The Society of Resentment

By Boaventura de Sousa Santos  

July 4, 2024

Source: Originally published by Z. Feel free to share widely


Philosophy’s interest in resentment in the Western world goes back a long way. It is present in Adam Smith’s Theory of Moral Sentiments (1759) as a feeling of frustration and acrimony caused by a certain social position and, in general, has a negative connotation (“unsocial passion”, the great poison of happiness). Nietzsche used the French word ressentiment because he thought that the corresponding word in German (Rachegefühl) did not express the semantic density of ressentiment. Something similar happened with another word, this time German, which became universalized – Zeitgeist. In the Genealogy of Morals, Nietzsche states that resentment is the internalized reaction of powerlessness in an oppressive society in which one has not succeeded. The resentful person is not direct, naive or honest, neither with himself nor with others; he squints as if suffering from strabismus; he likes to hide at the back of reality, in secrecy and clandestinity, wherever he considers himself safe; he knows how not to forget and knows how to wait until the moment arrives; while it doesn’t arrive, he is an expert in humility, flattery and self-deprecation; when the moment arrives, he is more clever, cunning and violent than any non-resentful person (1887). The “noble man”, on the other hand, is incapable of resentment and forgets the offenses of his enemies.

Since Nietzsche, the theme of resentment has not ceased to be present in philosophy, although not always with the same intensity. Phenomenology, in general, and Max Scheler, in particular, delved into the theme of resentment (1915). Sloterdijk found the root of critical theory in resentment culminating in his crusade for the end of critical theory, which both Toscano and Zizek rightly criticized. The interest in resentment captivated psychology and, finally, sociology. From a sociological point of view, Max Scheler’s reflection on resentment is particularly important. For Max Scheler, resentment is a feeling of hatred that results from a certain type of interpersonal relationship; it signals a disorganization of society and a deep crisis of values; it is manifested by a certain perversion of values that leads to a false view of the world. Resentment is a self-poisoning of the spirit, caused by a systematic accumulation of certain emotions and feelings, which generates a “thirst for revenge” on the authority towards which the resentful person feels envy and powerlessness. At the time of his writing, Scheler attributed resentment to a crisis of values that lay in the gradual replacement of Christian ethics by the bourgeois ethics produced by industrialization and machinery.

From Scheler, we can conclude that each society produces its own type (or types) of resentment. I have no particular sympathy for Oswald Spengler’s book on the decadence of the West (1922), but I agree with him when he says that in every age human beings behave in relations with each other in ways that are congruent with the general atmosphere of the time, and even reflect it – the spirit of the age. One of the most prevalent modes in today’s world experience is resentment. Resentment is an emotion or feeling that presupposes a conflict that is not formulated politically, but ethically and morally. To that extent, the question of power and power relations becomes much more complex. In this text, my aim is to characterize the relational world that characterizes resentment in general and then to focus on one of its types. Resentment is an emotion or feeling that manifests itself as resentment, hatred, anger, bitterness, acrimony, indignation in response to something experienced as harm or injustice. It is therefore a reactive attitude that is formulated in an ethical or moral register, rather than a directly political one, and is based on a watertight binarism between victim and aggressor. As such, it implies an unconditional moral justification that does not allow us to consider the complexity of the processes that may lie behind the resentful person’s situation. The person causing the resentment is reduced to the condition of aggressor and the resolution of the resentment can only occur through the aggressor’s recognition of the damage caused, reparation or repentance. Any use of power by the aggressor is, by definition, an abuse of power. The subject of resentment does not see himself acting out of power or interest, but rather for ethical reasons and moral behavior. They see the surrounding world as dominated by hostile powers and only recognize the power to feel offended as their own. This characterization is like Max Weber’s ideal-type, since the different types of resentment can have only some of these characteristics and with different accents. Inspired by Smith and Nietzsche, Fassin proposes two ideal-types of resentment: historical-ideological resentment (Nietzsche) and relational, inter-group-community resentment (Smith). The former refers to historical facts such as long experiences of persecution, genocide or apartheid; while the latter refers to reactions of frustration in relational or group situations that can include police officers, right-wing extremists, long-term unemployed workers, etc. The former refers to suffering of long historical duration, while the latter refers to relational suffering or even “positional suffering”. In both cases, these are emotions or feelings that dramatize harm considered unjust from an ethical-moral point of view, and therefore not immediately political. They always imply the existence and celebration of victims. Both types of resentment demonize the aggressor; in the case of historical-ideological resentment, the intensity of the resentment and hatred makes repentance, forgiveness or reparation almost impossible. In the resentments that abound in contemporary society, we find components of both types of resentment, but it is always possible to detect nuances and prevalences. In this text, I will deal exclusively with the predominantly relational intergroup-community resentment.

Intergroup-community resentment

In this type of resentment, ideological-political convergences between aggressors and victims are often common and become one of the factors that intensify resentment. Such convergences can give rise to parallel militancies, but not genuinely common militancies, because in the latter there tend to be negotiation processes in which binarisms don’t exist or, if they do, they are multiple and neutralize each other (the aggressor and the victim can be on the same side in a certain internal dispute, but on opposite sides in another dispute). Resentment demands unconditional binarism, just like the ethical-moral aggravation that sustains it. Especially in the global North, this type of resentment is prevalent due to the emergence of neoliberalism as the dominant version of capitalism at the beginning of the 21st century and the culture war that sustains the growth of far-right politics and the neoconservatism that accompanies it. They contribute to generating forms of individualistic subjectivation that celebrate autonomy and assert themselves through moral judgments about harm and injustice. The individual political subject is dramatized by being transformed into the center of politics through the exemplarity of its investment.

Neoliberal power generates various types of political subjectivation, but in general they all converge in the moralization of offence or harm and the detour of resistance or hatred towards identifiable and “proportionate” targets, many of which have nothing to do with real power. For this reason, neoliberal subjectivation favors forms of politicization which, in the light of the main vectors of real power, function as depoliticization (diverted or substitutive forms of reaction to real power). Like pain, resentment does not imply knowledge of its true causes. The targets of resentment may themselves be victims of neoliberal power and neoconservatism, but they are converted into aggressors when political subjectivation takes place through resentment. In the countries of the global North, the most typical illustration of this phenomenon is anti-immigrant resentment on the part of the working classes. This is an extreme case of the subjectivization of the politics of resentment, which consists of turning victim against victim.

The ethical-political subjectification of resentment has various nuances. In general, it is characterized by the dramatization of real or illusory harm and the unexamined certainty of its causes; by taking phantasms for reality; by resorting to epiphanies of individual autonomy that are, in essence, the substitution of dependencies; by the creation of a community of victims that enhances Manichean propensity and moral comfort in the face of a hostile outside world; by the conviction that the distribution of resources is unfair or that diagnoses are incorrect, with a total lack of self-criticism; the mobilization of feelings of indignation, resentment, anger, rage, acrimony, which can conceal envy, intrigue, an inability to confront one’s own limitations or analyses that make the origin, size or characterization of the damage more complex. The resentful person maximizes the damage in order to maximize the aggressor’s malice and thus enhance revenge. In extreme cases, the aggressor, more than evil, is the incarnation of evil. The greater the polarization, the less chance there is of reparation, repentance or reconciliation. The resentful person quickly moves from seduction to victimization.

