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France and Germany Agree to Block Facebook's Libra (reuters.com)
1255 points by huntermeyer 6 months ago | hide | past | web | favorite | 783 comments



I'm of course not familiar with the specific mindsets and the history of this decision, but I want to share a bit of cultural perspective from Germany that is so far not really considered in this comment section:

Germany is very, very keen on preventing powerful entities from acting outside of regulation and similarly, if not more, on preventing a single entity to get in control of everything. This is largely due to some foobar in the last century, which I'm sure everyone is aware of.

So if Facebook, 10x of Germany's population comes around the corner with a proposal akin to "Hey do you mind if we just skip the paperwork part and just control currency, while actually being a social media tech giant" there going to be up against every trick in the book. This is not hypocrite behavior because Germany allowed some fun regional currency project no one is aware of some time ago. This is much more protecting the idea of the German society.

And personally, as a German, I'm really glad about it. You remember the hundreds of cases of worked with a scummy developer on an app once, now I'm blocked out of my email and all my files stories? Now imagine that, but with money and with a company who never even bothered to pretend it isn't evil - this is gonna be a no, thank you!


Last week I wanted to purchase a used item but discovered that, without warning or notification, Marketplace was deactivated from my Facebook account. My Facebook account is quite active, with posts, discussion in multiple groups, and hundreds of friends. I still have no clue as to what rule I triggered and no recourse to reactivate it. Now imagine that's my digital Libra bank account? No thanks.


That's a good point, but other companies do this without recourse. Paypal is the classic example. They will literally ban you overnight and hold your funds for months. Oh and forget knowing the reason, because revealing why you got banned would reveal too much about their filter algorithm.

The key is to diversify where you buy and how you buy it so you're not dependent on any one company.


Which is exactly why you can't risk to have anything even remotely approaching a monopoly in any part of the systems involved in making transactions. Which is why I (also as a German) am very happy that we have a competitive (read: better in literally every way) alternative to credit cards, plus a strong cash culture.

Oh and for completeness' sake: if paypal (and libra for that matter) are not regulated according to all the rules that other financial services have to obey, something needs to change. But then I don't know enough about the specifics of that to say if that is a hypothetical or not.


> you can't risk to have anything even remotely approaching a monopoly in any part of the systems involved in making transactions.

AFAIK US is a monopoly for international money transfer. You just cannot bypass a US intermediary bank and US Dollar conversion.


There is not truth to this. How is there an American monopoly on money transfers?

Most countries have central banks that settle and controls its own currency. Bigger banks have accounts at the central banks and can settle cross border without a problem. The US has nothing to with it unless you are buying/selling USD (which, by the way, you can do outside of the US banking system, if you like) or you are buying selling some obscure currency which needs to be exchanged via the USD (or any other liquid currency for that matter).


I regularly transfer money from AUD to IDR or EUR, and from Australian bank accounts to Indonesian or Euro, without any apparent transition with US intermediary banks and USD conversions. I did surprise someone from Eastern Europe when I was in Indonesia that I had never touched USD, so I guess in some parts of the world USD is important.

Many of my non-mediated transactions go through American institutions (e.g. Mastercard, Visa) but not all.

And if anything does go via USD I don't notice it, even in price; it's clearly cheaper to go AUD->IDR than to go AUD->USD->IDR.


> I did surprise someone from Eastern Europe when I was in Indonesia that I had never touched USD

Thanks, as I thought, most international money transfers involve USD and, because of USD, have to use US based intermediaries.


International bank transfers within europe most certainly do not go through USD. If you want to send money to/from Europe to USA without a conversion, it is also possible, but you need a bank account in the currency you want to transfer on both sides.


You're likely thinking of the dollar being "unavoidable" as a unit of settlement due to its status as main world reserve currency, but even that's metaphorical and in any case a state & institutional level thing.

Just think about it - how would that even work?


Dollar or not is not that important. Forcing US intermediary is.


There is no forced US intermediaries. What are you referring to?


"U.S. control over transactions within the EU.

..The transaction was automatically routed through the US, possibly because of the USD currency used in the transaction, which is how the United States was able to seize the funds.." [0]

Also: "The U.S. Office of Foreign Asset Control (OFAC) enforces U.S. economic sanctions programs ... and any person or entity physically located in the United States (including branches of foreign corporations)" [2]. And most foreign banks do have US branches. And if transaction is in US Dollars, OFAC applies too [1]. I can dig deeper, down the rabbit hole :)

All right. Seems like if a transaction involves USD, it must pass US based correspondent bank.

[0] https://en.wikipedia.org/wiki/Society_for_Worldwide_Interban...

[1] https://nacm.org/pdfs/webinars/FCIBWebinar_Compliance_OFAC_U...

[2] https://www.riskscreen.com/kyc360/of-counsel/ofac-compliance...


the whole european region (+ schengen) does not use swift at all (at least not since 2018)


Yes, It was noted in this thread few times. I'm talking about all other transfers, not EU-EU. Even then, the wikipedia link shows that one EU-EU transaction which involved USD, was affected.


Even between EU countries? I wouldn't think so, but I'm no expert.


EU internal ones are likely an exception. Not an expert myself, it just consolidated in my mind as a fact from all the books and articles over the years.


EU internal transfers are most likely made by SEPA (Single Euro Payments Area) infrastructure (with European clearing entities) or for large sums by direct communication/deals between the European banks. Why would any US entity be needed for this?


Exactly. And since most corporations I deal with have at least an office in a European country, I almost never have to deal with US banks.


And those intermediaries are very closely watched by entities with power to affect the system, not by powerless "consumers" who's only choice is to shrug and choose another provider (if available).


Agree with you with the necessity of diversification. The issue is not Facebook issuing its own crypto but rather the potential control we let it take over. I believe that the same reason related to control that an entity can people on people (combined with the new technology) helped to originate bitcoin. The need to ensure no one ( including governments) deciding people's life by manipulating own belongings (by tax or rates manipulation). That's a the same anarcho- libertarian logic approach here. Anyone should be able to decide whether or not putting your eggs in the same basket.


By your logic, banning it through regulation decreases options and hence diversification.

Governments are not angels which seems to be an assumption in your and sibling replies. They're a bully who doesn't want someone else to get power.

I'm not being extreme, humor me. If the govt didn't want a monopoly, isn't it a hypocrisy that they themselves are one?

The proper thing to would've been to get closer to anarcho-capitalism, ie let there be govt currency and FB's libra. Let people decide what they want to use.


You speak as though corporations and democratic governments are the same thing. The government is (at least notionally) the will of the people. A corporation is unaccountable to anyone but it’s shareholders. It is folly to treat EU legislators the same as Zuck et al.


Isn't the answer better consumer protections, though? Rather than a ban on new technology that threatens the status quo. If Facebook wants to be a bank, they should be subject to the banking regulators and there could be (should be) strong consumer protections preventing the type of corporate behavior you describe.


I feel there is a conflation here. Facebook is free to apply for a banking license in countries they want to operate as a bank in. Facebook shouldn’t be able to circumvent banking over site and regulations by coming in as a technology company with fancy words. The conflation here is Facebook isn’t being blocked form becoming a licensed bank in Germany - correct me if I’m wrong


But they don’t want to become a bank. They want to build a cryptocurrency. There are already hundreds of cryptocurrencies that operate in France and Germany, and the developers do not have to have banking licenses.


With Libra, Facebook wouldn't just make itself a bank. It would make itself a central bank. A world wide central bank.

Libra = inventing a new fiat currency and then replacing a significant portion of other fiat currencies around the world through a cloak of "we're just here doing the next big thing, also App, p2p payments, online crypto AI blockchain social network Facebook innocent whistling of a song". As a little bonus, they would be selling the Libra nodes (that handle all the payment traffic) to third parties. Initially for 10 million USD per node. That way they can shift the blame of selling payment data to third parties away from Facebook, while still making money by giving third parties the right to do whatever they want with that payment data.

Having a banking license doesn't allow you to replace a countries' fiat currency by some new invented token. The value of Libra in Europe would depend on a promise by an American tech company (led by 1 man). A promise to keep the value of the Libra tied to a predetermined basket of fiat currencies. Assuming that Libra would become popular, this would yield pretty much infinite international political and economical power to Mark Zuckerberg based on the mere perception of the possibility that this promise could be broken by him. This is also why Libra is not comparable to an actual crypto currency like Bitcoin. The value and existence of Bitcoin and the Bitcoin network is not dependent on 1 man and the contracts he has with Bitcoin nodes.

Germany and France aren't stupid. I guess.

Those are my thoughts on what's actually going on.


Even if they don't fall within the traditional banking definition, which I have doubts about, they'd at least play the role of the exchange or broker and as such are subject to, at least, authorization through BaFin in Germany. Random hipsters buying BTC privately and Facebook attempting to erode traditional currencies are two wildly different things.


Are we sure those crypto developers are acting within the law? Genuine question.


The difference is that Facebook has millions to pour into resources, marketing, etc, while those other crypto currency companies do not.

I would be very very wary of a social media giant issuing crypto. Lots of inherit dangers there.


*inherent dangers


Hundreds of cryptocurrencies that aren't being operated by the most powerful social network corporation in the world.

it's such a small distinction I can see how you choose to overlook it ...


I have the same question in my first reaction. But then other than some bank owned one, they are not controlled by anyone. Can you access and exchange libra without Facebook account or banned Facebook account


I'm pretty sure you can. They're building a wallet, but it's not the only one. It's also separate to the rest of Facebook but likely would integrate with it well


For sure, the point is having conection to this cryptocurrencie network and a wallet. And its possible to exchange BTC for FBL also.


> there could be (should be) strong consumer protections preventing the type of corporate behavior you describe

there's not a snowflake's chance in hell that a megacorporation like Facebook is going to provide strong customer protections on a long-term basis, compared to what a EU country can provide its citizens.

how can you even begin to trust something that big, that has been around for such a short time (~2 decades?).

remember 15 years ago when people thought Google was cool and "one of us / the good guys" and way more trustworthy than most things on the Internet?

it's a long time on the Internet, but it's a blip in history when it comes to trust in state regulations and consumer protection.


The point is that not even a German bank would be allowed to do what Facebook plans to do.


Yes.

They can.

In Euros.

Thanks.

p.s.: they are already applying for it, PSD2 regulation allows them to emit cards or be intermediaries for payments.

No foreign fake, unregulated, privately conrolled currencies here in Europe, thank you.


Europe already has great consumer protections. The US doesn't, and probably never will.


Doesn’t that just shift the controls on corporate behavior and consolidate the controls into a political process?

https://en.wikipedia.org/wiki/Operation_Choke_Point


which is where you want it, because FB doesn't exactly have a good track record when it comes to customer protection, compared to most EU countries. in fact their track record is both worse and laughably shorter.


I was hoping this would happen. It will probably become a EU thing now.

The idea of a privately controlled currency needs to die quickly. Never been a fan of crypto currency in general but Bitcoin, and the like, are accepted because they are not centralized. Your Bitcoin won't change in value or disappear because your country and another get in a fight.


I'm quite fond of the idea of a decentralized currency that nobody has the ability to actively control becoming popular. That would act as a hedge against abuse of power by both governments and corporations.

A currency used worldwide, controlled by a corporation, and under the influence of the US government would be the exact opposite, and is not a thing I want to see succeed.


> nobody has the ability to actively control

AKA only the really powerful entities can

AKA "dictatorship"


A really powerful entity, let's say Facebook, or the US government would find it difficult to do any of these with Bitcoin (used as the example because it's well-known):

* Alter the monetary policy significantly

* Prevent a specific person, organization, or country from using the currency

* Prevent the use of the currency for specific goods or services

That doesn't make using Bitcoin a magic bullet to be free from the influence of the US government even if its popularity and monetary policy were appropriate for widespread use as a currency, but it raises the difficulty level versus influencing someone who's doing business in USD.


But it would certainly.


>I'm quite fond of the idea of a decentralized currency that nobody has the ability to actively control becoming popular. That would act as a hedge against abuse of power by both governments and corporations.

Precisely what Satoshi Nakamoto cited as his motivations when introducing bitcoin on the p2pfoundation forums.

>A currency used worldwide, controlled by a corporation, and under the influence of the US government would be the exact opposite, and is not a thing I want to see succeed.

Completely agreed. The U.S. has been using any reach it has into other countries to push its very peculiar cultural viewpoints into countries that don't want them but need fair access to finance capital.


There are lots of privately controlled currencies. Miles, points, certificates, game gold, etc. - they are all private currencies. Most of them aren't legal tender, but neither are cryptocurrencies. The only difference between facebook-coin and miles is that Facebook promises to encourage dealing in their coin and airline would frown on that. Not much difference otherwise. You have some tokens that you can exchange for things of value in some places.

> Your Bitcoin won't change in value or disappear because your country and another get in a fight

If one of them decides that banning bitcoin would serve their interests - it will get banned. You, of course, could work around it - as people do for centuries with drugs, guns and ideas proscribed by governments - but then you'd have to suffer the consequences when you're caught. Yes, when, because if you live in government's jurisdiction and they have interest in getting to you, they will.


> Facebook promises to encourage dealing in their coin and airline would frown on that. Not much difference otherwise.

Not much difference except it is controlled by one of the most powerful, and richest companies on the planet, with the most data on everyone, ever compiled. That if you are a member, knows you likes, dislikes, politics, sexual preferences, entire social network, where you live, when you get home, where you go, whether or not your like your friends. That has a bigger market cap than the annual GDP of small countries, that competes in local marketplaces, could easily take on and possibly wipe out craigslist, ebay, and more, and could conceivably beat entire national currencies in capitalization, reserves, convenience, and ease of use, thus supplanting the currency of entire small nations.

