Is El Salvador's Bitcoin Experiment Authoritarian Propaganda? (nytimes.com) 73
What exactly happened after El Salvador president Nayib Bukele made Bitcoin a legal tender for the country? "As Bitcoin has dropped more than 50 percent of its value this year, there have been suggestions that El Salvador's investment has pushed the country to the brink of bankruptcy," writes a Salvadoran political/human rights journalist in the New York Times.
"However, implying that the country's risk of default derives from the crypto-enthusiasm is wrong: The economic turmoil preceded and is bigger than that." The article notes that prior to their move into Bitcoin, "the Salvadoran economy was already stretched. Total debt amounted to about 90 percent of G.D.P., a large chunk of which had been accumulated by prior administrations or spurred by pandemic-related expenses."
But what are we missing with this focus on Bitcoin? Mr. Bukele has weaponized Bitcoin to whitewash his government's growing authoritarianism on the world stage. By spreading his propaganda, Bitcoin believers are promoting a product — and lining their pockets — at the expense of our rights and livelihoods.... Over the past three months, the government has used a state of emergency to imprison almost 40,000 people, often without defense. Mr. Bukele has begun to crack down on press freedom, through a gag law that prohibits reproducing messages from gangs and his government hasn't investigated the illegal use of Pegasus spyware to monitor dozens of journalists who cover El Salvador, including me, from independent news outlets between 2020 and 2021. Reporters have already fled the country, fearing reprisal for doing their jobs....
It's pretty obvious to anyone who visits any place in El Salvador other than its beaches that Mr. Bukele is not building a techno-utopia; he's building a run-of-the-mill authoritarian state in a tech disguise. Bitcoiners would do well to remember that when they cheer for Mr. Bukele, they're not ushering in the technology of the future; they're enabling a regime that's violating the human rights of its citizens. After all, the economic freedom Bitcoin promises is worth nothing to Salvadorans if it's the only freedom we can hope to have.
But even ignoring human rights issues — the Bitcoin experiment remains unpopular in El Salvador: Remittances account for more than 20 percent of El Salvador's G.D.P., because of a large diaspora mainly based in the United States. But, according to the Central Bank of El Salvador, only 1.5 percent of remittances went through digital wallets in April, which shows Salvadorans haven't gotten onboard with Bitcoin despite the promise of needed savings. And Mr. Bukele's plan for selling his Bitcoin bonds has stalled.
Just one year into Mr. Bukele's Bitcoin experiment, average Salvadorans can tell that Bitcoin isn't working for them. In May, a national poll showed that 71 percent of Salvadorans said they didn't see any benefit from the law for their family economy. Another found that about two of every 10 Salvadorans support the decision to adopt Bitcoin. Those Salvadorans haven't adopted the currency. A paper published in April by the National Bureau of Economic Research concludes that "despite the legal tender status of Bitcoin and the large incentives implemented by the government, the cryptocurrency is largely not an accepted medium of exchange in El Salvador...." A December national poll showed that only about 11 percent of respondents believed the main beneficiaries of the Bitcoin law are the people, while about 80 percent believed it's either the rich, foreign investors, banks, businesspeople or the government.
"However, implying that the country's risk of default derives from the crypto-enthusiasm is wrong: The economic turmoil preceded and is bigger than that." The article notes that prior to their move into Bitcoin, "the Salvadoran economy was already stretched. Total debt amounted to about 90 percent of G.D.P., a large chunk of which had been accumulated by prior administrations or spurred by pandemic-related expenses."
But what are we missing with this focus on Bitcoin? Mr. Bukele has weaponized Bitcoin to whitewash his government's growing authoritarianism on the world stage. By spreading his propaganda, Bitcoin believers are promoting a product — and lining their pockets — at the expense of our rights and livelihoods.... Over the past three months, the government has used a state of emergency to imprison almost 40,000 people, often without defense. Mr. Bukele has begun to crack down on press freedom, through a gag law that prohibits reproducing messages from gangs and his government hasn't investigated the illegal use of Pegasus spyware to monitor dozens of journalists who cover El Salvador, including me, from independent news outlets between 2020 and 2021. Reporters have already fled the country, fearing reprisal for doing their jobs....
It's pretty obvious to anyone who visits any place in El Salvador other than its beaches that Mr. Bukele is not building a techno-utopia; he's building a run-of-the-mill authoritarian state in a tech disguise. Bitcoiners would do well to remember that when they cheer for Mr. Bukele, they're not ushering in the technology of the future; they're enabling a regime that's violating the human rights of its citizens. After all, the economic freedom Bitcoin promises is worth nothing to Salvadorans if it's the only freedom we can hope to have.
But even ignoring human rights issues — the Bitcoin experiment remains unpopular in El Salvador: Remittances account for more than 20 percent of El Salvador's G.D.P., because of a large diaspora mainly based in the United States. But, according to the Central Bank of El Salvador, only 1.5 percent of remittances went through digital wallets in April, which shows Salvadorans haven't gotten onboard with Bitcoin despite the promise of needed savings. And Mr. Bukele's plan for selling his Bitcoin bonds has stalled.
