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Balaji Srinivasan Profile picture
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Mar 6 • 5 tweets • 3 min read
How do libertarians ward off tyrants without a strong state?

The answer is Bitcoin. Because it is stronger than any state.

War is expensive. If an aspiring Tamerlane can’t seize the gold, they can’t fund the war machine.

A Bitcoin strike.
Noah’s article makes fair points, and in the 20th century I may have agreed with him.

How do you fight off the Nazis or Soviets without a strong state? You couldn’t.

But in the 19th century and the 21st, the need for gold and digital gold constrains states. Makes them all weak.
Why is Russia less able to build planes?

No money, no supply chains.

So, economic war is effective. Though I think *targeted* economic war is much better than the untargeted response we have seen thus far.
People don’t realize that the 20th century was an aberration. Before then, the ability to seize money limited the ability of states to wage war.

“…soon after the supply of coin was expended, armies began to vanish and sources of supply would dry up.”
publications.armywarcollege.edu/pubs/2339.pdf
How did gold limit the ability of states to wage wars?

“…a survey of the crucial interplay between finance, national power, and the capacity to wage war…an aspect of military power that is too often neglected.”

From the US Army War College:
publications.armywarcollege.edu/pubs/2339.pdf

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Balaji Srinivasan Profile picture
Mar 6
Ukraine is not becoming a Russian client, Russia is becoming a Chinese client.
That’s what I thought might happen as soon as the financial nukes were dropped.

We may see China buy Russia for a song in the largest Belt and Road deal of all time, after the West dropped the price.
After the American invasion of Iraq, who won? Iran. They moved into the power vacuum.

After the Russian invasion of Ukraine, who wins? Perhaps China. They may move into the power vacuum. now.tufts.edu/articles/how-i…
Read 6 tweets
Balaji Srinivasan Profile picture
Mar 5
“Do this or I nuke you”

The problem of nuclear blackmail is not a trivial one. It occupied the thought of early Cold War theorists like Herman Kahn. And with more players, if one grows desperate, the dynamics could become unstable.
warontherocks.com/2017/02/blackm…
@NarangVipin has a new book out on an allied topic: how do states acquire nukes?

1) sprinters: get it fast, like China
2) hedgers: keep the option, like Japan
3) sheltered pursuit: use support of a patron, like North Korea
4) hiders: totally clandestine, like South Africa
The topics are related because in the event a desperate Putin decides to (say) nuke an iceberg to show he is serious, then a number of countries that were previously on the cusp of going nuclear may do so to deter him from trying something.

Just like Germany deciding to rearm.
Read 6 tweets
Balaji Srinivasan Profile picture
Mar 4
The US is a nation of emigrants. There’s nothing more American than leaving your home in search of a better life. Sometimes that means fleeing war and oppression. Sometimes it just means leaving a sclerotic economy behind. But there must always be an exit.
There are a million Ukrainian refugees. Would we prefer they were all stuck getting shelled?

Ukraine was once part of the USSR. Would we prefer Putin be able to revoke their ability to exit, to break away and determine their own fate?

Exit isn’t only escape. It’s freedom.
To be clear, I support what @garrytan is doing, and also appreciate @Noahpinion’s work to make the US more moderate domestically.

Reform has its place, it should be tried, even if only to show it was tried. But if and when it fails we must be free to build a better alternative.
Read 4 tweets
Balaji Srinivasan Profile picture
Feb 28
Best case outcome?
- Ukraine & Russia agree to cease-fire
- Ukraine says they won't join NATO (they don't need it, clearly)
- Putin gets to declare a "win", pulls back
- Nuclear crisis averted
- Then, @navalny allies with @VitalikButerin to win a real election and rebuild Russia
I'm serious on the last bit. It must be a fair election, or else it'll feel like US regime change.

But as an idealist, the Russian people & world deserve better than Putin. And as a realist, it's a security threat to leave their economy like this:
Winning the war is also about winning the peace. The Russian people won't want a repeat of Yeltsin. That's why many supported Putin. But a free & fair election (perhaps monitored by neutral observers) where they vote out Putin & vote in Navalny + Vitalik? That'd be an upgrade.
Read 6 tweets
Balaji Srinivasan Profile picture
Feb 27
Still processing the implications.

This is a financial neutron bomb. Bankrupts people without blowing up buildings. Hits all 145M Russians at once, every ruble holder. In a maximalist scenario, possible collapse of the Russian economy.

Btw, Russia is a nuclear weapons state.
If these (unconfirmed) visuals are real — as seems plausible given the news — it’s the complete opposite of what Putin may have contemplated in terms of a “limited” intervention like Georgia 2008 or Crimea 2014.

This is now something every Russian is harmed by. They’ll be angry.
I don’t know how bad it gets. Maybe the purported ~$240B they have left is enough to keep the Russian economy from collapsing. Maybe China extends them a special Belt and Road deal, a $100B credit facility in return for rights in the Russian Far East.

But things could get nasty.
Read 7 tweets
Balaji Srinivasan Profile picture
Feb 27
This is much bigger than even the SWIFT shutdown.

Russia made the mistake of holding its assets on computers where others have root access.

With a keypress they got shut down. QWERTY was in retrospect much more of a threat to them than NATO.
washingtonpost.com/business/2022/…
Russia appears to have gamed out the physical war, but not the digital war.

We’ll see what happens. There may be more left in this insanity.

But the cloud may now be a more important theater than land, sea, or air. If your adversary can just push a button to win, you lose.
This remarkable video, apparently from a day or so ago, shows that the financial attacks may be getting to Putin.

I’m amazed this is public for a variety of reasons. But if real…he’s trying to reassure the Russian economic elite.
Read 4 tweets

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