Yeah, pretty much the same thing as airline miles.


In your exercise in sarcasm you did almost everything except one thing - you somehow forgot to point out where the difference is. Yes, Facebook has a lot of data. And so? How that makes Facebook issuing crypto-tokens dangerous? If you consider the data volume Facebook has a problem, what does this have to do with the currency?


> There are lots of privately controlled currencies. Miles, points, certificates, game gold, etc.

Yes but these other currencies don’t have the possibility to be the most used and powerful currency for everything you do, and who knows what shape, direction and impact Libra will take/have over time once that Pandora’s box is opened!


> Yes but these other currencies don’t have the possibility to be the most used and powerful currency for everything you do

Why not? There's possibility that everybody would start flying around so much that United airlines miles would be so valuable that people would volunteer to be beaten up just to get a chance for getting some. This is a very remote possibility, but nothing in the laws of nature or laws of men preclude it, so it's a possibility. Facebook currency, which doesn't even exist, has roughly the same chance to match this description as United miles. But somehow United miles is fine but Facebook currency is Pandora's box. Note that Bitcoin is not pandora's box, Ethereum is not, Monero is not, 9000 cryptos that nobody can even count, let alone track, is not, but most white collar, buttoned down, corporate vanilla safe cryptocurrency that have ever been proposed, the most soft target, which would be the easiest thing in the world to track and regulate ever in crypto history - that one is the Pandora box! How does it even make a little bit of sense to you?


> The only difference between facebook-coin and miles is that Facebook promises to encourage dealing in their coin and airline would frown on that. Not much difference otherwise.

I mean there is the tiny difference that one of these is the biggest social network megacorporation on the planet with the power and will to heavily influence a user base larger than France and Germany combined, but otherwise, yeah.

Nobody wants Facebook to have that power, even if they hadn't screwed over their users multiple times and seem to be devoid of scruples, they haven't even existed long enough to demonstrate deserving that kind of trust.


The difference is that those other are not meant to be used as a money replacement. In Pokemon Go there are coins and they are nothing but points to spend in store.

If I could transfer them to other player, become a certified shop that accept payment with them, or do any of the many other thing you can do with money that would be probably a legally grey area.

(moreover I am not sure how you would tax such a currency)


You don't tax currency, you tax transactions. And you tax transactions based on the value of the transaction. So if I sell a widget for either $10 or 0.01 BTC, and the tax rate is 10% of the value of the transaction, then I'll have to pay $1 in tax for either of the transactions. If I sell a widget for 0.01 BTC and no other amount, then we can establish the value of the widget from other sources, for instance, someone else might sell the widget for around $10 (implying that it the tax is around $1) or someone else might exchange 1 BTC for $2000 (implying a the tax is around $2). Naturally, if you put the decision of the tax into the hands of the government, they'll take the best rate for themselves. You can avoid this by pricing things in terms of the tax rate i.e. using the government's currency.


> The difference is that those other are not meant to be used as a money replacement

That'd be a big surprise for me when I'll try to book my next flight with miles. I certainly thought they'd replace money.

> In Pokemon Go there are coins and they are nothing but points to spend in store.

That's literally definition of money - abstract points that you can spend in the store. Well, the definition of fiat money, to be precise, but we're not going back to gold doubloons anytime soon.

> that would be probably a legally grey area.

Transferring money to other person can certainly land you in legal gray area if it against the laws (money laundering, tax avoidance, fraud, etc.) So what's new here?

> (moreover I am not sure how you would tax such a currency)

The same way you tax any other goods. If you receive income, you are taxed on its value. You think if non-USD payments weren't taxed, nobody would have a bright idea to be paid is silver bullion? IRS is not stupid, you owe taxes on any income, and better believe it, if they don't know the exact value proving it to them will very soon become your problem, not theirs.


>> In Pokemon Go there are coins and they are nothing but points to spend in store.

>That's literally definition of money - abstract points that you can spend in the store.

Better move all my savings to pokécoins then, I am sure they can then be used for money replacement.

Jokes aside there are innumerable difference between real money and an in-game credit both from practical and legal viewpoint.

> That'd be a big surprise for me when I'll try to book my next flight with miles. I certainly thought they'd replace money.

Again credit with a company of a consortium is incomparable to money with a legal standing.

What libra tries to do here is to create a new worldwide concurrency that can in principle subsume most national currencies in the world (maybe except the dollar for technical reasons).


You don't buy food with miles.

You win cookware sets.

The best you can do to convert them in money is to trade them, but to obtain them you still have to buy them or flight for real (proof of work IRL)

But there's no largest marketplace on earth, controlled by a single company, where you can spend them.


But it could if some folks on the bitcoin team fight with others. Bitcoin is still controlled by humans and thus, not a replacement for traditional fiat currencies.

If you want a currency to be spent, it can't increase in value. That's the kind of thing you hold onto -- a store of value.


> not familiar with the specific mindsets and the history of this decision

I think Monsieur Macron has put this onto the agenda when Libra was announced. I'm not disagreeing with the decision and have similar concerns as you, but I'm still uncertain whether the state should even have the ability to block these and other things in general. Most of all, I miss a British voice here (as, sadly, not very much longer an EU member), and see this as a preview for where things are going with France getting more weight as the UK is leaving.


The primary purview of the state is geography (borders) and taxation (monetary policy). Allowing foreign money to be the primary medium of exchange directly challenges monetary policy.


> Allowing foreign money to be the primary medium of exchange directly challenges monetary policy.

Who said anything about a primary medium of exchange? Should dollars be disallowed as well? How about bitcoin? Starbucks gift cards?


Let's be honest, if Libra takes hold as Facebook wants it to, given the power Facebook already has over communications, ads and social networks, it very well could affect the capability of states to exert their own monetary policy. Not a single one of the examples you made had such a real possibility of being as big as Libra could be.


It won’t. Germany already doesn’t have control of the monetary policy for the currency it uses (the Euro). Monetary policy != taxation.


It has control as Germany is part of the Eurozone, the ECB is subjected to the EU treaty, operating under its guidelines, and is accountable to the European Parliament, in which the people of Germany have a say. Maybe it is not as accountable as we wish it were, but it is far from what Facebook would be.


Isn't the Bank of England privately owned? Or perhaps it merely was privately owned. If Facebook does this, they had better be prepared to be nationalised.


Is “a vote in” and “control” really the same thing?


In case of Germany it’s very close to be the same thing.


EU has many checks and balances, is governed by Germany and other like-minded countries, and has given lots of guarantees as well as an option to leave. If Facebook decides to discuss on that level, maybe an actual agreement could come out of that.


Facebook can come and expect to discuss on the level of trust that a country gets when it has existed for less than 2 decades and has been treating its citizens/users like an authoritarian dictatorship surveillance state. There are a number of other parallels, and none of them put FB in a good light.

It's not going to be a very amicable discussion.


If the EU goes tits up, Germany will be using marks again before the month is out. The EU could never have been started if member states had to give full control of monetary policy to the EU Council.


Facebook has a non controlling stake in Libra. Libra Foundation is an independent, not-for-profit membership organization. Do you feel a similar threat of non-profits that try to give financial opportunities to people around the world?


Libra Foundation is a foundation established by Facebook with members like Mastercard, PayPal, Stripe, Visa, Booking, Vodafone or Uber, among others. Calling it a non-profit is a technicality. It is a currency controlled by for-profit organizations. It doesn't have anything to do with actual non-profits.


Are you (1) employed by the Libra Foundation or Facebook, (2) in possession of a large Libra stake, or (3) duped by the marketing and in possession of a large amount of free time?


Not everyone who disagrees with you is a paid shill. Responding to a legitimate argument with some kind of absurd accusation will always make you look like you lost the argument.


Except you know, shills exist, and are real, so lets not make up some kind of even lamer "Godwin's law" about it.

Doesn't mean its (always) sensible to accuse people you disagree with of course.


Well, it's already one of the site guidelines...


1. No. I have a facebook account but I haven't posted in years

2. No. I don't think its available yet. Its not really meant to be a speculative investment since it's backed by a basket of stable currencies. Although it may be like a closed-end mutual fund where the investment could trade below or above net asset value. But I wouldn't recommend speculating on some price increase even if it takes off

3. No, I'm just interest in cryptocurrencies read the white paper [0]. I suggest you do the same. It's pretty interesting. I do have a fair bit of free time though

[0] https://libra.org/en-US/white-paper/#introducing-libra


Did they not lose you as soon as you read "blockchain"?

Their blockchain neither has block nor chain as I seem to recall. If the company is already lying in their whitepaper, what exactly are you expecting from the real thing?


Taxation isn’t monetary policy. You can tax without even having your own currency.

Monetary policy is entirely about currency control for inflation, etc.


See Montenegro, the country that has no own currency, but uses Euro: they have no particular problems because of this.


Montenegro has a population of about 600K. Its annual GDP is $12 billion.

There are also small countries that are pegged to the US dollar.

When you are a small-potatoes nation-state, and have a non-diversified or small economy, it is a great idea to use a larger, better established, currency.

* It's more stable * Trade is easier * More than 3 banks accept your currency!

The incentives of the nations controlling the euro are well known to Montenegro, and they trust that those countries will keep the euro stable.

Libra is a whole different ball of wax. It's not just a currency. When you use it, you are tied to Facebook's terms of services, Facebook's desires, and Facebook's fate. Your individual citizens could be locked out of the economy for reasons that have nothing to do with your nation's laws.

If Google and Apple wouldn't agree to use Facebook-dollars for all their transactions, I don't see why a company would agree to.


Also Ecuador uses the USD, with a GDP of ~$100bn.

There's a big difference between having a currency pegged to another, and not actually having a currency at all, and using physical foreign currency for everyday transactions.

Pegs can be broken and may be hedged with FX futures.

The second situation is a much stronger existential commitment, which makes it more reliable and predictable. Reinventing a new national currency is a high barrier, which cannot be hedged directly in the FX markets (although sovereign CDS might be close enough).


I don’t think you are tied to FB’s TOS. Nor their fate. If FB went bankrupt, Libra would still operate?

Not sure what you’re trying to get at.


> I'm still uncertain whether the state should even have the ability to block these

My reading of ECB publications makes me believe that they don’t want to block these.

Ultimately, governments are mandated to protect the wealth of their electorate. A system in which they have no recourse, even indirectly, against volatility (the preservation of wealth) and stability (the preservation of payment services) is one that they must supersede.

SWIFT was forced to block transfers to Iran. Libra is like SWIFT, but with more control, as they also act as the RTGS (real-time gross settlement system).

Imagine if your country’s currency stopped working because it was added to sanctions lists. Or got increased fees.

A private company is ultimately subdued by the government of the countries it is incorporated in. They apply laws and executive orders against them. This kind of power asymmetry between countries is dangerous.


That's a good point. Besides the potential dangers of allowing a tech company (one with no ties to your country) to run the money supply, there is also the understanding that you (as a smaller country) are inviting even more U.S. monetary policy into your country.

People may decide against that.


"not very much longer an EU member"

I don't think there is much chance of Brexit this year, and a pretty good chance that it will never happen.

Mind you - always a chance that we'll simply get thrown out for being incompetent at running a country...


The chance of the latter seems to be rising, EU leaders seem to be running out of patience with making Brexit extensions.


Yeah it is very peculiar how the British elites was able to establish the Mandate for Palestine to give Jewish people their own state but haven't been able to establish something giving British people their own state even after it was explicitly requested.


Mods: This user's posting history makes clear they are an anti-Semitic conspiracy theorist. Why have you not banned them?

https://news.ycombinator.com/item?id=20972062

https://news.ycombinator.com/item?id=20918028


Because we didn't see any of this. We can't moderate what we don't see. That's why the site guidelines ask you to flag comments that shouldn't be on HN, and in egregious cases to email hn@ycombinator.com. To flag a comment, click on its timestamp to go to its page, then click 'flag' at the top. (You need karma > 30 before flag links appear.)

Please see https://news.ycombinator.com/item?id=21003570 and https://news.ycombinator.com/item?id=21003591 for more.


Thankyou.


Please assume good faith and discuss the topics directly. What is it that you find debatable about my comment? I've always made good faith efforts at productive conversation whether someone agrees or disagrees with me on something


“Assume good faith” doesn’t mean “ignore evidence of bad faith”.


let it go.

HN mods are not here for justice, they'll never admit they are wrong.


>HN mods are not here for justice

Is the polite and free discussion of ideas not justice?


What evidence of bad faith are you referring to? Interesting how you and "other people" going through my comments have no actual objections to the content of what I say. Hard to have a productive conversation when all you have are dismissive remarks and insults.


Sure, I will try to unpack my thoughts.

You go after Jewish people as a class, rather than specific institutions controlled by Jewish people, which I think is bad faith argumentation. If you criticized Israel, for example, or some specific set of banks I would be ok with that.

I admit I would not have the same reaction against another person criticizing “white people” as a class. But I believe I am justified in that because whiteness is not an ethnicity, it is the practice of denial of ethnicity. That makes it a specific institution not a group of people.

I am vulnerable also to accusations of hypocrisy because I sometimes criticize men as a class. Maybe that should be out of bounds, (probably is out of bounds on HN) as men are clearly a real biological group and not a concept.

However, masculinity (as opposed to manhood) is not a biological reality, it is a system of identity constructed to hold childbearing women in a sex class (i.e. submitting to control of their bodies). So to the extent that men identify with masculinity as opposed to just having a penis and some hormones, I would say we are also open to being attacked as a class, and lose our protected status as an actual “tribe” of people.

Although as a side note, I do suspect that when masculinity was originally invented it was quite possibly an identity constructed for the protection of men as an actual ethnographic class of underserved people. Pregnancy does confer actual power and patriarchy I suspect was invented to counterbalance that. However I don’t believe it functions that way today.

