Cryptocurrency Is Agorism in Action

So wrote Samuel E. Konkin III in the “New Libertarian Manifesto” (The quotes in this article all come from NLM.) SEK3 died in 2004 and missed the opportunity to embrace cryptocurrency. As an associate and friend of his, however, I guarantee he would have reveled in it.

As it is, NLM foreshadowed one of the most important effects crypto will exert on individuals and the world. Crypto will mitigate the coming collapse of the dollar and of the global economy, which will probably take down several nation states with it. Like crypto, Agorism will do so by offering a non-statist method to create and use wealth while increasing individual freedom. Both of them function outside the box.

The book “New Libertarian Manifesto” (NLM) by libertarian-anarchist Samuel E. Konkin III (SEK3) launched a movement that has grown amazingly over the last few decades: Agorism.

This is the movement of peaceful revolution through counter-economics. Counter-economics is “the study or practice of all peaceful human action which is forbidden by the State.” Agorists, SEK3 wrote, are “counter-economists with libertarian consciousness.” As such, they refuse to participate in the state or to use violence except in self-defense.

Agorism According to Samuel E. Konkin III

“We witness to the efficacy of freedom and exult in the intricate beauty of complex voluntary exchange. We demand the right of every ego to maximize its value without limit save that of another ego. We proclaim the age of the Market unbound, the natural and proper condition for humanity, wealth in abundance, goals without end or limit, and self-determined meaning for all: Agora.”

Agorism in Action

The key to how Agorism operates outside the box lies in its approach to four types of markets: red, black, grey, and white.

Red markets consist of “exchanges” that involve coercive acts by private individuals, such as a mugging or a threat of harm. Although some coercive acts are popularly associated with the black market, this is a miscategorization. “The Mafia, for example”, SEK3 noted, “is not black market but acts as government over some of the black market which collects protection money (taxes) from its victims and enforces its control with executions and beatings (law enforcement), and even conducts wars when its monopoly is threatened.”

Black markets consist of “anything non-violent prohibited by the State and carried on anyways.” The goods and services exchanged include drugs, censored material, prostitution, fake documents, illegal housing, bootlegging, gambling, and knock-off products. The black market consists of victimless crimes. The importance and extent of the black market in any given society depends on the size of the white market that co-exists beside it. In the former Soviet Union, for example, the black market was vast because the white market-the “official” Soviet economy-was micro-controlled by the state and could not deliver the needs of the people.

Cryptocurrency Is Agorism in Action

Grey and White

A grey market refers to the trade in goods and services that are not in-and-of themselves illegal but which are obtained or distributed in ways that are. Unlicensed and under-the-table labor, such as “freelance” plumbing or construction work, are examples. Plumbing is not illegal but the state demands above-board plumbing so as to take its cut in the form of licenses and taxation.

The line drawn between an act or exchange being red, black, and grey depends on the level of aggression that is present. Consider the act of killing someone. “Murder is red market”, SEK3 explained, “defending oneself against a criminal (when the State forbids self-defense) … is black in New York City and grey in Orange County.” The difference, at least when NLM was published in 1980? Orange County recognized the right to self-defense but limited the circumstances in which it could be exercised.

A white market consists of legally accepted transactions that are regulated by the state and taxed. These exchanges are what most people conduct on a day-to-day basis. In a statist system, the economy will naturally tend toward black and grey zones because that is where financial freedom and profit exist. The restraining factor is fear of the state and punishment. As a practical reality, however, “even large businesses today could go partially counter-economic, leaving a portion in the ‘white market’ to satisfy government agents and pay some modicum of taxes and report a token number of workers. The rest of the business would (and already often does) expand off the books with independent contractors who supply, service, and distribute the finished product. Nobody, no business, no worker, and no entrepreneur need be white market.” Going grey is a choice, albeit one with risks.

The Four Categories of Crypto

Crypto can be viewed through the lens of all four categories. Red market crypto occurs when someone hacks into another person’s wallet or uses ransomware to extort; this is aggression. Black market crypto is when an e-currency is prohibited by the state but people use it anyway because it offers freedom and a superior store of wealth; Venezuela is an illustration. Grey market crypto happens when a legal crypto is exchanged in an illegal manner, such as peer-to-peer trading that avoids a state’s tax requirements. White market cryptos are epitomized by state- or central-bank issued ones but also include crypto exchanges that comply with the state requirements on issuance and reporting; this latter form of crypto functions as an extension of the state, which is the antithesis of the free market and freedom.

In writing of Agorism, SEK3 highlighted an impact that cryptos share as well. Namely, they not only soften the effect of statism on the individual who employs Agorism and crypto, they also provide a softer landing for society when the economy collapses. “Counter-economics provides immediate gratification for those who abandon statist restraint … But only New Libertarianism offers reformation of society into a moral, working way of life without changing the nature of Man. Utopias may be discarded; at last we have a glimpse of how to remold society to fit Man rather than Man to fit some society.”

This means the way to individual freedom and prosperity is the same as the path to societal health. Indeed, it would be remarkable if the paths diverged since society is nothing more than a gathering of individuals who share the same basic nature. The fundamental nature of man is to exchange for economic and personal gain, and the human need to exchange is what creates societies in the first place. The wellbeing of the individual is the wellbeing of society.

Free Exchange Without Coercion

For a genuine exchange to occur, however, the individuals must act voluntarily. To the extent aggression is present, the “exchange” becomes coerced. The more coercion, the less beneficial the “exchange” is to anyone but the aggressor. Otherwise stated: the black and grey markets allow individuals and societies to flourish. The red and white markets drain them of energy, prosperity, and freedom.

Unfortunately, crypto may be at a disadvantage vis-a-vis Agorism when it comes to functioning in the white market. It is not only possible but also commonplace for people to use black and grey markets to avoid the state. For one thing, the state often turns a blind eye either because the stakes are so small or because it realizes that society’s survival depends on under-the-table trades; the Soviet Union was an example of the latter. But the stakes are far from small with competing currencies, and the state’s survival depends on maintaining its money monopoly. As cryptocurrency gains in popularity, it increasingly threatens state power. There will be no blind eyes when it comes to crypto.

Those who value the prosperity and freedom of crypto would be wise to always prefer black or grey market means even when convenient white market ones are available. The former strengthens the individual and society; the latter strengthens the state.

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