Ian Welsh

The horizon is not so far as we can see, but as far as we can imagine

The End Of Cash & The Rise Of The Non-Person

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On July 8, 2025

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Image by TW Collins

Back in 2017 I wrote “The End of Cash”:

Understand, however, that getting rid of cash is part of this. Understand that blockchains, “coins” do not have to ultimately be a technology of freedom, but can easily be a totalitarian technology. Understand that virtually no one in a position of power is your friend on this: They want to know, they want to control, they want to be able to decide how you spend your money and your time, and they want to have an electronic dossier on you which is complete, and which will be usable to destroy you, because no one has never done or said something which cannot be made to look not just bad, but terrible and illegal, especially if you can pick, say, ten quotes or actions out of a lifetime.

In the 80s and 90s it was possible to live the cash economy, or the near cash economy (some checks, but no bank account.) Around 1990 I worked as a dispatcher for a printing company. There was an independent food stall nearby, the sort of place that was all “skilled short order cook” food. I bought most of my lunches there, and the owner ran a tab. When I was paid, by cheque, I endorsed them to him, he took 2%, and paid me cash, minus any tab I’d run up. I paid my landlord in cash, and I bought my food in cash.

At other points I was entirely casual labour: I painted, did light construction work for homeowners, various landscaping jobs, and helped people move. In most cases they paid me cash, if they paid me with a check and I didn’t want to wait the 28 days the banks often insisted on for “clearance” I’d endorse the check, lose 2% and count it not entirely unreasonable.

It’s very hard to do that now. Most people don’t pay with cash, or even checks, and everything goes thru a bank or payment processor and they are very picky about who they allow as customers. Legal activities (say selling nootropics, or porn) are often frozen out, and, indeed, banks have closed down clients accounts without even saying why. Indeed this was done to someone as prominent as Britain’s Nigel Farage, though he had enough fame and political clout to handle it. Perhaps you remember when PayPal, Visa and Mastercard all decided to stop letting people donate to Wikileaks.

Here’s a new case, in Germany, from the EU:

Here is a man, Hüseyin Doğru, a German journalist (of Turkish origins, but not a dual citizen) whom the EU authorities have found a novel, immensely cruel, way of punishing for his coverage of, and views on, Palestine.

The German authorities learned a lesson from my case. Not wishing to be answerable in court for any ban on pro-Palestinian voices (similar to the court case I am dragging them through currently), they found another way: A direct sanction by the EU utilising some hitherto unused directive, one introduced at the beginning of the Ukraine war, that allows Brussels to sanction any citizen of the EU it deems to be working for Russian interests. Clinging to the argument that Hüseyin’s website/podcast used to be shown also on Ruptly (among other platforms), they are using this directive aimed at an ‘anti-Russian asset’ to destroy a journalist who dared oppose the Palestinian genocide.

In practice, this means that Hüseyin’s bank account is frozen; that if you or I were to give him cash to buy groceries or make rent then we would be considered his accomplices and subject to similar sanctions; it also means that if he were a civil servant, he would be fired; if he were a student he would be expelled from his university; if he received a pension it would be suspended; if he received any social benefit it would be frozen. It also, astonishingly, means that he cannot leave Germany!

Last, but definitely not least, it means that Hüseyin cannot sue his government for turning him into a non-person but only challenge the European Commission in Brussels – where he is not even allowed to go!

Beautiful stuff, even cash is forbidden, BUT, of course, cash is hard to trace. Thing is, these days, most payments are electronic.

Back when the Trucker Protest happened in Ottawa Canada I opposed freezing their accounts, even though I thought they were a bunch of fools and opposed their agenda. Why? Because it is punishment without a trial or facing a jury. It’s devastating. And I understood that if it could be done to people I disagree with, it could be done to people I do agree with.

So Germany has made it so Huseyin will wind up homeless and possibly even starve to death simply by making him an economic non-person.