I suppose you could argue that Jewishness has crossed that rubicon but I don’t see how you could credibly do without getting into holocaust denial which I would also put in the bad faith category.

Serious apologies to any Jewish people reading this who may feel by engaging these questions I am being blasé about the threat of antisemitism. I really don’t want to do that, but I also want to hold a hand out for people who are having a hard time understanding the reasoning behind the rules of liberal discourse.


With respect, and despite being completely off topic:

> But I believe I am justified in that because whiteness is not an ethnicity, it is the practice of denial of ethnicity.

I fundamentally do not understand what that means. Surely I don't have a choice but to be white? What am I denying? It's true that whiteness is not an ethnicity, since Russians and white Americans are surely ethnically distinct - more so, I think, than white and Asian Americans or white and Asian Russians. But beyond that I can't make sense of your sentence. I wonder if it depends on a particular national interpretation of "white" that cannot be accessed by all people who might want to describe someone as "white". But it seems opaque to me.


> since Russians and white Americans are surely ethnically distinct

Are you an anthroplogist?

I bet not.

Many white Americans have slavic blood just like russians.


>Many white Americans have slavic blood

Is whiteness a social construct or a genetic one?


>Sure, I will try to unpack my thoughts. >You go after Jewish people as a class, rather than specific institutions controlled by Jewish people, which I think is bad faith argumentation. If you criticized Israel, for example, or some specific set of banks I would be ok with that.

Just to revisit my original comment you are referring to:

>Yeah it is very peculiar how the British elites was able to establish the Mandate for Palestine to give Jewish people their own state but haven't been able to establish something giving British people their own state even after it was explicitly requested.

I am referring to the state of Israel here, though I don't have a disagreement with Israel's existence nor with the Jewish people themselves in whole or in part, instead I am criticizing that the British elites do seem to have the ability to give a people their own state (as they did in the example of Israel here) however they are reluctant to extend that same work towards the British people. So here my discussion of Israel and Jewish people is not an objection to them in whole or part, but rather an example of what can be accomplished, so as to acknowledge but stave off some arguments that throw Brexit up as if it were somehow not possible. In hindsight, I see how the explanation I gave here would have more effectively prevented any interpretation of animosity, so thank you for making that thought clear.

>I admit I would not have the same reaction against another person criticizing “white people” as a class. But I believe I am justified in that because whiteness is not an ethnicity, it is the practice of denial of ethnicity. That makes it a specific institution not a group of people.

I think I agree about what whiteness is but for different reasons, mainly because the only concrete definition of "whiteness" that I can surmise from how "white people" are treated is "white people are the only unprotected class in law and are the only ethnic group of people ineligible for any race or ethnic protections or ethnic/racially based government programs, academic opportunities, or civil rights protections". Whiteness is imposed on to "white people" by society who say that they can not apply for any protection or benefit based on their white status while all other race or ethnic groups can.

>I am vulnerable also to accusations of hypocrisy because I sometimes criticize men as a class. Maybe that should be out of bounds, (probably is out of bounds on HN) as men are clearly a real biological group and not a concept.

>However, masculinity (as opposed to manhood) is not a biological reality, it is a system of identity constructed to hold childbearing women in a sex class (i.e. submitting to control of their bodies). So to the extent that men identify with masculinity as opposed to just having a penis and some hormones, I would say we are also open to being attacked as a class, and lose our protected status as an actual “tribe” of people.

I think you've brought this up as an example of talking about people in groups and how some groups can lose protected status even if membership in that group is determined biologically. While I agree that there are biological reasons that women and men sometimes need different accommodations in both private and public institutions, if some group is being declared unworthy of "protected status" then I am weary of what you mean by that.

>Although as a side note, I do suspect that when masculinity was originally invented it was quite possibly an identity constructed for the protection of men as an actual ethnographic class of underserved people. Pregnancy does confer actual power and patriarchy I suspect was invented to counterbalance that. However I don’t believe it functions that way today.

That's an interesting analysis, clearly a Marxian perspective in how you tally up what attributes give who power and how social institutions can be counterweights to that power. However if you historically look at the founding of major institutions the fundamental units are the families/communities counterbalancing the power of other families/communities, not sexes counterbalancing each other. Democrats vs Republicans, Labor Union vs Management, Army vs Army, State vs State, Religious institution vs Vice, Religious Institution vs State, Religious Institution vs rival Religious Institution, Academy vs Ignorance, Media viewpoint vs Media viewpoint, etc. etc. etc. The logistics to even support the idea of men and women wandering freely such as stable and safe states plus enough economic opportunity for men and women to wander around freely independently from the families and communities they grew up in is a fairly recent and I think still tenuous phenomenon.

>I suppose you could argue that Jewishness has crossed that rubicon but I don’t see how you could credibly do without getting into holocaust denial which I would also put in the bad faith category.

I don't think Jews should lose any "protected status", instead I am usually point out that Jews are showing us what is possible for a community to accomplish and other groups should be able to follow the same roadmap.

>Serious apologies to any Jewish people reading this who may feel by engaging these questions I am being blasé about the threat of antisemitism. I really don’t want to do that, but I also want to hold a hand out for people who are having a hard time understanding the reasoning behind the rules of liberal discourse.

Why do you feel you should apologize to the Jews for engaging in the free discourse of your ideas? Do you feel they may enact retribution on you? Do you feel the same about other groups like the men you discussed before?


To be honest, although i think it's sad that Britain left.

They were never fully in on the EU as France and Germany are ( i'm Belgian).

So i'm not sure if a agree as much with your opinion as you want :)


> as, sadly, not very much longer an EU member

it could have been a better, less irrational, EU partner (it was never a full member)


> Hey do you mind if we just skip the paperwork part and just control currency, while actually being a social media tech giant

This is a gross mischaracterization of what Libra is. Libra is a token that's backed 1 to 1 on some basket of currencies and mostly government bonds. The Libra foundation makes money by taking a portion of the investment return to fund themselves, much like a brokerage takes a bit of the return when they invest your cash account. Thats it.


Then create a bank. But that's not what this is. They want to make a bank that prints its own currency and skips the paperwork needed for current monetary exchange. It's just as OP has said.


Banks don't follow full reserve banking. They follow fractional reserve banking. When you put 1 Euro in the bank, they have discretion as to how to invest this amount and only need to keep a fraction of your money in reserves. With a bank I'm also stuck being exposed to the currency of my account. And European banks often have fees or minimum balances. Libra offers benefits to banks and is safer.

[edit] The idea of a bank holding 1 to 1 reserves is called narrow banking.

> It’s a “narrow banking” model that would back its deposits with 100 percent reserves, located at what is deemed by nearly everyone as the safest of safe locations —the U.S. central bank

Ironically the US Federal Reserve tried to stop the creation of a narrow bank because it would undermine fractional reserve banks.

[0] https://www.brookings.edu/research/the-fed-wants-to-veto-sta...


How is Libra a full reserve bank if investment is how they make their money? It doesn't sound any different at all except there's no regulations and no government backing (such as FDIC guarantees).


Full reserve:

> By fully backing each coin with a set of stable and liquid assets (described later) and by working with a competitive group of exchanges and other liquidity providers, users can have confidence that they will be able to sell any Libra coin at or close to the value of the reserve at any time. [0]

They'll fund expenses from the return of the investments.

> How will the reserve be invested? Users of Libra do not receive a return from the reserve. The reserve will be invested in low-risk assets that will yield interest over time. The revenue from this interest will first go to support the operating expenses of the association — to fund investments in the growth and development of the ecosystem, grants to nonprofit and multilateral organizations, engineering research, etc. [0]

Brokerages do this as well and earn most of their money this way (people keep cash in brokerage account and brokerage invests and earns interest).

> 57% of Schwab’s revenues are from net interest. The firm could literally give away every other service; discount the mutual fund fees to zero, do away with commissions, etc etc, and they would still be profitable. [1]

[0] https://libra.org/en-US/about-currency-reserve/#the_reserve

[1] https://www.kalzumeus.com/2019/6/26/how-brokerages-make-mone...


That doesn't sound like a full reserve though as its not 100% cash. It says right there that its partially invested in risky assets. Whether they're low risk is just an opinion.

But even assuming it was a full reserve, I don't think its fundamentally different enough to be allowed to skirt the existing laws.


Fair point, its not cash. But generally in banking, cash and cash-like products are equivalent. I think they'll make public the actual investment breakdown.

It's different enough from banks because its matched one for one with some asset. It's essentially a passthrough investment. The reason banks are so highly regulated is that they participate in fractional reserve banking where they take in deposits and invest in highly risky assets. That and deposits are guaranteed by FDIC or similar agencies.

Should Starbucks be regulated as a bank because they let you prepay for a cup of coffee?


> But generally in banking, cash and cash-like products are equivalent.

Except it's not. Well, maybe it is "generally", but fractional reserves in particular are, by definition, central bank money, and only central bank money. So, strictly speaking, cash or central bank deposits. Not bonds, not loans, not equity. Only central bank money.

> It's different enough from banks because its matched one for one with some asset.

In other words: It is exactly like a bank. Every loan any bank ever makes is matched with some asset, if it weren't, they'd be called gifts and not loans.

> The reason banks are so highly regulated is that they participate in fractional reserve banking where they take in deposits and invest in highly risky assets.

That doesn't even make sense. How would the fact that a bank has (supposedly) lower reserve requirements mean that "regulation" is required more? The whole point of regulation and oversight is to make sure that the minimum reserve is there, not that there isn't too much reserve, and if a bank supposedly had a 100% reserve requirement (because that is what they promise their customers, say), that would , if anything, make it even more important to check that that is actually true.

The whole reason why all of that regulation and oversight exists is not because banks have promised their customers too little, but because banks over and over and over told their customers one thing, but actually did something completely different, and ususally that means something a lot more risky.

The fact that Facebook promises to do something really good is exactly zero reason to do away with mechanisms that exist to make sure that promises are held.


> Every loan any bank ever makes is matched with some asset.

This was true 200 years ago not anymore. https://en.m.wikipedia.org/wiki/Money_creation#Credit_theory...

Only 3% need to be matched IIRC


Quoting from the section that you linked to:

> When a bank issues a loan of $1000 to a customer, they debit the customer's loan account with $1000 and at the same time they credit the customer's deposit account with $1000, ready for using. The bank now has a new asset of $1000 and a new liability of $1000.

So ... do you have a source that supports your claim rather than mine?


>Should Starbucks be regulated as a bank because they let you prepay for a cup of coffee?

Well this might just be where we simply disagree but I would say yes. Those Starbucks cards are often used as a way to launder money from country to country. You can't transfer balances from one individual to another as far as I'm aware so it's not nearly as problematic, though.


> Should Starbucks be regulated as a bank because they let you prepay for a cup of coffee?

In Germany, you might actually need a permit from the financial regulation (BaFin) if you offer gift or prepaid cards, at least if you store the value online (and maybe some other conditions).


> Should Starbucks be regulated as a bank because they let you prepay for a cup of coffee?

Yes. Including how the funds in the pre-paid card are managed and invested, and certainly including all the rules about when the user is allowed to reclaim their money.


> How will the reserve be invested? Users of Libra do not receive a return from the reserve. The reserve will be invested in low-risk assets that will yield interest over time. The revenue from this interest will first go to support the operating expenses of the association — to fund investments in the growth and development of the ecosystem, grants to nonprofit and multilateral organizations, engineering research, etc. [0]

If I were a country's finance minister, this single paragraph would be enough to get me to say "no".

This currency generates returns, which we don't see, and we don't control the allocation of. basically, it's slowly bleeding money out of the countries that use it, though accumulation of capital and capital investing.


Do you understand what 1:1 means in the context of banking?


> When you put 1 Euro in the bank, they have discretion as to how to invest this amount and only need to keep a fraction of your money in reserves.

That's... misleading? When you put 1 Euro into the bank, it allows them to hand out credits (promises) of 20 Euro. They don't just loan out what you paid in. They create their own money.


> > > It’s a “narrow banking” model that would back its deposits with 100 percent reserves, located at what is deemed by nearly everyone as the safest of safe locations —the U.S. central bank

Let's say I'm a country, say, not the U.S. Could you see me having a problem with having my currency backed by a U.S. corporation, who's reserves are held in the U.S. central bank?


Libra is meant to be safer and better than a bank. Seems almost impossible to fail, it has 100% reserve backing while banks have < 2% in europe. It supports instant payments even in the most remote regions of the eart. It will be a terrible competitor for banks, if it works. The problem is that it s backed by a conglomerate that is too big to trust.


I'll take regulated 2% over promised 100%. Otherwise we get another Tether story: https://cointelegraph.com/news/fractional-reserve-stablecoin...


It's also backed by a conglomerate that simply hasn't been around long enough to be safer than a bank.

Yet in its short lifetime, Facebook has been able to prove itself very untrustworthy towards consumers.

It's not too big to trust, it's just untrustworthy. The fact that it's also big, makes trusting it an even worse idea.


> It supports instant payments even in the most remote regions of the eart

no, they don't.

still need an internet connection and two person with a libra account.

Anyway, you can do the same thing with paypal...


> Libra is a token that's backed 1 to 1 on some basket of currencies and mostly government bonds

And that architecture is decided by the Libra foundation, therefore they control currency.


I’ll stick to using my money as money thanks. It works fine.


I'm glad that you live in a country with a stable monetary supply, little to no inflation and no capital controls.


and the solution is "let facebook be your central bank and currency supplier"?


Indeedy. My country has 7% inflation. And that calculation is done by the very state that is responsible for inflation so their word on this only means so much. Any other currency or store of value that solves this is more than welcome.


Would it be a solution for you to buy foreign currencies with lower inflation amount (e.g. EUR)?