Just one year into Mr. Bukele's Bitcoin experiment, average Salvadorans can tell that Bitcoin isn't working for them. In May, a national poll showed that 71 percent of Salvadorans said they didn't see any benefit from the law for their family economy. Another found that about two of every 10 Salvadorans support the decision to adopt Bitcoin. Those Salvadorans haven't adopted the currency. A paper published in April by the National Bureau of Economic Research concludes that "despite the legal tender status of Bitcoin and the large incentives implemented by the government, the cryptocurrency is largely not an accepted medium of exchange in El Salvador...." A December national poll showed that only about 11 percent of respondents believed the main beneficiaries of the Bitcoin law are the people, while about 80 percent believed it's either the rich, foreign investors, banks, businesspeople or the government.
Yes. (Score:1)
Next question.
Re: (Score:2, Funny)
The headline is clearly an attempt by cryptoscammers to manipulate reality using Betteridge's law of headlines but it's not going to work.
No (Score:2)
No, it's just theft (Score:3)
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I think you are being too cynical. Salvadoran politicians liked Bitcoin because it gave them the opportunity to fleece people from outside the country. They had that volcano bond scheme, and just becoming a major player in BTC would give the individual politicians a chance to buy or sell ahead of major moves.
Unfortunately for them, the number keeps going down. But if your dumb neighbors are caught up in tulipmania, it makes sense to try to sell them tulips.
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It's not "unfortunately". It's been inevitable when a pyramid scheme bottoms out.
Re: No, it's just theft (Score:1)
Don't you?
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Yeah just like the last time BTC bottomed out. Oh wait . . .
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They've been building a lot of distinct pyramid schemes, they won't all fall on the same day anymore than every fund investing in sub-prime mortgages collapsed at the same hour.
Re: No, it's just theft (Score:1)
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In fact, inflation paid off a fair chunk of my mortgage. Thanks inflation.
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I see no reason why it can't be both.
Corruptly taking people's money and stashing it offshore is very popular pastime of authoritarian regimes.
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Like they do with the current banking system where there is also a layer of secrecy preventing anyone from tracking it? Bitcoin actually makes it harder to hide corruption compared with the current banking-system.
With bitcoin the whole ledger is open to everyone and the transactions can be tracked forever... On top of that you add regulation on exchanges where it could be seized. Nowhere to hide. Nowhere to run. Always traceable.
Maras (Score:4, Interesting)
You may disagree with Bukele on the bitcoin thing but this article is bullshit: those 40,000 "imprisoned without defence" are gang members, "maras". The whole country was terrified with 60 persons being killed per day in a 5 million population country. Bukele stopped that and even threatened the not-yet-imprisoned mara members to stop feeding the imprisoned mara members if they didn't stop their homicides
https://en.wikipedia.org/wiki/... [wikipedia.org]
https://www.youtube.com/watch?... [youtube.com]
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Dude.
https://www.theguardian.com/wo... [theguardian.com]
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Yes, i am. Happily assuming that every single arrest made under the Bukele regiment were gang members is... naïve.
Read the story.
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True, but you can't make such assumption in any large scale crackdown
You're off to a good start.
Re:Maras (Score:4, Insightful)
If they are imprisoned "without defense", we have to take the government's word that they're gang members.
Re: Maras (Score:3)
You don't need to take the Government's word: maras members are proudly tatooed (full body, including face) with their maras signs. Now they are trying to remove those tatoos, even by burning their skin.
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Well, unless they make the prisoners available for public inspection, we kind of *do* have to take the Government's word.
In the US, you can be arrested for eating babies, and you still get a trial. This is not because the framers loved baby-eaters, it's because the framers realized that a government that wasn't forced to prove its case couldn't be trusted.
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They are available for public inspection, even on TV. Just search YouTube for "maras bukele". Also, the fact they have been imprisoned does not mean they will have less access to a fair trial. Pre-trial detention is 100% legal.
https://en.wikipedia.org/wiki/... [wikipedia.org]
Videos of thousands of mara gangsters where you can see their "credentials":
https://www.youtube.com/watch?... [youtube.com]
https://www.youtube.com/watch?... [youtube.com]
https://www.youtube.com/watch?... [youtube.com]
https://www.youtube.com/watch?... [youtube.com]
https://www.youtube.com/watch?... [youtube.com]
https://www [youtube.com]
Re:Maras (Score:5, Insightful)
Bukele’s roundup was freat, if you’re cool with absolutely no oversight and zero rule of law. That means that 80 percent of the people rounded up are bad gang members, very true. But 5 percent are innocents in the wrong place at the wrong time. Another 5 percent are people that personally pissed off a cop once, and the remaining 5 percent are people who pissed off a politician.
Re:Maras (Score:4, Insightful)
So excuse us people who have lived through such measures and survived if we're not taking it at face value that all of those arrested are gang members.
I like many others think that Blackstone's Ratio is a fundamentally good idea:
It is better that ten guilty persons escape than that one innocent suffer.
Authoritarian regimes on the other hand often do not adhere to such principles on the other hand, and will conduct sweeping crack downs where people are more or less arbitrarily arrested. This is a big red flag to look out for.