This is made much easier by the fact that there’s barely a cash economy any more

These sorts of administrative penalties are becoming more common. Palestine Action, for example, was designated a terrorist organization recently (at the same time as the terrorists who took over Syria were removed.) I’m going to come back to this, because it’s important.

But, basically, the end of the cash economy has made it MUCH easier for authoritarian governments to crush dissent, and in general, the removal of cases from courts, plea bargains, lack of jury trials, making it illegal to tell juries about jury nullification and the rise of “sanctions” and administravie orders has been extremely chilling.

Europe is trending hard authoritarian, with Britain and Germany leading the way. The US, of course, is working hard to end Habeas Corpus and other legal protections. Canada is moving in the same direction.

We need a new conception of how societies should run and until that happens we need a new conception of how to run organizations that the elite doesn’t approve of.

We’ll cover this more, soon.

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Week-end Wrap – Political Economy – July 06, 2025

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On July 6, 2025

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by Tony Wikrent

Trump not violating any law

‘He who saves his Country does not violate any Law’

Trump Stuns By Saying ‘I Don’t Know’ When Asked Directly NBC’s Kristen Welker ‘Don’t You Need to Uphold the Constitution?’

Joe DePaolo, May 4th, 2025 [mediaite.com]

Welcome to the Age of Disappearance: America’s new era of secret police 

Hamilton Nolan, July 02, 2025 [How Things Work]

…an avalanche of new funding for the Department of Homeland Security, ICE, and anti-immigration measures is, in fact, coming. This is going to spill well past the bounds of what any sane person would consider to be “immigration enforcement.” It is going to create a lavishly funded, unaccountable, quasi-secret police force that will transform our nation for the worse. Very soon.

A couple of weeks ago, I wrote about the terrifying scale of this new funding. This bill contains enough money to build a new system of immigration detention centers far bigger than the entire federal prison system. The American Immigration Council says that it will be enough to facilitate the “daily detention of at least 116,000 non-citizens.” It will let ICE hire more field agents than the FBI. Its $170 billion in funding for Stephen Miller’s rabid campaign to purge America of brown people is comparable to the total annual funding for the United States Army.

Donald Trump envisions himself as an all-powerful leader whose will is equal to law. He is bent on revenge against his political enemies. He has installed extreme loyalists in the Justice Department, the FBI, the Defense Department, the Department of Homeland Security, and all other security departments. The courts have declined to meaningfully restrain his abuses of these departments. This budget will give him the final piece of the puzzle that he needs to achieve his fever dream: a nationwide army of masked, unaccountable armed agents empowered to snatch anyone they like off the streets, and the physical infrastructure to imprison or deport those people at will. Thousands of men with guns, unrestrained by judges or local police, who do not answer to Congress, who point guns at the press, who arrest whoever they want, for reasons they do not share, and do whatever they wish with those people. The implications of this are going to make America a much darker place….

…ICE has already arrested a number of Democratic elected officials, including mayors and members of Congress and a judge. In this environment, it is a trivial matter for Trump and his loyalists to concoct reasons to arrest almost anyone. People can be arrested if they are immigrants, if they look like they might be immigrants, if they illegally harbored or assisted immigrants, or if they somehow impeded ICE’s quest to arrest immigrants. The mission can and will be scaled up from “deport immigrants” to “punish those who want to stand in the way of our mission.”….

16 Thoughts On The Republican Budget Atrocity

Brian Beutler, July 03, 2025 [Off Message]

  • Quite apart from the economics, this secret police force and the prison network that will be built for it, is the most repugnant and frightening aspect of the bill; Medicaid can be funded again, food stamps can be funded again, clean energy can be funded, taxes can be increased progressively. But an immigrant prison network, overseen by Trump-loyal paramilitaries, with no resources for due process, will be very hard to dislodge, and could easily be turned against the citizenry. This is Stephen Miller’s wet dream and it will stain the whole country….

