Cryptos and global inequalities

DateOctober 10, 2021
Reading Time6 min
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Camilla Carabini
Economic Anthropologist
If cryptos are catalysts for the revolution, let’s make sure it’s one wanted by the many.

In his latest book Capitalism Alone, economist Branko Milanovic, shows that, in the United States, the wealth of the richest 20% of the population is composed mainly of stocks and financial instruments.The richest 1% of the population have real estate assets that do not exceed a tenth of their wealth.

Those with higher salaries today will also gain more income from capital - because of jointly earning stock options and other forms of wage payments - making capital income even more profitable than labour income. This trend  confirms what has happened over the past 30 years: the rich are growing richer because financial assets have outperformed everything else, real estate included. 

Among the middle-income class, however, buying a house is still seen as the objective of a life. Nevertheless, in the U.S. real estate is a highly racialized issue. Afro-americans can never make as much profit from real estate as their white peers. In fact, if more than 10% of your neighbours are african-american, the value of your home declines. As the percentage of Black neighbours increases, the property's value plummets even further. 

This is one reason why economists like Sir Tony Atkinson and the same Milanovic suggest that promoting financial investment for  racial minorities could help narrow the wealth gap. So, on the one hand, the financial market is being proposed as the solution to inequality, on the other hand, both crypto-fans and anthropologists are somehow skeptical.

Bitcoin's vision

Bitcoin was born in opposition to the traditional financial world. Satoshi Nakamoto's white paper has a libertarian inspiration: the individual must get rid of intermediaries that cause inefficiency or even corruption. Among Bitcoiners, even more radical positions emerge, like the idea of separating money and the state by getting rid of any third party when dealing with transactions. The approach, therefore, is not to find the bugs in the system - the uneven accumulation of wealth, the conjunction between commercial and investment banks, the liberality of high-frequency trading's regulation - but to get rid of it all together: they propose not a complementary but an alternative system.


Anthropologists have been studying the way in which the world of finance influences life and transforms the subjectivities of many. Randy Martin talks about the financialization of everyday life: that phenomenon whereby, starting from the 1980s, more and more aspects of our lives depend on the products, values, and performances of the financial markets: the management of natural resources (water and air), retirement pensions, health insurance, mortgages or our studies. As the golden age of the welfare state came to a dawn, social rights shifted into the sphere of high finance. The processes of financialization are uneven, specific, and contingent, creating major structural changes in the social landscape. The tendency to convert assets into prices or securitized debt to create streams of income is what characterizes neoliberal economies. Everything can be sold. Even a relationship can become an asset. This is the world we're living in.

However most anthropologists warn against an overly dualistic schematization of finance: there is no complex or abstract financial world separated from the real economy, but rather it is continually created by the daily practices of those who believe "they are the market" (investors, traders, employees in financial institutions). Very much the same way religions are continually created by the daily practices of those who believe "they are the chosen ones". 

For a long time finance has been dominated by an aura of an unreachable world, dominated by complex formulas, something that only the experts could understand. Caitlin Zaloom has shown how this narrative does not correspond to reality: studying Chicago and London trading pits she found out that mathematics often do not count more than the trader's "market instinct" in their investment choices. Anthropologist Karen Ho in her book "Liquidated, an Ethnography of Wall Street" demonstrates how the employees in the financial realm all share the same background, have attended the same universities and therefore have the same culture of work. This leads to the closeness of this group, where those who do not share this same biography are discouraged or find many obstacles in trying to become part of it.

All these elements, I believe, have contributed to the rising appeal of DeFi: people who felt excluded by the formal sector of finance felt the right to be taken into consideration and play a role in it. Historically, bank lending and hiring practices have been demonstrated to be discriminating towards racial minorities. It is meaningful that cryptocurrencies in the US are owned by 30% of Black and 27% of Hispanic investors, compared with just 17% of White investors*. If on the one hand, this phenomenon demonstrates a lack of trust in the current financial institutions, on the other, more than a revolution in the way of thinking about finance, the crypto world seems to be enlarging the subjects engaged in the financialized dimension of everyday life.

The idea of an individual taking care of himself, without counting on intermediaries, governments, families, and communities, has a strong neoliberal stamp, which has its roots in an individualistic culture that does not value the support of the social environment in the promotion of the wellbeing of the person. If you succeed or if you fail, it only depends on yourself: it is what philosopher Michael Sandel calls the tyranny of Meritocracy. This ideology contributes to further depoliticization of welfare rights and could lead to a new centralization in a highly speculative world of the management of one's savings.

Anthropologists affirm that imaginaries of gender, race, kinship, religion, and citizenship are reflected into the cultural and social construction of the idea of money. If it is true that the crypto world is immensely variegated and lived by many different ideologies and cultures, the dominant part of it seems to be increasingly manifesting the neoliberal libertarian ideological structure that tends to depoliticize the use of money leaving it into the hands of the rational individual. 

The production and transformation of global social hierarchies are shaped through the meanings of money and financial relations. This is why it becomes urgent to promote a reflection among politicians and citizens, regulators and investors, in the crypto-sphere and beyond, as what is happening in Crypto has the power to radically shape the future of the (digital) economy as well as of global inequalities. 

If cryptos are catalysts for the revolution, let's make sure it's one wanted by the many. Tyranny, whether it be of meritocracy, the rich, or the few, would still be tyranny.

Written by Camilla Carabini.

Economic anthropologist interested in money, finance, and cooperatives. She works as an independent researcher and she is a board member of Fondazione Finanza Etica in Italy. She is an expert on international cooperative development: before choosing the freelance career she was director of an Ngo engaged in the promotion of social and cooperative enterprises in Africa and Latin America. She has lived, studied, and worked in Argentina, Cape Verde, Colombia, Ghana, Mozambique, Spain, Togo, and the UK. She is @camunz on Twitter.

Camilla Carabini

* Black Americans Are Embracing Stocks and Bitcoin to Make Up for Stolen Time - Bloomberg, 13 April 2021

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Camilla Carabini
Economic Anthropologist

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