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Bitcoin, an agorist currency

We often hear that Bitcoin is not made for the black market. What if in fact it is? In this article, we will discover the link between agorism, money and Bitcoin.

What is agorism?

Agorism (term derived from ancient Greek ἀγορά / agora meaning “market place”) is an anarcho-capitalist political philosophy advocating the practice of the underground economy as a peaceful means of reducing the influence of the state.

The term was coined in the 1970s by Samuel Edward Konkin III, a Canadian living in the United States who was in his thirties at the time. A great reader and a fan of freedom, he sought to radicalize the vision developed by the Austrian school of economics. He was notably influenced by Ludwig von Mises, Robert LeFevre and Murray Rothbard.

Samuel Edward Konkin III

Agorism is a doctrine stemming from libertarianism, a liberal movement in the United States which wanted to unite the economic laissez-faire of the old right and the civil liberties defended by the new left. Where agorist philosophy stood out is that it formally opposed the statist and collaborationist logic of the Libertarian Party, a political party that had been freshly created in 1971. Indeed, according to Konkin, voting and participation in institutions do not did not really work for the development of individual freedom, and could even go against it by corrupting its best supporters.

Eager to practice what he preached, Konkin lived for many years by the tenets of his theory, before putting it down on paper, which he eventually published as the Neo-Libertarian Manifesto in 1980.

Like libertarianism, agorism is based on the principle of non-aggression enunciated by Murray Rothbard in 1973:

No individual or group of individuals has the right to attack someone by injuring his person or his property […], “aggression” being defined as taking the initiative to use violence (or threaten to use it) against another person or their property.

Murray Rothbard, For a New Liberty: The Libertarian Manifesto, 1973.

It is not a precept of non-violence: according to this principle, a person is completely authorized to use force in a defensive context, if another person attacks his physical integrity for example.

The principle of non-aggression makes it possible in particular to determine a clear border between the state, which is the embodiment of aggression (through its taxes, restrictions and wars), and the market, which is the embodiment of voluntary interaction between individuals. According to Konkin, the state is “our enemy” and has no legitimacy. The goal of agorism is to eradicate aggression gradually and create a free society: the agora. But, unlike anarchism (or anarcho-capitalism) which only states principles, agorism also theorizes the transition from a society subject to authority to a society governed by freedom. : this is what Konkin calls the “counter-economy”.

The counter-economy (a term modeled on the counter-culture of the 1960s) is the subset of the underground economy which conforms to the principle of non-aggression. This includes the gray market, where goods and services authorized elsewhere are exchanged illegally (moonlighting is an example), and the black market, where prohibited goods and services are exchanged, such as narcotics, firearms, prostitution, or even on-site catering in France in 2021. The counter-economy by definition excludes the white (legal) market as well as the “red market”, which includes the attacks carried out by independent criminals and mafias.

The central idea of agorism is that it is the reasoned practice of countereconomics that will reduce the power of the state. Indeed, by organizing outside the law and depriving the tax administration of the income derived from his work, an individual de facto reduces the state’s capacity to intervene in the market and to perpetuate itself.

In addition, this practice is consistent with the economic incentives of individuals, who can thus “trade risk for profit” and live as freely as possible. Thus, the first principle of agorism is to walk the talk: the market is both a goal and a means. As Konkin writes:

“Agorism is the coherent association of libertarian theory and the practice of countereconomics; an agorist is one who acts consistently for freedom and in freedom. […] Always remember that agorism integrates theory and practice. Theory without the practice is a game; taken seriously, it leads to estrangement from reality, mysticism and madness. Practice without theory is robotic; taken seriously, it leads to plowing the land and reporting for work in closed factories. “

Samuel Edward Konkin III, An Agorist Primer, 1986.
Agorist poster made by thorsmitersaw.

Agorism is therefore a theory that emphasizes implementation and experimentation. Conceptually, it is similar to civil disobedience, advocated by Étienne de la Boétie and by Henry David Thoreau, and notably practiced by Gandhi in India and by Martin Luther King in the United States. Culturally, it has been illustrated in works of fiction such as The Strike by Ayn Rand (1957), Révolte sur la Lune by Robert Heinlein (1966) and Alongside Night by J. Neil Schulman (1979).

Money and technology

As we have said, agorism aims to reduce the influence of the state through the reasoned practice of counter-economy, which makes it possible to reduce its tax revenues. However, there is one instrument that plays a crucial role in this struggle between the market and the state, and which is today almost entirely controlled by the latter: money.

The control of the currency intervenes in the way in which the State withdraws the wealth of its citizens, and this is moreover why monetary control has always been a prerogative of the dominant authority.

The State uses two main means to finance itself: tax, which is characterized by the direct levy of the taxpayer, and seigniorage, which is characterized by the indirect levy of the saver through monetary creation and lending. ‘inflation. The third means often cited, indebtedness, is in reality only a deferred tax or a disguised monetary creation.

Consequently, the state must maintain several legal constraints in place in order to maintain its income. The first is financial supervision, imposed in particular on banking and financial organizations, which aims to prevent tax evasion. The second is exchange control, which manifests itself in drastic restrictions on foreign currencies, and which prevents the flight of capital. In particular, the state imposes a monetary monopoly on its territory to force people to value its currency and to be able to derive income from seigniorage.

