Facebook, Libra, and the Threat to New Zealand Sovereignty

tl;dr: In a world that runs on a Libra coin from Facebook and its friends, countries like New Zealand will be pawns in a massive corporate chess game.

I am not a particularly big fan of Elizabeth Warren’s politics.

I do think she is a very strong marketer with her “first-to-market” approach for many things, but her agenda doesn’t work for me for a variety of reasons. (See Enemies of the Economic Enlightenment for one of them.)

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However, I do think Sen. Warren has done the public a great service by raising overall awareness of the power of the tech giants in society.

We may have different ideas for solutions, but I get the feeling that we are coming towards a flashpoint in world history between multi-national corporations and nation-states.

It’s been building for 50–60 years, but the Internet, mobile, and broadband have disrupted the playing field in a way that Teddy Roosevelt, the famous “trust-buster” of the early 1900s never could have imagined.

I touched on this a few weeks ago on Facebook, Smithereens, and the End of US Dollar Hegemony.

However, it is on my mind again after reading Facebook Libra — the Threat and Opportunity for New Zealand by Mark Pascall.

New Zealand? Really?

Yes, because it is a specific example that supports his argument. Here’s Mark:

The Libra Association (the Geneva based entity that will control the underlying system) is made up of some of the biggest, richest and influential corporations on the planet (for example Facebook, Visa, Mastercard, PayPal, Uber and eBay). Let’s not forget that the majority of these entities are there to make money for their shareholders and they aren’t elected by us.

There is a very real scenario starting to play out where the Libra Association becomes this powerful global governing oligarchy (who incidentally could also control our identity).

The folk in “the club” are going to get even richer and we are simply going to accelerate the path that we’ve already started (which isn’t working out so well). Libra could literally become more powerful than big nation states (and good luck to small countries like New Zealand trying to influence what they do)

What Mark is pointing at is a type of economic climate change that has happened before many times. There’s a shift in the dominant reserve currency.

It was only 100 years ago that the global reserve currency was the British Pound. Before that, we had Guilders, Francs, and others.

When that happens, everyone is affected.

Mark’s post reminds us that, similar to environmental climate change, when it comes to economic climate change, smaller countries will be disproportionately affected (WHO report)

In the Libra scenario that Mark points out, however, there’s a different type of accountability and considerations coming this time because it won’t be a country behind the currency.

It will be an oligarchic group of large organizations.

In a permissioned system, such as Libra, the “little guys” (like New Zealand) will be fighting for the scraps and have even less agency over their own future than they do now.

I wonder if the choice comes down to Libra or Bitcoin as the “coin of the realm” in New Zealand, which will they choose?

It may not be as far-fetched a scenario as it sounds.


Facebook, Libra, and the Threat to New Zealand Sovereignty was originally published in Data Driven Investor on Medium, where people are continuing the conversation by highlighting and responding to this story.