The death of Democracy is around the corner — what will replace it? As Bitcoin changes the very fabric of society, we’ll need new modes of governance and coexistence.

With each new installment of this series, the Clown World simulation takes it up a notch.

.” by Frank Herbert


We’ve spent an entire series on democracy, so there is no need to explore that model any further. Let us instead turn our attention to socialism. We all know that socialism’s many incarnations have failed, irrespective of whether they start with the c or the f word. Many of us even know why it fails, again and again, i.e.; it’s a ridiculous, anti-life, pro-entropy idea.

Despite this, there is an entire cohort of people out there calling themselves “progressive Bitcoiners” and even “socialist Bitcoiners.”

It’s baffling. So let’s clear something up:

Socialism CANNOT exist on a Bitcoin standard.

Bitcoin moves social order and operation onto an economic standard and the idea of a “socialist economy” is simply a contradiction in terms.

In order for an economy to exist, there must be calculation. In turn, there must exist both private property and decentralized information flow (the highest fidelity being the pricing engine of the free market) to derive the values from which to make these calculations.

In a socialist setting, this is impossible because allocations of resources are pre-ordained and there is no room for arithmetic calculation for the purpose of better utilization or economisation of resources, time or energy.

If no private property exists and no pricing can exist, then no form of calculation nor economisation can exist, meaning we are squarely in the realm of “politik.”

In that sense, socialism, communism and their collectivist cousins are all forms of economic regression and reversion to a form of primitivism. They have no place on a Bitcoin standard, which is fundamentally economic and evolutionary in nature.

Bitcoin is NOT political. It is raw, organic capitalism in action. It embodies both the static (e.g., immutable timechain), and the dynamic (e.g., mempool, the market). It is chaos which through an emergent, probabilistic process, creates order.

There is no central management or order by committee. The consequences of being on such a standard cannot be predetermined, nor can calculations be made for the economic actions of individuals constituting the greater system who each control the keys to their own wealth (their own private property).

There are irreconcilable inconsistencies at every layer, and as such, there cannot be socialist territories (at any scale beyond perhaps the Dunbar number) on a Bitcoin standard patchwork of city-states. We must think beyond these broken paradigms.

Anarchy And Anarchism

Anarchy, aka the “law of the jungle” is simultaneously the least understood and most vilified of all modes of human organization, despite being “the natural state of things.”

By virtue of living in modern cities, under “rule by government,” people believe we’ve somehow transcended the jungle, when in fact all we’ve done is transform it.

Just because we live in a statist paradigm, does not mean that those “states” do not compete on a macro-anarcho-paradigm (notwithstanding the push toward a centrally-managed globalist state in which jurisdictional arbitrage and experimentation is eroded).

The relationships between China, Russia, North Korea, the EU and the U.S., whilst at times seemingly coordinated, are actually anarchic. They operate in their own self-interest and will coordinate when it suits their own geo-political agendas – only their coordination or agendas presuppose the forced compliance of their citizenry. In other words, they operate in the realm of anarchy and we are forced to operate in the realm of slavery.

The following quote by Juvenal, nested in a quote by Edmund Burke, nested in a quote by Benjamin Marks, editor-in-chief at sums this up nicely:

“Even absolute government fails to escape anarchy. The supreme judge has no superior authority; he is in a state of anarchy. Every criticism of anarchy in defense of government therefore fails, for no one ever governs the governors and we never really get out of anarchy; yet it is precisely for the combating of anarchy that government is defended. Edmund Burke called this the ‘grand error upon which all … legislative power is founded’:

“It was observed, that men had ungovernable passions, which made it necessary to guard against the violence they might offer to each other. They appointed governors over them for this reason; but a worse and more perplexing difficulty arises, how to be defended against the governors?

“‘Quis custodiet ipsos custodes?’”

[Juvenal’s “Who will govern the governors?]

Therein lies a big problem, and one that no amount of absolute government can ever solve; for the more absolute a government, the more tyrannical it becomes.

So if anarchy is inescapable, and merely comes in different flavors, shapes and sizes, what do we do?

First of all, recognize that it’s the natural state of things and that you’ve likely come into contact with it. Secondly, separate the organizing principle of “voluntarily-adopted rules,” from the more controversial “rejection of rulers.” You’ll quickly realize it’s neither scary, nor nuts.