When the resentful person rejects reparation or reconciliation, the only possible resolution to the resentment is revenge. For Max Scheler, the “thirst for revenge” is a form of “self-poisoning of the mind” that results from the frustration caused by a mixture of envy of something you don’t have and the powerlessness to obtain it. Revenge forces extreme reductionism on both the victim and the aggressor. Either of them ceases to be anything other than the victim or the aggressor. The possibility of complex constellations, whether victim-aggressor (to what extent is the victim also an aggressor?) or aggressor-victim (to what extent is the aggressor also a victim?) are no longer possible. The most elaborate form of revenge is sacrificial violence: the scapegoat. Sacrificial violence consists of denying the most inviolable values under the pretext of defending them. One of the most recent imperial struggles has been the “war on terror” which, among many other consequences, has given rise to the so-called “criminal law of the enemy” (I dealt with this topic in Law and Epistemologies of the South, Cambridge UP, 2023). This is an exceptional law in which the rights of the defense, procedural guarantees and the presumption of innocence are suspended in order to act effectively against the so-called “enemy”. It is, in essence, an expression of the right to revenge in which the end justifies the means.

Scapegoating is a specific form of ritual, sacrificial violence whose main objective is to create or reinforce a given social system or organization. According to René Girard (Scapegoating, Violence and the Sacred), scapegoating belongs to the “rituals of persecution” through which societies reject and destroy victims because they are convinced that they destroy or threaten the social order. A scapegoat is chosen – a person or group – who is innocent, sometimes marginal to the community, whose balance is restored when their anger is vented against him or her. Something about the marginality of the scapegoat (the fact that medieval Jews were blamed for the epidemics) makes the execution seem just to the perpetrators, so that the bleeding of society’s anger can be effective and order restored.

As the inequalities and discriminations of neoliberalism increase, we will increasingly live in societies of resentment: total fragmentation of feelings of injustice, the intensification of conflicts between victims and the impossibility of articulating struggles against capitalist, colonialist and patriarchal domination. These struggles leave the real aggressor unscathed and relieved by the fact that the forces and reasons for resistance and struggle against him are divided and effectively diverted from the targets that could benefit him. One of the dangers of the proliferation of the society of resentment is this: the perpetuation of the power that causes it. The other danger is the increased difficulty in distinguishing real damage from illusory damage, real causes from illusory causes, and real victims and aggressors from illusory victims and aggressors. This makes it more difficult to effectively punish, in a substantive and procedurally fair way, the real damage suffered by real victims against the real aggressors. Resentment puts an end to hope for a fairer society. Resentment replaces the Spinozist dialectic between fear and hope with the dialectic between hatred and revenge. Revenge aspires to the transfer of power, not the transformation of power. Without this transformation, there will be no hope for a better world.

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Boaventura de Sousa Santos is the emeritus professor of sociology at the University of Coimbra in Portugal. His most recent book is Decolonizing the University: The Challenge of Deep Cognitive Justice.

The Forgotten History of Hitler’s Establishment Enablers

By Adam GopnikApril 3, 2024Z ArticleNo Comments23 Mins Read
Source: The New Yorker
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GOEBELS CENTRE OF PHOTO LOOKS ALOT LIKE TRUMPS BRAIN; 

STEPHEN MILLER


Hitler is so fully imagined a subject—so obsessively present on our televisions and in our bookstores—that to reimagine him seems pointless. As with the Hollywood fascination with Charles Manson, speculative curiosity gives retrospective glamour to evil. Hitler created a world in which women were transported with their children for days in closed train cars and then had to watch those children die alongside them, naked, gasping for breath in a gas chamber. To ask whether the man responsible for this was motivated by reading Oswald Spengler or merely by meeting him seems to attribute too much complexity of purpose to him, not to mention posthumous dignity. Yet allowing the specifics of his ascent to be clouded by disdain is not much better than allowing his memory to be ennobled by mystery.

So the historian Timothy W. Ryback’s choice to make his new book, “Takeover: Hitler’s Final Rise to Power” (Knopf), an aggressively specific chronicle of a single year, 1932, seems a wise, even an inspired one. Ryback details, week by week, day by day, and sometimes hour by hour, how a country with a functional, if flawed, democratic machinery handed absolute power over to someone who could never claim a majority in an actual election and whom the entire conservative political class regarded as a chaotic clown with a violent following. Ryback shows how major players thought they could find some ulterior advantage in managing him. Each was sure that, after the passing of a brief storm cloud, so obviously overloaded that it had to expend itself, they would emerge in possession of power. The corporate bosses thought that, if you looked past the strutting and the performative antisemitism, you had someone who would protect your money. Communist ideologues thought that, if you peered deeply enough into the strutting and the performative antisemitism, you could spy the pattern of a popular revolution. The decent right thought that he was too obviously deranged to remain in power long, and the decent left, tempered by earlier fights against different enemies, thought that, if they forcibly stuck to the rule of law, then the law would somehow by itself entrap a lawless leader. In a now familiar paradox, the rational forces stuck to magical thinking, while the irrational ones were more logical, parsing the brute equations of power. And so the storm never passed. In a way, it still has not.

Ryback’s story begins soon after Hitler’s very incomplete victory in the Weimar Republic’s parliamentary elections of July, 1932. Hitler’s party, the National Socialist German Workers’ Party (its German initials were N.S.D.A.P.), emerged with thirty-seven per cent of the vote, and two hundred and thirty out of six hundred and eight seats in the Reichstag, the German parliament—substantially ahead of any of its rivals. In the normal course of events, this would have led the aging warrior Paul von Hindenburg, Germany’s President, to appoint Hitler Chancellor. The equivalent of Prime Minister in other parliamentary systems, the Chancellor was meant to answer to his party, to the Reichstag, and to the President, who appointed him and who could remove him. Yet both Hindenburg and the sitting Chancellor, Franz von Papen, had been firm never-Hitler men, and naïvely entreated Hitler to recognize his own unsuitability for the role.

The N.S.D.A.P. had been in existence since right after the Great War, as one of many völkisch, or populist, groups; its label, by including “national” and “socialist,” was intended to appeal to both right-wing nationalists and left-wing socialists, who were thought to share a common enemy: the élite class of Jewish bankers who, they said, manipulated Germany behind the scenes and had been responsible for the German surrender. The Nazis, as they were called—a put-down made into a popular label, like “Impressionists”—began as one of many fringe and populist antisemitic groups in Germany, including the Thule Society, which was filled with bizarre pre-QAnon conspiracy adepts. Hitler, an Austrian corporal with a toothbrush mustache (when Charlie Chaplin first saw him in newsreels, he assumed Hitler was aping his Little Tramp character), had seized control of the Party in 1921. Then a failed attempt at a putsch in Munich, in 1923, left him in prison, but with many comforts, much respect, and paper and time with which to write his memoir, “Mein Kampf.” He reëmerged as the leader of all the nationalists fighting for election, with an accompanying paramilitary organization, the Sturmabteilung (S.A.), under the direction of the more or less openly homosexual Ernst Röhm, and a press office, under the direction of Joseph Goebbels. (In the American style, the press office recognized the political significance of the era’s new technology and social media, exploiting sound recordings, newsreels, and radio, and even having Hitler campaign by airplane.) Hitler’s plans were deliberately ambiguous, but his purposes were not. Ever since his unsuccessful putsch in Munich, he had, Ryback writes, “been driven by a single ambition: to destroy the political system that he held responsible for the myriad ills plaguing the German people.”