Trump falsely questions Zohran Mamdani’s citizenship, threatens to arrest him over ICE operations 

[ABC, via Naked Capitalism 07-02-2025]

Trump’s Threat to Deport Mamdani Isn’t a Joke 

Ken Klippensteinm, July 3, 2025

Last month, according to an internal memo, the Justice Department ordered its attorneys to “prioritize and maximally pursue denaturalization proceedings” — the process by which naturalized Americans can be stripped of their citizenship — not for fraud or criminality, but “against individuals who pose a potential danger to national security.”

Strategic Political Economy

There’s a Race to Power the Future. China Is Pulling Away

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Open Thread

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On July 5, 2025

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Use to discuss topics unrelated to recent posts.

A Few Words On The “Big Beautiful Bill”

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On July 3, 2025

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Obviously this is a pile of steaming garbage. Four trillion of tax cuts, paid for by cutting Medicaid (11.8 million people will lose health care according to the CBO) and perhaps 8 million people will lose food benefits under SNAP. Green energy subsidies are cut (no, shut up, there are tons of dirty energy subsidies) and there’s a huge budget increase for ICE (including more prison camps), America’s Gestapo.

And, of course, there’s all sorts of nasty in the details, like cuts to Planned Parenthood (which does far more than abortions).

A lot of Americans are going to be hurt by this. I’d go so far as to say it might be the worst American federal budget I’ve seen in my life, though Obama and the Fed’s giveaways to the rich were worse.

Oh, and politicians like Josh Hawley who pretend to care about ordinary people? Yeah, fake. He voted for the bill.

I reiterate that things in the US are going to get worse and worse for years, with only a small chance of a reversal (based on a Mamdani style left populism). Get out if you can, take steps to prepare and protect yourself if you can’t.

Update: worse than I realized. Trump obviously doesn’t give a damn in Republicans are wiped out in the mid-terms, and Republicans know that Democrats won’t reverse their cuts, so people will have no choice and the duopoly will continue:

Because of a statutory requirement to automatically impose budget cuts when legislation increases the deficit, the Big Beautiful Bill would require automatic sequestration cuts across the board, something that has been confirmed by the Congressional Budget Office (CBO) but has been largely absent from the debate over the bill. Medicare is one of the programs that will face the axe, and the damage sums to $490 billion over the next ten years, starting in the next fiscal year that begins in October. While many of the safety-net cuts in the bill are delayed to help Republicans with their re-election campaigns, the Medicare cuts must begin next year.

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Why Does The CCP Accomplish Goals Meant To Better China’s People?

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On July 3, 2025

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Chinese and American flags flying together

When I originally formulated this article it was just “Why does the CCP accomplish its goals?”

But that’s a stupid article. Certainly there are governments which fail to accomplish their goals, in countries which lacks state capacity or are in constrained positions. But for most of my life most Western governments haven’t been all that constrained, they just acted as if they were.

The truth is that Western governments have mostly accomplished their goals over the last 45 years: it’s just that their ur-goal was to make the rich richer. If that meant burning everything else down, they were OK with that. There are a number of reasons for this, but basically political elites were bought: do what the rich want and even if you lose office you’ll be very well taken care of. Instead of viewing government as “theirs” and their countries as “belonging to them” they viewed political office as a way to get rich. Instead of viewing the rich as their competitors for power, to be kept under control, they viewed them as their benefactors and as the ones who could put them into office. Or, put another way, most elected representatives saw themselves as de-facto employees, or contractors, of the rich and corporations.

This view has explanatory power: politicians do what you’d expect them to do if it were true. Take a look at Trump: his budget has 4 trillion in tax cuts for the rich, and to partially pay for those cuts, it is getting rid of 800 billion in Medicare funding. The idea that he’s some sort of economic populist is laughable. He’s making the rich get richer, just like every other President since Carter (though Reagan was the real inflection point.)

This wasn’t always the case. From 33 till around 68 or so, the primary policy goal in America was the growth and prosperity of the middle class, and most politicians, while they’d take the money of corporations and rich to some extent, saw them as the enemy, to be kept under control.