Your local Sunday farmers’ market is a local example of anarchy, where self-interested vendors (irrespective of how friendly and altruistic they are toward each other) congregate to sell their goods without the need for some bureaucratic authority to tell them what to do.

All free markets are the same in fact. They stem from anarchy, and they find their own equilibrium without the need for some idiot bureaucrat to “regulate” it and get in the way.

The question is not ‘“how do we avoid that reality,” but “how do we live with it?”

The answer always lies in fostering stronger individuals, stronger communities and allowing the market to drive innovation in the protection and preservation of private property (the law). Humans and the groups they voluntarily form are perfectly capable of doing so in the absence of a monopoly on violence. We’ve been doing it long before “the State” arrived, and will do so long after it dissolves.

Bitcoin will once again enable anarchy at smaller scales so that humanity can flourish through competition and cooperation, not flounder through compulsion.

Of course, as we make this transition (as is the purpose of this series of essays) we will want to become acquainted with the different flavors of anarchy, and their modalities.

To begin with, we have “anarchism.”

As the name suggests it is an attempt to codify anarchy into a mode of coexistence. The core principle is that individual freedom can only be achieved if the power one can wield is limited to power over oneself. The boundary of one’s freedom is another’s property, and those who try to assume power over others face expulsion by the individuals making up said society.

The anarcho-capitalist variation is the same except it emphasizes the central importance of private property rights (the boundary and limitation) and the capitalist process (the driver for progress). Of all forms, this seems to be the most logically consistent and practical.

The anarcho-socialist version is like the three-wheeled vehicle, that’s neither tricycle, nor car, that neither works, nor is logically consistent. Don’t waste your time with such stupidity.

Voluntaryism, concerned more with interactions than power, is just the more “acceptable” version of anarchism. It recognises that a free and functional society is dependent upon the free and voluntary participation of the individuals constituting it — a principle deeply embodied in Bitcoin, and exhibited at your local farmers’ market.

Agorism is a more activist version of the theoretical anarchist modalities, where all relations between people are voluntary, but people also engage in counter-economic activities to minimize what they contribute to the state in the form of taxes, license fees, etc. I guess this is a more transitional modality, and perhaps less applicable on a Bitcoin standard. We shall see.

Note that the common thread in all of these logically consistent variations of anarchism is not the absence of rules, but specifically the absence of rulers.

Image source: Giamoco Zucco’s Twitter

This distinction is so important to note.

The cognitively-functional proponents of anarchism recognise that all games and forms of organization require rules, but they reject the idea of “rulers” who can change the rules, i.e., the elected or absolute kind. They know the state apparatus necessary for such rulers to rule virtually ensures that the most adept criminals just coalesce around it. Once hijacked, they can simply change the rules in their favor or force others to adopt rules they’ve concocted.

That is why stupidities like democracy always end up working against the very “citizens” who voted for it!

That is also why Mikhail Bakunin’s maxim is so accurate:

Anarchy is just the natural, voluntary organization of free, mature, responsible individuals who believe that the market can provide anything people need better, faster, cheaper, than the government can in its vacuum of economic consequence.

I know it’s hard for some people to come to terms with this simple reality. Maybe it’s because they’re internally inadequate and secretly yearn to be told what to do, or perhaps it’s a projection of their own desire to rule over others. Or a blend.

Whatever the case, people like Peter McCormack who criticize anarchy and the non-aggression principle (NAP) by calling failed states like Somalia, examples of “libertarianism” are moronic. Conflating the “protection of private property rights” with “the State” doesn’t make you edgy or “realistic.” It makes you uninformed.

The entire disagreement boils down to an inability to comprehend that an individual can defend themselves, nor that any other form of group or market-emergent organization can protect and preserve property rights.

Newsflash #1: Individuals are their best first responders.

Newsflash #2: The government sucks at protecting you.

Newsflash #3: The cornerstone of libertarianism and logically-consistent forms of anarchy is private property rights. The problem in Somalia is their complete absence! The necessary limitations and boundaries for peaceful coexistence are not present in failed states, where pure chaos reigns. There is no capitalist process. There is no private property. There is only theft and plunder, the very evils libertarians and anarcho-capitalists stand against.