Ryback skips past the underlying mechanics of the July, 1932, election on the way to his real subject—Hitler’s manipulation of the conservative politicians and tycoons who thought that they were manipulating him—but there’s a notable academic literature on what actually happened when Germans voted that summer. The political scientists and historians who study it tell us that the election was a “normal” one, in the sense that the behavior of groups and subgroups proceeded in the usual way, responding more to the perception of political interests than to some convulsions of apocalyptic feeling.

The popular picture of the decline of the Weimar Republic—in which hyperinflation produced mass unemployment, which produced an unstoppable wave of fascism—is far from the truth. The hyperinflation had ended in 1923, and the period right afterward, in the mid-twenties, was, in Germany as elsewhere, golden. The financial crash of 1929 certainly energized the parties of the far left and the far right. Still, the results of the July, 1932, election weren’t obviously catastrophic. The Nazis came out as the largest single party, but both Hitler and Goebbels were bitterly disappointed by their standing. The unemployed actually opposed Hitler and voted en masse for the parties of the left. Hitler won the support of self-employed people, who were in decent economic shape but felt that their lives and livelihoods were threatened; of rural Protestant voters; and of domestic workers (still a sizable group), perhaps because they felt unsafe outside a rigid hierarchy. What was once called the petite bourgeoisie, then, was key to his support—not people feeling the brunt of economic precarity but people feeling the possibility of it. Having nothing to fear but fear itself is having something significant to fear.

It was indeed a “normal” election in that respect, responding not least to the outburst of “normal” politics with which Hitler had littered his program: he had, in the months beforehand, damped down his usual ranting about Jews and bankers and moneyed élites and the rest. He had recorded a widely distributed phonograph album (the era’s equivalent of a podcast) designed to make him seem, well, Chancellor-ish. He emphasized agricultural support and a return to better times, aiming, as Ryback writes, “to bridge divides of class and conscience, socialism and nationalism.” By the strange alchemy of demagoguery, a brief visit to the surface of sanity annulled years and years of crazy.

The Germans were voting, in the absent-minded way of democratic voters everywhere, for easy reassurances, for stability, with classes siding against their historical enemies. They weren’t wild-eyed nationalists voting for a millennial authoritarian regime that would rule forever and restore Germany to glory, and, certainly, they weren’t voting for an apocalyptic nightmare that would leave tens of millions of people dead and the cities of Germany destroyed. They were voting for specific programs that they thought would benefit them, and for a year’s insurance against the people they feared.

Ryback spends most of his time with two pillars of respectable conservative Germany, General Kurt von Schleicher and the right-wing media magnate Alfred Hugenberg. Utterly contemptuous of Hitler as a lazy buffoon—he didn’t wake up until eleven most mornings and spent much of his time watching and talking about movies—the two men still hated the Communists and even the center-left Social Democrats more than they did anyone on the right, and they spent most of 1932 and 1933 scheming to use Hitler as a stalking horse for their own ambitions.

Schleicher is perhaps first among Ryback’s too-clever-for-their-own-good villains, and the book presents a piercingly novelistic picture of him. Though in some ways a classic Prussian militarist, Schleicher, like so many of the German upper classes, was also a cultivated and cosmopolitan bon vivant, whom the well-connected journalist and diarist Bella Fromm called “a man of almost irresistible charm.” He was a character out of a Jean Renoir film, the regretful Junker caught in modern times. He had no illusions about Hitler (“What am I to do with that psychopath?” he said after hearing about his behavior), but, infinitely ambitious, he thought that Hitler’s call for strongman rule might awaken the German people to the need for a real strongman, i.e., Schleicher. Ryback tells us that Schleicher had a strategy he dubbed the Zähmungsprozess, or “taming process,” which was meant to sideline the radicals of the Nazi Party and bring the movement into mainstream politics. He publicly commended Hitler as a “modest, orderly man who only wants what is best” and who would follow the rule of law. He praised Hitler’s paramilitary troops, too, defending them against press reports of street violence. In fact, as Ryback explains, the game plan was to have the Brown Shirts crush the forces of the left—and then to have the regular German Army crush the Brown Shirts.

Schleicher imagined himself a master manipulator of men and causes. He liked to play with a menagerie of glass animal figurines on his desk, leaving the impression that lesser beings were mere toys to be handled. In June of 1932, he prevailed on Hindenburg to give the Chancellorship to Papen, a weak politician widely viewed as Schleicher’s puppet; Papen, in turn, installed Schleicher as minister of defense. Then they dissolved the Reichstag and held those July elections which, predictably, gave the Nazis a big boost.

Ryback spends many mordant pages tracking Schleicher’s whirling-dervish intrigues, as he tried to realize his fantasy of the Zähmungsprozess. Many of these involved schemes shared with the patriotic and staunchly anti-Nazi General Kurt von Hammerstein-Equord (familiar to viewers of “Babylon Berlin” as Major General Seegers). Hammerstein was one of the few German officers to fully grasp Hitler’s real nature. At a meeting with Hitler in the spring of 1932, Hammerstein told him bluntly, “Herr Hitler, if you achieve power legally, that would be fine with me. If the circumstances are different, I will use arms.” He later felt reassured when Hindenburg intimated that, if the Nazi paramilitary troops acted, he could order the Army to fire on them.

Yet Hammerstein remained impotent. At various moments, Schleicher, as the minister of defense, entertained what was in effect a plan for imposing martial law with himself in charge and Hammerstein at his side. In retrospect, it was the last hope of protecting the republic from Hitler—but after President Hindenburg rejected it, not out of democratic misgivings but out of suspicion of Schleicher’s purposes, Hammerstein, an essentially tragic figure, was unable to act alone. He suffered from a malady found among decent military men suddenly thrust into positions of political power: his scruples were at odds with his habits of deference to hierarchy. Generals became generals by learning to take orders before they learned how to give them. Hammerstein hated Hitler, but he waited for someone else of impeccable authority to give a clear direction before he would act. (He went on waiting right through the war, as part of the equally impotent military nexus that wanted Hitler dead but, until it was too late, lacked the will to kill him.)

The extra-parliamentary actions that were fleetingly contemplated in the months after the election—a war in the streets, or, more likely, a civil confrontation leading to a military coup—seemed horrific. The trouble, unknowable to the people of the time, is that, since what did happen is the worst thing that has ever happened, any alternative would have been less horrific. One wants to shout to Hammerstein and his cohorts, Go ahead, take over the government! Arrest Hitler and his henchmen, rule for a few years, and then try again. It won’t be as bad as what happens next. But, of course, they cannot hear us. They couldn’t have heard us then.

