Intermediaries in the financial system at every level, are a problem. This is something that Satoshi Nakamoto understood well, but it is still taking the rest of the world some time to realize just how deeply flawed a system of rent-seeking intermediaries is. Most recently, members of the so called “Intellectual Dark Web” or IDW, are starting to understand the perils of having these intermediaries nested between their audience and themselves. Jordan Peterson and David Rubin, 2 figures identified with the IDW, announced yesterday that they are closing their Patreon accounts in response to the platform banning Sargon of Akkad. Nevertheless, they stopped short of a commitment to go “full crypto”.
The Sargon of Akkad Patreon Saga
IDW Members Oppose “Compelled Speech”
The ban must have struck a chord with Jordan Peterson in particular, since he was in the eye of the storm when the Canadian government was debating bill C-16. According to Peterson, this bill is the first instance of compelled speech in the history of English common law. Understanding the trouble Dr. Peterson has gone through for standing up for freedom of speech, his departure from Patreon following the Sargon of Akkad saga, was probably a matter of time. Now Peterson and other IDW members are starting to go down the “financial freedom” rabbit hole, realizing that intermediaries have too much power.
Going “Full Crypto” Not an Option Now
Knowing that an organization like Patreon could cut their funding arbitrarily overnight, apparently prompted Peterson and Rubin to start working on an alternative. Nevertheless, the alternative might end up looking just like Patreon but without the stringent and arbitrary censorship that Patreon metes out. That is in part because both Peterson and Rubin agree that going “full crypto” is not the solution right now.
Both Peterson and Rubin recognize that payment platforms are susceptible to “pressure” and might end up cutting certain beneficiaries off arbitrarily, regardless of whether the beneficiary is on Patreon or on any other platform. Yet they both seem to agree that these intermediaries are still necessary. Their reasons for embracing traditional payment platforms instead of going “full crypto” are the following:
- Bitcoin and other cryptocurrencies require a certain level of sophistication to be used, potentially keeping mainstream users out.
The Hierarchy of Money
Jordan Peterson and Dave Rubin might have other reasons for stopping short of a “full crypto” solution – at least for now. But instead of speculating, and taking advantage that Dr. Peterson is well-versed in the analysis of hierarchical structures, using some of the points that Andreas Antonopoulos recently made about the “banking cartel” might push these IDW members closer to Bitcoin and other cryptocurrencies. The core of the issue here is how money works, or what the hierarchy of money really is.
Dr. Peterson correctly identifies the problems with credit card companies in the monetary system. These companies act as a “proxy to cash” like Peterson describes, but they also have privileged information about us. They can link all the data and meta data around our consumption, to our identities. This makes them more than just a proxy to cash. These companies can actually be called in to censor our spending – an idea that is preposterous to Dr. Peterson and should be to every single citizen of any democratic society. This coupled with the war on cash, throws the hierarchy of money off.
The Way Money Was and the Way it is
The hierarchy of money before credit cards and other electronic payment systems existed, stemmed directly from central banks. Those central banks are supposed to be independent from the government, yet elected officials are in charge of naming their directors and overseeing their operations. Central banks would issue money that would go to commercial banks and through those, to companies and individuals. Before credit cards, cash was king, which meant people could spend their money anonymously.
Anonymity challenged the government’s ability to restrict certain types of transactions that are illegal, like the drug trade. Therefore, the advent of credit cards and other electronic payment methods was just the solution governments were craving for. Now, to spend money, people need to go through a KYC process and the government can intervene easily; confiscating someone’s money for whichever reason the government sees fit, requires just a few clicks. Meanwhile, users opted for the convenience these payment methods offered, bringing almost everyone within the developed world into a system of debt and mass control. A “proxy to cash” is how these little plastic cards are understood by many, but they are much more than just that.
Debt and Servitude
Banks, payment processors and other financial institutions, leveraged this sense of convenience and reinforced the idea of the “proxy to cash”, climbing up the hierarchy and acquiring more power on their way. Nowadays, these financial institutions and their payment platforms have enabled users to acquire debt easily, generating latent debt crises all over. The outcome is servitude: People’s incomes belong to the financial giants. That is true even for those who are not in debt.
Most employers pay their employees with direct money transfers to their accounts, where banks control how much of it each user can withdraw each day. Credit card expenditure limits are several times above the daily cash withdrawal limits in most cases, encouraging people to acquire debt. Employers are unlikely to pay their employees in cash if the employees request it; it is too cumbersome. In the meantime, every transaction made is “taxed” by a financial institution through fees – which are way more expensive than what they should be – and there is no real way out of the system if you want to keep on using fiat. In fact, as electronic payment platforms grow, governments have become more complacent and have limited the use of cash by law, conferring even more power to financial intermediaries. This is true in France, Australia, Sweden, Israel and many other industrialized countries that are aiming to abolish cash altogether, in favor of payment processing companies.
Going “Full Crypto” is the Only Solution
Within the hierarchy of money, Patreon is just another intermediary. As far as intermediaries are concerned, Patreon is probably closer to the base of the current money hierarchy, so quitting Patreon in favor of any other platform while relying on the traditional payment platforms, doesn’t solve the problem. As the war on cash advances, and the hierarchy of money tilts further in favor of financial institutions which share common interests with the government but don’t really care about their users, censorship will grow. As financial institutions gain more power, freedom of speech might be completely relegated to the realm of theory. In practice, governments or any financial institution will be able to cut people off the system with ease for any reason, including their susceptibility to certain pressure groups.
The Struggle for Financial Freedom
The only real alternative is Bitcoin and other cryptocurrencies. The problems that Dr. Peterson refers to when speaking about the “full crypto” option, are not that problematic. UX is a challenge when it comes to crypto, but Bitcoin/crypto wallet providers have lowered the threshold for mainstream adoption through easy to use apps. Liquidity is an issue only if you think in fiat terms. There are many highly skilled software developers, designers, sound engineers, marketing specialists and other professionals who are willing to take payments in Bitcoin. Dr. Peterson could hire some of them to develop his educational software for instance, and pay them with the Bitcoin donations that he gets.
Hopefully, the Sargon of Akkad saga and the possibility of censorship beyond Patreon will compel Peterson, Rubin and other IDW members to think less in fiat terms and more about the problems with the current hierarchy of money. They might just go all the way down the rabbit hole and realize just how the struggle for financial freedom is crucial in their fight for freedom of speech and the cultural wars they are engaged in.