"capital controls" generally includes foreign exchange controls, i.e. restrictions on conversion to foreign currency and local use of foreign currency.

https://en.wikipedia.org/wiki/Foreign_exchange_controls


And why should this be different for a private currency controlled by facebook?


It shouldn't. All capital control is terrible. It could be different though.


A lot of wealthy people do that. It isn't as straight forward though. It would be nice to be able to do so on the internet and for smaller amounts.


Because obviously an instrument backed by foreign currencies will be the solution to capital controls?!


Not in Sweden anymore, most of the lunch places in Gothenburg where I live don't allow payment by cache anymore. If you have money but not digital, you will go hungry nowadays.


This would never fly in Switzerland. You need to accept Swiss Franc Banknotes of any denomination as settlement for any monetary debt (this includes a purchase of a 1.- stick of gum paid for with a CHF 1000 Bill. there will be some arguing required for that one in practice, but the law is clear).


Wrong.

The relevant law (art. 3 WZG[0]) requires persons to accept all banknotes (and up to 100 coins per transaction) as payment, but this only applies after a contract has been formed. It's perfectly legal for any store to indicate to customers that it will not accept large-denomination notes or cards[1]. If the customer is not willing or capable to pay using the accepted means of payment, no contract is formed, and the chewing gum remains with the store.

[0] https://www.admin.ch/opc/de/classified-compilation/19994336/...

[1] https://www.srf.ch/sendungen/kassensturz-espresso/geschaefte...


You say that, Espresso is a good source for this kind of thing and I'm not saying your wrong. But the letter of the law does state that everyone has to accept Swiss banknotes with no restrictions.

My personal legal asessment: If you were to form a contravt for purchase of goods and stipulated ahead of time that payment will be made in small bills (or electronic payments only), receiving payment with 1000.- bills would give the right to demand compensation related to handling large bills (security, verification etc.) due to the contractual breach, but it would not allow you to deny the money and demand payment as contracted.


As I understand in the US a purchase is not the same thing as a debt, i.e. nobody has to accept any particular type of currency for a purchase, only for a debt. Is Switzerland really different here?


Is that even allowed? I don't know the specific law here, but in my country (France) a shop can not legally refuse to be paid in the legal currency (in cash). It can refuse credit card or checks, though.


How I wish it was this way in Sweden. Unfortunately it's not - there is no requirement to accept any specific kind of payment and it's by now rare to see anyone pay with cash.


This is the first time I've heard of something like this. I grew up in Greece during the mass deflation of the currency and people wouldn't accept anything but cash. Interesting to learn that it works both ways.


That's what they promise today, a cartel of private corporations accountable to no-one, and with a legal obligation to maximise profits.

They will break this promise to maximise profits, and there is sod-all you can do about it.


> portion of the investment return

I'm not super on top of a lot of the details here, but I thought Libra was like a currency. What investment return?


The foundation and validators have various ways of making a return

The users do not.


Sure but how is that an investment return? Usually when you hear "take a portion of the investment returns" you're thinking expense ratios, some small fraction of the returns that the user is getting.

If the user gets no additional returns, then it's just a fee, no?


Validators pay $10,000,000 for the privilege of processing transactions and collect transaction fees and can probably resale that privilege with a premium based on their absolute return, which would be called yield. They buy originally from the foundation, and thats how the foundation makes its first $1,000,000,000 dollars. These validators and other accredited investors also get access to a completely parallel asset called LIT, Libra Investment Token, which has value based on typical securities fundamentals.

The users get the stablecoin and are resigned to only possibly trying to speculate on foreign exchange rate changes, which are entirely inferior to the other opportunities such that it shouldn't even be considered. Users only have the opportunity to be users.

Probably time to read the white paper again if you really want to have a more nuanced discussion.


Isn't it highly likely that any crypto currency will be seen as a vehicle for speculation?


Libra is a money market fund with a unique way of tracking ownership. That's it.


From a history perspective : the hyperinflation leading up to the 3rd Reich.


Which is one reason why capital controls are so destructive. Allowing denizens to keep their savings in whatever form they so choose is a human right. Libra will afford people the option to invest in and use a token that is backed 1 for 1 to a basket of global currencies and government bonds at a low cost.


The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism—ownership of government by an individual, by a group, or by any other controlling private power.


You could argue democracy is in danger for small countries.

Large multinationals have more power than those governments. It does not matter how their electorate votes.


There is already examples of large multinationals (including Amazon) bullying and overriding democratic municipalities in the US.


Preventing people from preserving their wealth and the fruits of their labor is not liberty. It’s a restriction of liberty.

Capital controls have historically been associated with despotic governments.

Why shouldn’t I be able to put my wealth where I want ?


Can I invest in Cocaine or LSD? What about enriched uranium?


Organs are good investments these days.


They've also been associated with places like Finland, Israel, France, and the UK. Capital controls are just a necessary enforcement mechanism for attempts to control the exchange rate of a currency.


Giving people an option to invest in a basket of relatively safe investments and currencies is growth of private power that will lead to fascism?


You're assuming those people are not forced, tricked or otherwise persuaded by a company worth hundreds of billions of dollars, to use Libra. And that company has every incentive to do what I listed above. It also has very shady morals, as proven repeatedly.

Yes, it's a small individual loss (not being to invest in Libra) but probably a big collective gain.


> You're assuming those people are not forced, tricked or otherwise persuaded by a company worth hundreds of billions of dollars, to use Libra

Anybody who creates a product tries to persuade people to use their product. You can be a cynic and just attribute ill intent of basically everything but it's not really productive

Facebook doesn't control Libra. They have a non-controlling stake in the Libra Foundation, a non-profit.


Facebook has the power of market to force you to use Libra. Just like Apple had the power to introduce NFC payment terminals in US.

That's fundamentally anti free market.


It’s interesting because I agree with you and those are good examples, but there seems to be a contradiction here.

What you’re advocating for is a market with very clear boundaries, where everyone has equal access to the market but no one is allowed to do the things outside the market.

So it’s a “free market” in that no one has special powers. But it doesn’t make my American “freedom hairs” tingle because there’s a ton of stuff the government is telling you not to do.

I won’t make any argument as to which kind of freedom is more important in this case. But I do want to suggest that the more stuff you put in the “not allowed because the market can’t be administered fairly” bucket, the more of your GDP you cede to criminal organizations.

Because once it’s illegal, that’s just a big monopoly you handed to organized crime. And yes, organized crime does exist in Europe, and does control money supply.

So you have to be careful, there’s a devil’s bargain in both directions.


Minor technical remarks:

1. Since when is a currency a "product"? Did I miss a macroeconomics memo? — This statement is antithetic to the structure of modern economies, or to Facebook's claims about Libra for that matter.

2. As for cynicism, if you look at Facebook's history and mindset, their decisions and policy... I feel like "cynicism" qualifies as an appropriate response. — for reference: an inclination to believe that people are motivated purely by self-interest; skepticism.


You can do that without Libra, just buy the equivalent basket, you're even getting real assets instead of something like tether


If this was purely launched as an investment vehicle that people could put their savings in, I am not certain that the regulatory response would be the same. This is a mischaracterization of what Libra even intends to be. It's marketed as a new financial system if you read their whitepaper.


However its never been the case that people are allowed to keep their savings in whatever form they wish. I'm not permitted to for example save all my money in a ponzi scheme or invest it in a futures contract backed by the afghan opium crop.


> Libra will afford people the option to invest in and use a token that is backed 1 for 1 to a basket of global currencies and government bonds at a low cost.

That part sounds good to me - tying together the international money and trade system has reduced the threat of war.

But that argument doesn't imply the need for a foreign (or domestic) corporation to administrate your currency.


That, my friend, is very close to a Godwin point. Let's be careful here.


The original comment is about German attitudes towards the accumulation of power, which are a direct product of their experiences with Nazism. Germans don't want uncontrolled groups accumulating power precisely because it could lead to a situation like Nazi Germany.

Once Godwin's law became a meme it outlived its usefulness. Yes, people tend to hyperbolically compare things to the Nazis. But the Nazis were a real thing that happened in the real world, not some platonic ideal of evil to which nothing compares. Shutting down any comparison to Nazism is absurd, doubly so when discussing German policy.


I hereby nominate posts discussing actual deeds of actual Nazis to be exempt from Godwin's law.


> But the Nazis were a real thing that happened in the real world

not because of inflation though.

if you wanna be historically accurate.


I'm no historian, but it seems to me the hyperinflation of the Weimar Republic, and the resulting destruction of many Germans' life savings, were a big factor in why Hitler's rhetoric was appealing to many.


So we could say that one of the motivation of Hitler's rise to the power was the decision of Wilhelm II (Emperor of Germany) to entirely finance the first war by borrowing, that led to the hyperinflation.

No single event in history causes dramatic changes, everything is connected.

There was a process that brought nazis in power, and it wasn't the hyperinflation alone, there were a lot of different factors acting together, not last the example of Italian fascism from Mussolini and the idea of governing the masses by eliminating the opposition through violence and obtaining absolute power, while maintaining the illusion of a democracy.

The Night of the Long Knives is more important than the hyperinflation to understand the rise of nazism in Germany.


I agree with the rest of your points, but:

Germans don't want uncontrolled groups accumulating power precisely because it could lead to a situation like Nazi Germany

Uh huh. Really. Germans totally hate uncontrollable groups trying to take over Europe?

Please spare me sanctimonious Germans claiming some sort of moral high ground they don't have. In fact from a British perspective it appears Germany has learned nothing from its experiences at all. It's actually quite amazing how desperate they seem to repeat history over and over.

Germany is by far the biggest and staunchest supporter of the EU, which is literally an uncontrollable group accumulating power as fast as possible. It is partly because of hardline EU supporters like Merkel and Macron that both Switzerland and the UK are hurtling towards all out trade war with the rest of Europe, and why UK/EU talks have gone nowhere. The EU is building its own army, its democracy is a sham and it treats its own citizens with contempt, as can be seen in this remarkable blog post by the Commission (it has to be quoted now because the backlash was so huge it got taken down)

https://www.techdirt.com/articles/20190215/18005841607/eu-co...

The reason the French and German governments hate Libra is threefold:

1. They are very easily manipulated by their local press barons who perceive Facebook and Google as business threats. See the old link taxes that became Article 13 at the EU level.

2. They are institutionally cynical about their own citizens, who they see deep down as basically being stupid sheep. This shines through in their writings (see the link above) but has the more insidious effect that nobody in EU power structures really believes their own country could ever create a Google or a Facebook. So from their perspective, constantly attacking these firms is pure win: it creates an external enemy in a world without many, and these firms are usable as cash machines to keep the EU budget afloat.

3. One way the EU controls its southern member states is by letting pro-EU governments effectively buy votes by running huge deficits, financed by money printing by the ECB. If a country elects an anti-EU government, the ECB threatens to turn off the money supply until they do (this is very visible in Italy).

In other words the EU's power comes at least partly from manipulating the currency supply. This is bad for the typical German citizen who tries to save money, but good for the project of uniting Europe under a dictatorship:

https://www.theguardian.com/business/2019/sep/08/europe-cent...

Germany has recent experience with governments that try to take over Europe and governments that manipulate the money supply for political purposes. Indeed ECB policy is very unpopular with the Bundesbank and German government. But they can't do anything about it because their ideological commitment to EU domination overrules everything else, and the head of the EU Commission controls the ECB.

Ultimately, Germany's experience with hyperinflation, Naziism and the DDR has apparently left it convinced the moral thing to do is support a power structure that's taking over Europe as fast as possible, printing huge sums of money to do so, which is engaged in a power struggle with Britain, and which is run entirely by people who aren't elected.


From my perspective I think the EU/UK talks have gone nowhere because the brexiteers didn't have any strategy at all. It boils down to playing chicken and thinking the rest of the EU will flinch at the threat of the UK cutting all ties, when it has been clear that the UK (under May and now Johnson) desperately wants those ties. But the UK is not willing (or politically able) to make any concessions for those - concessions that other states had to make before, to make the same deal. They're not just selected arbitrarily.

It's tragic really, since the EU cannot move because it's bound to the will of the member states and their people - and the UK cannot move because it's bound to the will of its people (by which I mean the people of Northern Ireland, not the referendum).

Now the UK press seemingly wants people to believe that the "the EU" can just decide on a deal, independent of the interests of its member states. And that sadly will burn itself into the minds of many Brits (at least the leavers) as a story that the EU bullied the UK without any reason, just to be mean.


"The EU" means both the institutions and the whims of a handful of national leaders. Nothing about what it does has anything to do with the will of its people. Where is that even measured? The text of the Withdrawal Agreement was written by the Commission, which controls the negotiations.

And by the way, none of the things the UK is being asked to agree to have been presented as requirements to other countries. The only thing the UK really wants is a free trade deal. That is explicitly not on offer from the EU: ruled out immediately. That's available to countries not geographically near Brussels, but not to the UK.

And that sadly will burn itself into the minds of many Brits (at least the leavers) as a story that the EU bullied the UK without any reason, just to be mean.

The British press, despite what you may believe, is mostly pro-EU. Many Brits have concluded that about the EU all by themselves, based on the actual actions it's taken.


> The British press, despite what you may believe, is mostly pro-EU.

How are you measuring that, exactly? Here is a reasonably quantitative analysis:

https://rightsinfo.org/app/uploads/2016/06/Screen-Shot-2016-...

from this article:

https://rightsinfo.org/brexit-five-lessons/

> Many Brits have concluded that about the EU all by themselves, based on the actual actions it's taken.

I don't know how many Brits have reached their conclusions about the EU "all by themselves", without basing their information at all on what the media and UK politicians have told them.