Ryback’s gift for detail joins with a nice feeling for the black comedy of the period. He makes much sport of the attempts by foreign journalists resident in Germany, particularly the New York Times’ Frederick T. Birchall, to normalize the Nazi ascent—with Birchall continually assuring his readers that Hitler, an out-of-his-depth simpleton, was not the threat he seemed to be, and that the other conservatives were far more potent in their political maneuvering. When Papen made a speech denying that Hitler’s paramilitary forces represented “the German nation,” Birchall wrote that the speech “contained dynamite enough to change completely the political situation in the Reich.” On another occasion, Birchall wrote that “the Hitlerites” were deluded to think they “hold the best cards”; there was every reason to think that “the big cards, the ones that will really decide the game,” were in the hands of people such as Papen, Hindenburg, and, “above all,” Schleicher.

Ryback, focussing on the self-entrapped German conservatives, generally avoids the question that seems most obvious to a contemporary reader: Why was a coalition between the moderate-left Social Democrats and the conservative but far from Nazified Catholic Centrists never even seriously attempted? Given that Hitler had repeatedly vowed to use the democratic process in order to destroy democracy, why did the people committed to democracy let him do it?

Many historians have jousted with this question, but perhaps the most piercing account remains an early one, written less than a decade after the war by the émigré German scholar Lewis Edinger, who had known the leaders of the Social Democrats well and consulted them directly—the ones who had survived, that is—for his study. His conclusion was that they simply “trusted that constitutional processes and the return of reason and fair play would assure the survival of the Weimar Republic and its chief supporters.” The Social Democratic leadership had become a gerontocracy, out of touch with the generational changes beneath them. The top Social Democratic leaders were, on average, two decades older than their Nazi counterparts.


Worse, the Social Democrats remained in the grip of a long struggle with Bismarckian nationalism, which, however oppressive it might have been, still operated with a broad idea of legitimacy and the rule of law. The institutional procedures of parliamentarianism had always seen the Social Democrats through—why would those procedures not continue to protect them? In a battle between demagoguery and democracy, surely democracy had the advantage. Edinger writes that Karl Kautsky, among the most eminent of the Party’s theorists, believed that after the election Hitler’s supporters would realize he was incapable of fulfilling his promises and drift away.

The Social Democrats may have been hobbled, too, by their commitment to team leadership—which meant that no single charismatic individual represented them. Proceduralists and institutionalists by temperament and training, they were, as Edinger demonstrates, unable to imagine the nature of their adversary. They acceded to Hitler’s ascent with the belief that by respecting the rules themselves they would encourage the other side to play by them as well. Even after Hitler consolidated his power, he was seen to have secured the Chancellorship by constitutional means. Edinger quotes Arnold Brecht, a fellow exiled statesman: “To rise against him on the first night would make the rebels the technical violators of the Constitution that they wanted to defend.”

Meanwhile, the centrist Catholics—whom Hitler shrewdly recognized as his most formidable potential adversaries—were handicapped in any desire to join with the Democratic Socialists by their fear of the Communists. Though the Communists had previously made various alliances of convenience with the Social Democrats, by 1932 they were tightly controlled by Stalin, who had ordered them to depict the Social Democrats as being as great a threat to the working class as Hitler.

And, when a rumor spread that Hitler had once spat out a Communion Host, it only made him more popular among Catholics, since it called attention to his Catholic upbringing. Indeed, most attempts to highlight Hitler’s personal depravities (including his possibly sexual relationship with his niece Geli, which was no secret in the press of the time; her apparent suicide, less than a year before the election, had been a tabloid scandal) made him more popular. In any case, Hitler was skilled at reassuring the Catholic center, promising to be “the strong protector of Christianity as the basis of our common moral order.”

Hitler’s hatred of parliamentary democracy, even more than his hatred of Jews, was central to his identity, Ryback emphasizes. Antisemitism was a regular feature of populist politics in the region: Hitler had learned much of it in his youth from the Vienna mayor Karl Lueger. But Lueger was a genuine populist democrat, who brought universal male suffrage to the city. Hitler’s originality lay elsewhere. “Unlike Hitler’s anti-Semitism, a toxic brew of pseudoscientific readings and malignant mentoring, Hitler’s hatred of the Weimar Republic was the result of personal observation of political processes,” Ryback writes. “He hated the haggling and compromise of coalition politics inherent in multiparty political systems.”

Second only to Schleicher in Ryback’s accounting of Hitler’s establishment enablers is the media magnate Alfred Hugenberg. The owner of the country’s leading film studio and of the national news service, which supplied some sixteen hundred newspapers, he was far from an admirer. He regarded Hitler as manic and unreliable but found him essential for the furtherance of their common program, and was in and out of political alliance with him during the crucial year.

Hugenberg had begun constructing his media empire in the late nineteen-teens, in response to what he saw as the bias against conservatives in much of the German press, and he shared Hitler’s hatred of democracy and of the Jews. But he thought of himself as a much more sophisticated player, and intended to use his control of modern media in pursuit of what he called a Katastrophenpolitik—a “catastrophe politics” of cultural warfare, in which the strategy, Ryback says, was to “flood the public space with inflammatory news stories, half-truths, rumors, and outright lies.” The aim was to polarize the public, and to crater anything like consensus. Hugenberg gave Hitler money as well as publicity, but Hugenberg had his own political ambitions (somewhat undermined by a personal aura described by his nickname, der Hamster) and his own party, and Hitler was furiously jealous of the spotlight. While giving Hitler support in his media—a support sometimes interrupted by impatience—Hugenberg urged him to act rationally and settle for Nazi positions in the cabinet if he could not have the Chancellorship.

What strengthened the Nazis throughout the conspiratorial maneuverings of the period was certainly not any great display of discipline. The Nazi movement was a chaotic mess of struggling in-groups who feared and despised one another. Hitler rightly mistrusted the loyalty even of his chief lieutenant, Gregor Strasser, who fell on the “socialist” side of the National Socialists label. The members of the S.A., the Storm Troopers, meanwhile, were loyal mainly to their own leader, Ernst Röhm, and embarrassed Hitler with their run of sexual scandals. The N.S.D.A.P. was a hive of internal antipathies that could resolve only in violence—a condition that would endure to the last weeks of the war, when, standing amid the ruins of Germany, Hitler was enraged to discover that Heinrich Himmler was trying to negotiate a separate peace with the Western Allies.

The strength of the Nazis lay, rather, in the curiously enclosed and benumbed character of their leader. Hitler was impossible to discourage, not because he ran an efficient machine but because he was immune to the normal human impediments to absolute power: shame, calculation, or even a desire to see a particular political program put in place. Hindenburg, knowing of Hitler’s genuinely courageous military service in the Great War, appealed in their meetings to his patriotism, his love of the Fatherland. But Hitler, an Austrian who did not receive German citizenship until shortly before the 1932 election, did not love the Fatherland. He ran on the hydrogen fuel of pure hatred. He did not want power in order to implement a program; he wanted power in order to realize his pain. A fascinating and once classified document, prepared for the precursor of the C.I.A., the O.S.S., by the psychoanalyst Walter Langer, used first-person accounts to gauge the scale of Hitler’s narcissism: “It may be of interest to note at this time that of all the titles that Hitler might have chosen for himself he is content with the simple one of ‘Fuehrer.’ To him this title is the greatest of them all. He has spent his life searching for a person worthy of the role but was unable to find one until he discovered himself.” Or, as the acute Hungarian American historian John Lukacs, who spent a lifetime studying Hitler’s psychology, observed, “His hatred for his opponents was both stronger and less abstract than was his love for his people. That was (and remains) a distinguishing mark of the mind of every extreme nationalist.”

