Bitcoin Magazine – Conflict in Ukraine

It was a challenge for me to write something a bit more journalistic. I’m more accustomed to writing analysis.

krainian society has a low amount of trust, and high technical expertise. So, perhaps predictably, Ukraine’s Bitcoin scene is defined by isolated pockets of talented developers and miners (see did Ukrainians almost take over Bitcoin article by Bloomberg1). But it is absent of any substantial community of users or merchants. The public remains unaware of Bitcoin. A handful of people (myself included) are trying to change that by organizing clubs, Satoshi Squares, and educational resources.

The founder of Kyiv’s Kuna Bitcoin Agency2, a retail Bitcoin shop, explains on the agency’s website: “After the revolution we now have no fear nor anything to lose. Sounds like a perfect place for Bitcoin.”

Despite the violence and uncertainty, the mood in Ukraine is largely optimistic, more so the further you travel from the territories disputed by Russia where a low-intensity war is underway and where a substantial minority remains deeply skeptical of the West. For many others, the conflict in Ukraine is a long over-due divorce with the corruption and brutality of the Russian government — what Wikileaks dispatches revealed3 was considered a “mafia-government” by many diplomats.

Of course, there is concern too. Everyone is waiting to see how far Putin will push the covert invasion / uprising. He recently surprised many observers by stating Ukraine’s planned election for May 25th is “a step in right direction.” That means he’ll either be backing off, or launching a full scale invasion, or something in between.

Last month, the self-declared separatist mayor of Sloviansk, the Eastern Ukrainian city at the center of the covert invasion / uprising, said “We will take all necessary measures so that elections in the southeast do not take place.” Asked how he would accomplish this, he responded, “We’ll take somebody as hostage and hang him by the balls.” He also promised to destroy dissent, calling it “a harsh truth of life4.”

November seems like a life-time ago, and a world apart from today’s situation in Ukraine. The unrest began on November 21st. Victor Yanukovych was still Ukraine’s president. He was Moscow’s preferred candidate in the 2010 election (which he won), and earlier in the fraudulent 2004 election which was overturned by Ukraine’s Orange Revolution.

On November 21st, he announced the postponement of a planned accession agreement with the EU, a long, difficult process at the end of which, Ukraine might theoretically have joined the EU. Success was doubtful, but the process itself would have strengthened Ukraine’s ties with Europe. Even more importantly in the opinion of many Ukrainians, it would have symbolized a movement away from the corruption and criminality that replaced the Soviet Union. A minority of Ukrainians viewed the EU with skepticism and wanted closer ties with Russia, especially in Crimea and the two easternmost provinces known collectively as “Donbas,” the home of then-President Yanukovych.

http://bitcoinmagazine.com/13144/conflict-in-ukraine/

Putin’s Libertarians

I spent almost a week writing this long essay. It was exhausting, and personally important. I’ve been betrayed by my intellectual tribe — parts of it, anyway.

Last August, I met former Belarusian Presidential candidate Yaroslav Romanchuk at a libertarian conference near Lviv, Ukraine. He was somewhat of a Ron Paul figure, a businessman-turned-politician advocating radical free market reforms in Belarus. The consequences for being a libertarian in or near Russia are much more severe than in the United States. In 1994 he faced pressure: to stay in business he’d have to either join the mafia or join the government. He ended up abandoning the import-export business he had spent years building.

We joked about America’s RT (Russia Today) news service — that the United States government should sponsor a Russian language libertarian channel in Russia and Eastern Europe. The joke, which for us needed no explanation, was that governments can invoke principles of freedom when they undermine a rival government, while simultaneously behaving like a savage tyrant at home. This should not be difficult to understand.

http://romaninukraine.com/putins-libertarians/

A Ukrainian-American Watches Putin from Lviv and Wonders What’s Next for Ukraine

See the original article on The Daily Beast. It’s filled with links which I haven’t taken the time to post here.