I meant in the sense that most newspapers and media outlets are pro EU. Yes, the few that aren't have higher circulation. You can't easily disentangle cause and effect there though: do people read these papers because they feel they're presenting a more realistic view of the EU/the world, or do they decide what a realistic view is based on the papers they read?

It's also worth remembering that broadcast media is largely pro EU, even though it's theoretically meant to be neutral. I don't know many who really believe it is though.

At any rate, it's very easy to get news very slanted towards the EU in the UK if you want it. The fact that there's alternatives is different to in most of Europe, I've noticed, where the media is near universally pro EU and anti-member state. At most in Germany the ECB gets criticised.


Not everyone living in EU hate it as much as you do.

As someone living in smaller country, we now have our voice heard more than before, and other benefits of EU far outweigh the downsides.

> They are institutionally cynical about their own citizens, who they see deep down as basically being stupid sheep

Yeah Trump and Johnson are so much better \s. Every country has politicians like that.


Actually they are much better! Trump ran on an explicitly populist platform ("I listen to you, the elites don't") and Johnson is currently staring down the threat of a jail sentence because he's trying to actually leave the EU, as voters requested. They are much more guided by what's popular with voters than EU leaders are.

And yes I know lots of people living in the EU think it's great. Lots of people living in the USSR thought it was great too, as can be seen from the opinion polls showing how many Russian think Stalin was their greatest leader. That doesn't change the nature of what these systems are.


What Trump ran on and what Trump does are two different things.

And Boris (among many others), more or less engineered the whole brexit so he could gain power, if that fails he is done. He is doing it because he bet his whole career on it, and has nothing to loose.

And as someone who lived (although only for about 12 years of my life) behind iron curtain. I can assure you most people didn't think it was ok, and we are paying attention so we don't end up in the same situation again.


So Trump ran on basically the same platform as Hitler ("I listen to you! I will fix things and make us great! Other people are bad and a threat to us!") and you think this is better?

Part of what we usually want from our politicians is to filter what people want a little bit and remove some of the evil and stupid. I know, then we don't get exactly what we want. But if you ask exactly what people want, about 90% of it ends up being "people not like me to suffer more", and if you run everything based on that, all you get is everyone suffering more.


> In fact from a British perspective it appears

that you brits are wrong.

300 millions EU citizens know that.


Lage der Nation had a really good summary of Libra and summarized a lot of the concerns, especially on why this is not a case where you can let them do their thing, and regulate afterwards, when you've gathered some experience:

https://www.kuechenstud.io/lagedernation/2019/07/26/ldn150-p...

Of particular concern is the scale to which this can be bootstrapped by having the tech giants involved.


You sound like somebody tried to force you to trade in Libra and German government prevented it. But Libra is not money - unless you choose to trade in it and use it as medium of exchange, and nobody so far tried to make dealing with it involuntary. So what exactly German government saved you from?


It saved me from having to live in a world with an overly powerful, not democratically legitimized financial entity. Given the power cooperations already yield this is a _good thing_ in my view.


> It saved me from having to live in a world with an overly powerful, not democratically legitimized financial entity

You mean, besides about 100 or so banks and trans-national corporations, including Facebook itself, that already exist? But yes, surely banning one more cryptocurrency out of over 9000 already existing makes huge difference. Not.

> Given the power cooperations already yield this is a _good thing_ in my view.

You view seems to be "corporations have too much power, so any action that hurts any corporation, even if it doesn't change anything and does not improve situation in any way, is good". This is not a very sane approach to anything.


Banks are heavily regulated, and Libra would not be just another cryptocurrency. It's reasonable to expect that it would have been (and still might be) considerably more powerful than any one existing bank.

Comparing it to the toy money that existing crypto currencies are is likewise entirely irrelevant. It's structurally different for one, as Facebook et.al. would back Libras exchange rate. It's also backed by enormous economic power:

https://libra.org/en-US/association/#founding_members


The strange part to me is just that there are already hundreds of crypto currencies available in Germany. When the government says that yes, these hundreds of currencies are fine, but Facebook can’t create one, then it just seems like the policy is anti-Facebook for the sake of being anti-Facebook.


It's legally tricky to be anti-Facebook for the sake of being anti-Facebook, but I don't think it's morally tricky.

The entire idea of anti-trust (and frankly, the premise of most western democracies) is to prevent the over-concentration of power.

Facebook is the most powerful private entity on the earth right now, far more powerful than most nation states. I'm not sure that we as a society have ever dealt with a non-state actor this powerful before.

Germany's response of essentially "yeah no, we're not letting Facebook make money here," seems prudent to me.


Some people are questioning:

“Facebook is the most powerful private entity on the earth right now, far more powerful than most nation states”

Op did not clarify his reasoning. Though I have thought about this and here are mine.

If strip down a “nation state” to its bare essence, it is an idea. Lines drawn on a map, and symbols(flags, anthems etc). Add in the government directing education, and we end up with masses that can be influenced to behave in specific ways. i.e socialisation and sense of identity.

Now, we know that government plays a significant part in the country and in the world.

Now let’s consider FB. FB has by far the largest network of people that are connected in one massive network. I suspect Information (memes) could spread much faster on Fb, Whatsapp and insta than they could prior to these. Even email was never as fast. Since FB has control of the network without over sight on the algorithms and filtering, they wield significant power to shape global conversations. Shaping global conversations fundamentally can lead to over throwing of leaders with out ever a bullet being shot, it could lead to genocide, nationalism etc etc.

It’s no surprise that the EU is on high alert.

Edit: I think this requires more exploring. This is fundamentally a war against a new form of influence & control of masses of people.

See previous wars: religion vs state, state vs monarchy etc etc.

Has anyone considered this perspective before? Would appreciate any links


>I'm not sure that we as a society have ever dealt with a non-state actor this powerful before.

The east India trading company and the hudson's bay company as well as I'm sure some others were as large as or larger than some state actors of their time.


A fine point and two significant examples that illustrate the dangers of unfettered corporations.


Facebook is the most powerful private entity on the earth right now, far more powerful than most nation states.

This is hyperbole at best. Facebook does not have an army, weapons, or literally anyone that would be willing to die or even be physically put out to defend it.

I’m no Facebook fan, but let’s not let Facebook hysteria overrun these comments.


It is unrealistically limiting to think modern wars are fought only with armies. Most wars are quiet and fought with capital, thought, rhetoric, and policy. Armies only come into the picture if all else fails.


Can you point me to a 'modern war' without armies? I'm interested in what you actually think a war is?


Not op but will take a stab. The comment was in response to:

“This is hyperbole at best. Facebook does not have an army”

Op was pointing out that power != war with guns

“Facebook is the most powerful private entity on the earth right now”

The comment was how power could be achieved via other methods of warfare-including the ability to shape conversations.

Another word for this would be competition. He has a point.


Negative, Spock.

The ability to shape conversations or to compete is not the same as making war (or you are relying on an idiosyncratic definition of "war").


It seems we are splitting hairs here on the definition of "war" and missing the actual message. Since you brought it up again.

War (Noun) " - a state of hostility, conflict, or antagonism

  - a struggle or competition between opposing forces or for a particular end 

  - a struggle to achieve a goal: 
"

War (Verb): " - to be in active or vigorous conflict

- to carry on active hostility or contention

"

The point still stands. War is an isomorphism for competition, conflict and tension between parties. One could probably use something like category theory and prove it.

References:

https://www.merriam-webster.com/dictionary/war

https://www.dictionary.com/browse/war


Ask any country under crushing US sanctions.


cyberwar springs to mind.


[edit/ downvote this all you like, pretending like warfare requires guns and armies when 2 different government elections have been attacked using social media, namely Facebook.]

https://www.thegreathack.com/

> Data has surpassed oil as the world’s most valuable asset. It’s being weaponized to wage cultural and political warfare. People everywhere are in a battle for control of our most intimate personal details. From award-winning filmmakers Karim Amer and Jehane Noujaim, THE GREAT HACK uncovers the dark world of data exploitation with astounding access to the personal journeys of key players on different sides of the explosive Cambridge Analytica/Facebook data scandal.


Yanks to the rescue: the secret story if how American advisers helped Yeltsin win

http://content.time.com/time/covers/0,16641,19960715,00.html

Was that an act of war against democratic Russia?


One could argue they have a higher GDP and population than most countries right now (all depends how you measure “power”) but I’m with you: if it went down tomorrow, I’m not sure what the world would actually be losing, nobody would die, and the world would keep spinning.


Yeah they only know everything about 1B people and can swing elections but other than these they are just a regular company selling stuff.


There is zero evidence that any activity conducted on Facebook has ever actually swung a single election. As far as I can tell, that is hyperbole as well.


Absolutely. A $5 billion USD hyperbole.

https://en.wikipedia.org/wiki/Facebook–Cambridge_Analytica_d...

"The governments of India[30][31] and Brazil[32][33] demanded that Cambridge Analytica report how anyone used data from the breach in political campaigning, and various regional governments in the United States have lawsuits in their court systems from citizens affected by the data breach.[34] On April 25, 2018, Facebook released their first earnings report since the scandal was reported. Revenue fell since the last quarter, but this is usual as it followed the holiday season quote. The quarter revenue was the highest for a first quarter, and the second overall.[35] In early July 2018, the United Kingdom's Information Commissioner's Office announced it intended to fine Facebook £500,000 ($663,000) over the data scandal, this being the maximum fine allowed at the time of the breach, saying Facebook "contravened the law by failing to safeguard people's information".[36] In March 2019, a court filing by the U.S. Attorney General for the District of Columbia alleged that Facebook knew of Cambridge Analytica's "improper data-gathering practices" months before they were first publicly reported in December 2015.[37] In July 2019, the Federal Trade Commission voted to approve fining Facebook around $5 billion to finally settle the investigation to the scandal, with a 3-2 vote.[38] Facebook established Social Science One as a response to the event."


Nothing you provided is evidence that any Facebook activity has ever swung any election. The very people that paid Cambridge Analytica for their services in 2016 said that the company’s strategies were ineffective at best, referring to it as “snake oil” [1]. You have provided evidence that people attempted to use Facebook to swing an election. Those two things are not the same.

[1] https://www.washingtonpost.com/news/monkey-cage/wp/2018/03/2...


They have tried to swing elections and broke electoral law in UK.

How could anyone besides them prove effectiveness or ineffectiveness of this campaign? I don't think it's possible. At the very least, the side they supported won (Brexit) and they should not be trusted.


You may believe Faceache broke electoral law in the UK; but they have neither been charged nor convicted. So your belief would be false.

Leave.UK was accused of violating electoral law. I believe the Electoral Commission has now dropped its investigation.

Incidentally, to break UK law, you usually have to perform the violating act in the UK (we have a few laws that involve extraterritoriality, but they are far and few).

Faceache barely does anything in the UK. They apparently make no money here; they don't sell stuff (not even advertising - that would be the Republic of Ireland). CA collected data on US citizens; that's legal here (and would have been of very little interest to Brexit campaigners). As far as I know, nothing CA did violated UK or EU law.

You say "the side they supported won (Brexit)". Do you mean that Faceache supported Brexit? I don't think they had a dog in the race at all. Or do you mean CA? It's been argued that CA took money to provide services to Leave.UK, but that's not the same as saying they supported Brexit.

Trying to "swing elections" is legal in the UK. In fact it is encouraged; people who successfully swing elections often get appointed to important positions such as Prime Minister. It's completely legal to hire polling companies to help you better understand the voters. It's completely legal to hire advertising companies to promote the electoral outcome you want promoted.

Now you are speaking of trust; of course, I trust neither CA (now defunct) nor Faceache. But Faceache did not drag my country into wars in Iraq, Libya and Syria. Faceache did not have that much power. The UK joined those wars largely because of diplomatic pressure from the USA - a much more powerful entity than this rather tedious online advertising company.

From what I have read, and despite their bragging, CA wasn't even helpful to the Leave.UK campaign. Their data wasn't relevant, and anyway Leave.UK didn't have the organisational capacity to make use of whatever data they could offer.


Leave.EU was found guilty, and fined at least once:

https://www.theguardian.com/politics/2018/may/11/leaveeu-fin...


> You may believe Faceache broke electoral law in the UK; but they have neither been charged nor convicted. So your belief would be false.

You are correct that they haven't (been charged with having) broken electoral law in the UK, but they have broken data protection laws in relation to the information which was then used by Cambridge Analytica:

https://www.theguardian.com/technology/2018/jul/11/facebook-...

Whether that information was then used by Cambridge Analytica as part of a Brexit campaign is open to more questions.


What you are asking is impossible. How do you want me provide evidence? Fly back in time and stop facebook interfering? I can flip the question, why would politicians use this setup if it was not working?


The point is that Facebook ads, regardless of how precisely targeted they may (or may not) have been, did not sway the 2016 election, and I am not aware of any other election Facebook is even thought to have had any effect on. The whole “it’s Facebook’s fault” narrative was shaped by a liberal media desperate to explain why they were unsuccessful in influencing it themselves. Rather than accept the fact that they had simply a run a fatally flawed candidate, and had alienated large swaths of the country by calling them stupid for not agreeing with every one of their views, liberals found a scapegoat: it was Facebook’s fault.

Facebook is an echo chamber. People don’t go there to be informed; they go there to validate their already held beliefs. Given the large ideological chasm between the two candidates in the 2016 election, it defies logic that even a single voter was swayed or chose not to vote at all based on ads they saw on Facebook.


Having lost the popular vote, but winning the presidency with a margin of 77,744 votes in specific locations, it is not hard to imagine that Trump's success could have been thanks to carefully targeted political ads.

https://www.washingtonexaminer.com/weekly-standard/the-elect...