In November of 1932, one more Reichstag election was held. Once again, it was a bitter disappointment to Hitler and Goebbels—“a disaster,” as Goebbels declared on Election Night. (An earlier Presidential election had also reaffirmed Hindenburg over the Hitler movement.) The Nazi wave that everyone had expected failed to materialize. The Nazis lost seats, and, once again, they could not crack fifty per cent. The Times explained that the Hitler movement had passed its high-water mark, and that “the country is getting tired of the Nazis.” Everywhere, Ryback says, the cartoonists and editorialists delighted in Hitler’s discomfiture. One cartoonist showed him presiding over a graveyard of swastikas. In December of 1932, having lost three elections in a row, Hitler seemed to be finished.

The subsequent maneuverings are as dispiriting to read about as they are exhausting to follow. Basically, Schleicher conspired to have Papen fired as Chancellor by Hindenburg and replaced by himself. He calculated that he could cleave Gregor Strasser and the more respectable elements of the Nazis from Hitler, form a coalition with them, and leave Hitler on the outside looking in. But Papen, a small man in everything except his taste for revenge, turned on Schleicher in a rage and went directly to Hitler, proposing, despite his earlier never-Hitler views, that they form their own coalition. Schleicher’s plan to spirit Strasser away from Hitler and break the Nazi Party in two then stumbled on the reality that the real base of the Party was fanatically loyal only to its leader—and Strasser, knowing this, refused to leave the Party, even as he conspired with Schleicher to undermine it.

Then, in mid-January, a small regional election in Lipperland took place. Though the results were again disappointing for Hitler and Goebbels—the National Socialist German Workers’ Party still hadn’t surmounted the fifty-per-cent mark—they managed to sell the election as a kind of triumph. At Party meetings, Hitler denounced Strasser. The idea, much beloved by Schleicher and his allies, of breaking a Strasser wing of the Party off from Hitler became obviously impossible.

Hindenburg, in his mid-eighties and growing weak, became fed up with Schleicher’s Machiavellian stratagems and dispensed with him as Chancellor. Papen, dismissed not long before, was received by the President. He promised that he could form a working majority in the Reichstag by simple means: Hindenburg should go ahead and appoint Hitler Chancellor. Hitler, he explained, had made significant “concessions,” and could be controlled. He would want only the Chancellorship, and not more seats in the cabinet. What could go wrong? “You mean to tell me I have the unpleasant task of appointing this Hitler as the next Chancellor?” Hindenburg reportedly asked. He did. The conservative strategists celebrated their victory. “So, we box Hitler in,” Hugenberg said confidently. Papen crowed, “Within two months, we will have pressed Hitler into a corner so tight that he’ll squeak!”

“The big joke on democracy is that it gives its mortal enemies the tools to its own destruction,” Goebbels said as the Nazis rose to power—one of those quotes that sound apocryphal but are not. The ultimate fates of Ryback’s players are varied, and instructive. Schleicher, the conservative who saw right through Hitler’s weakness—who had found a way to entrap him, and then use him against the left—was killed by the S.A. during the Night of the Long Knives, in 1934, when Hitler consolidated his hold over his own movement by murdering his less loyal lieutenants. Strasser and Röhm were murdered then, too. Hitler and Goebbels, of course, died by their own hands in defeat, having left tens of millions of Europeans dead and their country in ruins. But Hugenberg, sidelined during the Third Reich, was exonerated by a denazification court in the years after the war. And Papen, who had ushered Hitler directly into power, was acquitted at Nuremberg; in the nineteen-fifties, he was awarded the highest honorary order of the Catholic Church.

Does history have patterns or merely circumstances and unique contingencies? Certainly, the Germany of 1932 was a place unto itself. The truth, that some cycles may recur but inexactly, is best captured in that fine aphorism “History does not repeat itself, but it sometimes rhymes.” Appropriately, no historian is exactly sure who said this: widely credited to Mark Twain, it was more likely first said long after his death.

We see through a glass darkly, as patterns of authoritarian ambition seem to flash before our eyes: the demagogue made strong not by conviction but by being numb to normal human encouragements and admonitions; the aging center left; the media lords who want something like what the demagogue wants but in the end are controlled by him; the political maneuverers who think they can outwit the demagogue; the resistance and sudden surrender. Democracy doesn’t die in darkness. It dies in bright midafternoon light, where politicians fall back on familiarities and make faint offers to authoritarians and say a firm and final no—and then wake up a few days later and say, Well, maybe this time, it might all work out, and look at the other side! Precise circumstances never repeat, yet shapes and patterns so often recur. In history, it’s true, the same thing never happens twice. But the same things do.

We Ignore the Ongoing Collapse of American Democracy at Our Peril

Fascism can happen here and we know this because it is happening here. And unless more people wake up and fight back, it will be too late.

By Thom Hartmann

February 4, 2024

Source: Common Dreams


Like an alcoholic family that won’t discuss alcoholism (proving Don Quixote’s warning never to mention rope in the home of a man who’s been hanged), far too many Americans are unwilling to acknowledge or even discuss the ongoing collapse of democracy in the United States.

We see it in everything from our last two Republican presidents having lost the national vote but taking office anyway, to the extreme gerrymandering happening in every Red state in the country, to the naked bribery of our legislators and Supreme Court justices.

And our media exclude it from almost every conversation. Networks run promotions mentioning Trump’s indictments, but completely fail to point out that he is calling for the end of democracy in America, the suspension of the Constitution, and playing the role of a “dictator” on day one.

The extent of the problems within our political and economic structures are laid bare with startling and sometimes frightening clarity.

President Jimmy Carter took it head-on when he told me on my radio program that the Citizen’s United decision, which brought us this crisis:

“[V]iolates the essence of what made America a great country in its political system. Now it’s just an oligarchy, with unlimited political bribery being the essence of getting the nominations for president or to elect the president. And the same thing applies to governors and U.S. senators and congress members. So now we’ve just seen a complete subversion of our political system as a payoff to major contributors, who want and expect and sometimes get favors for themselves after the election’s over.”

This “complete subversion of our political system” grew, in large part, out of Richard Nixon’s 1972 appointment of tobacco lawyer and rightwing extremist Lewis Powell to the Supreme Court.

Powell, in 1971, had authored the infamous Powell Memo for the US Chamber of Commerce, strongly suggesting that corporate leaders needed to get politically involved and, essentially, take over everything from academia to our court system to our political system.

In 1976, in the Buckley case, Powell began the final destruction of American democracy by declaring that when morbidly rich people or corporations own politicians, all that money that got transferred to the politicians wasn’t bribery but, instead, was Constitutionally-protected First Amendment-defined “Free Speech.”

Powell expanded that when he personally authored the decision in the 1978 Bellotti case, which acknowledged corporations as “persons” with full access to the Bill of Rights, including their own “free speech” right to own politicians. Five corrupt and in-the-bag Republicans on the Supreme Court radically expanded that doctrine in 2010 with Citizens United.

As a result, there’s really very little democracy left in our democracy.

