Berlin Wall falls title with people on wall.

Deep Dive – Parallel Economy

The Parallel Economy Destroyed the East German Police State

That’s Why We Need to Build the Parallel Economy Here

by Toby Esterhase

The East German government fell suddenly, quietly, and without violence, after 34 years of murderous oppression under a Communist dictatorship. This history can help us now, even knowing there are some differences between 1989 and today.

  • The American public doesn’t, in the main, recognize that we are already living under a totalitarian state, and so conservatives are ineffective when they try to counter extreme leftist dogma, politicians, and their brown-shirt enforcers from woke industries.
  • There were several factors in the overthrow of the Communist government in 1989, but the most important was the leveraging of universal corruption to destroy the moral legitimacy of the regime, which in turn triggered a sequence of events that dissipated the power of the elites. The entire government, even the Stasi, walked off the job.

This article explores the degree to which that success can be repeated in America.

We Are No Longer On the Edge of a Slippery Slope: We Are at the Bottom of It

As I write this, former MP and conservative activist, Nigel Farage, lost access to all his bank accounts and credit cards in punishment for speaking out against government policy in Britain.

We are not moving towards a fascisto-Communist totalitarian police state, we are already there. Canada and Michigan now have, or soon will have, compulsory speech laws threatening up to five years in prison if you call somebody by the wrong pronoun.

We are caged up in a woke nightmare. What we want to hear is not an endless recitation of our miseries, led by the Whiner-in-Chief, Sean Hannity on Fox News. We want to hear an action plan for activism and resistance. A way to foment revolution against the oppressor. And all we get is wall-of-words essays stating the obvious, over and over again.

By demanding that our leaders provide action plans, and not just complaints, we will have purpose again.

The first step is to recognize the depth of the problem and to shed our normalcy biases. We are living in a state of low-level, but persistent dread of government and its woke, fascist enforcers.

Every day we fail to change our outlook and stop living on naive hope and ignorance delays the day of our liberation.

The Mystery of the Collapse of East Germany Was Solved in 1997

Films, television programs, and literature never provided a solid and satisfactory explanation as to why, on November 9, 1989, the East German government, including the army and the Stasi, simply stopped functioning and the regime ended. The German federal government commissioned an in-depth study which reported in 1997, in the form of a 900-page analysis (in small font, no less). No single factor dissolved the tyranny — all the main factors worked together in an integrated way. Those factors were, in descending order of revolutionary effectiveness:

  • Economic corruption at all levels of society, including the enforcers of Communist policy, which made the elites vulnerable to predation by criminals and blackmail
  • The destruction of the moral basis for the government and the exposure of government central planning and control as having no value other than to maintain the power and wealth of the elites. This destruction of legitimacy was done through ridicule, often by the spreading of written memes, gossip and cruel jokes.
  • The re-emergence of the moral authority of the masses over that of the elites. This was advanced largely through informal (Christian) religious association, sassy entertainers and protests by visual artists. The open advocacy of freedom for labor to seek employment not dictated by the state triggered a series of liberalizations and a waning of the fear of being shot by the Stasi.

Today’s woke elites believe they have the moral high ground and can keep it simply by heckling, canceling, deplatforming, and calling the opposition dirty names, like “racist” or “homophobe.”

It is essential that the common people regain the moral superiority over the elites, but that is a task for a future article to address.

It Only Takes a Dedicated 3% to Create a Revolution, We Already Have 20%

This article recommends taking positive action to expand the shadow economy for the simple reason that it is a necessary part of corrupting the elites; making them vulnerable.

Most attempts at revolution fail unless they receive overwhelming outside support. Only 3% of the population believe strongly enough in their revolutionary cause to do anything that would draw attention to themselves, and this is a particularly difficult era in which to voice dissent, given the universal surveillance state that now exists.

But we start with an enormous advantage: By various estimates, the size of the “shadow” or “cash” or “off-the-books” economy is around 20% of the total, on a global average. (The World Economic Forum estimates provided detail on the top-ranked economies in their 2011 update).

Start With the Barbers and the Hairdressers

Who are these people who earn all or part of their incomes on the shadow economy? According to the WEF, about a third of them are drug dealers and other assorted criminals. This still leaves around 15% of the economy in the hands of casual laborers, personal service providers, and people earning adjunct income by selling small items for cash.

Consider the hairdresser. Hairdressers have enduring contacts with their clients and so trust them to pay by whatever means, including credit, yet they are often paid in cash. This is a highly-qualified profession with very high barriers to entry and high operating expenses. The difference between solvency and poverty is often the cash tips they receive.

What are these people to do when cash no longer exists, all payments are electronic, and the money used (central bank digital currencies) can be debased, frozen or confiscated at the whim of a hate-filled emotionally-immature mercy-hire bureaucrat?

Likewise, consider the casual-laborer working in home construction. Many small contracting companies are one step away from bankruptcy. These workers don’t accept pay in the form of checks or anything else that can be canceled or rescinded. If you don’t think so, just ask any small, independent construction company owner.

If the US follows the recommendations of the World Economic Forum, CBDCs will be invoked in the US for interbank transfers starting this summer, then spread to general distribution of them as a replacement for the dollar as early as 2024. The US treasury will then remove cash from circulation.

Few realize this, yet.

There is one rational and practical alternative to surveillance state CBDCs and that is Bitcoin. That seems to be the only alternative in the age of CBDCs. No other good, or commodity, or even money, such as gold, has the properties of Bitcoin when used as a currency.

If someone offers you payment with a piece of gold, how do you verify its purity on the spot? How do you give them change for an overpayment, and in what form? Gold bugs imagine a world of gold coinage or perhaps gold certificates being used as a currency, but those would all be private monies, since the only government money of any kind will be CBDCs. Who will issue all this private coinage? How will you test a gold coin to assure it is full purity and full weight, in the middle of the grocery store checkout aisle? You can’t.

Combined dollar + Bitcoin point of sale systems in the form of apps on smart phones are already available in the US and many other countries. Their ease of use is improving every few months.

Bitcoin based transactions take the form of any other electronic transaction with one principal difference: the payment can never be rescinded once made. It’s called a trustless system, meaning there is no counterparty risk of the kind associated with any other form of money, including CBDCs.

You can help. First, understand what CBDCs are and how the government will use them to control your very thoughts and punish any dissent. Then have a conversation with your service providers and ask them simply, “what do you plan to do when 20% of your customers received their income in the form of Bitcoin and that is what they want to pay you with?”

They will catch on fairly quickly, I expect.

(The views expressed in this commentary are those of the author and do not necessarily reflect the official position of the Nevada Signal.)