***

I watched Putin’s March 19th speech celebrating Russia’s annexation of Crimea in a coffee shop in the Western Ukrainian city of Lviv. I watched with a friend who’d been active in the establishment of the Ukrainian state in 1991 and then, as he puts it, decided to disgrace himself by entering politics for a brief period at the city level. He considers himself a patriot and was keenly interested in Putin’s announcement.

To both of us, Putin’s speech seemed disconnected from reality. Here’s one of the more glaring examples:

“I understand those who came out on Maidan with peaceful slogans against corruption, inefficient state management and poverty. The right to peaceful protest, democratic procedures and elections exist for the sole purpose of replacing the authorities that do not satisfy the people. . . . They resorted to terror, murder and riots. Nationalists, neo-Nazis, Russophobes and anti-Semites executed this coup. They continue to set the tone in Ukraine to this day.”

None of this is true.

The major violence was sparked on January 20th when the Russian-backed Yanukovych government, without following legislative procedures, criminalized virtually every conceivable form of protest.

The accusations of Nazism, anti-Semitism and Russophobia have been actively and repeatedly denounced by Ukraine’s Jewish community, and by many Russians who took part in the Euro Maidan protests.

Regarding the persistent accusations of hooliganism, one can easily contrast the nature of the pro-Ukrainian protesters with the pro-Russian ones.

Two deaths occurred at the hand of Pro-Russian protesters in Kharkiv – raw footage here.

In Donetsk, pro-Russian protesters broke through police lines and stabbed to death two pro-Ukrainian protesters – the raw footage is here and here is a heartbreaking eye-witness account with subtitles. The victims were locals. It is widely believed that their attackers arrived from Russia. Ukrainian language books have been burned in Crimea and Kharkiv.

Also in Crimea, a Tartar, Reshat Ametov, was found murdered with signs of torture. His friends said he was going to join the Ukrainian military.

There has been no analogous violence directed toward Russians. The hypocrisy of the Kremlin propaganda is unbearable.

For weeks Ukrainians have been wondering how far the Kremlin will go and how they should prepare. Though I wouldn’t curtail any preparation for worst-case scenarios, to my friend and me, Putin’s speech, which condemned pro-Ukrainians as neo-Nazis, Russophobes and anti-Semites, and attempted to put the invasion in historical context, seemed like a declaration of victory and an attempted consolidation of moral authority, rather than a pre-cursor to more Russian aggression.

It seems that Putin will only attempt to discredit and affect the government in Kyiv by covert means, as discussed by Forbes contributor Paul Gregory.

One can only speculate about Kremlin’s calculations, but here are four that may inform Putin’s future actions.

First, Russia had deep internal divisions. They’ve waged war on two occasions to prevent secession of Chechnya. The invasion of Crimea has sparked huge protests. Dissenters included included university professors, and a former Russian General. If the Russian army advances into new territories domestic unrest will likely increase. By stopping now, Putin will have made a point about Russian power and can turn his attention back to stifling dissent in Russia before the internal protest movements grow into a bigger problem.

For weeks Ukrainians have been wondering how far the Kremlin will go and how they should prepare.

Second, Ukraine has been a tentative ally of Moscow and a huge trading partner,fourth in imports and sixth in export to Russia. Influential oligarchs who have interests in both countries would be harmed by the all out war, which would likely ensue if Putin pressed too hard. Perhaps he also hopes he can keep Ukraine as a borderland instead of having it join NATO.

Third, though Peter Pomerantsev has argued that Russia’s ruling elite may actually have been enriched by recent market turbulence, perhaps Russia is feeling the pressure of investor flight, and, separately, the newly announced sanctions which target influential Russians appear to be significantly more severe and impactful than the last round.

Lastly, Crimea was the easiest target. It is geographically defensible, and had the highest percentage of people who wanted to join Russia: 41%, according as reported by Ukrainian News Channel 24 last month. Substantial, though certainly not the 97% indicated by the referendum.

The subject of Crimea’s considerable Russian minority has been discussed since Ukraine gained independence, and was frequently polled. The 41% reported by Channel 24 is consistent with USAID sponsored polls from 2009, 2011 and 2013. According to them, 40-45% of Crimeans considered themselves Russian, 23-33% believed Crimea should join Russia, and 12% rated relations with Russia as one of the top three issues from a list of 17. Interestingly, it also found that in 2013, 40% of Crimeans do not use the internet.