Of course it's impossible to say whether Trump would have won even if he hadn't spent any money on Facebook ads, but we're talking about a campaign that spent hundreds of millions of dollars in total. If this amount of money doesn't include enough to influence 78k people to go out and vote for a specific candidate, then we might as well give up on the very concept of advertising.


Yet, western democracies have been centralizing more and more power every year. It's more that a premise is that western democracies want to increase the power of the government and no one else.


Well, on the bright side most democracies are not explicitly about profit-making and/or cost-cutting as their first priority, even if it's the first priority of individual politicians.


I would agree with your statement that most western governments are not explicitly motivated by cost cutting and profit seeking. It would seem evident when we look at the trajectory of the US national debt in the past 40 or so years. However, I do not know if this is a good or bad thing. Will the national debt ever be paid off? And if not, what will the consequences be?


A nation paying its debt would actually not be as beneficial as you think, considering today's society runs on debt, having it is actually beneficial to an extent for relations, trade, to avoid war etc.

Now whether things should be this way am not sure, but a nation simply paying its debt off without significant changes to the role debt plays is not the answer.


The U.S. being the major exception?


Is it only western democracies that you think have been centralizing power? What about countries like China, Iran and Russia?

Western democracies historically have been party to increasing the power of private companies through government protection from competition (corporate welfare). The first example that popped in my head was the provision of prison labor for U.S. Steel through convict leasing.

There are numerous examples though, link below from Mises (admittedly a source with a conservative bias, but theres still good info there).

https://mises.org/wire/government-created-monopolies-are-eve...

It would seem to me that governments provide preferential treatment to private companies when it is beneficial for the government and they provide roadblocks and difficulties to companies who would be detrimental to the government. This is of course a generalization and not a hard-and-fast rule that explains every instance of government behavior when viewed in respect to a private company.


It was in response to the comment above - of course autocracies are constantly trying to increase their power.


>Facebook is the most powerful private entity on the earth right now

No it isn't, not even close. At most it's the third most powerful tech company, after Alphabet and Amazon.


Amazon is surely big and rich, but do they really exert the same psychological/social power on you? You don't read your news on Amazon, you don't send messages to your closest friends on amazon, you don't go down reading rabbit holes from following links on Amazon (not really, anyway).

Certainly purchase data is very powerful (ask supermarkets!), but I think it pales in comparison to the breadth of data Facebook and Google collect.


I guess Amazon is maybe not as powerful as Facebook, yes. I was thinking about it also in terms of AWS and such, but I guess that Amazon can't really convert that into an evil master plan in any way.

I might also be biased towards underestimating Facebook since nobody in my social circle actually uses Facebook or Instagram. I guess Facebook is more powerful than I gave it credit for, though it still pales in comparison to Alphabet.


While I agree that Google is more powerful, remember that even if you or your friends don't use Facebook, many of the sites you visit do - so unless you've got pimped out tracking protection (which as a HN user you probably do, but maybe your friends don't!), Facebook still have a good idea where you're moving throughout cyberspace


Why is Facebook more powerful than Google/Alphabet?

> I'm not sure that we as a society have ever dealt with a non-state actor this powerful before.

Amazon and Google being of somewhat similar or greater power at least tempers down that statement. And unlike Facebook they have really good reputations outside specific parts of circles like the tech circle.


Facebook has way more control over the social fabric and distribution of information than Google does. We've seen violence-inciting disinformation campaigns spread through Facebook and rack up a literal death count to the point that governments have angrily demanded intervention from FB with the result of FB shrugging their shoulders and going 'our bad, we didn't hire enough moderators'.


Not really though. Apple and Alphabet effectively could cripple Facebook. We are already seeing some of this take place with Apple banning Facebook's VPN apps, options on data shared with apps and by rolling out its new app sign in with Apple feature.

There are benefits and drawbacks to social media/everyone has a voice. On a benign level, the NYTimes released a story misinforming its readership that Apple was proactively promoting its own apps. This was cleared up on Twitter by @drbarnard whose view was promoted via Stratechary.

I realize there is a lot more complexity to nation-states creating false narratives around China or Hong Kong protests, but on a basic level, I believe social media allows a quicker iteration cycle to correct misinformed views with the drawback of initial misinformation traveling at a greater velocity.

In many ways, you can get a more informed and accurate view of the situation in Hong Kong today if you have the propensity to avoid overreacting to the first piece of information and developing a skillset for finding the right person to listen to.


> We've seen violence-inciting disinformation campaigns spread through Facebook and rack up a literal death count

To me that signals they have less 'control' of the distribution of information on their own platform. It's debatable who could wield more social influence, Google or Facebook. On me, it'd certainly be Google, since I use about a dozen google products (Chrome, Gmail, Search, Mesh, Calendar, Analytics, Voice, Android, Scholar, Cloud, Maps, etc.), and zero Facebook products.


I think you’re underestimating the impact of YouTube. Its driven to prominence extremist ideologies, especially on the far right, that would have had difficulty finding purchase via traditional media outlets. And especially among young, alienated men, who are historically more prone to violence. Just look at the case of the New Zealand shooter and the subsequent violence he has inspired.


I still remember back in the late-noughties when the DOD was inviting arabs to come to the U.S. and attend workshops teaching how to use facebook to organize insurgencies. That stuff is out of fashion now, but we were oddly okay with it back during the Arab Spring.


Europe has developed a fairly anti-US-big-tech attitude recently. As a Brit I kind of understand it. We probably don't benefit from importing all of our 21st century products and services from the US, especially when these companies don't pay any taxes in our countries.

Europe as a market has higher taxes, more regulation, and has more cultural barriers giving us a huge disadvantage when trying to compete in the global market with the big US (or increasingly Chinese) tech companies.

Unfortunately I think we may need protectionist policies like this if we want to develop our own tech companies and products. It's the same situation the US is in with manufacturing. The US simply can't compete with countries like China, so if the US is passionate about preserving its manufacturing sector the only answer is protectionism.


> Europe has developed a fairly anti-US-big-tech attitude recently

I don't think it's an "anti-US-big-tech attitude" so much as an aversion to companies that have repeatedly been found to break the law (be it tax, competition, privacy or otherwise).

You don't (at least I don't) really see much hostility towards Apple, Netflix or Microsoft, despite them being large US tech companies.

The only examples I can come up with for companies Europeans might be hostile towards are companies that have given Europeans reason to be hostile: Facebook (tax, privacy), Google (tax, privacy, competition), Amazon (workers' rights) or Uber (workers' rights, flagrant disregard of the law).

If European companies behaved the same way, they'd face the same consequences (feel free to give counter-examples). I think the reason you hear about American companies so much more often is because:

- They're big, so violations are big and fines are big, making them big targets and big news

- They often break the law (perhaps because they're used to operating in America, which is relatively lawless when it comes to competition and privacy), making them easy targets

- You're reading English-speaking media, so you're less likely to hear about say a mid-sized German or French company being fined


For all of the companies you mentioned: taxes. They all use either a double Irish with a Dutch sandwich, or are incorporated in a tax haven (Uber, Amazon in Luxemburg)


And it's not just tech. See Starbucks paying sweet fanny adams in tax, etc.


> ... when these companies don't pay any taxes in our countries.

I'm not sure whose fault that is: https://www.theguardian.com/technology/2017/dec/05/ireland-r...


> We probably don't benefit from importing all of our 21st century products and services from the US

This amounts to "our country is bad at [thing], so let's restrict trade for [thing] to protect our industries."

Of course it sounds great until other countries counter by restricting the thing you are good at, and then everyone loses.


That's precisely the right decision if those industries have national significance.


It amounts to "these multinational companies employ armies of accountants to use every trick in the book to avoid paying taxes on all the sales they've made in our country, and it's not fair"


It also robs those not in the favored industries by either providing them an inferior or more expensive product/service, usually both.


There's a key difference here in that Libra is a permissioned ledger in a fundamentally different way. One could argue that PoS-based blockchains fall under that as well, since you need to acquire tokens to stake to become a validator and the tokens need to come from somewhere. But if we take Ethereum as an example, they have been under permissionless PoW for years, the tokens are traded on public markets and the capital that needs to be locked up i order to become a validator node is ~6,000 USD with today's ETH price.

In the case of Libra, a validator needs to be brought into the Libra foundation, subject to approval of current members and a membership fee of 10 million USD.

So you can see Bitcoin (permissionless PoW) and Ethereum 2.0 (permissionless PoS) as anonymous, permissionless cooperatives where everyone is playing on the same field, whereas Libra consists of a small consortium of large corporates who can set the rules as they wish.


Cryptocurrencies like Bitcoin are usually by design not controlled by anyone but the users participating in mining and trading it. Banning that is like banning people from trading in carrots; you can't.

It's very different when there's a company with its own financial interests manning the door, regardless of what company that is.


Yes you can ban trading in carrots. Especially in Germany where the law is ... enforced.

A ban make most things commercially unviable. If botcoin had widespread use a ban would make it an underground payment system.


I think his overall point stands: going after facebook is more sensible than chasing individual bitcoiners.


Physically ppl ban guns and drugs.

Digital services ppl ban child porn and gambling.

Sucks you are downvoted because you are right


Well the decentralised nature of most crypto currencies prevent this sort of ban, but a centralised offering from a known entity is a lot easier to block. I would also say it is better to block it, especially with Zuck at the helm, he has proven he cares nothing for regulation or laws in the nation's in which FB operates. At least bitcoin is consensus driven,libra will be driven by Zuck and the tech giants. No thanks.


> Well the decentralised nature of most crypto currencies prevent this sort of ban...

Just because Bitcoin is decentralized doesn't mean that a country can't ban it within its own borders. To do that, all a country would need to do is pass a law making it a crime to own or use Bitcoin, while also prosecuting people who didn't report profits from illicit Bitcoin transactions with tax evasion. At that point, no legitimate business in the country would be able to accept Bitcoin or convert it to cash, and the vast majority of citizens wouldn't risk fines or imprisonment to use it.

Since, at this time, a very small fraction of the population uses crytocurrencies (or even knows what they are), enacting such a law probably wouldn't face a lot of resistance, especially if it were presented as a measure to fight crime or terrorism.


You can ban bitcoin from your country but you can't stop it from being used. You could ban Libra from your country AND stop it being used.


Ideologically, at least, extant cryptocurrencies aim to decentralize power, whereas the OP was saying that German resistance to Libra comes from a concern about the centralized power it might afford. That's not mere bigotry.


That's why it's specifically Lubra* that is being addressed.

* - Intentional typo, for a double entendre.


Libra is not a cryptocurrency. It's a private payment system integrated into a global tech monopoly ecosystem masquerading as a cryptocurrency.


I think it's more of an anti-tech mindset more than an anti-Facebook mindset. If Google did this, I imagine that Germany would be just as upset.

If, for example, Goldman Sachs did the same thing, that might not go over smoothly, but I don't think it would see such a negative reaction. I'd assume that feels more in line with the status-quo, whereas tech companies getting involved in financial instruments is not as familiar.

I more so wonder what would happen if a company like Stripe did this. They are sort of a "financial" company, but I'd say also undoubtedly a "tech" company too.


I think the way Facebook did this was the right way. It set up Libra as an independent non-profit and they have a non controlling share. The founding members include Stripe, Visa, Mastercard and PayPal.

All the media coverage on Libra is incredibly dishonest and ill-informed.


Yes, but Facebook will have enormous power in this deal as they own the platform.

Distrusting them is the only logical conclusion given their track record and power.

Libra isn't a decentralized crypto currency, it's a new fiat currency minted by a private corporation with a very questionable track record and an uncomfortable amount of concentrated power. It's also seated in a country with a very weak track record enforcing rules on giant corporation misbehaving.

Users choosing to use something they collectively create and control is very different than this type of centralized power moves. They are in essence trying to bring billions (trillions?) of dollars worth of the worlds savings into US jurisdiction (and likely invested in the US economy via bonds and stocks)

Good decision on the part of Germany and France IMO. I hope more countries follow their example and protect their sovereignty.


> They are in essence trying to bring billions (trillions?) of dollars worth of the worlds savings into US jurisdiction (and likely invested in the US economy via bonds and stocks

That's not true:

> What are the actual assets that will be backing each Libra coin? The actual assets will be a collection of low-volatility assets, including bank deposits and government securities in currencies from stable and reputable central banks.[0]

[0] https://libra.org/en-US/about-currency-reserve/#the_reserve


> invested in the US economy via bonds and stocks

> bank deposits and government securities

Your point doesn't contradict mine. It actually re-enforces it.

What percentage will be in US deposits and government securities? US bank deposits get invested into the market, so yes, this would take the money from someone in France, who would currently hold savings in a French bank involved in the local economy and move it to Facebook's vault.

The very link you provided lacks transparency and is exactly the type of reason I distrust Facebook. In fact it doesn't have a single #, percentage or actual thing I could verify/which they are committing to, the language is vague... I'm guessing intentionally so.


That's fair, I think I forget that not everyone knows that this is a project managed by a consortium, not by a single company alone.


The consortium is like a rogue's gallery of companies I distrust though, so I'm not sure decentralizing my deep distrust is going to help the Libra project.


How many of those are backed (edit: created and fully controlled) by a foreign company with 2.4 billion active users and extremely questionable privacy track record?


As another commenter noted Facebook does not control it.

But you're right that the token is backed by something, mainly one to one reserves of currencies and government bonds. So you're okay with bitcoin, that has a market cap of over $100bn that's backed by nothing, but someone creates a cryptocurrency that's backed by one to one reserves of the safest investments in the world and that's somehow extremely questionable.


Libra is not cryptocurrency. It is digital currency.


It's not questionable at all. It's undesirable.


> backed (edit: created and fully controlled) by a foreign company

This is factually wrong. Facebook controls a very small portion of Libra (<1/10): https://libra.org/en-US/partners/


This is a very good description of your argument. It may seem like an unfair stance - I'll try to show why it might not be a crazy position to take.

