At the recent Adopting Bitcoin 2024 conference in Cape Town, Russell Lamberti, executive director at Sakeliga, shed light on pragmatic solutions to combat the pervasive issue of state failure.
Rather than merely discussing the challenges posed by failing state institutions, he delved into concrete strategies to mitigate their impact while drawing on lessons from the growth of cryptocurrencies as a proposed alternative to the failures of state (fiat) money as a fruitful example of resisting state failure and ‘building freedom’.
Three crucial takeaways for addressing state failure:
- Concrete Strategies: Sakeliga has practical strategies to mitigate the impact of failing state institutions, moving beyond theoretical discussions to offer actionable solutions.
- Legal Action: Strategic litigation is a powerful tool for resisting systemic governance failures, as exemplified by Sakeliga’s successes in removing regulatory barriers to better state procurement practices.
- Alternative Structures: Building tangible alternative structures to replace failing state services is crucial for long-term success.
State Failure Unveiled
Real-world examples of state failure include municipalities defaulting on debts to utilities like Eskom, discriminatory procurement policies, and a breakdown in basic service delivery. Municipal mismanagement leads to the discontinuation of essential services like electricity and water, with dire humanitarian consequences. Because state failure is failure at scale, we must develop practical solutions that scale.
Strategic Litigation for Change
One effective strategy is strategic litigation to challenge systemic economic challenges. Sakeliga has succeeded in this realm, for example, in removing regulatory barriers to better state procurement practices. Successful litigation and advocacy for value-driven procurement make an increasingly tangible difference in how municipalities and state entities are managed.
Building Alternative Structures
Beyond legal interventions, alternatives must be built to replace failing state governance structures. Instances where state-managed infrastructure and security have failed require coordinated alternatives outside the state.
Lessons from Cryptocurrency
This has strong parallels with cryptocurrency. Bitcoin can teach us about combatting state failure. Chiefly, Bitcoin shows us the need to actually build working alternative governance mechanisms when state mechanisms are failing but states are unwilling to reform.
The Architecture of Freedom
Central to the message is the idea that organised communities must “build the architecture of freedom.” Just as Bitcoin offers a working alternative model to state fiat monetary systems, organisations like Sakeliga must offer working alternatives to key business-inhibiting dimensions of state failure. Advocacy may be necessary, but it is not sufficient. Practical alternatives are essential.
In Conclusion
Communities are navigating significant governance complexities where state governance is failing. Sakeliga has shown that viable legal avenues can help create reform where possible and buy time where necessary to build better alternative structures. Bitcoin is a powerful proof of concept that building working alternatives can trump mere advocacy and theory.
Freedom and economic flourishing must be built, not just theorised.