Channel 24 reported that Ukraine’s Eastern regions had smaller, though still significant Russian minorities. Donetsk 33%, Luhansk 24% and Kharkiv 15%.

The world provides plenty of examples of multi-ethnic regions existing on the border of two countries who claim them. History shows that it’s often only after blood has been shed by both sides that peace is reached, and that the most stable arrangement for these disputed border lands solution seems to be local autonomy (which, incidentally, Crimea had according to the Ukrainian Constitution).

Right now, Ukrainians feel slighted and wary about the future. They want to fight for every inch of their homeland. I hope Russians take this feeling seriously enough to not press further. I hope the anger subsides and local autonomy is granted and diffuses tensions where large ethnic minorities exist. Lastly, I hope that Ukraine’s strategy for self defense includes a determined effort to create a country freer and more prosperous than their tyrannical neighbor. A contrast in standard of living would be the best long-term defense.

The attitude among Ukrainians is promising. The sense of civic duty is soaring, at least here in the Western part of the country. One friend of mine who was on Maidan during the worst days returned to organize his neighborhood, which sits on the outskirts of Lviv. He helped make a call list of volunteers and a plan to address potholes and dumpsters. Another friend of mine, the owner of a small software company, is designing an online corruption-reporting platform. I hope they get a better future and the chance to pursue it in peace.

Ukraine must remain a Borderland

My Essay on The Daily Beast: http://www.thedailybeast.com/articles/2014/03/06/caught-between-empires-ukraine-can-t-rely-on-the-west-for-its-independence.html

A peculiar aspect of Ukrainian identity has been the perceived need to prove our own existence. I vaguely remember some sort of heritage day in grade school at PS 229 in New York City. The teacher corrected me when I described myself as Ukrainian—I was Soviet, she said, or Russian. That was fine with me at the time, though I also remember a look of horror on my mother’s face when I relayed the episode.

Looking back at the history of Ukraine, a country whose name is usually translated as “border land,” one finds instances of Poles referring to Ukrainians as “Eastern Poles” and Russians referring to them as “Little Russians.” I’m grateful that as of about a week ago, I will forever be alleviated of the long-standing need to prove Ukrainians exist.

Since the Mongols sacked Kyiv in 1241, the territory of today’s Ukraine has been the border between the agrarian civilization of the west, and the nomadic cultures of the steppe. Its aristocracy vanquished, Ukraine became largely a peasantry, and home to a very complex and evolving “Cossack” culture, which represented different things to different people—from an alternative and viable social order to, a Medieval feudal arrangement, to an unpredictable menace. The Cossacks remain very much part of Ukraine’s national myth.

At different times in history, Cossacks allied with Tartars to sack Moscow, allied with Poles to fight an invading Turkish Army, and made a treaty with Moscow to enable a rebellion against the Polish monarchy. Ukraine was a battleground on the border of empires, and seemingly remains so.

Understandably, most coverage of Ukraine’s ongoing crisis focuses on the geopolitical struggle between Russia and the West. The Ukrainian diaspora among whom I was raised are entirely on the side of the West.

Having grown up among these refugees who narrowly escaped forced repatriation into the hands of Stalin (see Operation Keelhaul for a dark and little known chapter of WWII history), I understand the resentment of Russia, the terror, humiliation, and the long shadow of the artificial famine 1932-1933 which killed millions of Ukrainians. I inherited this history. It still lives in my family and others like us. So I understand why I’m getting emails from old acquaintances urging me to contact my elected representative and demand Western intervention. But they’re making a mistake. Forceful intervention by the West is not what’s best for Ukraine

Ukraine’s Ethnic Mix

1) The Ukrainian immigrant community that left the country in the 1940s and 50s is made up mostly of western Ukrainians. The reason? After WWII, western Ukrainian refugees were able to claim Polish birth, thus avoiding forced repatriation into the hands of Stalin (again, see Operation Keelhaul). So the immigrant community as a whole often doesn’t appreciate the ethnic gradient of Eastern Ukraine. The country’s ethnic mix is not a black and white issue, or one defined only by hostilities. The fact that so many Ukrainian citizens are Russian or of mixed heritage is already pacifying this conflict. There have been gestures of peace and kinship from both sides.

