Authoritarianism and Blockchain – Bitcoin (BTC) SV Wales
China’s extraordinary rise to prominence on the global stage can be attributed to significant economic success following the restructuring of their markets in 1978. Such was the success of these reforms, that China now find themselves the second largest economy in the world, posing a significant threat to US hegemony. That being said, this economic success must be considered within the wider context of the country’s wider development, as the aggregation of Chinese fortune has failed to permeate through to the lower classes of society, typically found more in rural regions, which has contributed to widespread economic disparity. Accordingly, the Fraser Institute’s Human Freedom Index 2018 ranks China 108th out of the 162 countries assessed on ‘economic freedom’. So, how is it that China finds itself as the world’s second largest economy yet failing to address its crisis of poverty?
The answer lies in a system that trusts third party participation without obligated transparency, which, in the case of China, often manifests itself in the corruption of officials. The South China Morning Post cites numerous examples of officials exploiting local and rural populations, often through the embezzlement of funds explicitly allocated to tackle poverty. This corruption, facilitated by the current economic model, means that the Chinese oligarchy can continue to exist and as long as this is the case, it is difficult to argue that the Chinese population will experience true economic emancipation.
China’s authoritarian-style government means that restrictions aren’t simply limited to the economy, and in fact play a more profound role in the lives of its citizens. Referring back to the Fraser Institute’s Human Freedom Index 2018, we can see that China ranks 141st out of the countries assessed on ‘personal freedom’. This can perhaps be attributed to a seemingly symbiotic relationship between politics and economics with both profoundly influencing one another. This complicated relationship is exacerbated by the contradiction between its communist government and its decision to operate in a capitalist market; an amalgamation that permits the omnipotence of a puppeteer central government that consciously seeks to undermine the civil liberties outlined by the UN.
The effects of this authoritarian stranglehold have become particularly pertinent in recent months as China’s relationship with Hong Kong is thrown into question. Officially operating as a Special Administrative Region, Hong Kong is entitled to its own governing and economic systems until the Basic Law expires in 2047. As such, Hong Kong employs a more liberal democratic system of governance that allows them to compete on the world stage. Unhampered by communist surveillance and control, residents of Hong Kong enjoy far superior levels of human freedom with the Human Freedom Index 2018 placing them highest in the world for economic freedom and 32nd out of 162 for personal freedom.
With the judicial independence and civil liberties of its citizens contested, under a bill proposed in June this year which could see certain criminal suspects extradited to mainland China, the people of Hong Kong have taken to the streets in protests that have become increasingly violent. In all this chaos, ATMs in the city are running perilously low on cash as people seek to withdraw large quantities of cash under the fear that Chief Executive Carrie Lam will freeze government assets and accede to demands from Beijing.
The issue at the heart of this controversy is the Chinese threat to Hong Kongese autonomy, with protestors refusing to use, and indeed trust, centralised digital cash. In this way, we can begin to see how bitcoin and blockchain technology can offer a great utility to the citizens of Hong Kong. The reduction in the outright reliance upon fiat currency has the potential to give citizens more control over their finances, whilst alleviating the shackles of authoritarian governments who seek to suppress their citizens and undermine their freedoms. In this way, a competitively decentralised system offers a more secure failsafe that can protect against harsh capital controls and hyperinflation, encouraging healthy competition on a trusted and transparent network.
‘Bitcoin has performed a very important role in helping people in distressed situations around the world: getting around governments (institutions, really) that want to control you, starve you, and hurt you.’
— Steve Forbes, 6th October 2019
For China in particular, this technology can help mitigate strict state censorship whilst opening up a global market for anyone with an internet connection to transact freely both internally and externally. This will allow people to hold the state accountable for their actions without the fear of being denied their economic, and in turn, human freedom should they wish to.
Indeed, just recently we have heard more about China’s plans to build a Digital Currency Payments System (DCEP) that would seek to sate some of these demands. Whether or not such a system is able to match the potential offering of a global, public blockchain, however, is something that remains to be seen.
Published at Fri, 01 Nov 2019 11:55:10 +0000
{flickr|100|campaign}
