In finance, the Minsky Moment describes the instant a market collapses from reckless speculation. This week we’ve seen the Trudeau Moment, when liberal consensus collapses from a reckless politician. In both, a years-long or decades-long process suddenly takes a lurch.
In case you ignore news, last week in Canada the government suspended civil liberties to crush peaceful protesters. This is suddenly waking millions of people to the need to protect ourselves from increasingly rabid governments. Bitcoiners have known this for some time, but it’s now becoming clear to the Bitcoin-hesitant and the private money deniers.
First, I think many of us expected this sooner or later. The West has been moving towards fascism — a state-dominated society with private residual claimants — in a ratchet-like process for over a century. This started as the Bismarck model was exported first across Europe, then in the US by Prussia-trained public schooling activists, followed by the 1883 Pendleton Act that created a permanent bureaucracy — the “deep state.”
These bureaucrats went on to seize power piece by piece across the West, occasionally in-fighting when one got ahead of the game and annexed bits of Poland. The game was slow and steady so everybody can advance at a speed that doesn’t wake the victims. In case you wonder what’s the purpose of OECD, IMF, or G7 summits.
That measured speed radically accelerated during Covid and across the West. Core liberal rights including freedom of speech, freedom of peaceful assembly, even free exercise of religion came under attack to a degree I think many of us didn’t expect. This happened not just in usual authoritarian suspect Europe, but across the English-speaking world.
So I think Canada is in many ways a canary in the coal mine: a fast-forward preview of what’s falling into place across the West, and what is coming for many of us.
What Bitcoin Did in Ottawa
Bitcoin quickly took on a star role in Ottawa when the government threatened anybody who funded the peaceful protests – common in authoritarian regimes. Canada has an enormous number of smart and politically aware Bitcoiners, who did everything they could to help out – some went to Ottawa to personally help truckers get connected and get funds, while other Canadians exiled due to vaccine mandates did what they could from abroad, donating or giving technical support.
Now, what Canada did wasn’t an outright ban, rather it used its existing financial surveillance apparatus to choke off funding. It sent letters to banks, financial intermediaries -- anybody it could threaten – demanding they cut off protesters and their supporters.
This meant the ban hit, not only the Canadian dollar system, but also any institutional crypto that can identify users, and that therefore can censor them on behalf of the regime. So exchanges, custodians, corporate holders. Incidentally, comparable surveillance systems exist across the West, ostensibly to monitor tax evasion and terrorism but perfectly capable of hunting down peaceful protestors.
So Canada highlighted not just how vulnerable state money is, but how vulnerable institutionally-hosted crypto is. Indeed, the only way for a trucker to keep feeding his family was to remain outside the surveillance panopticon altogether: keep transfers Bitcoin-to-Bitcoin between self-hosted wallets. The problem is how do you actually buy groceries. Protesters have been using anonymous gift cards as a workaround, but that’s a very vulnerable link that could easily be banned.
Ideally, of course, we’d have enough use of Bitcoin that nearly all stores accept it and that self-hosted Bitcoin couldn’t be banned any more than physical cash could be banned. Alas, in the near term only El Salvador’s Nayib Bukele is working towards that kind of world. Canada, Europe, or the US don’t look ready to follow anytime soon.
Is Repression Coming to America?
Whether Canada-style repression spreads to the US depends on both idiosyncracies and big-picture factors. Like all complex processes, the statistical noise and the statistical trend.
First, the noise: the idiosyncratic factors unique to Canada. Throughout Covid, Canada has been much more authoritarian than the US: I was living there and writing on policy through early Covid, and there were an amazing number of things you couldn’t write about Covid mandates: you couldn’t mention masks, you couldn’t compare Covid to influenza. Indeed, I was one of the only people in Canadian punditry writing against lockdowns, largely because I was American so didn’t care about my future employment prospects in Canada. The non-left in Canada was intimidated, with very few exceptions like Rebel Media or the Post Millennial.
The other idiosyncracy to Canada is Trudeau. He’s not famous for his brain, and he isn’t a very competent politician — a smarter PM would’ve had coffee with protestors, then did some tweak to make them go home. Because bumping up trucker vaxes 2% wasn’t, objectively, worth the political capital. He also has a family history of sympathy, indeed of practice, of authoritarianism: his father, Pierre, sent tanks into the streets of Montreal as Prime Minister in 1970, and both he and his father were fervent admirers of Fidel Castro, only half-jokingly rumored to be Justin’s father via his promiscuous mother.
So Canada is unique in some ways. Still, the trend is similar in the US. Given how January 6 protests were prosecuted, Biden and Dems would love to crush dissent just as much as Trudeau. And I do think Biden is, if anything, dumber than Trudeau and likely to be just as incompetent.
But I think the main difference is simply public opinion: American public opinion remains far more skeptical of government than in Canada. We’ve seen, for example, a recent wholesale abandonment of Covid restrictions from the American left after bad polling, even as Trudeau spent the week trampling grandmothers to squeeze a few more jabs out of truckers. In short, the American left will need another generation to train Americans to Canadian levels of obedience and credence.
Speed, I think, partly depends how it turns out in Canada: If Canadian public opinion turns against Trudeau and he’s dumped, other politicians will take note and draw a big “here be dragons” on their mental map. If, on the other hand, Trudeau gets away with it, then other countries will be emboldened.
But whatever happens to Trudeau, I think this sort of thing will come again, simply because governments desperately want to lock in control. They know anti-elitism and populism are on the rise, they have utter contempt for those who just want to be left alone. Even center-right mainstream parties have no sympathy for blue-collars and an increasingly populist working class, and will do what they can do shut them up and shut them down: disrupting, sabotaging, and slandering them just as in Canada.
After all, the totalitarians spent 3 generations building this control apparatus, and they just got a taste of victory. They won’t let go voluntarily.
How to Stop It?
I’d argue today’s best analogy is 1918, just after World War I ended. During those four years of war the entire west had gone full-bore socialist, termed at the time “War Socialism.” And those bureaucrat-Gods spent the rest of their lives trying to recapture the magic. Unfortunately, they largely succeeded, from FDR’s “New Dealers” to their ideological fellow-travelers in Berlin and Rome, London and Moscow. Like the Great War, Covid gave a generation of bureaucratic pets the taste of human flesh, and we must now be very wary of them.
So, yes, I think Trudeau is a sign of what’s to come. He himself may fail; given his unimpressive personal traits he probably will. But the Will to Power his authoritarianism represents is something we’ll be fighting off for decades, hopefully successfully this time.
Fortunately, this time we have an ace up our sleeve: Bitcoin. Bitcoin takes the money-printer out of the hands of totalitarian government, radically curtailing their ability to bid away society’s resources. But Bitcoin’s biggest advantage, politically, is it makes it impossible to silence dissent. They can reduce it, yes, they can harass and arrest and trample. But so long as there is a way to transact, hence to coordinate and marshal resources and messaging, they cannot silence us. The harder they repress, the more we shrink, but the more powerful our remaining messaging gets. This is how governments that shoot dissenters nonetheless collapse.
As for how to help, the best we can do for now is to on-board millions, spread awareness, get more people on peer-to-peer rather than institutional, and do what we can to encourage El Salvador-style Bitcoin monetization that put money, exchange, and the ability to organize politically in the hands of the people. I do believe the totalitarians will lose this time, and I believe Bitcoin is essential to ensuring that victory.
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