Relying on Western help in response to every Russian aggression leaves Ukraine in a position of permanent dependence on allies who may be understandably hesitant to venture so far east.

When Has the West Not Forgotten Ukraine?

2) The Ukrainian-Russian border is 2,295 kilometers long. However this conflict is resolved, Ukrainians and Russians will continue to be neighbors. Relying on Western help in response to every Russian aggression leaves Ukraine in a position of permanent dependence on allies who may be understandably hesitant to venture so far east. Ukraine, whether through diplomacy, threat of force, or force itself must find its own solution to this conflict. In the words of Lord Byron, “he who would be free must himself strike the first blow.”

If my fellow Ukrainians accuse me of suggesting the impossible, I would tell them that they are expecting the impossible. When has the West not forgotten Ukraine? After WWI, how eager were the western powers to stand up for Versailles’s “self-determination” in the borderland. Few non-Ukrainians remember the Western Ukrainian state which formed in 1918—not surprising given that it lasted for all of three months. The Ukrainian People’s Republic which formed that same year in Kyiv was similarly successful. And Operation Keelhaul is all anyone needs to know to understand the extent of Western “help” after WWII. Asking the West for support invites Western powers into a confrontation that (arguably) is against their self-interest, and against historic precedent. Unfortunately, there are no easy roads in the borderland.

Putin’s Reasonableness

3) Russian President Vladimir Putin, for all his barbarity, is completely reasonable to want a buffer in between himself and the Armies of NATO. Reliance on foreign militaries for its own integrity changes the status of Ukraine from a buffer to an antagonist. The more neutral Ukraine remains, the better it retains sovereignty.

The Economic Solution

4) The long battle is an economic one. If Abkhazia (the territory disputed by Russian and Georgia) is any indication, the corrupting influence of Russian kleptocracy leads to economic morass. If Ukraine’s new government focuses on fighting corruption and dismantling their outrageously corrupt, bloated, ineffective, hyper-centralized bureaucracies, it will create a foundation for economic success. A stark contrast in quality of life would pull disputed territories back into Ukraine’s sphere of influence, this is particularly true of Crimea which relies on mainland Ukraine for food and electricity.

Successfully forging an alternative to Russian kleptocracy would not only have the most lasting effects in terms of national security and quality of life, it would also be the fulfillment of Ukraine’s national myth. In his wonderful book The Cossacks, Shane O‘Rourke writes:

“The symbolic importance of Cossack culture cannot be overestimated for the oppressed masses of Poland-Lithuania and Muscovy. To see or even hear about a boyar or great lord treated with contempt by a Cossack demonstrated to those masses that an alternative and viable social order did indeed exist. This was to prove far more threatening to Poland-Lithuania, Muscovy and the Russian Empire than Cossack swords and muskets on their own could ever be.”

Ukraine needs to embrace its historic role, not to mention its strategic reality, as a borderland. Within that narrative, it needs to find a way to build a free and prosperous society, which will serve as a powerful example for its neighbors and any territories that may remain disputed in the years to come.

The Enemy of Your Enemy is Not Your Friend

My dear friend Peter Brimelow, a former Forbes editor, invited me share my analysis of Ukraine and the coverage it has received in the libertarian media. Peter is perhaps best known for being called a racist.

***

The Enemy Of Ukraine’s Protesters Is Not Necessarily The American Right’s Friend

I am a Ukrainian-descended American software developer, based for the last two years here in Lviv, in western Ukraine, about 300 miles from the capital, Kyiv, where the worst of the recent civil unrest has taken place.

