In many countries, tricking stupid people out of money is a crime. In the United States, it’s the basis of a whole economy.
Cryptocurrency is the crowning glory of this broken system. You give me a bunch of your real money, and I’ll give you some of my fake money. Fantastic! It’s like tulip mania, only instead of flowers, you get… nothing.
The collapse of FTX — the second largest crypto exchange in the world — will cost millions of customers billions of dollars. Some expect it to significantly worsen the recession, though I’m not so sure. If those folks hadn’t wasted their savings on Bitcoin, they probably would have wasted it on some other scam. (Is William Duvane still selling gold?)
In theory, this is bad news for the Democrats. Sam Bankman-Fried, FTX’s conman-in-chief, was a DNC megadonor. Many lawmakers and regulators are implicated in his racket. But in reality, they’ll be fine. You can’t arrest government officials just for breaking the law. That would set a dangerous precedent.
No, it’s the libertarians I feel bad for.
Our laissez-faire friends were the first crypto enthusiasts. The US dollar, they say, is a “fiat currency.” Since we dropped the gold standard, it is no longer based on real wealth — unlike Bitcoin, which is generated in huge warehouses full of computers known as blockchain mines (you can’t make this stuff up).
Libertarians also like crypto because it’s not issued by the government. Crypto-based transactions are harder to trace and tax. Naturally, this also makes it harder for the government to protect consumers if (say) a crypto exchange chief decides to take their money and flee to the Bahamas.
Now, for the principled libertarian, that’s all fine. He takes a Darwinian view of economics. Anyone stupid enough to fall for a Ponzi scheme deserves to lose their money. But the FTX scandal has shown that crypto itself is a Ponzi scheme. And libertarians fell for it — hook, line, and sinker.
This is hilarious, because the movement’s whole brand is based on the idea of the libertarians as shrugging Atlases. They’re on the cutting edge of finance and technology. They could take over the world! But the state holds them back. It kills their creativity with red tape and forces them to support lesser men through heavy taxation.
In reality, libertarians are selfish and dumb. I’d hazard to guess that they’re dumb because they’re selfish.
It’s the same with all egomaniacs, from Milton’s Lucifer to Nietzsche to Sam Bankman-Fried. They think that not caring about other people is some brilliant life-hack. It allows them to “see through” the petty scruples felt by weaker, less intelligent men.
Actually, most people just don’t like to see their neighbors suffer. But they also understand that a free-market system requires a certain amount of regulation.
This is why Marx hated socialism. He believed that capitalism, if left to itself, would become so unbearably abusive that it would trigger a full-on communist uprising. Socialism (especially “democratic” socialism) is merely a concession made by the bourgeoise to keep themselves in power.
Of course, that’s exactly what socialism is. Hence why zillionaires like George Soros and Bill Gates vote for Democrats. They know that government needs to coddle the poor, if only to keep them from eating the rich.
Libertarians don’t get that because, again, they’re not very intelligent. They spend so much time talking about economics yet they go and buy into obvious scams like cryptocurrency. It’s unbelievable.
In fairness, they’re right about the government being too big. Yet besides Nicolás Maduro, I can’t imagine anyone arguing that the US government is too small. That’s not exactly a libertarian trademark. You know what is a libertarian trademark? Booing candidates who say you shouldn’t sell heroin to five-year-olds.
This is not a race of Gordon Gekkos we’re talking about here. They’re just fanatics. They’ve sacrificed both common sense and fellow feeling on the altar of ideology. So much for “rational self-interest.”
Michael Warren Davis is the author of The Reactionary Mind (Regnery, 2021). You can subscribe to his newsletter, The Common Man, on Substack