So, let’s turn to the CCP. They have lifted more people out of poverty than every other country combined. The one-child policy, whether you agree with it or not, did get China’s population growth under control. They are ahead in 80% of techs, when 20 years ago that number belonged to the US. They have the largest industrial economy in the world. They are reducing housing prices, which was their goal. They are reducing inequality and smashing the number of billionaires. They are installing more renewable energy than the rest of the world combined. They are building industrial stacks so that nothing they actually need comes from the rest of the world—they’re not quite there yet but they will be. (Don’t invest in TMSC long term, their near monopoly position is almost over and they will soon be overtaken by the Chinese. Three to five years at most is my guess.)

The CCP accomplishes its goals. Its primary goal is:

The Preservation of its own power. There are two branches to this: avoidance of foreign military conquest or regime change, and avoidance of domestic collapse or revolt.

To be powerful, and thus not be at the mercy of foreigners (one of Mao’s main goals) requires an educated, prosperous population and an industrial economy, because military power post-industrial revolution is primarily a result of technology plus industry. If another country can defeat you militarily, you won’t stay in power if they don’t want you to.

Domestically if the population loves you (and all polling shows vast support for the CCP) you will keep power. If they despise you, you will eventually lose power. The Soviets, with all their tanks and soldiers, fell in part because neither the people nor the elites believed in rule by the Party any more. So making the people prosperous is job one for protecting the CCP’s rule. Prosperous people don’t revolt. The Chinese believe this more than any other civilization. The entire “Mandate of Heaven” is based on this, and for over two thousand years the Chinese have regarded the government as responsible for prosperity. When it can no longer provide it, not only is overthrowing it justified, it is even virtuous. On the other hand, to overthrow a government which takes care of the people is vile, and understood as such.

Likewise, if one doesn’t want a change in which elites control the country, one can’t allow domestic power centers other than the party to spring up. This is why the CCP has been crushing billionaires. This is why the CCP banned the Falun Gong (who had widespread membership, including members in the CCP.) Bilionaires were particularly pernicious, because they corrupted party members, and those members goals changed from keeping the CCP in power by making China stronger and people more prosperous, to making a small number of people rich at the cost of general prosperity.

Xi was absolutely correct to make going after corruption his first and most important goal, because the CCP had split into factions and those factions were putting their own prosperity and strength above those of the party and the country. Left unchecked China would have fallen into a corruption spiral, inequality would have spiralled out of control and even if the CCP existed in form, it would no longer be its own power center, but controlled by others.

Now it should be understood that the CCP’s basic ideology isn’t “stay in power at all costs”. Like all ideologies it justifies it otherwise. It would say, and many party members, probably including Xi, would say that the party wants to stay in power because it can make China powerful and prosperous.

Given China’s progress since the party took over (and there was plenty of progress under Mao, don’t let anyone tell you otherwise — education and lifespand went way up), the CCP feels entirely justified in this belief.

Of course all things pass, and at some point the CCP will fail and be replaced, either in form (abolished) or by takeover. The Democratic party still exists in America, after all, but FDR or even LBJ would not recognize it, nor have any respect for it. Even Carter, the original neoliberal, by the end of his life, found it abominable. (I suspect young President Carter didn’t fully understand the consequences of what he helped birth.)

But for now, the CCP stands in its glory, having accomplished much of what it originally set out to do. It kicked out foreign occupiers. It made China strong enough that it could no longer be pushed around or occupied. It made the Chinese people prosperous. It gained the technological and industrial lead over the West.

It did so because it regards China as belonging to it, and believes that it has a responsibility to the people of China and that it deserves and will keep its power only if it delivers for the people of China: not for a minority, but for the masses.

None of this is to say the CCP is perfect, just that it’s an effective government which actually wants a prosperous population.

Our governments are effective, but what they want is richer rich people. As a result they will become ineffective and at some point they will either fall and change form and rise again, or they will devolve into full-on failed states.

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Prices of Both Housing And Rent Are Decreasing In China

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On July 2, 2025

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In 2016, Xi said that houses were for living in, not for speculating. The Chinese government took steps to reduce prices, those steps took time to bear fruit.