My lead developer travels to Kyiv every time violence flares up. He, like many Ukrainians, considered it his duty. Two days ago, when the latest and most intense fighting flared up, I texted him: “Should I wish you a safe journey?” He texted me back: “You’re late. I’m already on Maidan.”

I pay him well, though he could probably earn even more elsewhere. His enthusiasm for Bitcoin keeps him with me. (I’m particularly interested in Bitcoin—see here and here).

He’s part of Ukraine’s miniscule middle class. He owns an SUV and a three-story home where he lives with his wife and two children. We go skiing together. He is not the type of person who’d be motivate by the thirty Euros a day which Paul Craig Roberts (alas!) claims was sustaining the protests. [US and EU Are Paying Ukrainian Rioters and Protesters, February 17, 2014]

Nor was Yuriy Verbytsky, a seismologist from the Geophysical Institute in Lviv and mountain climber who, after being injured in the protests and hospitalized, was kidnapped from the hospital, severely beaten, and left in the woods where he froze to death. Nor was Bohdan Solchanyk, a university lecturer killed on February 20th.

Today (Friday February 21) reports have been circulating of a deal negotiated between the Ukrainian president Viktor Yanukovych and the Ukrainian opposition parties. The deal would include immediate presidential elections, plus a roll back of presidential powers. (Fluctuating presidential powers are a sign of the volatility of Ukrainian democracy: In 2004, when the Orange Revolution brought Victor Yushchenko to power, the Rada [congress)] limited presidential powers, but in 2010, when Victor Yanukovych, the Russian-backed villain of the Orange Revolution, returned to office, they were restored.)

Chances are that the protesters in the streets will allow the opposition politicians to speak for them, though they’ve scorned them in the past. (But there are also reports that the protestors are resisting, and even a rumor that Yanukovych has fled to his power base in the Eastern and proclaimed a separate state).

Personally, I believe the best thing for Ukrainians would be a dismantling of the hyper-centralized, corrupt, ineffective government bureaucracies and the development of local or private solutions. (I am skeptical of the European Union, which I don’t think Ukraine needs, and regret so many Ukrainian nationalists have persuaded themselves that it offers protection against Russia). But both sets of politicians contending for influence want the bureaucracy to remain intact so that they can simply affect the leader.

In this regard, the peace deal could be a lost opportunity. But, on the positive side, the people have shown their strength. The fact that they were able to overthrow a corrupt government will be a restraint on all future regimes and, because of Ukraine’s vertical power structures, there’s going to be a lot of change.

There seems to be unusual awareness in the US Main Stream Media that Ukraine has deep demographic divisions and that the Russian-speaking Donbas in the East, and possibly the Crimea, could secede. (Unusual because the American Establishment and MSM has a bias against secession at home and abroad—remember George Bush’s notorious 1991 “Chicken Kiev” speech urging Ukraine not to leave the Soviet Union).

This map is from Is It Time for Ukraine to Split Up?, by Brian Whitmore, theatlantic.com, February 20, 2014 It’s an interview with Rutgers University’s Professor Alexander Motyl, concluding that, while Ukraine probably won’t split up, Western Ukraine—overwhelmingly Ukrainian-speaking—would be better off if it did. I agree—it’s a good and insightful analysis.

Note that this map includes Ukrainian- and Russian-speakers—and also ethnic Ukrainians who speak Russian. This may be a hard concept to grasp. It was strange for me. As the child of Western Ukrainian exiles—my mother’s family fled when the area was seized by the Soviet Union after World War II and a Jewish neighbor warned them of an imminent Communist purge—I had the typical Western Ukrainian prejudice that Russian speakers are the enemy, and everything east of Borispol Airport had been lost to the Muscovites. But after all, many Irish nationalists speak only English.

It’s another reason I would steer readers away from one common misconception—this hasn’t been a simple struggle between “Ukrainians” and “Russians”. It’s a struggle between Ukrainians and their corrupt government with a mixture of sympathy, apathy and skepticism from the Russian parts of Ukraine.

(In one recent amusing incident, Russian television abruptly cut off an interview with a Russian-speaking Crimean politician when he downplayed the protests but started to say Yanukovych’s Party of Regions government had stolen prime real estate in the Black Sea resort province and were afraid of retribution.)

