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Bitcoin and the Blockchain: a coup d'état in Digital Heterotopia?
Kavanagh, Donncha; Miscione, Gianluca
The 9th International Conference in Critical Management Studies: Is there an alternative? Management After Critique, University of Leicester, United Kingdom, 8-10 July, 2015 This conference invites us to explore new organisational forms and practices that might be alternatives to 'neoliberal market managerialism' and 'financial capitalism'. Our starting point is that the latter two phenomena cannot be separated off analytically from powerful actors — such as the state — that have co-emerged with and played a key role in the evolutionary process through which capitalism has come to be (Graeber 2011). Specifically, this paper takes its move from Hobbes’s (1651/2005) idea of the Leviathan, which has provided a foundational intellectual basis for the nation-state form, which is today ubiquitous, and on which both neoliberalism and financial capitalism are reliant. Hobbes rooted his construct in a pessimistic view of humankind that is naturally inclined towards the 'war of all against all'. He argued that people must recognize that such a 'state of nature' is destructive, and must accept, on the basis of utilitarian reasoning, the necessity of a social contract to constitute a supreme actor whose power is absolute and enforced by a monopoly on violence. Hence, the Leviathan and the body politic are constituted at once and are irreversible. No exit is allowed; no ethical, moral or religious limit can be posed in front of this power. The Leviathan is total because there is no room for any other rationality, and finite because all people are tied to the social contract. Hobbes’s idea of the Leviathan has proved to be enduring and alluring, and provides a primary focus for this paper. What is especially interesting for us is that cryptocurrencies like Bitcoin have emerged from a similar 'thought experiment' beginning with a 'state of nature' not unlike Hobbes’s depiction. Here, the seminal contribution is by the mysterious individual or individuals known as Satoshi Nakamoto who, in 2008, published a paper that set out the basis for the 'blockchain technology' on which cryptocurrencies such as Bitcoin, and other services, are based (Nakamoto 2008). Not unlike Hobbes’s 'state of nature', Nakamoto begins with an imaginary world populated by trustless individuals. The problem he addresses is how to enable trustworthy transactions on the internet without recourse to a 'trusted third party', such as a state-regulated (and state-supported) bank. Indeed, in line with libertarian ideology, one of Nakamoto’s key objectives was to preclude the possibility of any single and all-encompassing ruling authority emerging. His elegant solution is Bitcoin, a purely digital cryptocurrency that is not administered by any constituted organization and is not circumscribed within any consistent jurisdiction. The 'blockchain', on which Bitcoin is based, is a public ledger of transactions maintained by a dispersed and open-ended number of 'miners' who provide computing power to maintain and guarantee the integrity of the ledger. While the Bitcoin economy is tiny compared to official currencies — but remarkable compared to alternative and local currencies — it plants the seeds of a currency (intended as a mode of regulating transactions) that could threaten many of the quasi-monopoly powers that the state currently exercises through the central bank, viz: surveying and collecting data on citizens and corporations, setting credit rates and monetary policy, deciding on and implementing exchange rate policies, assuring the robustness of the payment infrastructure, protecting the interests of consumers, controlling money-laundering, and regulating/supporting existing financial service providers (Murphy 2014). Nakamoto’s attempt to create a money system without a central authority is best seen at the intersection of diachronic and synchronic issues. Historically, the blockchain is one of a long string of information technologies that, since the 1960s, have avoided centralization, partly as a defence against possible Soviet nuclear attack, and partly in sympathy with the Western open culture of the 1960s and 1970s. In relation to contemporary phenomena, Bitcoin entangles with the state’s power and jurisdiction, which is simultaenously being challenged by the shadow economy, by individuals and corporations choosing where they wish to pay tax, by the free flow of information within trans-national information infrastructures, and by global internet services and commerce. While Hobbes and Nakamoto start from similar positions, they end up in quite different destinations, and, since theory can be performative (Austin 1970), this means that very different worlds come to be. Analytically, each provides a lens through which one can examine the other, in theory and in practice. Together, the lenses provide a framing device for reimagining key ...
Keyword(s): Bitcoin; Blockchain; Information infrastructures; Currencies; Heterotopia; Leviathan; State
Publication Date:
Type: Other
Peer-Reviewed: Unknown
Language(s): English
Institution: University College Dublin
First Indexed: 2015-08-27 05:15:28 Last Updated: 2018-10-11 15:32:33