How Crypto Is Like Early Corporations

Hogarthian image of the 1720 “South Sea Bubble” from the mid-19th century, by Edward Matthew Ward, Tate Gallery

Crypto sucks, but it’s here to stay. Like the corporate form, it’s a version of artificial life that’s not very good for humans, but it’s not going anywhere. Today’s religion was yesterday’s cult. Today’s cult is tomorrow’s religion.

People forget that early corporations were bonkers, colonial charlatans were essentially selling NFTs to all of South America. This South Sea Bubble blew up so bad that governments banned new corporate forms for decades. But they came back. Corporations are still dodgy and dangerous as shit, we’ve just gotten accustomed to it. So it’ll be with crypto in a few generations.

Crypto may even get banned when the current bubble pops, but it’ll come back. It simply makes too much money for its followers. Crypto is an artificial species that lives in the ecosystem of our greed and—like the Jurassic Park dinosaurs—artificial life finds a way.

If you read about the South Sea Company, it sounds like the NFT marketplace OpenSea today, some transparently speculative bullshit that just waiting for a crash. As Joel Bakan writes in his book The Corporation:

Doesn’t a bunch of rich kids selling the ‘rights’ to South America sound like a bunch of rich kids selling the ‘rights’ to literally made-up gold. It’s all fucking stupid until you get a critical mass of fools, and then it’s actually huge.

Via How Much

The South Sea Company was many times larger than any company listed today (inflation-adjusted). Colonial companies (which essentially sold fraudulent NFTs to other human beings and nature) dwarfed the corporations of today. The early stock market was not some primitive thing, it was huge. If you look at a historical chart, there was an absolute supernova when the bubble popped.

GFD: Stocks for the Very Long Run: The UK-100 and 327 Years of British Equity History

In response, the UK government banned new corporations (which still favored the ones that already existed). The form itself did not and would not disappear. It was just too fucking lucrative. And so it’s still here.

I honestly see crypto as being on a similar trajectory. It’s currently bubbly as Veuve Clicquot and will inevitably crash, either causing or being crushed by the coming global financial crash. Maybe some people will get arrested, maybe there will be calls that they be ‘sewn up in sacks, along with snakes and monies, and then drowned.’ But inevitably the crypt form will remain. There’s simply too much money to be made.

Like a religion that seems culty and weird when it’s new, once crypto is old all of its weird shit will just become mundane. It’ll just blend into the background, like the Pope wearing funny hats, hoarding tons of earthly wealth, and presiding over a bunch of pedophile priests. If you came up with the idea of the Catholic Church out of nowhere it would be insane, but if it’s been around long enough you don’t even notice it.

In the same way, we just ignore terrible predations of the corporate form today. We literally cannot imagine anything else. As Bakan continued:

Hence as much as I think crypto sucks—that it widens inequality and kills the environment—it’s really just some other species of artificial life getting in on the ripe ecosystem that corporations have already carved up. There’s money here, there’s energy, and—after going through a few cycles of extinction—the crypto form itself will thrive. So just sucks for us, really. With the emissions of these new species, we’ll be lucky to make it out alive.

I’ve written further about AI here, and how it’s been here for hundreds of years already.