I consider myself a libertarian. (Click here to see me speaking at Hans-Herman Hoppe’s Property And Freedom Society conference on June 3, 2011). But in the last two months, I have become painfully aware of the gap between reality and the perception of American libertarian and conservative writers, no doubt reacting out of years spent attempting to limit the power of their own US government. The embarrassing fact is that some MSM reporting has been better.

The enemy of your enemy is not (necessarily) your friend. Ayn Rand’s very reasonable hatred of the Soviet Union led her to make ridiculous claims, like the United States being the “only moral country in the history of the world.” I feel a similar bias has afflicted much of the Alternative media for whom I felt so grateful until just recently.

After Snowden and Syria, Vladimir Putin’s credibility reached a high water mark (which perhaps receded only slightly when Russia become the only country in the world to outlaw Bitcoin). I think many conservatives remain inspired by the Russian President’s embracing Christian identity and declarations of family values. From the comfort of the West, they assume Russia to be a place with Western-style property rights and rule of law—plus a leader championing neglected conservative causes.

But Russia as a symbol in the West is very different from Russia up close and personal. What these commentators, like Pat Buchanan who authored Is Putin One Of Us?, fail to realize is that, in Russia and its satellites, people have a leader who offers conservative rhetoric in exchange for property rights and rule of law.

No, Pat. He’s not one of us.

Paul Craig Roberts describes the protesters as “pawns” who would “place their country in the hands of the IMF so that it can be looted like Latvia.” [Is Ukraine Drifting Toward Civil War And Great Power Confrontation? February 20, 2014.]

Does Roberts not realize how dramatically higher the standard of living is in Latvia than in Ukraine? Compare any post-Soviet EU nation (Estonia, Latvia, Lithuania), to any post-Soviet non-EU nation (Ukraine, Belarus) and the story is the same. (Remember, I speak here as a critic of Ukraine’s joining the EU).

I have no illusions that some protesters weren’t getting paid and that Western intelligence agencies aren’t trying to affect the outcome of this civil unrest. (In fact, late Friday there were reports that Israelis had been among the protestors. Arguably, weakening Russia, which has discouraged the US from war in Syria, is an Israeli foreign policy objective.)

(While we’re on the subject, I hated the suspiciously slick “I Am A Ukrainian” viral video, because I think Ukrainians should finding their own solutions rather than appealing for outside help, and I wonder what its creator, the American filmmaker Ben Moses, was doing in Kyiv.

http://vdare.com/articles/the-enemy-of-ukraine-s-protesters-is-not-necessarily-the-american-right-s-friend

A Conversation With Genghis Khan

I wrote this allegory to demonstrate flaws and limitations in popular libertarian thinking. It’s directed very much at a libertarian / Rothbardian audience, though everyone is of course welcome to have a read:

“Genghis Khan: I am Genghis Khan. Not the actual one, but the author’s imperfect allegorical reflection. I like to rape, pillage, loot, and in general, be the flail of God.

Libertarian Villager: You shouldn’t do that stuff.

GK: Hahahahaha.

LV: Seriously.

GK: Why shouldn’t I?

LV: It violates self-ownership. Every person owns themselves.”

Read more: http://dailyanarchist.com/2014/02/16/a-conversation-with-genghis-khan/

My Account & Analysis of Ukraine’s Civil Unrest

On January 22 three Ukrainian protesters were killed by riot police, two by gunshot. It happened, strangely enough, on Unity Day. The holiday marks a proclamation of unity made in 1919 between the short-lived Western Ukrainian government, who was then battling Polish forces for control of Eastern Galicia, and the similarly short-lived government in Kyiv, which was soon overrun by Bolshevik forces. Tragedy has been the hallmark of Ukrainian history since the Mongols sacked Kyiv in 1240.

So we now have the blood of good people, but what exactly has it baptized? This remains up for grabs.

More: http://dailyanarchist.com/2014/01/23/civil-unrest-in-ukraine/