The family-owned barbecue truck at Porcfest was doing a bang-up business. I stood in line and finally ordered my plate of meat.
In years past, most vendors at this event processed Bitcoin for purchases, even as far back as 2011, when the idea of magic Internet money seemed goofy. All these years later, its inability to scale to its popularity has made it slow and expensive to use for regular purchases, so people have turned to other tokens and cash. But actually, what is handling most transactions at this campground is credit cards.
To get the bill paid, the vendor took out his smartphone with a small attachment, stuck in the card, and the deed was done. My receipt arrived via email. I asked about the technology. The truck owner was thrilled to discuss it because it is the source of 95 percent of his business now. He considers the whole thing to be a lifesaver.
Ten years ago, you had to be a merchant of a certain size to accept credit cards. There were multiple layers of third-party providers, fancy hardware, high fees, lots of annoying apparatuses. That’s why so many small merchants would only accept cash. It was a kind of commercial apartheid developing, one that the arrival of cryptocurrency (fast, low fees, no intermediary) came along to fix, possibly ending financial exclusion.
The same year that Bitcoin was invented, another company came along to change the situation, not by bypassing the existing system but by making it far more democratic and efficient. The company was Square. Its CEO is Jack Dorsey (yes, the same man as the CEO of Twitter), who is sometimes compared with Steve Jobs for his charisma and visionary brilliance. His tiny device attached itself to any smartphone with a card swiper, reducing the giant cash register of old to a small box in your pocket.
Among many other great innovations: the card reader comes free. The profit comes from the fees, which are quite low at 2.75 percent, with no additional subscriptions or layers. The company produces these little readers by the millions.
How is this possible? One word: trade. That means China. Global capitalism and trade. Innovations in shipping. Supply chains. Profits. Big business. All the stuff both Left and Right claim to hate. It all sounds really intimidating. Left and Right are both determined to hobble the system, via tariffs and antitrust and taxes and all kinds of investigations and denunciations, even tech blacklists.
But look who actually benefits in the end. It’s the smallest merchants. It’s the minimalist lifestyle. It’s the home-cooked-barbecue truck. What we see is the small merchant making money by selling home-cooked food to passersby. What we don’t see are the factories abroad, the crowded shipping lines, the complex supply chains, the multitudes of layers of production that go into making this seemingly simple transaction possible.
Simplify Our Lives
When I was in Budapest recently, I debated a self-proclaimed left-socialist who stood before the audience decrying the complexity of our lives. He longs for a time when people sit around together, discussing big ideas, eschewing the smartphone and internet, drinking a locally owned beer. Here’s the problem. There is no way these microbreweries on the current scale could exist without global capitalism. The steel from China, the internal combustion, the smart applications for managing payroll, the fossil fuels for shipping, with parts and replacement parts coming from all over the world.
My socialist friend longs for the simple life and doing without. And today this truly is possible, more and more so. This is why people are choosing to live in what they imagine to be this minimalist way, keeping only that which sparks joy. The digital nomad. But this is possible only because of global capitalism and its creation of ebooks, tiny devices that access all the world’s knowledge, communication technology that allows instant video chatting for free with anyone on the planet, credit card processing that allows us to get what we need, full grocery stores that remove from us food uncertainty, locks and safety devices to grant us security, and so on without limit.
Global capitalism has made possible our aesthetic choice for minimalism. The infinite complexity of the global division of labor and international supply chains makes our simplicity seem easy.
It’s true that I can live for days and weeks with a small kit of toiletries, some changes of clothes, a laptop, internet, and a power source. This would never have been possible in ages past. Such a clean and simple life we can enjoy today – thanks only to the extended order of massive complexity that people we will never meet have built for us.
It’s not unusual for socialists to speak as if we can easily dispense with global capitalism. Alexandria Ocasio-Cortez wore on a border trip her very fancy Movado watch that retails for $600. She is being criticizedfor this. Doesn’t matter to me what watch she wears. But the performative contradiction is a bit much to bear. The Movado company is a designer of watches based in Switzerland, but the watches themselves can’t be manufactured there. They are outsourced to China and Hong Kong. They too are a product of the global capitalism she decries.
So too with so many products and services in our lives. The more the division of labor expands, the less visible are the production processes that make our standards of living possible. Look around you. I guarantee that within just a few feet around you, there are goods that involve dozens of layers of manufacturing involving many countries. Thousands and even millions of people have made it possible for these goods to be right within your reach.
Global capitalism has made it possible for you to forget about all the complexity behind the everyday conveniences you enjoy. This is good and bad. It’s good because capitalism is a humble system that loves you and asks nothing back. It’s bad for precisely the reason that it can function without your appreciation or allegiance and thus tempts people to imagine that they could go on without it. It’s not true.
Try even for a day to live without global capitalism. It’s not possible for the experiment to take place, but pretend as if it were possible. It’s a guarantee that you wouldn’t like the results. Moreover, it’s not really about you. It’s about every small merchant trying to make a go of it. The irony is that global capitalism is the best friend that the hipster minimalist, the digital nomad, and small food truck selling local food, ever had.
Jeffrey A. Tucker
Jeffrey A. Tucker is Editorial Director for the American Institute for Economic Research. He is the author of many thousands of articles in the scholarly and popular press and eight books in 5 languages, most recently The Market Loves You. He speaks widely on topics of economics, technology, social philosophy, and culture. He is available for speaking and interviews via his email. Tw | FB | LinkedIn
This article is republished with permission from the American Institute of Economic Research.