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How To Destabilize Authoritarian Regimes

Destabilize Authoritarian Regimes
Development experts claim that freedom is a necessity in the fight to end poverty, yet more than 2.5 billion people around the globe live under authoritarian rule. As the world becomes increasingly digital, powerful autocrats gain access to virtual tools capable of stifling dissent and quashing liberty. Nowhere is this more evident than in China, where the government has taken steps to replace paper cash with a digital currency that central banks back. The transition would allow state officials to monitor the purchases and activities of every Chinese citizen, as well as enable the central banks to freeze an individual’s assets should they threaten party doctrines. However, blockchain could help destabilize authoritarian regimes.

How Blockchain Works to Destabilize Authoritarian Regimes

The blockchain, which Satoshi Nakamoto created in 2008, is an encrypted digital network that records information in a decentralized database. Nakamoto’s invention has paved the way for cryptocurrencies such as Bitcoin, Litecoin and Cardano to revolutionize the financial sector. The nature of cryptocurrency is such that governments cannot manipulate them nor monitor them; they are secure, private and resistant to authoritarian fiscal policy. Cryptocurrency “takes control of people’s monetary futures away from governments and places it in the hands of individuals,” said Ross Gerber, the CEO of Kawasaki Wealth and Investment Management. Nicolas Maduro cannot print crypto coins like the Venezuelan bolivar. Miguel Diaz-Canel and the Cuban government cannot intercept remittances that go to one’s crypto-wallet. Vladimir Putin cannot surveil transactions on encrypted trading platforms. Additionally, Xi Jinping cannot freeze crypto-accounts. Cryptocurrencies are actively destabilizing authoritarian regimes.

Laws Against Peer-to-Peer Exchanges

It should come as no surprise, then, that Algeria, Bolivia, Egypt, Iran and Russia have passed laws restricting peer-to-peer exchanges. Perhaps none have cracked down harder than China’s President, who enacted a comprehensive ban in September 2021. However, such legislation is more symbolic than practical, as cryptocurrency usage persists in each of the aforementioned nations. Alexei Navalny, a notorious Putin-critic and opposition leader, raised more than $300,000 with Bitcoin after the administration jailed him. Something similar happened in Nigeria; the government froze the assets of activists protesting a violent police force but they received supplementation through an infusion of cryptocurrency from supporters. “The only way to ‘shut down’ cryptocurrency is to disconnect the internet,” said David Yermack, a professor at NYU, adding that a government might just as well attempt to ban the sun from rising.

How Blockchains Can Revolutionize Information

The utility of Nakamoto’s blockchain with regard to destabilizing authoritarian regimes is more than fiscal. In the same way that Bitcoin revolutionized the financial world, so too will blockchain search engines revolutionize information. Such innovations offer trustworthy alternatives to state-run propaganda machines that specialize in misinformation. Readers will have “access to unbiased information online, as well as more ownership of their personal data and real digital privacy,” said Colin Pape, the founder of a decentralized search engine. With the groundbreaking technology, civilians living under authoritarian rule can circumvent these information blockades by logging into an encrypted web browser, verified by users around the globe in much the way that crypto miners authenticate Bitcoin exchanges, that tracks for credibility and accuracy.

The technologies that can destabilize authoritarian regimes are at the world’s disposal. It is essential to encourage their adoption and use in countries that lack freedom. Thanks in part to Nakamoto’s invention, authoritarianism could someday be a relic of the past, and poverty with it.

– Thomas Willhoite
Photo: Flickr
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The Rise of Income Inequality in Russia 

Income Inequality in Russia
In 2015, 111 people controlled 19 percent of all household wealth in Russia. Russia’s wealth and income inequalities have drastically increased in recent years, surpassing the U.S. Historically, income inequality in Russia has fluctuated. Towards the end of Tsarist Russia, the top 10 percent of earners made about 45 to 50 percent of the national income. During the Soviet period, this dropped to about 20 to 15 percent. However, it rose back up to about 45 to 50 percent in 1990 with the fall of the Soviet Union.

Income Inequality in Russia

Recently, income inequality in Russia has risen so that the top 1 percent of earners’ combined income is as high as 20-25 percent of the national income. This is comparatively much higher than Eastern European countries, where the top 1 percent income shares of wealth make about 10 to 14 percent of income. Since the fall of the Soviet Union, socioeconomic stratification has exceeded that of other formerly socialist economies, including China. Wealth inequality is even more drastic, with the richest 10 percent of Russians owning 87 percent of the country’s wealth, making it the most unequal of the world’s major economies.

Causes of Income Inequality

The transition from communism to capitalism after 1990 is the primary cause of increased income inequality. Specifically, housing played an important role in the rise of private wealth and increased from less than 50 percent of national income in 1990 to 200 percent of national income in 2015. This results from housing privatization and the rise of real estate prices. In turn, these shifts in housing prices significantly increased rents for a large fraction of the population. Their income didn’t increase to help account for the raised costs, exacerbating socioeconomic inequality in Russia.

The rise of the oligarchs, a group of individuals who control most of the productive assets and the capital in Russia, also contributed to the severe inequalities in income and wealth. Oligarchs formed ties with political figures, giving them a foothold in politics. This, combined with their economic power, allowed them to influence governmental and market structures.

Oligarchs have contributed to development and economic growth, but they also play a critical role in increasing inequality in Russia. The political and economic power of the Russian oligarchs enables corruption. Oligarchs want to lower competition, avoid taxation and keep wages low. Because of their political influence, they are able to support policies that will further their own interests. These interests maximize their profits while keeping taxes and wages low and preventing redistribution, which increases inequality.

Resistance to Corruption

In 2017, about 60,000 people protested inequality on the streets of almost 80 different cities. This isn’t a large percent of the population but does show people’s anger with the current socioeconomic inequalities. Alexei Navalny, who has been the face of Russian opposition to President Vladimir Putin, called these anti-corruption protests. Over 1,000 protesters were detained as a result and Navalny was sentenced to 30 days in jail. While many people are scared to protest in Russia, a significant number of young people were among the demonstrators who turned out for the anti-corruption protests, showing promise for intensified anti-corruption activism in the future.

– Maia Cullen
Photo: Flickr