In this article, I argue that future geopolitical uses of Bitcoin technology have a roadmap like the Non-Aligned Movement created by former Yugoslav leader Josip Broz Tito during the Cold War.
Like many great ideas, this one started with a question from a child. It’s a typical morning driving my daughter to her high school in New York City. She asked, “Daddy, why are there 750 US bases in 80 countries around the world?” In 2021, parents want to avoid giving stupid answers, she had learned in her Global History class and I wanted to get to the heart of the matter. Not one to buy into the lasting freedom narrative, I said, âWell, we have so many bases in the world to support the US dollar. We continued on this topic 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’s a good question from a teenager and for Americans at 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 have 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 by the blockchain. It’s very similar to any other product in the sense that someone once asked, “How much would you pay for a bitcoin?” In no time, the answer to that question has gone from a few pizzas to tens of thousands of dollars. It is an explosive and volatile market that has captured the attention of the world for the creation of new millionaires who were the first to adopt it. This is the time of the introduction of Bitcoin which makes it more than just a financial vehicle. The white paper and Satoshi Nakamoto’s benchmark implementation that sparked Bitcoin’s genesis landed around the world during the worst economic recession of our lives between 2007 and 2009. It was a massive crisis response and criticism. of the system that did not work 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 is a judgment on the powerful and the policymakers, that their behavior and lack of oversight led to this economic catastrophe that has financially injured millions of people. Bitcoin promises that it will provide low cost, anonymous entry into its ecosystem and, most importantly, that it will live outside the jurisdiction of those who could have destroyed the global economy. If this notion of sovereignty through an alternative pledge of value is true for the individual, would it also be true for a community or a nation-state?
The Salvador test case
On September 7, 2021, El Salvador became the first country in the world to treat bitcoin as legal tender, which means it can be used in the same way the US dollar had been used before. The stated goals of this adoption were to improve the efficiency of remittances from abroad, reduce the number of its âunderbankedâ citizens and, whispered in the end, reduce dependence on -vis the US dollar. This last point is the politics of realpolitik from the point of view of a nation that ditched its currency for the dollar in 2001. The notion of self-reliance through an alternative currency has many supporters of those who understand the long-term promise of Bitcoin.
However, traditional financial organizations, think tanks and the media that act as spokespersons for the status quo are casting doubt on the project. Even the casual observer on this issue would notice the asymmetric coverage in the West describing the idea as “insane” or financially unhealthy. Those same sources also want to create a narrative that El Salvador’s leadership is erratic and overbearing, an issue they largely had no comment on prior to the adoption of Bitcoin. We have yet to see whether their policies will provide a shield against currency manipulation or global inflation, but it is likely that other countries whose history of their sovereignty has been compromised will attempt the same. Going forward, is there a model for countries that want to thrive outside of the current U.S. and Chinese hegemony and fund it through bitcoin? Yes there are and it comes to us through a certain history of the Cold War.
Yugoslavia and the non-aligned movement
Josip Broz Tito is synonymous with Yugoslav political history, fighting in World War I and as an anti-Nazi partisan in WWII he was initially a staunch Communist until he was enraged by 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 push back fears 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 path to self-reliance and friendships with like-minded nations. At the 1950 United Nations General Assembly, the representative of Yugoslavia said the following:
â… the Yugoslav people cannot accept the premise that humanity today has only one choice – a choice between the domination of one bloc or the other. We believe there is another road. Of course, it can be difficult, but at the same time it is inevitable. It is the path of democratic struggle for a world in which people are free and equal, for democratic relations between nations which would eliminate external interference in the internal affairs of nations, and for full and peaceful cooperation among nations. based on equality.
It was the embryonic notion that started Yugoslavia’s movement towards so-called market socialism; they had to rely on their ingenuity to achieve the level of international autonomy envisaged by Tito. Echoes of this Yugoslav identity can be found in their own computer company Galaksija and the decommissioned but very nostalgic Yugo compact car of the 1980s. Tito believed that countries with sources of self-sufficiency could play a role in world politics beyond the limits imposed by economic and military resource capacities. Although Tito had very little knowledge of the Third World, he knew he needed international allies. These countries coming out of a postcolonial era, he visited them first. The message he conveyed to leaders like Indian Jawaharlal Nehru was that total reliance on one political bloc or another was wrong. 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 for a sovereign nation. In 1961, Yugoslavia joined India, Egypt, Ghana and Indonesia at the first conference of non-aligned countries; later, 120 Member States were part of this group. There were many reasons why the non-alignment did not increase to create a reliable third way, such as balkanization, the death of key rulers, the internal revolution. Arguably the key and perennial problem was their inability to fund mutual trade.
Satellites Of Love: How Bitcoin Can Make a Difference
If there was a new set of non-aligned countries or even communities that took the Yugoslav mantle but were equipped with Bitcoin and blockchain, it could lead to a cultural revolution. In the current environment, the new political blocs are China and the United States. They both demand loyalty and can project their economic power to support and punish. The United States has shown how far it is prepared to go with sanctions against Cuba that have lasted for generations. This is an extreme example, but it is what modern alliances that do not agree with American hegemony can face. Bitcoin could not only provide a solution to international sanctions, but would offer superior trading service for their goods and services. For example, with cryptocurrency technology in place, customs formalities 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 ‘love satellites’ could start with shared technical knowledge to establish blockchain networks and strong bitcoin-based bond initiatives to pay for infrastructure costs. The point is, unlike their Cold War ancestors, they would only be limited by their imaginations and their desire to thrive with mutual respect. Legacy institutions like the International Monetary Fund (IMF) and central banks will certainly try to undermine efforts that divert their control over the global economic system, but they are looking in the rearview mirror, while Bitcoin is on the horizon.
This is a guest article by Scott Dennis. The opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.