So, no, Somalia is not libertarian, not anarchism, nor even anarchy. It is the blind, unhinged chaos of a failed state with no moral compass or rules.

I must quote Frederic Bastiat here again, as I have in previous parts of this series:

“[E]very time we object to a thing being done by government, [defenders of government intervention claim] that we object to its being done at all. We disapprove of education by the state — then we are against education altogether. We object to a state religion — then we would have no religion at all. We object to an equality which is brought about by the state then we are against equality, etc., etc. They might as well accuse us of wishing men not to eat, because we object to the cultivation of corn by the state.” — Frederic Bastiat, 1850

A monopoly on violence (such as the case in Somolia) does not fix this. It just gives the biggest thug the guns and the legal right to use them, then devolves into the institution where those we want to protect ourselves from congregate.

Instead of a robust society in which private property rights are first and foremost enforced by the individual, and then protected by a market of competitive providers, we end up with a bureaucratic apparatus that uses its monopoly to encroach upon the very property rights it was instantiated to protect.

An anarchist society is one which trends toward strength, resilience, independence and responsibility. It is smaller, nimbler and more values-aligned internally. All the services the state provides, from regulation, to licensing, to judicial, policing and defense can all be better provided by competitive private entities who are accountable to the customer and the market.

The only thing we do by centralizing these necessary services, and bestowing their provision to a monopoly is we give the criminals a crevice to initially hide, and then an apparatus to wield in “legally” perpetrating their crimes.


Localism is the natural antithesis to globalism.

It’s the idea that instead of one bureaucratic committee making decisions on behalf of larger and larger populations, that local bodies should govern local populations based on the unique cultures, values and ideas of their local territory.

In fact, I would include the unique terrain and resources of their local geography too.

The end goal for globalism is that one committee decides everything for everyone on the planet. Brainlets think this is a good idea because they view humans as linear entities to be plugged into a spreadsheet and simply shuffled around like numbers.

Localism, on the other hand, assumes complexity is the standard and recognises that diverse humans cannot be herded into one direction, under one directive, like mindless sheep.

Localism is built around the family unit and projects outward to the tribe (e.g., extended family, neighbors) and then community. By definition it does not scale beyond that which is “local,” because its mechanisms for trust are reputation and relationships. In other words it has a natural limiting factor in that it cannot work for populations large enough for reputations to get lost. Restraints to poor behavior naturally emerge as a way to ensure you’re not ejected from the local community or society.

In distinct contrast, large territories that encompass millions or even hundreds of millions of people, where the potential looters do not know their victims, and vice versa, the human desire to enrich oneself at another’s expense is subject to little or no restraint. Democracy is the pinnacle of this anti-achievement.

Democracy breaks down the family unit by replacing dependence on family bonds with dependence on the State. The government becomes the parent, the caretaker, the guardian, the nanny, the uncle, the aunt and in time, your overlord.

There’s a reason why terms like “Nanny State” and “Uncle Sam” have emerged to describe the apparatus of government.

Democracy is anti responsibility and attacks society at its very core and most important level; the individual. When you remove responsibility you transform individuals into infants. This process turns into a self-reinforcing downward spiral where the more infantile people become, the more they require a nanny state; and the greater the nanny state grows, the more infantilised individuals become.

This is what we’re seeing in society today. The masses have degenerated beyond the status of even sheeple and become real-life lemmings, marching right off the cliff.

Image source

Localism is a philosophy of responsibility, relationships, reputation and robust communities disavowing both reliance and dependence on large-scale government institutions.

It is not only more morally consistent because it allows humans to coalesce around similar values, creating internal homogeneity (peace) and external heterogeneity (diversity), but it is for similar reasons the only economically viable way to operate a territory. It’s like an extension of the “1000 true fans” idea from Kevin Kelly, or simply the idea of a niche. Niches are much more profitable. Mass market only remains viable insofar as the machinations of the state create Cantillon effects that enable zombie corporations and insiders to remain competitive by extraction, regulatory moats and access to free money.

Localism is the cure to globalism, but in order for it to be successful, there needs to be a cure for politics and statism first. There must exist unbreakable economic “bounds” which we’re all held accountable to by virtue of their existence. I don’t have to tell you by now what “fixes this.”