— Our votes are cast in districts so gerrymandered that a 50/50 electorate can produce an 70/30 outcome in congressional representation.

— Our laws are written, more often than not, by corporate lawyers/lobbyists or representatives of billionaire-level wealth.

— And our media is owned by the same class of investors/stockholders, so it’s a stretch to expect them to do much critical reporting on the situation.

In his book The Decline of the West, first published in German in 1918 and then in English in 1926, Oswald Spengler suggested that what we call Western civilization was then beginning to enter a “hardening” or “classical” phase in which all the nurturing and supportive structures of culture would become, instead, instruments for the exploitation of a growing peasant class to feed the wealth of a new and strengthening aristocracy.

Culture would become a parody of itself, average people’s expectations would decline while their wants would grow, and a new peasantry would emerge, which would cause the culture to stabilize in a “classic form” that, while Spengler doesn’t use the term, seems very much like feudalism — the medieval system in which the lord owned the land and everyone else was a vassal (a tenant who owed loyalty to the landlord).

Or its more modern incarnation: fascism, a word that didn’t even exist when Spengler wrote Decline.

Spengler, considering himself an aristocrat, didn’t see this as a bad thing. In 1926 he prophesied that once the boom of the Roaring Twenties was over, a great bust would wash over the Western world. While this bust had the potential to create chaos, its most likely outcome would be a return to the classic, stable form of social organization, what Spengler calls “high culture” and I call neofeudalism and/or fascism.

He wrote:


“In all high Cultures, therefore, there is a peasantry, which is breed stock, in the broad sense (and thus to a certain extent nature herself), and a society which is assertively and emphatically ‘in form.’ It is a set of classes or Estates, and no doubt artificial and transitory. But the history of these classes and estates is world history at highest potential.”

Twentieth and 21st century cultural observers, ranging from billionaire George Soros in his book The Crisis of Global Capitalism, to professor Noreena Hertz inThe Silent Takeover: Global Capitalism and the Death of Democracy, have pointed to deep cracks in the foundational structure of Western civilization, traceable in part to the current legal status of corporations versus humans.

More recently, Jane Mayer has laid out in painful detail in her book Dark Money how the Koch Network and a few other political-minded billionaires have essentially taken over the entire Republican Party, as has Nancy MacLean with her book Democracy in Chains. The extent of the problems within our political and economic structures are laid bare with startling and sometimes frightening clarity.

As a result, of all these changes in our politics (most driven by five corrupt Republicans on the Supreme Court putting oligarchy above democracy), Princeton scholars Martin Gilens and Benjamin Page famously found that the odds of average Americans’ political desires being translated into policy are about the same as “random noise,” whereas what they referred to as “economic elites” frequently get everything they want from the political class.

They wrote that we still have the “features” of democracy like elections, but ended their paper with this cautionary note:


“[W]e believe that if policymaking is dominated by powerful business organizations and a small number of affluent Americans, then America’s claims to being a democratic society are seriously threatened.”

It seems that America has arrived at the point Spengler saw in early 20th century Europe, and, indeed, there are some concerning parallels, particularly with the late 1920s and early 1930s. Italy, Germany, and Spain all lost their democracies and moved to fascism during that era, while Spengler and his acolytes cheered.

And, indeed, it was one of FDR’s biggest challenges in the early 1930s: steering America through a “middle course” between communism (which was then growing popular) and fascism (also growing popular). He pulled it off with small (compared to Europe) nods to democratic socialism, instituting programs like Social Security, the minimum wage, and establishing the right to unionize (among other things).


American democracy can’t afford many more years of corruption before it’s dead

Mark Twain is often quoted as saying that history doesn’t repeat itself, but it rhymes. Many look at the all-out war being waged against American government by the hard right, from Trump and his cronies to the billionaire networks funding right-wing propaganda and lobbying outlets, and think “it can’t happen here.”

They’re wrong. It can happen here.

We now have police intervening in elections, privatized corporate voting systems, and a massive voter suppression campaign to prevent elderly, young, and non-white Americans from being able to vote.

Meanwhile, Republican politicians and the billionaires who own them are now dropping any pretense at all to caring about the fate and future of our country’s fiscal health, so long as they get and keep their tax cuts.

In summary, what’s left of our democratic institutions are under siege.

Add to that a largely billionaire-funded/owned right-wing media machine that’s willing to regularly and openly deceive American voters (documented daily by Media Matters), and you have the perfect setup for a neofeudalist/fascist takeover of our government.

Or, as President Carter so correctly called it, oligarchy.

This year’s election may be our last chance to push back against the oligarchy that the GOP has been constructing for the past forty-three years. President Biden and Democrats in Congress made a valiant try with the For The People Act that would have expanded voter rights, outlawed gerrymandering, and reversed Citizens United to strip dark money out of our electoral system, but were stabbed in the back by Joe Manchin and Kirsten Sinema.

If Biden is re-elected and Democrats can take the House and hold the Senate, there’s a very good chance — particularly without Manchin and Sinema to sabotage the process like they did in 2022 — that such legislation can be brought up again and pass.

Double check your voter registration — particularly if you live in a Blue city in a Red state, where they’re already purging millions of voters every month — and help everybody you know get their registration up to date.

American democracy can’t afford many more years of corruption before it’s dead: our time to act is now.

Bitcoin And Geopolitical Rivalry – Analysis

 March 17, 2023 

By Geopolitical Monitor

By Jose Miguel Alonso-Trabanco

Bitcoin, the flagship stateless cryptocurrency, is a double-edged sword that can either strengthen or harm national power. As financial warfare becomes increasingly complex, this decentralized cybercurrency is acting as a versatile strategic instrument of statecraft that can play various roles under confrontational geopolitical circumstances.

This under-researched subject matter needs to be clarified because it entails meaningful implications for national security, strategic intelligence, foreign policy and grand strategy, but also for the domain of high finance. In order to provide a sharper sense of situational awareness, the following article integrates strategic forecasts that attempt to predict the hypothetical usefulness of Bitcoin for conflicts with scrutiny of illustrative contemporary examples that point in a similar direction.

Analysis of Hypothetical Applications

BTC circuits as conduits to bypass sanctions

Bitcoin can offer a potential lifeline for states under sanctions that need to ensure the continuity of their international economic exchanges. Since the BTC grid cannot be controlled by the coercive or restrictive power of national states, its borderless circuitry provides secondary financial arteries worth harnessing to bypass sanctions that limit the ability to carry out cross-border transactions and transfer wealth through more conventional platforms ‒ anchored to major reserve currencies ‒ that enable international payments. An additional advantage of decentralized virtual currencies for sanctioned states is their discretion. They offer covert gateways to engage formal financial systems or even to avoid them altogether if necessary. In other words, it is difficult to determine if sanctions are being neutralized through cryptocurrencies like BTC.

Furthermore, despite their drawbacks ‒ including wildly volatile exchange rates ‒ nonstate cryptocurrencies like BTC are helpful to evade sanctions thanks to their growing transnational projection, their unsupervised channels, and their lack of centralized nerve centers that could be politically threatened, co-opted, or influenced. An academic essay written by US military officer Deane Konowicz for the US Naval War College identifies three strategies to use unofficial virtual currencies as asymmetric equalizers to diminish or overcome sanctions imposed by an enemy with superior financial firepower. Yet, the implementation of each comes with challenging caveats.