 

 

Likewise, rent prices have been dropping recently:

And yes, this is a result of government policy:

While, according to the PBOC, in the pre-pandemic decade, the annual rental inflation in China exceeded 1.2%, it slowed significantly in recent years and has been in the negative in the last twelve months. In March 2025, the rent of the rental housing component of the consumer price index (CPI) showed a 0.1% year-on-year decline, trending upwards, however, from -0.4% and -0.3% annual change rates previously registered in September 2024 and December 2024, respectively.

“In recent years, rents have declined due to lower income expectations and the increase in government-subsidized housing supply. This has provided tenants with more options and increased bargaining power, making lease renewals a key challenge for leasing companies,” noted Savills in their 2025 Chinese Real Estate Market Outlook.

Now you might think “this means the Chinese economy or citizen is in trouble!” No.

In stark contrast to the slowdown across housing and industry, however, Chinese consumers appear motivated to open their wallets and spend on goods. Retail sales grew 6.4% in May, topping expectations and sharply accelerating from April’s 5.1% rise.

Now, standard Western economists think that the real-estate market slumping is bad, and retail trade going up is good, but they’re both good and they’re both a result of government policy. China wants relatively cheap real-estate and to increase the size of its domestic consumer market so its industry is less reliant on exports. (Trump has kindly demonstrated the problem with over-reliance on trade partners.)

The thing is that if real-estate had kept going up in price the way it did in the past, the CCP would be in danger: their legitimacy rests on the idea that people’s lives keep betting better. For many years I kept reading young people in China saying they couldn’t afford to own a home. That was (and still is, to some extent) a problem. Xi acted on it.

Further high real-estate prices increase the costs of every single business, since they increase the costs of employees. China wants to stay an industrial power, not become worthless rentiers and financiers, and as such real-estate can’t be allowed to increase too much.

Now for a long time real-estate is how city government financed themselves. It was an engine which allowed growth. But when it started becoming a financial game, with people owning multiple condos or houses; prices increasing faster than wages and people locked out of ownership Beijing acted.

You can’t be an industrial power if rentiers: people who expect to make money thru time arbitrage and managed scarcity, are in charge of your society.

It is also true that if you aren’t a major manufacturing power you can’t become or remain a major military power. (Britain says “Hi!” America says, “uhhhhh….”)

Anyway, China needs to keep housing and rental prices down. At the very least they need to increase less than wage increases and for many years.

All signs are, that as is most often the case, the CCP is succeeding at the policy goals it set out for itself.

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Verdun Then and Now

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On July 1, 2025

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Thirty-one years ago on my first trip overseas I visited Verdun in France. Specifically to see the battlefield of Verdun, where von Falkenhayn sought to bleed the French white. From 21 February 1916 to 18 December 1916, 9 months, 3 weeks and 6 days the Boche–the term the French used for the Germans–did exactly that. I’d written my senior’s honor thesis in history on Verdun and felt it was right to visit.

Fallen Lion of France at the Verdun Battlefield

I’m not going to go into too much detail. You can read about it in its fullness here. I only want to add a few things. First, this was the first time any general attempted a strategy of attrition. Some of what Grant did during the Wilderness and the siege of Fredricksburg is semi-attritional, but it wasn’t Grant’s spoken intent as it was the explicit aim of the Cheif of the German General Staff Erich von Falkenhayn’s. He knew he could not break through the ring of forts surrounding the Meuse Heights and the medieval city of Verdun. His aim was to take the heights and dig in and then take the strategic defensive, forcing France to regain her honor at any cost. 50 German divisions squared off against 75 French. von Falkenhayn succeeded in forcing France’s hand, certainly. In the end his strategy was a failure and he was dismissed by the Kaiser and replaced by Ludendorff and Hindenburg, who quickly established a military dictatorship over the Second Reich for the remainder of the war. Needless to say that over a million men–French and German–died fighting in the trenches along and up the heights and into the forts Douamont and Vaux trading them back several times.

