NFTs Are Flowers of Evil, Yes, But They Can Save The World

Alice In Casino Wonderland

Suddenly, the digital rights to fairly ugly little “cryptopunks”—i.e. pixeled retro 1980s style images of punks that you can own in the same manner that you own a piece of Bitcoin—are being bought and sold for millions of dollars.

Stupefying fortunes made and lost overnight, a veritable digital Klondike of speculation arises alongside obvious perversions of artistic endeavors as artists and collectors scramble to make a fortune. Prices skyrocket. “Bored apes” join the fray and Madonna got one. Many more projects struggle to become part of the action. A whole market mushrooms with at least a dozen marketplaces like Rarible, OpenSea, Larva Labs (where you can now get your very own cryptopunk for as little as 200.000 USD, but don’t ask about the expensive ones) and so on. In the background lurk major anonymous collectors like the legendary WhaleShark who reportedly owns 400k NTFs (enigmatically self-describing as a “social entrepreneur and investor with a focus on disrupting the status quo, while elevating the brave and dedicated communities behind the innovation”).

Of course, scams have proliferated in no-time. As wasps to non-zero Pepsi, grifters have amassed and scrambled to profit. This article lists ten types of scams that have already been identified and victimized many. I’m sure there’s more of where that came from.

Cryptopunks.

NFTs = The “Contemporary Art” Market Crossed with Cryptocurrency

I will refrain from a closer discussion of the technicalities of NFTs as many others have already done good jobs at explaining the phenomenon and it’s already being discussed by more people than I could overview. Basically, you become the owner of NFTs on a blockchain that guarantees that the image is owned by you, even if it’s a digital image that of course anyone else can still download and use. While anyone can have a printed postcard of the Mona Lisa, there is only one “real” Mona Lisa in the Louvre. The blockchain code is the digital counterpart of your owning this “real” Mona Lisa.

What I wish to draw attention to are instead the sociological traps and potentials of the rise of this phenomenon. Particularly, I am committed to the generation of new societal forms that can be called “Protopian” (i.e. societies that can flourish on the other side of modern life), and I’d like to lay out how the NFT phenomenon—for all its obvious wackiness and distortions of incentives and income distribution—can come to play a key role in the creation of social experiments with new and better adapted ways of organizing societies around the world.

The NFT phenomenon may be a hype with huge distractions of speculation and a long shadow of criminality. But its sheer force is undeniable: anything that can move countless millions of dollars across the world can only be viewed as an economic energy to be reckoned with. And such a strong force can and will, arguably, also be harnessed for socially sane purposes, along with the insane ones.

The NFT revolution combines two principles:

• The creation of cryptocurrencies on a blockchain.
• The speculation in contemporary art and art collections.

In brief, each NFT artwork is a unique “coin” or bill with a value seemingly arbitrarily attached to it. It’s just that the coin is the artwork in an of itself, or rather, the coin is the code that says you own the “original”. Like with money, if enough people “believe” in that value, it’s there. Poof. A lot of rabbits are being pulled out of a lot of hats. Some of the hatters go crazy, some become filthy rich. Both things have been known to coincide.

To better understand how the rise of the NFTs is part of a new social and economic logic, where cultural capital rules and drives financial capital (previously discussed by me here and here), we need to investigate the nature of how the arts (and their markets) have developed over the last decades.

The Social Construction of Reality Becomes Transparent

This discussion, in turn, shall lead us to an understanding of a more generally pervading principle of sociology: the social construction of reality or social constructionism. Simply put, we have gone from a (Modern) situation in which social construction was mostly unconscious and implicit, to one where it has become understood to a point where it can be hacked (Postmodernity), and we are now entering a cultural situation where it is becoming obvious and apparent, out in the open in all of its absurdity, and can thus be actively harnessed for purposes good and evil (Metamodernity). The genie of social construction is, as it were, out of the bottle for all to see—and for many more of us to use.

A new social game emerges: whoever can make others believe in the value of their tokens, wins. It’s the game of social magic. The game of wizards of social construction. And to increase the value of your tokens, you have to get people to believe that others will believe in it, too, so that their investments will pay off in terms of spiking valuations. The mastery over social construction has risen to the top of the savviest minds—in tech, in finance, in arts, and soon across the field.

The NFTs lie at the very crux of this story—they started out, unsurprisingly, as a mechanism for a few people to get unreasonably rich unreasonably fast, quickly slid to ignoble uses, and are now beginning to increasingly become a genuine transformational potential for the common good.

My claim is that NFTs can play a key role in releasing our joint imaginative efforts to redefine social realities. This happens first, perhaps, within virtual worlds and the Metaverse (the emerging, immersive version of the Internet). But, as what Baudrillard called hyperreality increasingly drives and reorganizes the experience of and relationships pertain to everyday life, life and society as we know them can also transform as a result.

