BITCOIN: Marxian Sociological Perspective

By Satyawan Tarar

BITCOIN IN MARXIAN CONTEXT

Those who had ridiculed the Utopian communism of Marx, by declaring it a dead dream in the era of the welfarist capitalism. They must wake up now and see the dialectical materialism is unfolding to its next stage. Bitcoin’s emergence as a global cryptocurrency, sustaining and spreading without any central authority has raised certain sociological hopes. Libertarian and neo-anarchism ideas gave rise to a new breed of intelligentsia who believe that the time has come for a new economic dynamics in the world.

Marx identified the inherent contradictions within the Capitalistic structure and predicted its demise thus paving the way for the next stage of the society i.e socialism and eventually communism. But the last century has witnessed the spread of capitalism dovetailed with the welfarist state, thus proving Marx wrong in his prediction. But that was too hasty to conclude. The basic premise of the Capitalism hinges on the Monitory system of the world. The tightly-gripped Capital control of the world lies in the modern banking sector which is increasingly loosing trust of the masses. Recent developments in the last decade such as financial crises of 2009, investment gambling, bailouts, Quantitative easing, negative interest rates etc have exposed the darker sides of the banking system. The two classes as Bourgeois (Haves) and Proletariats (Have-nots) have been distancing apart thus giving rise to the polarization and Homogenization of Proletariat which was one of the inherent self-destructive feature of the capitalism predicted by Marx.

The Modes of production and the world resources are being controlled by rich and affluent. The stratification and hierarchical system of the current economic order is leveraged on the very concept of the fiat currency. Perfectly timed introduction of Bitcoin as an alternative to the basic functions of the monitory system will work as a catalyst to start the sequence of the events leading to a new economic order. The underpinning technology ‘Blockchain’ has already started disrupting the dominant forces of production.

According to Marx, social change is not random rather it’s in perfect order. The world is dynamic and is always in flux. The emergence of concept of common global currency in the form of Bitcoin is the result of the ever-changing ‘Forces of production’ in the world. In order to understand the Bitcoin’s place in the historical context one has to understand the Marx’s idea of ‘Historical Materialism’. This view designates that Economic Development has been the ultimate cause and major moving force. of the historical development of the societies of mankind. Other developments such as cultural, political, legal and ideological were shaped by the economic order of that time.

Whole history of the mankind has been the history of the class struggle. The continuous struggle of the classes over the ownership of the ‘modes of production’(MoP) and the emergence of the new MoP (Exp. Land was old MoP in feudal society, Technology is new MoP in Capitalistic society) give rise to the progression of the society to the next stage. ‘Relations of Production’ between dominant and subjugated classes gets altered and new Relations emerges which forms the further new classes and it heralds a new struggle and it goes on . The succession so far has happened in the same way as Darwinian Theory of natural evolution. As per Marx, Societies have progressed from these stages sequencely in the order Primitive Society, Ancient Society, Feudal Society and Capitalistic society.
The next stage according to the Marx arrangement of things will be Communist Society. That is where Bitcoin fits in the picture. It heralds the new era of the disintegration of the modern Capitalistic structure and moving towards the next stage. That next stage could be the neo-capitalistic stage or a completely different arrangement remotely unrelated to the communism or could be a communism Society as envisaged by Marx.

REASON FOR BITCOIN ACCEPTANCE

Karl Marx may be criticized for his extreme pessimistic and deterministic stance, but one cannot deny that the economic order of the today’s world is far from perfection rather in fact the unequal distribution is the cause of the most of the evil in the society. The gross widespread inequality and economic injustice is the direct result of the over-reliance on the generosity of the capitalism. The political class of the Nation State is the strongest pillar of the Capitalistic interests. The status quo is being maintained by the hand in glove strategy in the form if the over-regulation by the state, which in fact is killing the innovation and intentionally keeping the doors, shut for the outsiders.