Fort Douamont on the Meuse Heights

If the Miracle on the Marne was the most important battle of the 20th century–and it was we ought paraphrase Churchill and call it France’s finest hour. That being so makes the Battle of Verdun one the finest last stands in the annals of human endeavor. To a man the good, stolid French poilus stood and died in the mud, the filth, the lice, the decaying bodies and the artillery shells shattering overhead all day long, every day for almost a year.

When I visited in 1994 I walked from the city of Verdun all the way up the heights along the single supply route the French called the “voie sacrée” – the sacred way. It was ten miles there and ten miles back. A long day. I walked through trenches, both forts Douamont and Vaux and at the end of the day I walked, rather solemnly through the hallowed arches of the Ossuary, which holds the bones of over 130,000 unidentified French and German soldiers. There was no entrance fee for anything and I was free to roam just about anywhere I wished, except when I saw signs that declared, “Non! Munitions non explosées!” Unexploded ordnance, still active almost a hundred years after being fired.

Ossuary of Verdun

So this morning I watched a video made by a young French woman of the battlefield and its environs. A lot has changed. There is a new, modern museum, and to walk the grounds and see the museum cost about $20. The young woman does an admirable job of guiding the viewer through the most important parts of what I now guess is a monument park of sorts called Mémorial de Verdun Champ de bataille. She’s tactful, sincere, respectful and cognizant of the sacrifice the men made for her. She honors them in her own way. I was pleased to see their sacrifice is still remembered and revered. (As some of you may recall, I had the good fortune to befriend an American WWI veteran in the 1990s before he passed away. So, WWI is important to me, I carry the memory of one of the last American soldiers to fight in the war and I cherish that memory.) She also pays her respects to the Germans who fell during the battle (part of the site was re-dedicated in the 50’s after the Franco-German rapproachment after WWII). She even visited the graves of our doughboys who fought in the area in 1918.

In all honesty, I can’t say I would have enjoyed walking through the museum. Of course seeing the uniforms and the kit of the poilus was fascinating, but there was a rich, chilling awe of gravitas to my imagination that day as I walked through the empty echoing halls of forts Douamont and Vaux. There were no wax figures as there are now. Only a haunting silence. If I listened closely enough I could almost hear the distant echoes of incoming artillery. The shots of mausers. The cracks of the countering French Berthiers. And the loud pops and booms of French and German grenades.

Sometimes less is more.

Regardless, it was an unforgetable experience.

Doomed Tesla (RoboTaxi Edition)

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On July 1, 2025

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I’ll keep this one short and sweet.

Tesla was contacted by the National Highway Traffic Safety Administration on Monday after videos posted on social media showed the company’s robotaxis driving in a chaotic manner on public roads in Austin, Texas.

Elon Musk’s electric vehicle maker debuted autonomous trips in Austin on Sunday, opening the service to a limited number of riders by invitation only.

In the videos shared widely online, one Tesla robotaxi was spotted traveling the wrong way down a road, and another was shown braking hard in the middle of traffic, responding to “stationary police vehicles outside its driving path,” among several other examples.

Elon Musk is not that smart. He chose to use cameras only, and not Lidar, against the advice of his own engineers.

China has robotaxis already. They work fine. They have Lidar.

Tesla is doomed. Their cars are worse than those of their competitors and more expensive. Robotaxis aren’t going to work. The only thing saving Tesla right now is 100% tariffs on Chinese autos, but even non Chinese electric cars are better and often cheaper.

Meanwhile Musk is in a feud with Trump, Trump has threatened to remove subsidies for Musk enterprises and Musk (again, an idiot) has said Trump should go ahead. And yes, he does need those subsidies.

The majority of Musk’s wealth is tied up in Tesla, and it’s days are numbered. Meanwhile Starship keeps exploding, the last time during fueling, not even after launch. There are a lot of competitors to SpaceX, and w/o NASA contracts SpaceX doesn’t look so hot either. Right now NASA is stuck with Musk, but that’s not going to last.

Musk isn’t going to be the world’s richest man much longer.

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