Let's just use Bitcoin vs. Libra, because bitcoin is much easier to type than cryptocurrency.

You know, instead of typing up a list of the pros and cons of allowing your citizens to use bitcoin vs. libra, I'll just talk about the underlying premise.

I think that as a government, you don't want to lose control of the money supply. That includes:

* How the money is used * Inflation * (And unfortunately, nowadays) tracking the money.

Looking at this from the point of view of a government, it seems pretty dangerous to put all those controls in the hands of a company.

Personally, I would be against this decision for any company, not matter how well liked.

Situations change, and then the powerful can change the rules.


Do those crypto currencies have the ability to pound 80% of German citizens with adds employing them to adopt their currency everyday?


That's because they have a clear way on how to stop facebook while they don't really know how to stop decentralized crypto (whose whole point is to resist state interference).


> already hundreds of crypto currencies available in Germany

How many cypto providers have > 2 billion users? FB should be regulated.


Yes, distributism has been a founding principle of post-war europe. Not just in Germany but in all of western europe.

That said, the governance of Libra is setup with distributism in mind. Facebook has set it up explicitly so they don't control the currency, a founding group of 100 corporations will control the reserve (one vote each) and they are explicit about accepting new qualifying members.

If it takes off, it will attract a lot more corporations/institutional investors leading to free market control.

However, I don't see the point why governments are afraid of it because the monetary policy mechanisms requires a fractional reserve banking system to enact its effects.

Libra is fully asset-backed and wouldn't have an impact on any monetary policy.

I think what most people don't understand is that monetary policy doesn't work by devaluing cash, it works by making debt cheaper leading to companies end individuals to take out more debt to invest and as a consequence push up aggregate demand.


I don’t want corporations controlling the reserve. I want democratic controls.


Germany is obviously somewhat keen on letting single entities get control of everything, as the EU is in many ways an extension primarily of Germany, and the closest entity I'm aware of that could be said to be doing just that.

I'd also like to mention that certain entities operating outside of the state are precisely the sort of thing that can prevent the sort of tyranny that Germany enacted during the 20th century. Sometimes, and often, the entity capable of "regulating" is the tyranny. Imagine if Germany had had the capability to prevent payments to Jews, or track which households were spending more on food than they should and were likely harboring enemies of the state. I'm not saying Facebook needs to be the entity that does it, but monetary systems operating outside of the state could be argued to be one of the strongest weapons against tyranny.

I actually think this highlights one of the fundamental differences between Western liberalism and German schools of thought. Germany tends to fall back on the central authority, whereas liberalism thinks that the central authority is the single most corruptible attack vector.


> Germany is obviously somewhat keen on letting single entities get control of everything, as the EU is in many ways an extension primarily of Germany, and the closest entity I'm aware of that could be said to be doing just that.

I'm not sure a union with a democratically elected parliament is comparable to a social media corporation which answers to its shareholders?


Why can other people not make that comparison? You seem to be doing just that -

A has a democratically elected parliament

B answers to its shareholders


I'm pointing out it's just not relevant to the conversation. They're too different to meaningfully (in good faith) bring up as a discussion point.

The original comparison read very much as whataboutism to me.


> monetary systems operating outside of the state could be argued to be one of the strongest weapons against tyranny

This is in direct contradiction to your previous paragraph, unless such a system is inherently decentralized, and not controlled by a single entity (such as FB).


Facebook would already make the situation into 2 competing entities, as the state will always be the other.


I agree with this comment.

Also, i think it shows a major difference in the way of doing bussiness and between the economic models most used in european countries vs the USA. Most notably the idea of a much more cooperative economy vs the highly competitive american model.

things like the rhineland model[1] are common across most western european countries for a reason, especially outside of the anglo-american sphere.

1: https://en.wikipedia.org/wiki/Social_market_economy#Rhine_ca...


Is it just another kind of foreign currency, not controlled by German government. The reason why bitcoin is popular is that people believe governments and central banks cannot be trusted, and they are evil anyway.

I understand why the governments do this, because they fear losing control.


That's for the theory. In practice, Bitcoin is popular because it allow you to speculate on an instrument easy to manipulate if you have enough funding and because it allows you to buy drugs on dark markets. Beside that, due to the volatity of Bitcoin, it has no practical use.


Like Gazprom ?


[flagged]


> Germany is deconstructing itself by [...] ignoring millenium problems in governance, such as unchecked mass migration.

What are you talking about? Germany is 25% immigrants, the US is close to 100% immigrants.


14.8% seems to be the real figure for Germany:

https://en.wikipedia.org/wiki/Immigration_to_Germany


That's not "the real figure", that's a UN estimate.

If you want the real figures you need to ask the German Statistische Bundesamt. Which put the number at 22,5% in 2016 [0], at 23,4% in 2017 [1] and at 25,5% in 2018 [2].

Keep in mind that those numbers are averages for the whole country and thus can be very misleading in their individual effects on each region. Because a whole lot of regions that previously had barely people with a migration background, at least from the MENA regions, have now seen a surge of MENA refugees.

This has visibly changed the landscape in some cities in the East, in the West not so much because Western Germany already had a lot of Muslim migration for decades, tracing back to literally mail ordering Turkish guest workers from Istanbul. That's why in many bigger Western cities you will find very "diverse" districts often referred to as "little Istanbuls" and Döner shops are abundant everywhere.

Thus in West Germany MENA refugees usually have an easier time integrating and finding contact trough the established Muslim sub-culture there.

The same does not hold true for East Germany, it doesn't have such a history of Muslim immigration, what is there in migration background is mostly from Eastern Europe, a bit of Vietnamese, due to the GDR times. But what the East did and still does have: Lot's of cheap and affordable housing, room for the federal government to cheaply "store" migrants.

By now many Eastern German cities kinda look like their Western counterparts but in a way sinister way: Large groups of young men just hanging out around the Plattenbauten they were put in, with everything from families to pensioners living right next to them, and yes crimes have increased because those guys also can't work (wouldn't want to steal a German the job), so they have nothing to do but hang out and get bad ideas.

[0] https://www.zeit.de/gesellschaft/zeitgeschehen/2017-08/stati...

[1] https://www.zeit.de/gesellschaft/2018-08/migration-deutschla...

[2] https://www.welt.de/politik/deutschland/article198890559/Sta...


Not in a very short period of time, the intensity of a phenomenon should not be ignored.


What is your definition of immigrant?


I think he is talking about the murders, rapes, and stabbings. Heck, NL had 2 US citizens stabbed by an Afghani living in DE.


Per population Germany has less of that than the US has school shootings.


So now it is ok?


> Germany is very, very keen on preventing powerful entities from acting outside of regulation and similarly, if not more, on preventing a single entity to get in control of everything. This is largely due to some foobar in the last century, which I'm sure everyone is aware of.

Ironic that aforementioned foobar in the last century was a governmental entity that existed entirely within the limits of regulation. Not to mention the completely reckless monetary policy of the Weimar Republic with respect to the Papiermark that arguably caused the rise of Nazi Germany.


So people or governments are not allowed to make mistakes and learn from them? If, apparently, something likewise happened in the past and caused lots of problems, the German government should just let it happen now just so that it isn't 'ironic'?

Not to mention the fact that the German government around the second world war was completely different from the current German government in terms of the actual people making it up.

Is it 'ironic' when governments try to improve equal rights for men and women just because there is oppression of either of the two in their past? What nonsense.


But this behavior is not an example of learning. In fact, as Libra could potentially limits government power and encourages sound money money, one could argue this is the opposite of the dangers you mentioned.

This false equivalence borders on Godwin's law. Combine that with the 9/11 rhetoric in the US hearings and it's really quite telling how they get SO scared. Idk how far it's going to go, and it might not be Libra at all, but there is so so clearly big role for crypto currencies to play.


Well it seems like the German government is worried about Facebook controlling money, not cryptocurrency per se. And I completely agree with that. Facebook creating money and everyone switching to libra sounds very dystopian to me.


As nobody would be compelled to use it, and those "everyone switching" network effects only occur if it has merit, I'm a bit more concerned about the banning being "dystopian".

And, of course, the Ministry of Truth https://en.wikipedia.org/wiki/Netzwerkdurchsetzungsgesetz


Yes, I don't think we are disagreeing here. Perhaps I should have said intention of regulation instead of regulation. The past events showed that the regulation was rotten, not watertight and prone to abuse. Thus there was a restructuring from the ground up, not only in the law but also in culture, and so Facebook's behavior is triggering all the red flags.


Ironically, Germany generally also controls the Euro for the so called PIIGS countries. For all intents and purposes the euro is just as much as an externally-controlled entity as the Libra.


Oh come on, you’re being (deliberately?) quite liberal with the truth here.


Maybe not "imposes" , it's voluntary participation. But there is no easy , not even intermediate route out of the Euro. And as money, it's not much different from a hard currency you can't control for countries that can't catch up with the developed economies of the north.


The "liberal with the truth" bit isn't about the ability to exit; it's about the EU being "externally controlled". The EU is an organization of which each Eurozone member is, well, a member. They have votes in the EU Parliament and European Council (the latter is responsible for appointing the ECB president) and a say in deciding the membership of the Executive Board.

(Indeed, the German Constitutional Court generally rules on the constitutionality of power transfers to Brussels based on the degree to which the control of said powers is democratic.)


i meant that the Euro, as national currency of italy and greece, is "externally controlled", cannot be bent to the needs of those countries , but to the needs of germany. Eurozone is not the EU


The Eurozone is a subset of EU members; decisions about the governance of the Euro are made by the Euro-using subset of the European Council (the upper house of the EU legislature, representing member states directly). Germany has a voting share on the Council proportional to its population.

Germany's outsized influence came 25 years ago, when it had the dominant part in writing up the rules and powers of the ECB.


germany has outsize influence, whether it is by choice, and whether they like it or not. Their decisions have such effects as bank bail-ins and capital controls in other euro countries


Not really. Germany effectively controls the euro, and it's not a great thing for many of its member countries. It was entered into as a union, sure, but now it's effectively a prison.


The first poster compared a proposed digital currency--one that no one might ever even use--to Nazi-era fascism and an assault on democracy.

Buboard suggests that Germany exerts coercive monetary pressure over some other Eurozone countries. That crosses the line for you?

If Ireland had independent monetary policy maybe it could have lanced the bubble earlier and not been hit with 14% unemployment after the end of the Celtic tiger era. If Greece didn't have Merkel on the other side of every table, it could have attempted something similar to the Plano Real, rebasing its currency completely and restructuring its society through default.

Or maybe they would be way worse off without Germany. Who knows? A claim that Germany has an outsized impact on monetary policy, at times to the disadvantage of other negotiators, is certainly debatable! But it's not the sort of thing you can brush aside ad lapidem. Especially not in the context of this farcically hyperbolic thread.


Like any incumbent, they don't like competition.


"Imposes"... Yeah.... Right... Was it Germany that forced Greece to cook their books to be accepted into Euro?


Well, "forced" is probably a bit strong. German manufacturers need markets; Germany "encouraged" the other members of the EU to allow countries like Croatia and Greece to accede, even though they didn't meet the entry requirements.

There are good reasons why the UK declined to join the Euro.


The EU, incl. Germany, did kind of encourage it.

Same happened for other countries accessions. And of coures France and Germany bent the EU budget rules all the time too. Then when things started going poorly in Greece, the gang kicking the fallen guy promptly forgot about this.

(To be clear, many of the rules reflected a irrationally strict anti-debt anti-inflation puritanism to begin with, and the problem was more in the rules than their lack of enforcement)


>> on preventing a single entity to get in control of everything

You mean like the EU?


EU is not a private company, is made of 350 millions of EU citizens and we like it like that.

More than having to worry about my kids getting shot at school by some other angry kid.


dude are you for real? Germany is one of the slowest moving countries in terms of innovation (minimum 1 month to setup a business) while maintaining a high level of corruption, Deutsche bank, pharmaceutical companies etc etc. They give no shit about protecting anything but uncontrolled money flowing around without them being able to do anything about it.


Germany is notoriously anti credit cards so no surprise when it comes to them. Its a stupid move of course but my guess is that they are worried it will be successful and threaten the EURO.


Why is Germany (the state) "anti credit card"? It is accepted everywhere.

You might mean that some Germans don't like CC and prefer cash for privacy reasons. But that is a personal decision.


>It is accepted everywhere.

Not in my experience in the least bit. Germany was the only place that I’ve been where there were so many non-credit card restaurants etc. I was traveling for work in Bavaria and baden-württemberg. It was an issue and we had to make sure I selected the right place to use my work cc.

I took some personal time in Munich and most of the places I went were cash only. 2 students, one from Finland another from the Netherlands complained about the cash issue and forgetting it multiple times. Leading to interesting situations.


Strange, I'm living in Germany, hailing from Baden-Württemberg and now been living in Northrhine-Westphalia for almost ten years, and I cannot remember a single restaurant that doesn't accept credit cards. And I'm paying almost everything with credit card.

Sure, the ice cream stand at the swimming pool only accepts cash, as does the local discotheque, but restaurants? Never a problem.


Munich was much worse. 3 lunch cafes, coffee shop, bar, and one of the beer gardens. Luckily I was warned and asked the places before I went.

Even the cab to the Munch airport would only accept cash. I had to walk across the airport to get it. His payment app was “not working”.

In Stuttgart it was only the smaller places. Although we made sure find places that took corporate Amex using a website.


Your problem was most likely using an Amex. Amex is accepted nearly nowhere in Germany.


No it wasn’t. I wasn’t working when I was in Munich and not using my Amex.