Inventive and idealistic employment of NFT technologies and investments can thus drive projects that redefine human relationships and create opportunities for what I call a Metamodern society.

But I’m getting ahead of myself. How does this startling phenomenon relate to a wider sociological shift of our shared consciousness?

Postmodernism—and the Magic of Fake It ’til You Make It

To fully make the argument here, to see how and why the NFT market could evolve, we need to take a detour into the world of postmodern art.

In sociology, the term “passing” refers to a person’s ability to blend into a certain social context. For instance, I have crashed more than one academic conference since I simply “pass” as an academic, even enjoying a few nice buffet leftovers in the process. If I were a rugged, street-roaming mendicant, I wouldn’t have made it past the door to the seminars and keynotes. I have academic “passing”. I probably couldn’t have crashed a party held by biker thugs. You can pass a middle class, straight, or anything else. Passing is often a certain privilege—and it allows entry and access to certain networks. It’s one of the key mechanisms of how class society reproduces itself.

Learning a few manners and mannerisms to “pass” can go a long way. More than one inventive grifter have discovered as much: You can become “passing” as parts of the superrich elites. Recently, the world has watched in morbid fascination, on Netflix and other media, the workings of the Tinder Swindler (a common criminal who designed an elaborate scheme to live a superrich life, impressing the next woman with the wealth he scammed off of the last lady, in what amounted to a huge and uniquely pernicious pyramid scheme), Anna Sorokin (who impersonated a wealthy German heiress just to impress the upper echelons of New York society, of course mixing in a lot of contemporary art in the scheme), the Danish Stein Bagger (who simply conned his way to millions by making it appear as though he had a big company and getting plenty of loans), and, of course, the cult-like and worldwide scam that was the WeWork open office complex (which was made possible by an especially energetic and charismatic company founder who left so many lives in shambles). Fake it until you make it, right?

The Tinder Swindler—“passing” as a rich gentleman.

In their very own way, the financial system and stock markets have followed a similar logic, where social reality has been hacked—with very real consequences. The GameStop debacle that shook Wall Street in early 2021 (where Reddit users caught major investors in a “big short” and pumped the value of the stock to unearthly heights) is just one example. Another is the housing mortgage bubble of 2008—it heralded a new age of wild speculation, a virtual reality detached from the material economy, following its own logic but ultimately affecting economic realities. Fortunes made, fortunes lost, livelihoods destabilized. Virtual actions with very real consequences.

Unsurprisingly, the art world—which tends to portend social logics in so many ways—saw its own corresponding scandals play out already in earlier decades. And this, too, was honored with its own Netflix documentary. In Made You Look: A True Story about Fake Art, the story of a major scam is detailed. A large number of fake paintings were sold by New York’s most respectable art dealer, Knoedler (founded back in 1846!), and ended up not only in the private collections of the superrich, but in renowned galleries like the Metropolitan.

These weren’t exactly “copies” of art; just paintings made in the styles of major American 1950s artists like Jackson Pollock, Andy Warhol, and Mark Rothko by a Chinese math professor in his garage in Queens. Then a few grifters went ahead and made up stories about the provenance of the paintings (they had been bought by an anonymous family back in the 1950s and had now been rediscovered, etc.). Beginning in 1995, the scams went on for well over a decade and involved over 80m USD—until eventually forensic analysis revealed that there was paint used only invented in the 1970s, the observation was made that there was no evidence of the paintings existing in old photographs with the painters, and so on. Knoedler, the “finest” art dealer in America, came down as a house of cards.

Knoedler Gallery in New York, before it closed in 2011.

Interesting as this documentary is, it seems to miss what in my mind is the main point of how the art market developed: that postmodern art itself had exhausted itself as a movement and begun to run amok as a Warholesque replica of its original impulse. The postmodern creative spark was no longer the crux of art itself, nor of the inventive genius and prescience of the artists, but the very field had been colonized by rich art collectors who wished to exchange financial capital for prestige and cultural capital, by the art dealers who pandered to this impulse through exclusive auctions, by designated experts who propped up the value of the art with so much sophisticated “analysis”, and—eventually—by downright con artists who managed to “pass” as any of the above. And, it should be said, by a growing cadre of fairly manipulative artists who exchanged artistic genius for the genius of magicians: to create scenes in which their artwork was valued and esteemed by the people who were, in turn, valued and esteemed in society at large.

What we normally refer to as “modern” art (pertaining to the “modernist” period) is a wide umbrella of art movements that, in painting, were prevalent roughly from the 1920s and onwards—but it may just as well be called “postmodern” art. If you look at the Wiki articles for Modernism and Postmodern art, many of the examples discussed overlap. This is because the social logic embodied within the arts always develops somewhat ahead of culture and society at large—so at high modernity, from the 1920s and onwards, you already see postmodern logic playing out in the realm of the arts.

