As Facebook faces growing criticism for bias and privacy issues, it is moving ahead with a massive new project. The giant tech firm is putting together a consortium to launch a cryptocurrency.
Everything about the project should trigger red flags. The possibility of abuse is everywhere. However, Facebook is treating it like one more app or start-up in its vast cyber-empire.
The new currency will be called the Libra. It will be fully backed by deposits and presented as a unit based on a basket of real currencies, which will be controlled by an independent board of partners in Geneva, Switzerland. Because the unit’s value is defined by reliable currencies, the Libra is not expected to be unstable, like Bitcoin or other such experiments. It can thus function like money as a means of exchange and not a volatile, speculative commodity.
Pros and Cons
On the surface, the move is marketed as a means to buy and sell instantly and everywhere. It would help the poor by allowing the transfer of money internationally for a minimal fee. The system will circumvent banks and cut out the middleman. A borderless currency would be one more way to take power away from abusive government.
However, such surface benefits hide more profound dangers involving the new unit. In some ways, this system would merely replace old problems with new ones on a much vaster scale.
For all the talk of helping the poor, the Libra will effectively become the in-house currency for the 2.7 billion users of Facebook, and its Instagram and WhatsApp applications. Sharing in the project are big brand tech companies like Visa, MasterCard, PayPal, eBay, Lyft, Uber and Spotify. Because of their large platforms, they too will profit from the Libra.
The main player, however, will always be Facebook, where most of the power will be centralized. Indeed, Facebook boasts more followers and income than many nations. Adding an important monetary instrument to the mix will give Facebook et al. the ability to create an alternative financial system. This is the stuff of which empires are made. The Libra feeds Big Tech’s monopolistic tendency by surrounding its platforms with a protective glue that will enshrine the market dominance of its consortium members.
A Concentration of Power
This concentration of power is worth noting. The Libra will allow Big Tech to assume functions similar to those normally reserved for governments like issuing money. Far from a free-market initiative on a level playing field, this consortium of super-corporations will make of this new currency a supra-governmental instrument that can remake global currency, upset financial systems and challenge national sovereignty. From the currency, it later hopes to expand into other financial services and credit products.
This select, unelected group of investors will be making decisions impacting the lives of billions. While Facebook assures the public that no transaction data will be used for marketing “without the user’s permission,” many are fearful that the data may find itself in the powerful Facebook algorithms that roam the cyber-marketplace.
The new currency accrues all the benefits of the stable currencies upon which it will be based. However, it will not share in the risks and efforts needed to stabilize money. It leeches off the present international financial system while undermining it.
There is big money in all this. Every dollar, yen or euro of the Libra will be backed by a dollar, yen or euro safely deposited in an established bank. This will generate huge amounts of interest to pay back the initial investors. Representatives of these powerful one hundred companies will become de facto corporate central bankers with great privileges. Their profits amount to a type of seignorage, the profit that governments normally earn from the minting or printing of money.
Dismantling the Present System
This giant step toward a global monetary system is portrayed as liberating. In reality, it is coercive and excluding.
On the one hand, globalized money does make it easier to move funds quickly and effortlessly, and thus facilitates trade. However, the same system exerts pressure on those outside the system. As such massive systems proliferate, such people will be forced to enter the system to survive.
Indeed, many countries, for example, are moving toward a cashless society linked to massive systems. Merchants refuse to take cash, leaving buyers without electronic money locked outside the system.
The issuing of cryptocurrencies like the Libra is part of a great dismantling of past economic structures that once gave some stability to society. Especially targeted is the dollar, which represents the world’s most powerful monetary instrument. America’s enemies, (and even some allies) are hard at work to find ways to circumvent the dollar’s dominance. Disruptions like the Libra cannot fail to chip away at the dollar and the chaotic remnants of the postwar order. They will impact national markets, ways of doing things, the making of products and the selling of goods and services.
Replacing Everything With Global Networks
In the past, people become “massified” by conforming to national markets and systems. Now people become part of the global masses. In today’s interconnected world, people must increasingly join global systems, where all habits, purchases and selling are quantified and standardized. All activities are registered in centralized and shared databanks. Giant companies, or co-ops of giant companies, like that of the Libra consortium, are ideally placed to use this information to target and manipulate markets.
Such global networks are capable of imposing standardized regulations and norms that would supplant those of the nation-state. Such integrated systems are already in place in China. They provide ease in transactions but also the sinister control of the citizens in this communist nation.
An Ideological Weapon
One final consideration on the Libra involves the consortium’s founding members. Most of the mighty one hundred are part of the cutting edge of a liberal establishment that pushes a radical ideological agenda. The multinational and high tech worlds represent all that is most liberal and progressive in politics and culture. They support unfettered access to procured abortion, the homosexual agenda, transgenderism and massive, socialist government.
This ideological agenda will be enhanced immensely if a powerful global currency is aligned behind it. Just as Facebook can deny a page to those it considers ideologically incorrect, so also can the Libra be weaponized against those who oppose the liberal agenda.
Indeed, the Libra will not liberate but enslave.