Alienation of the Man from himself has reached its zenith. Everywhere there is a call to connect to the roots thus giving rise to the fundamentalism and cultural-conflicts. At the same time the promise of the emergence of an alternative economic order in the form of a common currency and the elimination of the middle man is very fascinating for the masses.

Lack of Innovation in banks, Systematic exclusion of the Majority of the world’s population, slow and inefficient legacy systems, huge middlemen charges, profit centric attitudes of the Banking system has led to the resentment among the people and at the same time Bitcoin provides an alternative to that. But it would be immature to think that arena of the Bitcoin will confine only to the payments segment. It has the potential to disrupt each business which deals with the things of value.

Other reasons are austerity measures, relaxation in Labour laws, high unemployment rate, recession cycles, exploitative working conditions, regulatory aggression and failure of the nation states to control its monetary health as evident in the EU. The uncertain economic conditions in the emerging markets have brought the economic development of the world on the grinding halt. In the middle of which the culprit is the monitory system of the contemporary world.
Another reason is that Man by nature is bored with the monotonous capitalistic lifestyles. Bitcoin promises an adventurous and uncertain journey to the creative minds.

RESISTANCE TO BITCOIN

In economics dynamics of Marx, ‘Modes of Production’(MoP) are dynamic in nature. Man’s love for creativity and objectification gives rise to the Innovation which changes the existing MoP. Bitcoin as an Innovation is emerging a new kind of MoP. ‘Relations of Production’ are the class interests which are associated with the existing MoPs. Thus they will resist any change in the status quo. This is evident in the form of the opposition for Bitcoin both by Bankers as well as nation states. But as per dialectical materialism the new MoP will take on as sub-structure and consequently the superstructure (like legal, political, cultural systems) will adapt and alter with the new arrangements.
The argument of the resistance varies from its misuse by antisocial elements, money laundering, technological constraints, energy intensive nature, scalability and private-key security. But all of these limitations are already there in the existing systems which are running for decades.

FUTURE OF BITCOIN

The ground has already prepared for the emergence of the Bitcoin as a common trusted token of value. Availability of Smartphones, Accessibility of internet, increasing digital education clubbed with a generation which is already accustomed to use the money wallets thanks to the fintech startups. People have started questioning the monopolistic and high handedness attitude of the Money agents (banks, brokers etc.). In Marx words social change happens when people start realising the Subjective consciousness of the objective reality.

Ironically, from economic standpoint the social currents are in the favour of the common, deflationary, global and fair monetary system, which leads to the true Globalisation. But at the same time cultural revivalism and religious fundamentalism trying to take the societies back to their roots are also the social realities. The synthesis between the two may lead up to establishing a social order where a global currency and multiple cryptocurrencies co-exist and claim the value in their respective geographical and supposed boundaries. Any community could issue their coloured tokens and thus could create a localized self-reliant economy.

Marx states in the ‘The Communist Manifesto’ [1848], that “The bourgeoisie cannot exist without constantly revolutionizing the instruments of production, and thereby the relations of production, and with them the whole relations of society. Conservation of the old modes of production in unaltered form, was, on the contrary, the first condition of existence for all earlier industrial classes. Constant revolutionizing of production, uninterrupted disturbance of all social conditions, everlasting uncertainty, and agitation distinguish the bourgeois epoch from all earlier ones”

In the context of the above statement, the Invention of the Bitcoin could either be a yet another instrument of production for the existing bourgeoisie class or it could be a beginning of a transition from Capitalistic stage to a more egalitarian society.

Bitcoin will break the barriers of the fiat currency and will truly usher an era of realizing the true value of the things. Thus it could enormously alter the existing ‘relations of the production’. It will lead towards the greater inclusion, less hoardings and proper re-distribution of the ‘modes of the production’ but it would be too early to say that it will revolutionize the world in near future. The widespread adoption of Bitcoin will have to go through the resistance from those whose interests’ lies in the current Relations of Production. It may face the censorship and bans from the nation states ,But Bitcoin in its current form or in rather completely different form will stay there to change the world for the good.

As the famous saying of the Victor Hugo “One cannot resist an idea whose time has come.”