Localism and Bitcoin are compatible. In fact, they’re more than compatible; they’re like blood and body, or fish and ocean. For localism to work and not be destroyed by some bumbling bureaucratic fools (or bad actors), the cost of defending one’s wealth must be low, and the consequence for non-economic (i.e., politically deranged) behavior must be high and immediate.

Localism is the natural state, but the natural state cannot thrive, let alone survive when the artificial state envelopes, consumes and destroys everything around you.

Localism and large-scale governance modalities, like democracy, on the other hand are entirely incompatible.

We will get to localism in the end. The world must and will fragment. The only question is how do we get there?

Will we still have the infrastructure we’ve spent centuries building still available to us, or will we blow it all to pieces and wind up in a “localist” paradigm with technology no more sophisticated than the Amish … or worse.

My hope is that we fragment into city-states and transform the capital that is currently being wasted consciously. Local-scale governance seems to be where optimal economic performance will lie, alongside containing an optimal number of people to achieve both economies of scale without the diseconomies of scale notable in large scale cities, states or nation-states.

In Closing

Bitcoin is simultaneously voluntary, and essential.
It is both chaos and order. It is physical and metaphysical.

It’s a living, breathing paradox on so many levels.

It allows people to become sovereign over the product of their labor, arguably an extension of their property beyond their thoughts, ideas, body and family, which comes with ramifications that we’re yet to truly fathom.

It gives people a choice to create what they want with their wealth and experiment with new forms of cooperation, governance and coexistence, which will inevitably lead to both successful and failed experiments.

We will simultaneously see anarchy, small-scale communes, new forms of hierarchical order and quite possibly an age of modern monarchies; which we shall explore in Part Five.

Some of you may want to prove me wrong and build a communist or socialist utopia on a Bitcoin standard, one day.

And by all means, if you want to go ahead and build a city in which you ask that members share their wealth around by the will of some form of centrally-managed committee, go for it. I don’t think many people will stay, but you’re free to try it out.

The whole point of Bitcoin is to make forced collectivism impossible.

What succeeds in the end I do not know, but based on principles of what we’ve discussed in this series, and the works by the greats we’ve quoted, we can make some assumptions.

I want to close this out with something for you to ponder before the fifth and final installment of the series…

The Mob

I was in an Uber in Las Vegas last week and the driver said the most interesting thing …

There was a shooting at a shopping center nearby the location he was dropping us off at. He told us to be careful and then offhandedly said:

“This would never have happened while the mob ran the place.”

I found this profoundly interesting. Here was clearly a conservative man, probably in his mid-fifties, pro “law and order,” advocating for … the mob?

I asked him about who runs Vegas these days. He responded (I’m paraphrasing):

“The corporate mob came and took over from the old mob. The old guys aren’t allowed anywhere near here anymore, and the guys who took over don’t give a crap.”

This gentleman recognised “the mob” was an institution of law and order, and although he may not have articulated it this way, because the OG mob was economically accountable (i.e., they couldn’t print or tax their way out of a mistake), the services they rendered were far superior to those their broken government of Las Vegas currently offers.

This is consistent with the idea that the government is simply the biggest “mob,” with the most gun-wielding thugs. They win not because they’re the best, but because they’re able to fund themselves through the most widespread forms of theft (taxation and inflation) and obtain the subsequent “monopoly on violence” to solidify their power.

Knowing this, the most adept criminals simply adopt the maxim, “If you can’t beat ‘em, join ‘em.”

This is why governments and legal monopolies of any kind are so dangerous. They become the very thing they were instituted to protect us from.

I later reflected on his comments, and it reminded me of James Dale Davidson and William Rees-Mogg’s “Sovereign Individual.” Throughout the book, they point out the rise of mobs and gangs against the backdrop of the failing state. As power structures crumble, new entrants will emerge to fill those voids.

I wonder what the changing world order will look like as criminals realize the ideal apparatus for theft is no longer the state? Will they rise up once again and muscle in?

How will mobs form on an emergent Bitcoin standard?

Will these territories be run in fact, by economically accountable “mobs” who offer protection services at a fairer market rate than the current governments we are subject to?

Will the families that run these mobs resemble mini-monarchies?

I don’t know, but chaos will surely ensue until a new, stable anarchy is achieved.

Until next time …

This is a guest post by Aleks Svetski, Author of The UnCommunist Manifesto, The Bitcoin Times and Host of Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

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