As a foreigner who lived in Germany for several years until recently, my experience is also that cards were accepted at 50% of places at most - often with a minimum purchase, and usually no contactless.

By contrast, in New Zealand even most farmer’s market stalls and pop-up espresso carts presume that contactless will be the main means of payment.


It's basically the opposite in Sweden, if you don't have a credit card but just cash, you will at least in Gothenburg where I work go hungry during lunch.


When it is the majority of the population, it is beyond a personal decision.

This is just my personal observation. Among the western European countries, German has the smallest level of adoption of credit cards. The French, the Dutch, the Swedes etc love their cashless nature of credit cards, the Germans not so much.

Furthermore most of the credit cards offered by the German banks are actually debit cards.


When it is the majority of the population, it is beyond a personal decision.

It boggles my mind, but "majority" of the German population has a preference to Currywurst ( https://en.wikipedia.org/wiki/Currywurst ) - is this also "beyond a personal decision" ?

If you have a reference to German government pursuing an anti credit cards policy - please provide it here.


Curry wurst is definitely a cultural thing. Most kids growing up in Germany eats curry wurst, and continues to eat them in adulthood.

This paper (0) is a good write-up on how the card systems works in Germany.

(0) - https://refubium.fu-berlin.de/bitstream/handle/fub188/22957/...

edit:updated the link


Thanks for the link, it is indeed very good.


The link doesn't work?


A debit card is just as cashless, what is your reason for using a credit card?

Hotels or car rentals which want to block a certain amount on my card as guarantee are one. Other than that I never needed a credit card.

In case of an emergency most bank accounts in Germany can go into the negatives, I guess making minimum payments on a credit card is cheaper but that style of life isn't at all common in Germany.


No sure why people are downvoting me for this.

But let me just say that, when I was at Square this was common knowledge and why that wasn't the first market we looked at.


I'd wager that about 90 % of "credit card transactions" in Germany are actually Girocard transactions. Virtually every bank card is a Girocard.


Depending on your bank, it's quite the opposite, particularly when you want to draw cash from an ATM.

With a Girocard, you have to go to a specific brand of bank or hope they are in your "cash group" or else you will pay a hefty fee.

But some banks offer to withdraw from any ATM using their VISA CC with no fees at all.

For years I've been using this to get cash without much of a hassle and pay for stuff I'd otherwise probably pay for with my Girocard.

Makes me wonder if my cash withdrawals are counted as CC transactions?


That should be easy to figure out by looking whether the transaction shows up in the checking account or in the credit card account.


The money is taken from the CC account, so I guess that would make it a CC transaction when I draw money to pay in cash? That's kinda funny lol


Most of these "credit cards" in Germany aren't really credit cards though. They take the money from your account immediately instead of sending you a monthly statement and letting you decide how much you want to pay towards your credit.


In general they are debit cards, yes, and I think that everyone means is debit or credit cards or equivalent.


> Germany is very, very keen on preventing powerful entities from acting outside of regulation and similarly, if not more, on preventing a single entity to get in control of everything

If you watched the news some time during the last 30 years you get quite a different impression. The German government parties, particularly CDU, CSU and SPD, are _constantly_ trying to grab power and erode our civil liberties; They barely do anything else. If I had a euro for every law that those three passed that was obviously unconstitutional I'd have enough money to bribe my own CSU congressman. The only problem the German government has with Facebook Libra is that they themselves don't control it.


>> The only problem the German government has with Facebook Libra is that they themselves don't control it.

I don’t see why this is hypocritical, a problem, or even an argument. The CDU, etc... are elected by the German people and hence are designated by the people to control state power. It’s their job to control these kinds of things.

Facebook is elected by no one, represents only Mark Zuckerberg’s interests, and is accountable only to him.


>It’s their job to control these kinds of things

No, that’s not a given. Many people don’t agree that it’s the government’s job to decide what kind of currencies you’re allowed to hold and trade.


Interesting. But contrary to how you sell it it's the big German state that again knows better what's good for people. With that said it's not an opposite vector to some foobar from the past. It's the same foobar as it was in the past. No kidding. The big state is a problem. State having less and less control over people liberties would be the right direction and the opposition to that foobar. And not state telling people what currency they should use. Definitely not. I have spent past few years in fintech, mostly in crowdfunding. The lesson learned is that state is the biggest problem in many countries. Free People should have an option to make mistakes. If people are naive enough to buy shaky crypto they should be allowed to do it. And most countries at least don't penalize crypto. Here the problem is not the good of German citizens but who controls value flow . With this huge consortium behind libra, not just Facebook, it would be the first time in the crypto world where crypto would have a real chance of being used for transaction and not for investments, which may go totally in the interest of most Germans. All but the people that benefit on the endless quantitative easing cycles that Germany controlled ECB keeps injecting. Average German folks will lose on this ban.


Ironic that the German government wants to avoid irresponsible monetary policy through a private entity when it is literally printing money to stimulate growth through the ECB.


Monetary and fiscal policy is not the same as us balancing a checkbook at the end of the month. Money is created over time for many reasons, on a micro scale for stimulus, and on a macro scale because the economy grows over time and money represents a slice of economic activity. Keeping it from going up and giving disproportionate gains to money holders past is part of the job. There's nothing ironic about it, this is the job of central banks, and there's nothing shady about it.


>Keeping it from going up and giving disproportionate gains to money holders past is part of the job. There's nothing ironic about it, this is the job of central banks, and there's nothing shady about it.

There is something incredibly shady about it, because inflationary monetary policy is inherently a regressionary redistribution of purchasing power and wealth due to Cantillon effects whereby those relatively closer to the printing press (governments, banks, and asset holders in roughly that order) gain a higher purchasing power than those at the very end of the chain which has traditionally been wage-earners and average workers.

There is no need to print money in a growing economy, it's purely ideology from the Keynesian economic establishment where they've somehow convinced the general public that it is crucial to have a steady inflation in an economy because otherwise people won't spend money or invest (which is a priori false, as time preference is a thing in both humans and firms). For thousands of years gold has been used as a monetary backing (which is deflationary by definition), and some of the highest recorded levels of economic growth in history has generally been slightly deflationary (the United States during the 1800s is a prime example).


> There is no need to print money in a growing economy...

There is, for a number of reasons, but not least of which is fairness. If I get a dollar, then the size of the economy doubles, my purchasing power as a fraction of the total amount of economic activity doubles. This creates wealth inequality over time, too. Likely to the benefit of the same people.

I hear you re: Cantillion effect, though I'm sure that could be solved with a targeted tax.

Most importantly, philosophically, nobody owes you a risk-free return over time on your idle, un-invested capital. I can think of no justification for why your dollar should be worth more in the future than it is today. At best, I could see an argument for the same amount, though I think a little bit less to encourage investment is a totally reasonable place to draw the line.

> ...some of the highest recorded levels of economic growth in history has generally been slightly deflationary (the United States during the 1800s is a prime example).

You mean the industrial revolution? I'd say there were externalities that affected that. Counter-point, the great depression.


>There is, for a number of reasons, but not least of which is fairness. If I get a dollar, then the size of the economy doubles, my purchasing power as a fraction of the total amount of economic activity doubles. This creates wealth inequality over time.

You assume that as an economy doubles prices won't decrease. The natural tendency of a free market is a decrease in prices due to competition, technological innovation, and other factors. If anything, holding the same dollar will lead you to purchase more goods at a higher quality than before as the market develops and expands - a higher purchasing power.

Wealth inequality is exactly what is caused when you print money to match the growth of the economy due to the aforementioned Cantillon effects.

>Most importantly, philosophically, nobody owes you a risk-free return over time on your idle, un-invested capital.

There is nobody that is giving you that return. The so-called "return" is the tendency of a free market to lead to cheaper prices and higher quality goods and services. If anything, I can't see a justification to allow the public's money to decrease in value over time.

>You mean the industrial revolution? I'd say there were externalities that affected that. Counter-point, the great depression.

Yes, there were externalities that affected it, but the core point remains the same. Competition and rapid technological innovation lead to a decrease in prices over time. The Great Depression was not a consequence of a natural deflationary regime rather it was the consequence of extremely lose monetary policy during the 1920s ("The Roaring Twenties") and it would have resolved itself quite quickly but as letting people be unemployed is usually politically unpopular Roosevelt enacted price controls that extended the market correction process that would have otherwise taken a much shorter time than it did.


> If anything, holding the same dollar will lead you to purchase more goods at a higher quality than before as the market develops and expands - a higher purchasing power.

AKA, a risk-free return on your uninvested, idle, capital that nobody owes you. The poor tend not to have much savings, by definition, which means that all this win goes to the already wealthy. Your argument is simply that your dollars should be worth more later because you got your dollar first. That's not a good reason, IMO.

> If anything, I can't see a justification to allow the public's money to decrease in value over time.

Let's say you decide it should be worth the same amount forever. Fine, that still requires printing new money. All you're arguing now is the magnitude.


>The poor tend not to have much savings, by definition, which means that all this win goes to the already wealthy.

This is not true - saving rates were higher in the past before irresponsible monetary policy took over after the erosion of the gold standard.

>Your argument is simply that your dollars should be worth more later because you got your dollar first.

This is exactly what happens in an inflationary monetary regime, althought the difference is that the distribution of purchasing power increases is not homogenous in an economy rather it is concentrated on those who are either politically or economically well-connected, usually asset holders.

>Your argument is simply that your dollars should be worth more later because you got your dollar first.

How about not controlling the value of money and instead letting it reflect the general purchasing power in an economy?


You've kinda dodged the core of my argument: why should your money be worth more later than it is today even though you're not doing anything with it? And further, if you think money should be backed by gold, why is it not sufficient for you to simply buy gold with your fiat as you earn it? I'm having trouble understanding why this fails to meet all your objectives.


>Monetary and fiscal policy is not the same as us balancing a checkbook at the end of the month.

This is a candidate for most tired meme on the internet and I really don't understand what it even has to do with this discussion as I've never met a household with a printing press (running the press is exactly what GP was referring to).


Right, a technically private institution which is built on capital of all EU member states and tightly knit into the complex web of EU entities is literally the same thing as a social media giant who denies even conducting business at scale in Germany or France to dodge taxes and comes freshly out of manipulating the US elections for profit.

Germany is not perfect, neither in ideology nor in execution. Neither is the EZB or the EU, for that matter. But this is just bad faith arguing.


How about we not relitigate all of monetary policy in a thread about Facebook? This isn't productive; it's a gigantic, pointless digression.


It's not pointless, because control of monetary policy is exactly why they are banning it.


It's pointless because you're not going to persuade anybody, but rather recapitulate a timeless, tedious dorm-room argument. The article is about Germany and Facebook. It isn't an essay on whether central banking is evil.


Germany is very much opposed to the current ECB policy.

Hermel 6 months ago [flagged]

That’s a very typical German mindset. You implicitly assume that nothing good can come out of Libra so it should be banned from the beginning. The pragmatic approach is to wait and see what happens. Most likely, it won’t be as successful as you assume it will be. Also, there are plenty of other forms of private money out there that you don’t seem to have a problem with (e.g. credit cards), as well as foreign currencies. Why do you think using Russian rubles for payments should be perfectly legal but using Libra for payments is completely evil? It does not make much sense to me.


Sorry, no. This is just reckless. I'm trying hard to assume good faith here.

"Wait and see" is a good approach to see whether your new electric city bus line is working or whether people prefer your website logo in red.

You can never, ever take back what became basic necessities on a nation level while being even remotely democratic. Once people have it, they won't give it back.

And you seriously think Facebook is to be given any such power, even after Cambridge Analytica? We're talking about currency, and billions of people. Lifes are very much at stake.

But sure, let's wait until Facebook uses Big financial data to get some populist party manipulated into power and a mere few thousand people die from the consequences, than be all enraged on reddit for a week and unable to change anything? I'll keep my typical German mindset, thanks


If that is a typical German mindset it bodes well for the world. You make your points well.


Why are you so convinced that everyone would immediately want to use Libra? Do you think the Euro is such a mess? If that’s really the case, wouldn’t some people using an alternate currency be a step forward?

If Libra is going to be more economically than a typical bank, that will take many years and give plenty of time to react in case of problems. Also, it should first be up to the people for themselves to decide what means of payment they are using. The government should only intervene when the market fails.


> Why are you so convinced that everyone would immediately want to use Libra?

In the beginning, it will be optional. But if/when everyone starts using it, most people won’t have a choice.


[flagged]


You're making his point for him... waiting isn't helpful, since it either won't work out (and little value would have been lost if banned) or you'll end with regulatory capture and loose your ability to regulate/ban.


Because VW is so much more powerful than Google?

Well, at least Germany can get a jump on banning automated driving development. Hopefully BMW, MB, and VW are all banned from working on it since it's still early enough to prevent bad things from happening.


CA was not facebooks making and favebooks own algorithms are far superior to CA.

Crypto currencies are not going away and both Getmany and France are hurting their own entrepreneurs.


I could say it's hard to assume good faith from you. You're making ridiculous leaps. We'd be stuck still riding horses and buggies if people had your mindset in the early 1900's.


If they just took the “wait and see” approach and some fraction of the population took it up, they’d find themselves fighting against a group of citizens with vested interests, and the corporations would say “you can’t take this away from these people” much like the gun lobby does in the USA. The real “wait and see” approach is to prevent it get a foot in the door, see what happens elsewhere, and then perhaps repeal the decision in the future.


A classic reactionary approach


Germans seem not to like credit cards either. Most people pay with cash at the store.


We do in Italy too.

Protesters in Honk Kong did that too, to not be identified and tracked.

Protesters is US did that too to buy subway tickets, again, to avoid being tracked.

It's ok to pay in cash.

It's not that we go around with leather suitcases full of cash to buy tons of cocaine...


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