[Column] Welcome to the age of artificial scarcity!

Posted on : 2022-01-18 18:01 KST Modified on : 2022-01-18 18:01 KST
(provided by Getty Images Bank)
(provided by Getty Images Bank)
Slavoj Zizek
Slavoj Zizek
By Slavoj Žižek, Global Eminent Scholar at Kyung Hee University

The best indication of the change that affects our financial system is the rise of two new interrelated phenomena: bitcoin and non-fungible tokens, or NFTs. Both emerged out of a libertarian idea of bypassing state apparatuses so as to establish a direct line of communication between concerned parties. In both cases, we see how the idea turned into its opposite: bitcoins and NFTs have their own 1% which dominates and manipulates the field. We must neither praise bitcoin and NFTs as a new space of freedom nor dismiss them as the latest speculative capitalist madness.

In the case of bitcoin, its value is not guaranteed by any public institution of authority, but it is determined by what people will pay for it — and they are ready to pay for it if they believe in it and trust it. Here, in the domain of cold and ruthless financial speculations, belief and trust enter the stage. Bitcoin is like an ideology, such as communism, in that it exists as a real force only if enough people believe in it. There’s a similarity to how stocks are priced, but the difference is that, in principle, at least, the value of stocks is not purely self-referential — it refers to investments that are expected to generate profit from “real” production. And unlike gold and other precious metals, bitcoin has no intrinsic “real value.”

Bitcoin miners, who work to construct and secure the space for bitcoin in the digital big Other, are proletarians in the new domain. The paradox here is that they do not work to produce new use values but to create new space for exchange value. This process creates a heavy ecological burden, meaning that an individual who mines for bitcoins pollutes our environment more than a miner digging coal. The potentially progressive idea of bitcoin as global, independent of particular state apparatuses thus actualizes itself in a form that undermines its premises.

The situation is similar for NFTs, which were also invented as a decentralized, anti-state libertarian attempt to save the autonomy of artists from institutional clutches. The price we pay for this idea is that, as Nelson Wan wrote, “the creation of an NFT is an attempt to create artificial scarcity where there is none. Anyone can create an NFT for a digital asset, even if there’s no actual asset behind it!”

The paradox of NFTs is that they introduce scarcity into a domain in which items are accessible to everyone for free. For this reason, NFTs compel us to rethink the notion of property, of owning something in a digital space.

What is intriguing about NFTs is the idea of taking a digital asset that anyone can copy and claiming ownership of it: an NFT has almost no use value (beyond some social prestige to its owner), what sustains it is its potential future exchange value. It is a copy with a price, an item of purely symbolic ownership that can bring profit.

The key Hegelian insight here is that, although bitcoins and NFT appear as an anomaly, a pathological deviation of the “normal” functioning of money and commodities, the two effectively actualize a potentiality that is already contained in the very notion of commodity and money.

Exemplary is the figure of Peter Thiel for whom “AI is communist” and “crypto is libertarian.” Why? Because with AI, “you’re sort of going to have the big eye of Sauron watching you at all times, in all places,” says Thiel. It’s impossible to miss the irony here: the libertarian anti-Leninist Thiel relies on the very “Leninist” AI mechanisms he deplores.

The same goes for Steve Bannon who openly declares himself to be a “Leninist” for the 21st century, in that he wants to bring down big corporations and apparatuses of the state which control and exploit ordinary working Americans. But Bannon had no problem using AI when it came to Donald Trump’s campaign for the presidency.

There is no contradiction between Thiel’s anti-Leninism and Bannon’s Leninism: if we understand under “Leninism” the practice of total digital control over the population, they both practice it while maintaining a libertarian face.

Digital control and manipulation are not an anomaly, a deviation, of today’s libertarian project. They are its necessary frame, its formal condition of possibility. The system can afford the appearance of freedom only under the conditions of digital and other modes of control that regulate our freedom. Because for the system to function, we have to remain formally free and perceive ourselves as free.

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