This logic took a firm and undeniable hold of the art world when Marcel Duchamp put a porcelain urinal on display in a museum in 1917 and called it The Fountain. In one stroke, he revealed the social construction of the very category we designate as “art”: art was art because it was being branded as such when displayed and revered in a museum. It caused a splash (no pun intended) and a scandal—which made the piece of art famous, and thus incredibly valuable. The postmodern tendencies of irreverence, ironic distancing, deconstructing social realities, critique, open questions, and social construction are all but painfully apparent in retrospect—even if the commentators of the time didn’t use the term postmodern (although, emblematically, the term was first used in a book published by a German philosopher the very same year).

The Fountain by Marcel Duchamp, 1917.

It was this tendency of irreverence towards the categories of modern society (art, religion, economy, and so forth) that in turn underlined much of the creative explosion in the decades that followed: we saw the rise of Picasso, Dalí, and all the rest of the geniuses that found ways of breaking away from modernity and its three-dimensional Newtonian space (which, in turn, goes back to the Italian Renaissance).

In the 1950s, especially in New York which was a sort of cultural center of the world after the Second World War, this movement culminated with the likes of Jackson Pollock (the wild expressionist who sought to express raw, internal states on the canvas with no inhibition or filter of interpretation or translation) and, of course, Andy Warhol.

Convergence, 1952, by Jackson Pollock (from jacksonpollock.org)

At this point in time, the 1950s, there was arguably still a generative explosion of innovation in postmodern art. Pollock was not “just splashing paint like a kid” and adding a few nails for good measure. A host of research has revealed fractals in his paintings, an increasing complexity of these fractals as his career progresses, and even an increasing appeal of the more complex fractals to viewers in controlled experimental settings. There’s more to it than splashing colors and furiously adding nails.

But, most of all, it was Warhol who epitomized the consummation of postmodern logic in the arts: his work melded with his public persona and it showed a collapse between the popular and “fine” art, a ruthless reflection of the endless simulacras of modern copy-paste society, lifestyles of norm-breaking with a shrug at his famous New York venue The Factory, and his own replies in interviews always being deliberately devoid of meaning: “I don’t know what the art is about, you tell me” and so forth. Warhol was the pure embodiment of postmodern cultural logic in the art world, a kind of Foucault of the arts (as in the archetypal postmodern scholar/philosopher a few decades later, Michel Foucault). While the two are almost diametrically opposite in terms of demeanor and temperament (one mellow and shy, the other veritably sparkling with opinionated intensity), their biographies do indeed show more parallels than could be ignored. Warhol did not just comment upon the flatness of meaning in art, he lived it to the fullest, ironically thereby achieving an artist’s life like no other. It’s hard not to admire him: when asked, he plainly told everyone exactly what he was doing—he was just never believed or taken literally, which was largely the source of his success.

The creative venue of innovation opened up by Duchamp was in effect exhausted by Warhol (who, surprise-surprise, counted Duchamp among his greatest influences). “Post Warhol”, what was there really for postmodern art to do? What was left to reveal? The category of fine art had already been broken out of, by its own master, its own Houdini.

In many ways, the historical moment of postmodern art was over before the 1960s had passed. But, of course, that’s only true in terms of its ingenuity, originality, and deep relevance to culture. For most of us, it had just started! And so, millions of artists, dealers, collectors, and curators sought to join a party that was already over. A lot of money became involved. Bubbles started being blown up. Municipalities started paying huge sums for modernist sculptures and painting to fill up public spaces and institutions. The age of “incomprehensibly sophisticated culture” was here—always promising wealth and prestige to the acolytes refined enough to appreciate it.

Meanwhile, “the world spirit” (to vulgarly misuse Hegel’s term) had moved on to new horizons. What was left was a game of trying to become part of this action, of this moment of cultural breakthrough—as though it could be frozen in time, and, like a Warhol triptych, repeat itself in ever new shrill colors.

Now, in light of this analysis, I urge the reader to consider this fake Rothko painting that the Chinese math professor had made (drawing on the centuries-old East Asian tradition in art and crafts, to studiously copy works of art):

Pei-Shen Qian painting in the style of Mark Rothko, one of the Abstract Expressionist fakes sold by the Knoedler Gallery. Luke Nikas/the Winterthur Museum.

It’s a good “Rothko”—well made. But what of the painting itself, viewed apart from all connotations of “fine art”?

Well. What can we say, in all honesty? It’s two squares. It looks like someone’s been sampling two paints on a yellow background. If it’s sublimely beautiful, you tell me how and why.

Nevertheless, please do note that leading art dealers, a number of accredited experts, and buyers, and exhibition curators, all agreed that this was a sublime piece of rediscovered art. Note, moreover, that people reportedly fell deeply in love with this painting and exchanged millions of dollars for it. If there ever was a naked emperor, this is it: it came in the form of two squares on a yellow background—not even as a porcelain urinal. This was a situation in which scams were just waiting to happen, given that there was already such a degree of apparent bogus to the whole endeavor.

