establishing trustworthiness for one candidate and juxtaposing it against the asserted, relative lack of trustworthiness that the opposing candidate has. This can take many forms and the preferred forms vary depending on which side you are on.

Democrats tend to appeal to authenticity and/or ideological purity; Hence, Joe Biden insisting, ad nauseam, that he’s just a simple, working-class kid from Scranton, Pennsylvania. This, when decoded, means “Trust me because I’m no one of these rich, Silver-spoon insiders.” Bernie proudly stated that he has received no donations from CEOs or billionaires. The emphasis on campaign donation sources is generally a way to solicit trust, arguing that a candidate who receives only grassroots donations cannot be compromised by special interests. These are just a few examples.

Republicans, on the other hand, tend to play the authenticity game from a slightly different angle — namely highlighting one’s remove from or relative inexperience in politics as evidence of authenticity, as if to say one’s adjacency to, or years in politics is a negative thing in itself. This is Trump’s political outsider angle. Republicans will, like Democrats, also engage in class signaling, which often manifests as the oft-repeated contrast of rural, fly-over folks and the dreaded “coastal elites.”

The point of all this, though, is to solicit, inspire and secure trust. This trust model has many problems.

First of all, individuals and political parties could be compromised. It is possible to renege on a commitment. Ideas can change, evolve or fail to adapt to changing facts. There are always errors. Special interests can be more perilous and difficult to overcome than originally thought or promised. Even more troubling, power can corrupt, and often does. Candidates can and do lie. This is not to say that individuals are the only point of failure. As I have learned, it is foolish to believe that any of the above phenomena will happen.

“The truth is that all men having power ought to be mistrusted.” – James Madison

Second, you are implicitly trusting individuals to have (or be able to swiftly acquire) requisite knowledge about the myriad and numerous topics upon which they would legislate and about which they would make crucial decisions. The scope of human endeavor that Congress is charged with overseeing is constantly expanding and self-perpetuating. It is absurd to think that these lawmakers, many who are old, can have a good grasp of every issue they make laws about. This is alarming. It has led to negative outcomes in the past — think the Iraq War, the bailouts of the banks and bankers in 2008, the uber-inflationary monetary policy that has widened the wealth gap, the hollowing out of our manufacturing capacity, the bungled exit from Afghanistan, the failure to keep up with China, etc. It will continue to have negative consequences in the future if it is not addressed.

Third, Washington, D.C.’s machinery — with its deeply rooted polarization — has reduced politics down to the mere performance and an increasingly esoteric bipartisan game of virtue signaling.

I believe that Bernie supporters are uniquely equipped to overcome the three aforementioned challenges.

Bernie believed the same ideas throughout his political career. This is quite refreshing when compared to Biden, whose stated political beliefs seem to align around the most likely candidates for reelection. Bernie’s unwavering commitment to his ideas was and remains authentic. It made it seem that Bernie was not susceptible to outside influences trying to undermine his vision, as so many others. We won’t know the outcome, since he didn’t win, but it sure felt that way at that time.

I would argue that Bernie’s authenticity, especially when compared to his opponents, was so strong that less attention was paid how well he understood the problems he was trying to solve. After all, as I’ve written before, it is precisely the kind of Modern Monetary Theory approach to deficits and monetary policy advocated by folks like Bernie that tends to exacerbate the wealth inequality those same folks seek to address. In a future article, I will explore this further.

There was also a quaint belief that Bernie could somehow break through or transcend Congress’ insoluble gridlock through his pure, unwavering will.

We will never know what Bernie would do as President, but it is clear from the developments that there is no single solution to many of our national problems. It was a powerful testimony to our collective, desperate belief in this type of one-person solution that so many placed their faith in Bernie.

It is worth noting that much of the enthusiasm surrounding Trump was based in the idea that one exceptional actor could cut the Gordian knot. This sentiment was ironically referred to by the campaign as “draining and cleaning the swamp.” It is clear that neither Democrats nor Republicans have the ability to believe in the one person solution. This piece is not about Bernie’s (or Trumps) failures. It’s about how our political system encourages us to trust individuals to solve more problems in an environment that is more hostile to problem-solving.

