Crypto Rorschach Test

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One of my favorite movie scenes involves a meeting between a communist and a poet. Can't a communist be a poet? Not if he's truly committed. But I digress. In the movie, the communist revolutionary and the poet are half-brothers. They meet as the latter returns to his house and finds it has been confiscated by the bolsheviks and is now shared with multiple other families.

The communist, Yevgraf, expects the poet, Yuri, to be hostile to communism after reading his poems — poems that the Party considered to be "personal, petit-bourgeois and self-indulgent." But Yuri offers a surprising appraisal of the revolution:

"You lay life on a table, and you cut out all the tumors of injustice. Marvelous!"

Yevgraf suggests that if Yuri truly feels that way, he should join the Communist Party. But Yuri explains why he can't:

"Cutting out the tumors of injustice, that's a deep operation. Someone must keep life alive while you do it, by living."

To Yevgraf, this obsession with "living" rather than submitting to a utopian ideology seems like a recipe for disaster. In revolutionary Russia, Yevgraf thought Yuri was "walking about with a noose around his neck and didn't know." The brothers part ways shortly after, and the plot of Dr. Zhivago continues to unfold.

I often think about Zhivago's attempt to "keep life alive by living." Over the past century, my ancestors were uprooted again and again by people who were eager to "cut out the tumors of injustice." My own life has been less tumultuous, but I've been close enough to the fire — and sometimes in front of it. As a result, I am hypersensitive to people trying to make the world a better place. I am less concerned about the Right or the Left; I am worried about certainty and people who know what everyone else should do.

As the great and not yet late Milan Kundera wrote, "a parade of people marching by with raised fists and shouting identical syllables in unison" is the basic, pervasive form of evil — a form that transcends the differences between Communism, Fascism, and all other isms. This does not mean that any social movement is necessarily wrong, or that people should not protest or fight for their beliefs. But it means that the human desire for certainty and simple narratives are a destructive force. A force that is always lurking, always eager to drag the purest human movements into barbarism.

A movement's phase change from benevolent to malignant is hard to predict in advance, and it's hard to notice even in real-time. But there's an important hint: the point at which "living" is subjugated to an abstract goal, the point at which the ability of human beings to relate to each other as such disappears. This is the point at which we must stop and reassess. But it's also the point at which it is hardest to do so.

How can we balance the need to "cut out all the tumors of injustice" with the need to "preserve life by living"?

Crypto and Decentralized Finance seem to attract people who are interested in both. They offer an opportunity to build new economic gatekeepers, new social organizations, and new political institutions. This opportunity kindles an ideological fervor that's been absent from the mainstream of the tech industry for decades. A recent "debate" between two venture investors offers a case in point.

Mike Solana, a VP at Peter Thiel's Founders Fund, balked at the fact that Li Jin, founder of Atelier Ventures, mentioned Karl Marx as an influence and noted that "the world is unfair and we need to push it in the direction of justice and fairness."

Li was arguing for a New Deal of sorts for online creators and contingent workers. In a world that is increasingly competitive and less secure, and increasingly reliant on human creativity, people need a new kind of safety net that enables them to make a decent living while they experiment with new ideas and careers.

Solana was having none of it:

"Arguments for a 'creator middle class,' to be funded by a guaranteed income for all 'creators,' and any hinting at the eradication of business ownership in exchange for a system of collective user ownership, misunderstand not only the basic nature of social media, but of reality."

Interestingly, both Li and Solana see crypto as a trump card in the ideological battle between pure Capitalism (in Solana's case) and some sort of tech-enabled Socialism or Equitable Capitalism (in Li's case).

Solana sees Bitcoin as "a currency that can't be destroyed, inflated, or seized." Such a currency "encourage[s] the mass circumvention of centralized banks" and undermines the power of the state or anyone else to collect taxes or enforce laws within traditional geographical boundaries.

Li sees crypto as the enabler of new corporate and social structures that expand ownership, redistribute wealth, and incentivize people to work towards common goals:

"Cryptonetworks provide a promising alternative: Decentralized organizations that no single entity controls, which facilitate trust among participants through hard-coded rules. In these networks, ownership is distributed to all stakeholders via a native cryptocurrency or 'tokens,' that reward actions that contribute to the network’s success."

Both Solana's piece and Li's call for a new Labor Movement are worth reading, and both Li and Solana's newsletters are worth subscribing to. I have sympathy for both and don't think they're as far from each other as they think. Both acknowledge that the world is not inherently just and that technology is inherently polarizing — economically, socially, ideologically. They're both bright and passionate.

And they both have critical blindspots. Solana believes that the rich/successful can actually live peacefully in a world that's even more polarized than the one we already have. Li believes that the winners will share more of the spoils with the losers just because technology makes it easier for them to do so.

Both are also too focused on middlemen and gatekeepers. Solana thinks that crypto does not just undermine current centers of power, but that it offers some guarantee against the emergence of new centers of power. Li seems to focus on the struggle between individual people and existing platforms (Facebook, Spotify, YouTube, UpWork, Apple App Store etc.), while the real battle for resources is between the people themselves. The platforms can charge less or share their proceeds differently. But ultimately, it is a smarter, hungrier, more determined individual who is coming to take your job or make it redundant.  

The sun is about to set so I'll stop here. A synthesis is required to moderate the polarizing impact of technology and make sure we retain our freedom to think, interact, and transact with each other. I have to give it much more thought, but my hunch is that technology will not provide the answer we're looking for. It does have inherent tendencies, but they are not strong enough to sway us to the world that either Li or Solana have in mind. To get there, we will have to return to morality, to a shared system of beliefs that we all agree on and commit to working towards — not necessarily a religion, but some common core.

More on this soon. 🙏 If you enjoyed this piece, subscribe to my newsletter for a weekly analysis on the history & future of finance, work, and cities.

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Best,

Dror