In order to be effective, agorism therefore requires a reduction or even a disappearance of this control. There are obviously precious metals like gold and silver which allow value to be exchanged outside state control, but they have flaws such as their imperfect divisibility, their reduced portability (especially over long distances) and their high verification cost.

With the emergence of the personal computer and the internet, some have imagined bypassing flaws in precious metals by using technology to create electronic money and import the free market mechanism online. The cypherpunks, although they were foreshadowed by the “high-tech hayekians” of the 1980s, took this idea to its limits. Thus Timothy May declared from the birth of the movement in 1992:

“Just as printing technology altered and reduced the power of medieval corporations and the social structure of power, cryptological methods fundamentally alter the nature of government and corporate interference in economic transactions. “

Timothy May, Le manifeste crypto anarchiste, 1992.

The cypherpunks thus came close to the agorists, in particular by their enhancement of the practice (“the cypherpunks write code”). Konkin himself was well aware of this similarity when he said in 1995:

“There is a new battleground for agorists and statists: cyberspace, where agorist cypherpunk road warriors are ahead of Gore’s statist highwaymen. “

Samuel Edward Konkin, The Last, Whole Introduction to Agorism, 1995.

Unfortunately, the cypherpunks failed to implement their ideas satisfactorily. In particular, they failed to come up with a robust digital currency that would work natively on the internet, despite many attempts. It took until Bitcoin for this to happen.

Bitcoin, the crypto-currency agorism

Satoshi Nakamoto never made clear his motives for inventing Bitcoin. Nevertheless he left some indications in his statements. In particular, to a person who told him that he would not find a “solution to the political problems in crypto” in 2008, he retorted:

“Yes, but we can win a major battle in the arms race and gain a new area of freedom for several years.

Governments are good at cutting off the heads of centrally controlled networks like Napster, but purely peer-to-peer networks like Gnutella and Tor seem to be holding up. “

Satoshi Nakamoto

Martti Malmi, the young Finnish developer who was helping Satoshi Nakamoto during Bitcoin’s early days, also wrote a short intro on Freedomain Radio’s anarcho-capitalist forum in 2009:

“The system is anonymous, and no government could possibly tax or prevent transactions. There is no central bank that can depreciate the currency with the unlimited creation of new money. The widespread adoption of such a system sounds like something that could have a devastating effect on the state’s ability to feed itself from its livestock. “

Bitcoin is therefore an ideal digital currency concept for agorism thanks to its resistance to censorship and thanks to the absence of seigniorage. Bitcoin is a way for agorists to “give back to Caesar what is Caesar’s, and to God what belongs to God” by stopping the use of state currency like the euro, which is closely linked to the levy of state wealth. , and using exclusively free, neutral and essentially decentralized money.

But it goes further: not only does Bitcoin exist for the free market, but also through the free market. Its security model is indeed not political, but economic. To operate, it does not require state authorization, but relies on economic incentives from minors and users. Its preferred territory is therefore the gray market and potentially the black market, and not the white market.

During its short history, Bitcoin’s compatibility with Konkin’s agorism has been exemplified by the dark web marketplace Silk Road. On this platform, people could buy and sell illicit products (mainly drugs) with bitcoin, and receive their products directly at home, by post.

Moreover, it was not just a mundane black market affair, but a pure agorist experience. Indeed, the creator of Silk Road, Ross Ulbricht, has openly admitted to having been influenced by the philosophy of Samuel Edward Konkin III to design his platform. Himself a lover of Mises and Rothbard, he found himself deeply in this way of seeing the world. On March 20, 2012, under the pseudonym Dread Pirate Roberts, he wrote:

I read everything I could to deepen my understanding of economics and liberty, but it was all intellectual, there was no call to action except to tell the people around me what I had learned and hopefully get them to see the light. That was until I read “Alongside night” and the works of Samuel Edward Konkin III. At last the missing puzzle piece! All of the sudden it was so clear: every action you take outside the scope of government control strengthens the market and weakens the state. I saw how the state lives parasitically off the productive people of the world, and how quickly it would crumble if it didn’t have it’s tax revenues. No soldiers if you can’t pay them. No drug war without billions of dollars being siphoned off the very people you are oppressing.

Source : Silk Road Forum

Silk Road was a resounding success: between February 2011 and July 2013, the platform brewed the equivalent of $ 183 million in sales. However, it seems that the bet was too big and the platform ended up being closed by the FBI in October 2013. Ross Ulbricht, him, was arrested then sentenced to life imprisonment by the American justice, with the obvious aim to make an example of it. But the idea stuck, and many other marketplaces of the same type (the famous “darknet markets”) have now taken over.

Bitcoin thus constitutes an agorist currency model by reducing the capacity of the state to withdraw the wealth of the people who use it. Evolving in cyberspace and being economically secure, it exists for the free market and the free market, honoring the principle of coherence laid down by Samuel Edward Konkin III. In practice, this translates into the emergence of a multitude of gray and black market uses, of which Silk Road is the best known example.


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