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The problem is we don't know the truth of it.
After all, the people sent to China's re-education camps are misguided people as well and it's an internal cultural matter. But thanks to Chinese skepticism, we know that the Uyghurs are basically being wiped out by China.
While i have no doubt SOME of those people are gang members, there should be some skepticism applied - because maybe some of those are part of the gang known as "the political opposition", for the freedom and democracy gang, and other such thing
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You may disagree with Bukele on the bitcoin thing but this article is bullshit: those 40,000 "imprisoned without defence" are gang members, "maras".
So? I don't care if they committed fucking genocide. Imprisonment without defense is a human rights travesty. They should be put in front of courts, tried, and when (assuming you're right) they are found guilty they should then be imprisoned.
The article is on point and not bullshit at all. A leader imprisoning any of the population without defense is THE definition of an authoritarian. Whether or not it's popular or has had a positive impact on other parts of the country is completely irrelevant.
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If politicians are such great economists, why did every single government fail where the government started to take over the means of production and decided what to produce, when and how fail?
Granted, it took the Soviet Union 70 years, but even there...
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> If politicians are such great economists, why did every single government fail where the government started to take over the means of production and decided what to produce, when and how fail?
The standard in most places is for the government to float a fiat currency it controls with monetary and fiscal policy. That means the government must be good at economics or it wont last long.
Isn't choosing bitcoin getting the government out of economics? Its sort of like going back to a specie system, since neit
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guess China and Viet Nam didn't get the memo.
I hate communism but bad economic systems can endure for centuries.
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Have you taken a closer look at China's economy lately? Even the US is closer to capitalism than China is to communism right now. Though I have to admit, them straying from "pure" communism into a weird mix of communist heavy industry and utilities and "don't get too successful or we cut you off" market economy is a way better divergence from the ideal than the US' weird mix of cronyism, nepotism and cleptocracy that was layered on top of that capitalist model.
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Pure communism is a myth anyway, can't scale beyond hippie commune in size. Pure capitalism is a myth too, real world is more complicated. I can't make nuclear weapons in my den for purely political reasons, they'd be wildly popular and profitable but sadly that would be illegal as hell, supply chain throttling and zoning and all other manner of damn restrictions. The man is keeping me down!
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Tsarist Russia didn't actually have much to take over, because it hadn't gone through a capitalist stage yet.
But in general, you only get monopolistic state capitalism when things are badly messed up. (It's not what socialists want, they want worker control, not government control.) You got state capitalism in Russia because socialists got control over a completely different part of the world economy to the one they were planning for, (due to WWI messing things up,) so they couldn't make a socialist economy
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in general, you only get monopolistic state capitalism when things are badly messed up. (It's not what socialists want, they want worker control, not government control.)
This is a distinction that seems to immediately fall apart into nothingness as soon as it is examined. Workers can only exert "control" collectively (if we assume you mean the "control" of something medium to large-scale, and not simply control over their personal lives). And how are collections of workers supposed to exert control? Well, by voting. For representatives. This is otherwise known as "electing a government"-- and, by implication, handing the control of large-scale decisions to that governm
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Real power comes from tricking idiots into following your orders. C'mon, how long have you been on this planet?
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Workers can control what is produced simply by each deciding for themselves what to help produce. Or they can elect their own managers etc. There are various different models.
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Most actually did improve things. Do you think the average Russian was better off under the Czar?
Of course the real problem in those Countries was Authoritarians seizing the leadership. Stalin would have been a problem under any economic system
And the Converse? (Score:1)
If BTC were up 3x this year would the author be singing praise?
No, this propaganda piece glows.
Re: (Score:2, Funny)
He makes it up in volume.
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"If he had won just one of those lottery tickets, would the author be singing praise?"
Government can inspect (Score:3)
Block-chain means the government can inspect every transaction that occurs. It means a transfer that was legal 5 years ago, can be (retroactively) criminalized and punished today. Government has reasons to like Block-chain, it's just the deployment as a speculative collectible - cryptocurrency, causing problems.
The idea of wealth controlled by the people - decentralized finance, isn't being realized with cryptocurrency.
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You give government too much credit. The reality is the government(s) doesn't have the resources to make heads or tails of large portion of the data they collect.
And if you're passing laws with retroactive punishment then you have far bigger problems than bitcoin.
"debt 90% of GDP" (Score:3)
This is non-remarkable for a modern economy. For example, the US national debt is 138% of its GDP, and the numbers for the UK and France are 104% and 98%.
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This is non-remarkable for a modern economy.
You're right for a modern economy but El Salvador is not a modern economy. Large wealthy nations with very serious strong trade links can weather far larger debt to GDP than a country with a yearly export in the single digit billions and a trade deficit even larger than that.
If you want to compare countries it helps to compare like countries, not countries with 500-1000x higher trade volumes and 1000x higher GDP.
Is this a real story? (Score:2)
Wtf does any of this shit have to do with Bitcoin? It's no surprise El Salvador, a place sending us hundreds of thousands of refugees, is a shit-show.
But I don't see any sort of Bitcoin connection here. What does Bitcoin have to do with El Salvador's problems?