Brian Holmes on Sun, 9 Jan 2022 19:45:46 +0100 (CET)

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Re: <nettime> Pyramid schemes: from Albania to the US

This is sharp thinking, kudos to Felix for sending it on.

Housing prices in the US (plus numerous other countries) were already akin to a Ponzi scheme in the runup to 2008. They were paper values sustained by myth, lending home-buyers an illusion of stock-market wealth, directly translatable into cash by home-equity loans. After the crash this configuration ALREADY gave rise to a neofascist wave in the US. We know this for a fact because the Tea Party originated in the media room of the Board of Trade in Chicago. But interestingly - because it affected so many people who never gave a thought to speculative profits - the housing crash also gave rise to a powerful socialist movement in this country.

Bitcoin and the rest of the crypto-garbage has primarily attracted speculators, especially of the small-wallet, middle-class type. The much-discussed NFT phenomenon represents a bid by the temporarily wealthy to lend themselves a cultural halo imbued with the aesthetic refinements of people like Elon Musk. Apparently it also represents a "great white hope" for many hackers and digital artists too -- but don't miss the ocean for the ship of fools. The neofascist wave has not yet fallen. Even bigger storms are brewing.

I wonder, will all those former friends and allies with their heads currently in the ether snap back to something real when the lightning strikes?

On Sun, Jan 9, 2022 at 12:11 PM Felix Stalder <> wrote:
The unraveling of large Ponzi schemes is a hugely destructive affair,
all the more because such schemes thrive in societies were official
institutions are either weak or captured by criminal interests and
people are desperate. In the 1999 nettime reader, there is an account of
the Albanian pyramid scheme which brought the country to the brink of

ALBANIA 1996–98
DATE: WED, 30 SEP 1998 11:22:29 -0400

Of course, the situation today with crypto-currencies is much more
extreme today, simply because of the size of the bubble that cannot but
burst at some point. Below is an excerpt of a recent article that tries
to think through the consequences for the US. And Europe is probably not
that much behind.


The Ticking Bomb of Crypto Fascism
The crypto market’s inevitable crash will pull America’s politics in an
even scarier direction.


The crash of crypto is bound to happen for the same reason that all
Ponzi schemes eventually crumble: There is not an infinite supply of new
people willing to pay ever-increasing prices for the stuff that you
currently own. The more interesting question is not whether many
small-time investors will lose a lot of money on their crypto
investments, but what will happen when they do?

Here is what will happen when hundreds of thousands of younger investors
are smashed by the crypto crash: They will be radicalized. This will not
be experienced as simply a decline in prices, because crypto represents
much more than a simple investment to its most fervent adherents — it
represents a way out of the American trap. It represents the existence
of opportunity, the possibility of economic mobility, the validation of
the idea that you, a regular, hard working person without connections,
can go from the bottom to the top, thanks to nothing but your own savvy
choices. When that myth is shattered, disillusionment with the American
system will follow. Unfortunately, given the realities of the moment,
these newly disillusioned and radicalized and angry and broke people are
far more likely to turn to fascism than to socialism.

Crypto, a portfolio of inherently worthless online tokens, is already
sustained almost entirely by myth. Its value proposition is so
inscrutable that when it melts down, almost any narrative could be
crafted to plausibly explain it. It was the Fed! The government! The
leftists who hate entrepreneurialism! It was the dark and devious forces
of the shadowy deep state! Anything will do. It will enforce the priors
of those who placed their faith in crypto as a good substitute for the
American dream — a crowd of Barstool Sports readers and tech
libertarians and the types of people who used to buy silver bars from
Alex Jones before they turned to Bitcoin. The crypto-evangelist
population skews heavily towards a sort of New Age libertarian,
anti-government right wing-ism, and when they see their financial dreams
evaporate, they will likely set their sights for revenge on the things
they already despise. The broad effect will lead to a large number of
newly angry, bitter, disillusioned, hopeless people who are too steeped
in the culture wars to turn towards working class solidarity, and
instead turn towards hate.

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