• The theft of wealth through acts of cybercrime against cryptocurrency exchanges or ransomware attacks to demand payments denominated in cryptocurrency. This approach requires sophisticated cyberwarfare know-how.
• Cryptocurrency mining on a large scale as an industrial activity which generates profits that do not flow through traditional financial networks. This pursuit demands investment, technological infrastructure, advanced hardware, vast amounts of energy, and technical expertise.
• The encouragement of the sanctioned state’s population and business community to freely carry out all sorts of transactions through cryptocurrencies. Said possibility comes with the risks of weakening the position of the country’s official currency and the prospect of widespread economic instability, a phenomenon that could lead in turn to political turmoil.

Some statesmen have also identified the potential usefulness of cryptocurrencies like Bitcoin to diminish the impact of sanctions through arteries that bypass the US dollar. For example, according to a report published by the Russian newspaper Kommersant, Sergei Glazyev ‒ one of the Kremlin’s chief geoeconomic masterminds ‒ argues that the Russian Federation has an “objective need” to rely on unofficial cryptocurrencies to circumvent Western sanctions. Nevertheless, BTC is no “silver bullet” that can completely defuse enemy sanctions. Its limitations are also being acknowledged. In a 2021 interview with CNBC, Russian President Vladimir Putin admitted that Bitcoin is a valid means of payment, but he also mentioned that, even though Russia has been seeking alternatives to the dollar in international economic exchanges as a result of its weaponization by Washington, it was still too soon to anchor the exports of Russian energy and commodities to such cryptocurrency.

Yet, as a result of the Western backlash against the Russian invasion of Ukraine, Moscow is seemingly reassessing its position and deliberating about the eventual pertinence of embracing BTC in several sectors to carry out international transactions that deflect American and European sanctions. In this context, Moscow is reportedly considering the possibility of accepting Bitcoin as payment for its energy exports. Since crypto-assets cannot be frozen or seized, they represent potentially attractive financial vehicles for states that seek to contest the interests of Western powers. According to the New York Times, in order to gather stockpiles of unofficial cryptocurrencies to carry out undetected international transactions, the Russians could even engage in ransomware cyberattacks and develop technical tools designed to mask the involvement of Russian entities in said transactions throughout blockchain-based financial environments.

These possibilities indicate that Bitcoin and similar cryptocurrencies can hypothetically operate as protective shields for states under sanctions. As such, they pose game-changing challenges for the effective implementation of sanctions as a tool of diplomatic coercion by the US and its allies, especially considering that such measures have become an increasingly common staple of Western foreign policy. Nevertheless, some analysts believe that measures like better regulations, collaborative information-sharing partnerships between governmental agencies and private entities, international cooperation, and increased oversight can prevent the evasion of sanctions through Bitcoin and similar cryptocurrencies.

BTC as a potential asset to hedge the financial risk of geopolitical tensions

Bitcoin has been identified as an unconventional asset that could be helpful to hedge financial risks in case of conflicts or heightened geopolitical tensions. Some scholars hold that BTC can operate as some sort of “digital gold” because it represents a potential safe haven that provides shelter from exposure to rising systemic geopolitical tensions. In fact, the value of Bitcoin seems to be positively influenced by the incidence of phenomena which trigger a perception of geopolitical turmoil, such as Brexit, the rivalry between Iran and the US in the Middle East, and the so-called “trade war” between Washington and Beijing. These attributes make BTC attractive for national states, private companies and individuals.

An important advantage of Bitcoin as an alternative asset is its high resilience from both volatile market fluctuations and potentially hostile manipulations not motivated by economic interests. Plus, the horizontal Bitcoin system cannot be destroyed. As the American financier James Rickards explains, even though some of its material or digital nodes can be attacked, the dispersed structure of BTC organic networks contains no center of gravity. BTC also lacks centralized systemic records kept in physical servers which could be hit. The ability of the Bitcoin environment to withstand the impact of disruptions from external sources was demonstrated when China followed a heavy-handed approach towards said cybercurrency. Even though the ‘Middle Kingdom’ managed to evict Bitcoin from Chinese soil, the whole BTC ecosystem was not undermined, and China-based mining operations simply relocated to other countries with more flexible frameworks.

However, a nuanced perspective shows that, despite its advantages, Bitcoin is far from being a suitable replacement for hard assets with intrinsic worth like precious metals. As Refk Selmi and other researchers point out, there are major differences that need to be highlighted: 1) Bitcoin’s markets are smaller and less structured; 2) its supply is artificially limited by design; 3) the volatility of this cryptocurrency makes it convenient for short-term speculative purposes rather than as a long-term store of value; 4) whereas BTC is a nascent monetary item, the traditional role of gold as stable store of value is supported by the weight of history since the dawn of civilization; 5) Bitcoin’s legal status is unclear in many jurisdictions.

Potential weaponization of BTC

Bitcoin can also hypothetically act as a weaponized instrument that can be wielded in the practice of statecraft. Ironically, its anti-state properties mean that it can be employed by states against their rivals in offensive acts of hybrid warfare. As an article in the Small Wars Journal argues, The BTC landscape offers 1) asymmetric advantages to instigate monetary disruption in small nations with weak currencies, 2) covert channels to fund terrorist, insurgent, separatist, guerrilla or dissident groups whose militant activities fuel destabilization behind enemy lines and 3) subtle gateways to increase the resonance of psychological warfare, “soft power,” and propagandistic influence through the undisclosed purchase of an active presence in the overlapping platforms that undergird the transnational info-sphere. Potentially, BTC can even be engaged to hit heavier targets. Interestingly, Silicon Valley entrepreneur Peter Thiel, himself a strong supporter of BTC, has expressed his concerns about the potential weaponization of Bitcoin by Beijing against the US: “I do wonder whether at this point [if] Bitcoin should also be thought [of] in part of as a Chinese financial weapon against the US where it threatens fiat money, but it especially threatens the US dollar.” Paradoxically, the fact that China despises Bitcoin at home does not mean that it cannot be useful abroad as a spearhead against major strategic competitors.

Analysis of Empirical Realities 

Involvement of BTC in predatory acts of cyber-financial warfare committed by North Korea

BTC offers opportunities to engage in unconventional forms of economic predation. According to a report prepared by a panel of experts for the UN Security Council (2019), the North Korean military intelligence agency, the Reconnaissance General Bureau, has been responsible for acts of cyber financial warfare and cybercrime ‒including malware and ransomware attacks against foreign corporate targets in South Korea and elsewhere ‒ involving Bitcoin and other decentralized cryptocurrencies. Said source claims that Pyongyang’s presence in the cryptocurrency ecosystem also includes mining. It is estimated that the profits made by North Korea through these measures were worth $2 billion over a couple of years. The official report indicates that the resulting stolen wealth can then be used to undertake unsupervised international transactions, evade sanctions, and fund North Korean military expenditures, including its nuclear weapons programme. The American blockchain research firm Chainanalysis calculates that, in 2022 alone, North Korean entities stole $1.7 billion worth of cryptocurrencies through hacking. This aggressive behavior shows the problematic overtones of state-sponsored criminal activities related to crypto assets.

