How a man that got into an argument with Stalin may have developed the blueprint for Bitcoin’s political phase.
In this article, I argue that the future geopolitical uses of Bitcoin technology have a road map in the example of the Non-Aligned Movement created by former Yugoslav leader Josip Broz Tito during the Cold War.
Like many good ideas, this one began with a question from a child. It’s a typical morning, driving my daughter to her high school in New York. She asked, “Dad, why are there 750 U.S. bases in 80 countries around the world?” In 2021, parents want to avoid giving dumb answers, she had learned this during her Global History class and I wanted to get to the heart of the matter. Not being a person who buys into the enduring freedom narrative, I said, “Well, we have that many bases in the world to support the U.S. dollar.” We continued on this subject until we got to her school where she finally asked, “So, if the dollar is strong because of our military, is that a good thing?” That is a good question from a teenager and for Americans writ large. Shortly after our conversation, I read that the nation of El Salvador was buying bitcoin and would make it legal tender there. It seems that the leaders of this tiny South American country envisioned a new kind of future with Bitcoin at its center.
Why Is Bitcoin Political?
Bitcoin is the world’s first cryptocurrency, an expression of value brought about by the blockchain. It is very much like any other commodity in the sense that someone one day asked, “How much would you pay for one bitcoin?” Over a short amount of time, the answer to that question has gone from a few pizzas to tens of thousands of dollars. It’s an explosive and volatile market that has garnered attention the world over for minting new millionaires that were early adopters. It is the timing of Bitcoin’s introduction that makes it more than just another financial vehicle. Satoshi Nakamoto’s white paper and reference implementation that brought about the genesis of Bitcoin landed in the world during the worst economic downturn of our lifetime between 2007–2009. It was an answer to a massive crisis and a critique of the system that wasn’t working for the majority of citizens. News of the fortunes made from bitcoin has dominated the press since then but at the heart of this new development lay a judgment on power brokers and policymakers, that their behavior and lack of oversight led to this economic disaster hurting millions of people financially. Bitcoin promises that it will provide low cost and anonymous entry into its ecosystem and, most importantly, live outside the jurisdiction of those who might have destroyed the world economy. If this notion of sovereignty through an alternate token of value is true for the individual, would it also be true for a community or nation-state?
The El Salvador Test Case
On September 7, 2021, El Salvador became the first country on Earth to consider bitcoin as legal tender, which means that it can be used in any way that the U.S. dollar had been used previously. The stated goals of this adoption were to improve the efficiency of remittance arriving from abroad, decrease the number of its citizens that are “underbanked” and, just whispered at the end, to reduce the reliance on the U.S. dollar. This last point is the realpolitik policy from the perspective of a nation that abandoned its currency for the dollar in 2001. The notion of autonomy through an alternative currency has many supporters from those who understand the long-term promise of Bitcoin.
However, mainstream financial organizations, think tanks and media outlets that act as the mouthpiece of the status quo are heaping doubt on the project. Even the casual observer on this issue would note the asymmetrical coverage in the West painting the idea as “hairbrained” or financially unsound. These same sources also want to create a narrative that El Salvador’s leadership is erratic and authoritarian, an issue they largely had no comment on before Bitcoin adoption. We have yet to see if their policy will provide a shield from currency manipulations or global inflation, but it is probable that other countries with a history of their sovereignty being undermined will attempt the same thing. Going forward then, is there a blueprint for countries that want to thrive outside of the present U.S.–China hegemony and finance it through bitcoin? Yes, there is and it comes to us through some Cold War history.
Yugoslavia And The Non-Aligned Movement
Josip Broz Tito is synonymous with Yugoslavian political history, fighting in WWI and as an anti-Nazi partisan during WWII, he initially was a loyal communist until he gained the ire of Joseph Stalin. This created a rift in the International Communist apparatus of the time. Now the leader of Yugoslavia felt compelled to work with the West to fend off worries of a Soviet military invasion. The larger problem Tito wanted to solve was the slavish political polarity of the Cold War; he envisioned a third way toward autonomy and friendships with like-minded nations. During the 1950 UN General Assembly, Yugoslavia’s representative stated the following:
“… the people of Yugoslavia cannot accept the postulate that humanity today has only one choice — a choice between the domination of one or the other bloc. We believe that there exists another road. True it may be a difficult one but, at the same time, it is an unavoidable one. It is the road of democratic struggle for a world in which people are free and equal, for democratic relations between nations that would eliminate outside interference in internal affairs of nations, and for a full peaceful cooperation between nations based on equality.”
This was the embryonic notion that began Yugoslavia’s move toward so-called market socialism; they had to rely on their ingenuity to achieve the level of international autonomy Tito envisioned. The echoes of this Yugoslav identity can be remembered in their own computer company Galaksija and the déclassé but highly nostalgic Yugo compact car in the 1980s. Tito believed that countries with sources of self-reliance could play a role in global politics beyond the limitations imposed by economic and military resource capabilities. Although Tito had very little knowledge of the third world, he knew that he needed international allies. Those countries that were emerging from a post–colonial era he visited first. The message he brought to leaders like India’s Jawaharlal Nehru was that total reliance on one political bloc or another was a mistake. He astutely pointed out that it was perilous to align with the ideological Soviet Bloc but that the western methodology of imperialism through financial aid was perhaps even more debilitating to a sovereign nation. By 1961, Yugoslavia joined India, Egypt, Ghana and Indonesia in the first Non-Aligned conference; later 120 member states were part of this group. There were many reasons why non-alignment has not risen to create a reliable third path, such as balkanization, the death of key leaders, internal revolution. It can be argued that the key and perennial issue was their inability to finance mutual trade.
Satellites Of Love: How Bitcoin Can Make A Difference
If there were a new set of non-aligned countries or even communities that took up the Yugoslav mantle but were equipped with Bitcoin and the blockchain, it could result in a cultural revolution. In the present-day environment, the new political blocs are China and the United States. They both demand fealty and can project their economic power to support and punish. The United States has shown how far it is willing to go with sanctions against Cuba that have lasted for generations. This is an extreme example but is what modern alliances that don’t agree with American hegemony can face. Bitcoin could not only provide a solution to international sanctions but would offer a superior trading service for their goods and services. For instance, with cryptocurrency technology in place, customs red tape could be streamlined, the cost of settling payments between countries reduced, and the supply chain could be improved through a new level of transparency and traceability. These aligned “satellites of love” could begin with shared technical knowledge to establish blockchain networks and robust bond initiatives based on bitcoin to pay for infrastructure costs. The point is that, unlike their Cold War progenitors, they would only be limited by their imagination and desire to prosper with mutual respect. Legacy institutions like the International Monetary Fund (IMF) and central banks will certainly try to undermine efforts that reroute their control over the global economic system, but they are looking in the rear-view mirror, while Bitcoin is over the horizon.
This is a guest post by Scott Dennis. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.