Wednesday, December 13, 2017

Bitcoin - A Glimpse At Our (Grim) Economic Future

There's been quite a lot of mainstream media attention on the Bitcoin phenomenon recently. And while any amount of prognostication about whether its runaway increases in value represent a bubble can be found pretty much wherever one cares to look, there's one aspect of the present Bitcoin boom that I think's been somewhat under-discussed.

Namely, the way in which what we're seeing right now is arguably a 'glimpse into the future'.

And I don't mean that in the simple sense of currency being decoupled from states [not least because recent developments in both Venezuela and Russia appear to suggest that you can perfectly viably run cryptocurrencies *as* a state .. and potentially have them actually 'worth' something, so to speak], nor the Cyberpunkishness of Darknet-denizens paying for elaborately staged murders or exceedingly cheap-for-quality hard-drug procurations.

Instead, if we take a look at how Bitcoin is actually produced - 'mined' - these days, it basically features a relatively small number of people and operations using pretty excessively large 'mining rigs' of linked computers with super-massive processing power and power-requirements, solving largely pointless [except insofar as they generate more precious bitcoin] mathematical equations, with virtually nil human input required beyond the setting up of the rigs and the paying of the powerbill.

Or, in other words, this is *exactly* how a pretty broad swathe of economic activity is going to go down over the next few decades. Human "operators" - capitalists, entrepreneurs, bourgeoiCPU, whatever ... presiding over effectively automated workforces ... who do ever more 'stuff' to generate a nominal economic return, that's probably functionally pointless except insofar as it leads to some electrons indicating nominal value flowing around an increasingly digitized economy.

While, at the same time, draining ever further quotients of *real* resources out here in the non-cyber world [in this case, power-inputs - but no doubt all manner of other things, too, with time], to turn into largely imaginary [except for its somewhat subjectively agreed upon worth by an investor clade] 'output'.

And meanwhile, you'll have this ever-expanding class of regular ol' Humans who're basically 'locked out' of the whole thing, because they have neither the investment capital necessary to set up an operation of their own inside an increasingly hard-to-get-into market [I mean seriously - the level of coin, bit or otherwise, required to buy the hardware necessary to run a commercially viable mining rig is *ridiculous*, let alone the power-bills] , nor the technological skills to viably participate in this cyber-economy in other ways that'll effectively allow them to make ends meet without assistance.

Personally, I think this whole setup is pretty fundamentally wasteful. Of a whole lot of things. Of the aforementioned physical resources, for a start [because seriously - you're not producing anything tangible via bitcoin-mining except an ongoing arguable "bubble"]; but also of a huge swathe of yet-living human potential. Who are now, after all, just straight-up "surplus to requirements" in so many senses of the term.

But at the same time, it's interesting to consider the way in which Bitcoin and its generation shows that straight-up a lot of the way in which wealth is derived in our economic system [whether present or [near-]future] doesn't actually involve any real effort on the part of the presumptive main beneficiaries of same, other than the initial set-up of capital goods and *maybe* some wrangling of finance here and there.

It's then 'distributed' out by the owners & employers of capital to various beneficiaries from same - whether investors, perhaps, or whatever workforce they've got under them in their operation, or whomever's selling the next round of hardware, software, and other resource-inputs [like POWER! UNLIMITED POWER!] which might be needed to keep the whole thing operational in the short-to-medium-to-long term.

OF course, to bring this back to those aforementioned 'surplus' humans who aren't capable of supporting this whole venture ... that's where things start to get a bit messy. Because these people have no share of the wealth that's thusly generated, whilst it's quite plausible that the rest of the economy which they might otherwise be employed in, is steadily atrophying and dying.

The impacts of having an ever larger swathe of your population with ever less money to spend is pretty obvious - both in economic terms; but also, dependent upon what welfare/redistributive apparatoi look like in your society, quite probably in human/humanitarian terms as well.

Where am I going with this?

Well, one of the main arguments people often have against a UBI, is that it entails giving people money for nothing. And that isn't necessarily true imo , on grounds that a lot of people perform a helluvalot of unpaid and unrecognized labour *anyway* [think caregivers and homemakers], with a UBI arguably forming a partial recognition & remuneration for that. But I digress.

This misses the point that increasingly, on into the future, the way that income is derived for *just about everybody* outside of an ever-narrowing field of occupations, is going o be precisely that - income that is handed to them not through any actual hard work or effort on their part [again, barring initial set-up bist and pieces, for the most part] ... but instead simply as a result of property rights [i.e. a return on increasingly entirely automated capital].

Phrased in these terms, then, when we talk about a UBI we are not simply suggesting that it's one serious way by which an economy might avoid straight-up crash as a result of greater automation being a thing.

But rather, we are making the case that in a vaguely similar manner to the investor/'miner' class, one's right as a stakeholder in the Nation effectively entitles one to a comparable income-stream as a result of this and this potentially alone. [Whether one wishes to get into the extent to which individuals-as-citizens actually play a role in 'investing' in the Nation and supporting its existence through their ongoing civic behavior, or whathaveyou]

Or, to say it another way ... if it is necessary for ongoing economic activity for people to be able to spend money, and we have effectively 'decoupled' the main source of income for a pretty important [economically] portion of society from actual effort [although 'risk' is perhaps another matter], then why do we not look more favourably upon continuing this 'decoupling' for the rest of society at large with a view to *ensuring* that people actually *do* have the ability to spend such money as may be necessary to keep the economy as a whole ticking over.

And I would rather suspect that the power-inputs and other such things hat would go into supporting a UBI scheme would be far an away less wasteful all-up than what we're presently seeing with Bitcoin.