My own support for Bernie is a good example of this reaction. The idea is that things are so bad that only an ideologically unimpeachable person can fix them. This is essentially a way to increase the stakes but not change the nature of the game. Incumbent, special interests still win. This is, to quote Ambrose Bierce, politics as “a strife of interests masquerading as a contest of principles.”

There is another way, however; this is where Bitcoin comes in.

What would happen if we reduced the legislative area? This would reduce the potential damage caused by ill-informed decisions and discourage moral compromises by reducing its payoffs.

But, we cannot reduce the legislative area without replacing it by another mechanism. The power that is available to us now does not mean that the issues we used to have will disappear. We don’t want to face the same trust problems that we have outlined above with any replacement mechanism. We want to find something that is effective but also trustless. This was not possible before Satoshi Nakamoto.

Bitcoin adoption, whether it is by proactively transitioning into a world with a neutral reserves asset, pegging bitcoin to the dollar, or even an outright currency-level embrace takes away some, but not all, of the monetary issues that Congress, along with the Federal Reserve, and the Treasury Department, have traditionally exercised power and judgment over. This makes them more resilient to human error as well as the vicissitudes partisan agendas. It would establish and enforce a monetary discipline, which cannot be misused to achieve short-term goals at the expense long-term sustainability.

I want to clarify that I am not suggesting that we abandon the entire legislative process to computer codes. The democratic processes can and should be maintained. I suggest that we have some encoded monetary discipline that will allow us to move away from the current monetary trajectory that sees crises requiring interventions. These crises then lead to greater crises that require larger interventions. This leads to existential crises and so on. This is an unsustainable path that will eventually prove economically fatal. Sober minds seek out more effective treatments when the patient’s condition is getting worse. It is a sign of hubris to believe that the same harmful “cures” will work for everyone, even if they are implemented by different people.

Bitcoin can be extremely difficult to corrupt, especially when compared to the corruption of the average human being. Its adoption would eliminate the need for politicians, whether they are sincerely interested or not, to have meaningful expertise on topics such as monetary policy. This would also limit the negative consequences of not having that expertise. It would be remiss of us not to admit that most politicians are and not interested in gaining meaningful expertise.

Currently, there is simply too much surface area for governmental incompetence, ignorance and outright malevolence. I am not suggesting that politicians or individuals should be trusted, nor am I advocating for the derogation of Congress’ legislative function. Not at all. I am only suggesting that we be realistic, pragmatic, and clear-eyed about the scope of competence and potential accomplishments of these trusted individuals or political parties versus the possibilities of what could be achieved by according the delineation basic parameters (namely those relating the integrity and equity our monetary system as well as our money) to protocols that do not require any trust. We should also be aware of the potential irreversible damage that can be caused by entrusting control of the money supply to the vicissitudes if partisan manipulations, hasty, ill-conceived and sometimes dubiously motivated lawmaking. This is often done by people whose knowledge of basic monetary concepts is often not evidently more advanced than the average high school student or undergraduate. Yes, we can and must use the democratic process to replace legislators who are under-educated on these critical issues. However, something so fundamental to the preservation of the collective good such as the money supply could be removed from the whiplash and hot-potato changing between divergently interested elected or unelected hands and instead given to a secure, trusted protocol.

My first major breakthrough on my journey from Bernie and Bitcoin was facing the idea of trust in politics. I also wondered how Bitcoin’s trustlessness could possibly be used to benefit political ends via its potential to train lawmakers.

My next and most important breakthrough was understanding that both sides misunderstood the causes of the problems they claimed to be solving. These causes can be identified and Bitcoin addresses them more persuasively than politicians.

I’ll be exploring this in part 2.

This is a guest post by Logan Bolinger. These opinions are not necessarily those of BTC Inc. or Bitcoin Magazine ..

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