NFTs, Artificial Scarcity, and Libertarian Data Politics

The paradox of NFTs is that they introduce scarcity into a domain in which items are accessible to everyone for free; for this reason, NFTs compel us to rethink the notion of property, of owning something in a digital space:

Through subscription services, we have temporary access, but never own a thing. In some quite important sense we might ask, were we to own something, what would it be? An original master of a film or music? Perhaps. But in reality what we can say is ours is either the temporary access, or a download. The download is likely to be absolutely identical to every other download that exists. In other words, our owning it doesn’t preclude others from owning it. This is why even the thought of owning a piece of art online has a tinge of absurdity about it. If the song exists as a file, it can exist identically in an infinite number of digital spaces. But NFTs provide a kind of “solution”: artificial scarcity. They give us digital collectibles in a world where duplication has zero costs.90

What is intriguing with NFTs is the idea of taking a digital asset that anyone can copy and claiming ownership of it. An NFT has almost no use value (maybe it brings some social prestige to owners); what sustains it is its potential future exchange value. It is a copy with a price, an item of purely symbolic ownership that can bring profit. The key Hegelian insight here (as well as in the case of Bitcoin) is that although Bitcoin and NFTs appear as anomalies (as a pathological deviation from the “normal” functioning of money and commodities), the two effectively actualize a potentiality that is already contained in the very notion of commodity and money.

Partisans of crypto and NFTs are ready to admit that Bitcoin and NFTs are not anomalies but a logical consequence of the economy based on commodity exchanges, but they don’t see how the “libertarian” crypto necessarily gives birth to new forms of centralized control. They dismiss such new forms of domination as contingent anomalies. Peter Thiel is a perfect example, to whom “Artificial Intelligence is communist and crypto is libertarian”—why? Because with AI, … you’re sort of going to have the big eye of Sauron watching you at all times, in all places … The main AI applications that people seem to talk about are using large data to sort of monitor people, know more about people than they know about themselves … where you can know enough about people that you know more about them than they know about themselves, and you can sort of enable communism to work, maybe not so much as an economic theory, but at least as a political theory. So it is definitely a Leninist thing. And then, it is literally communist because China loves AI.91 Sounds evident and convincing.

However, as Thom Dunn duly noted, Thiel’s big critique here does seem to be about the authoritarian use of data and surveillance. Which, okay, cool, I agree, that’s a valid concern. I don’t know what that has to do [with] a revolutionary vanguard party forming a transitional state in order to establish a classless and leaderless society, but, um, sure. China does technically call itself a government. So I think I get what he’s putting down here. But just so we’re clear: this is the guy who helped found Palantir. Like, the big data analytics company that literally ICE [hired] to organize its authoritarian tactics. Which is the same Peter Thiel who also founded the Anduril surveillance company, and used his billions to destroy a successful news organization for criticizing him. And he’s afraid of AI because of … communism?92

It is impossible to miss the irony here: The libertarian anti-Leninist Thiel relies on the very “Leninist” AI mechanisms he deplores. This is why one of the true heroes of our time is Christopher Wylie, a gay Canadian vegan who, at twenty-four, came up with an idea that led to Cambridge Analytica. He was a key figure in digital operations during Donald Trump’s election campaign and created Steve Bannon’s psychological warfare tool.93 Wylie’s plan was to break into Facebook (now Meta) and use the private and personal information of millions of people in the U.S. to create sophisticated psychological and political profiles that would target them with political ads.94 At a certain point Wylie was genuinely freaked out: “It’s insane. The company has created psychological profiles of 230 million Americans. And now they want to work with the Pentagon? It’s like Nixon on steroids.”95

What makes this story so fascinating is that it combines elements that we usually perceive as opposites. The alt-Right presents itself as a movement that addresses the concerns of ordinary white, hard-working, deeply religious people who stand for simple traditional values and abhor corrupted eccentrics, like homosexuals and vegans, but also digital nerds. Now, their electoral triumphs were masterminded and orchestrated precisely by such a nerd who stands for all that they oppose. There is no contradiction between Thiel’s anti-Leninism and Bannon’s Leninism if we understand “Leninism” as total digital control over a population. Both men practice this while maintaining a libertarian face. The difference resides only in the fact that for Bannon, “Leninism” means the destruction of the state and its apparatuses (without, of course, really intending it). Here, we must go to the end: Digital control and manipulation are not anomalies or deviations from today’s libertarian project; they are its necessary frame, its formal condition of possibility. The system can afford the appearance of freedom only under the conditions of digital and other modes of control that regulate our freedom. For the system to function, we must remain formally free and perceive ourselves as free, too.