Bitcoin is more than a weapon for North Korean statecraft. It also helps Pyongyang compensate its lack of access to mainstream international financial channels and provides money to purchase food. According to a work of investigative journalism, North Korean policymakers regard cryptocurrency as a vital gateway to enhance the country’s financial infrastructure and, despite Bitcoin’s libertarian theoretical underpinnings, its adoption by this communist state is compatible with the strong emphasis of Juche ideology on the pursuit of self-sufficiency. Yet, tricky measures are needed to maximize its usefulness. As a report published by the National Committee on North Korea explains, the volatility of Bitcoin and similar cryptocurrencies makes them unsuitable as permanent vehicles for international payments. Some North Korean partners might accept Bitcoin, but it would make more sense to exchange cryptocurrency for conventional hard cash ‒ whose liquidity is much higher ‒ first and then use it to pay for goods and services later.

BTC donations to bankroll the military defense of Ukraine 

Bitcoin can be used to bolster the military defense of a state in conventional conflicts.  In the Ukraine War, it has been used by Kiev to prepare for the clash and to mitigate its consequences. Thanks to crowdfunding campaigns organized by both the Ukrainian government and private networks of volunteers through virtual platforms, Ukraine received donations denominated in cryptocurrency from foreign supporters. This digital war chest was helpful to increase Kiev’s pool of resources before and during the 2022 Russian invasion. According to open sources, said funds were invested in the purchase of military equipment, unmanned aerial vehicles, medical supplies, and even facial recognition software to identify Russian soldiers, spies, and mercenaries.

Although Kiev has received far larger sums of money through more traditional financial systems, the BTC grid turned out to be convenient channel for the direct reception of donations from overseas because it does not require the permission of institutional facilitators or intermediaries. Hence, this flow of money completely bypasses the formal paperwork and ‒ perhaps more importantly ‒ the restrictions of conventional financial channels that prevent remittances whose purpose is to fund military activities. Ironically, the specialized consulting firm Elliptic Intel notes that this course of action was inspired by the preceding crypto-asset fundraising undertaken for years by pro-Russian separatist militias in the Donbass.

This reality indicates that cryptocurrency has become not only a mainstream financial phenomenon, but also an instrumental digital asset in contemporary conventional warfighting. Considering that both Moscow and Kiev are actively resorting to decentralized cybercurrencies to gain an upper hand in this ongoing conflict, an article published by the Washington Post metaphorically described such confrontation as the world’s first “crypto war.” Yet, it is still unknown if cryptocurrencies will represent a game-changer that can decisively alter the facts on the ground in favor of either side.

In order to increase its war chest of crypto-assets, the Ukrainian government even courted the participation of large private cryptocurrency trading platforms, including FTX, Kuna, and Everstake. This involvement generated unexpected externalities. Specifically, the revelations that have uncovered the fraudulent criminal behavior of private cryptocurrency exchange FTX under the leadership of Sam Bankman-Fried ‒ involving cyclical transfers of wealth as a scheme that was facilitated by powerful political and corporate connections ‒ demonstrates that that these initiatives can also offer opportunities that encourage acts of corruption. The resulting fallout is problematic because it harms the public legitimacy of the crowdfunding efforts due to the fear of misappropriation of funds and also because at least some of the money sent by donors might not have reached its intended destination.

In the context of the Ukraine War, BTC has not just been used to optimize the defensive capabilities of Kiev’s military forces in the operational theatres of engagement. The cryptocurrency has also helped civilians caught in the crossfire. As a response to the destruction of infrastructure, Ukraine’s worsening macroeconomic trouble, the intermittent occupation of large urban areas by Russian forces, the exodus of millions of refugees, and the unreliability or unavailability of traditional financial services under such chaotic conditions, Ukrainian citizens are turning to BTC as a non-traditional monetary item to carry out safe and quick transactions whose purpose is to cover essential needs.

Iranian engagement in the BTC ecosystem to deflect the impact of sanctions

The Islamic Republic of Iran has harnessed the Bitcoin landscape in an effort to deflect Western sanctions through unorthodox measures. According to the consulting firm Elliptic ‒ involved in the scrutiny of blockchain analytics ‒ Teheran is encouraging BTC mining in order to use the resulting profits to pay for imports, overcoming the coercive restrictions that limit its ability to participate in economic exchanges carried out through ordinary platforms. Since the process involves the ‘alchemical’ transformation of energy into cryptocurrency ‒ a borderless monetary asset that circulates in an almost unrestricted way ‒ on an industrial scale, it offers the Iranian state an opportunity to monetize its energy resources (oil and natural gas), an important advantage for an economy deprived of hard cash and access to conventional financial services in international capital markets.  Furthermore, Teheran is engaged in negotiations with other states ‒ including Austria, Bosnia-Herzegovina, England, France, Germany, Russia, South Africa, Switzerland ‒ over the development of collaborative frameworks for the use of cryptocurrencies in cross-border financial transactions. Therefore, for Iran, Bitcoin represents a backdoor to access the world economy. As such, it bolsters its counter-hegemonic policy of “economic resistance.”

Nevertheless, Iran’s position towards stateless cryptocurrencies has zigzagged as the balance between costs and benefits has changed. Iranian authorities reversed their permissiveness towards Bitcoin mining due to rising electricity consumption, shortages of natural gas supplies as a result of the sanctions, Bitcoin’s falling value, and the incidence of droughts which have diminished the operational capacity to generate hydropower. Tehran even launched a clampdown due to concerns over the prospect that widespread BTC mining could overload the country’s power grid and provoke blackouts, a problem which could unleash socio-political unrest. Yet, there are signs which indicate that Tehran is revisiting its position once more. In August 2022, the Iranian Ministry of Industry, Mining, and Trade announced on social media that the Middle Eastern country had completed its first import order denominated in an unnamed stateless cryptocurrency, a transaction worth $10 million, adding that more operations like this will continue in Iran’s international economic exchanges. Although still worried about the problematic consequences of mining for energy security, Iran has released hardware for BTC mining that had been previously seized.

Concluding Remarks

Both strategic forecast and analytical assessments reveal that, in the strategic chessboards of 21st century “connectivity wars,” the leading cryptocurrency can be wielded as a high-tech financial sword or shield by innovative practitioners of economic statecraft. Some predictions have already come true. Others anticipate conceivable possibilities that might come to fruition in the near future. In turn, reality itself has brought some unexpected, but not surprising, developments that had not been foreseen. The unchartered waters of the cryptocurrency ecosystem might bring even more exotic applications of Bitcoin and similar virtual currencies for economic warfare worth exploring that have not been identified yet.

The increasing weaponization of Bitcoin in conventional and unconventional battlefields is consistent with the transformational character of “hybrid warfare.” A century ago, the historiographical German thinker Oswald Spengler explained that rather than an item that flows from one hand to another in economic exchanges, money is ‒ for modern Faustian civilizations that favor the march of technological development, the pursuit of worldly power and economic dynamism in the quest for wealth ‒ also an organic impersonal lifeform whose strength can be harnessed to project political force. The ongoing and eventual involvement of Bitcoin in several expressions of conflict shows that such an axiom is certainly valid in the digital age of FinTech.

This article was published by Geopolitical Monitor.com

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