A part of us might be thinking that these superrich pretentious snobs had it coming. But there is more to it. They were part of a social logic playing out at the heart of Western (and even global) culture.

The very fact that the legendary Rothko could so easily be forged—in fact, that this was the attractor point awaiting the entirety of the postmodern art—should be obvious: It’s not really a very interesting painting in and of itself. Rothko just made squares, lots of squares. The real action was made up by the social processes that placed his squares in sacred spaces called museums and galleries, and then a postmodern priesthood of art scholars sprinkled their fairy dust on it. It was made to “pass” as art, because it was good at slapping the art world’s pretentions in their face. And then replicas of this irreverence were bound to show up. Capitalism, I guess, always wins. It gobbled up Rothko just as easily as the symbol of Che Guevara. If postmodernism sought to escape from the confines of modern disenchantment and hypocrisy, to at least be honest and authentic about just how artificial and synthetic our world is, late modernity responded by being massively inauthentic about authenticity. Checkmate.

Postmodernism flattened the view of art, revealing that its mystery is to be found outside of the artwork itself—in its contexts, in the participant eye of the beholder, even in the angle of observation. But the God of Cruel Jokes caught on, and turned this on its head: “Okay, so if the sacred can be constructed by manipulating context, I shall manipulate the context of postmodern art and sensibility to create meaningless money machines.”

After Warhol the artist, whose work is fundamentally emancipatory, came the Warholeque monster that we today know as contemporary art: a vast factory (sic!) of empty simulacras of feigned authenticity and phony critique. And cash.

Like all other social logics, postmodernism imploded: it collapsed under the weight of its own premises. As art, certainly—and as philosophy, increasingly so. When it collapses, it exacerbates the logic that came before it: that of mainstream, modern, consumer capitalism.

How NFTs Bring Social Construction to Its Conclusion

Now, only a few years after the humiliating own-goals of the art world, the NFTs emerged. The money involved is magnitudes larger and the whole thing seemed to emerge out of nowhere.

If we compare the way in which “value” is created and ascribed to a Rothko, to say, a cryptopunk, the two are similar. But a cryptopunk can, without even having material existence, be much more valuable. It doesn’t claim originality, nor a noble pedigree of provenance (“this was owned first by the Queen of England and kept in Buckingham Palace, then by Paul McCartney, then by Xi Jinping, and now it is yours!”). It doesn’t claim genius. It is not part of profound commentary of our world. It has no sacred aura. It’s just valuable because people speculate that it will become more valuable, because more people are believed to speculate in the future.

Does that mean that the cryptopunks are nothing more than a bubble, like the tulips of 1637, these fleurs du mal? No. For certain, the NFT market as a whole will see bubbles, rises and falls, and whole sections going defunct after some craze or pyramid scheme. But the cryptopunks—and the Bored Apes, peace be with them—will remain valuable simply because they have passed a threshold of enough of speculators. Their prices will vary, and they are far from “sound investments”, but, like a Rothko, they have become valuable because they are so damned famous (at least, collectively speaking), and they are so famous because they are valuable. So at least these will continue to hold value—or that’s my bet, but please don’t take financial advice from a social theorist.

But the most valuable NFTs are more like the fake Rothko than the “real” ones. The fake Rothko is recent. It’s made for money. It’s made for speculation. It’s made to be a money reserve, where investments build on rising expectations of rising expectations.

The difference between the fake Rothko and the cryptopunk is that the latter is honest about its dishonesty and absurdity. It just builds on the craze and momentum of cryptocurrencies and found a niche in this market: If people are already investing in “just a piece of blockchain”—why not mint unique pieces of “just a piece of blockchain”? It just happened to find a way to “pass” as a currency, and thus as a way to “pass” as an art investment.

It’s actually a lot like what Warhol himself did with the art world. He was entirely honest about the meaninglessness of what he was doing, thereby ironically enchanting his work and persona with an especially mystical lure. He appeared to be able to break the rules of social reality, which made him and his work sacred, larger than life. There’s a whole literature on these things in the sociology of religion. Warhol (and those like him in those select moments of history) seem to “walk on (sociological) water”. From thereon, everything they touch becomes gold.

Now, the originator/s of the cryptopunks have done something similar: they have created a phenomenon that seems to defy all social reason. The sheer banality of the cryptopunks (I could probably have made them in Paint when I was about 14–15) spits in the face of art being art, and it spits in the face of cryptocurrencies being practical means of exchange.

It’s a speculation that knows its a speculation. A construction of unreasonable fortunes of wealth that we know are absurd—and somehow damned funny. Like the GameStop stock explosion, it’s the revenge of pajama-clad basement hackers against the world of fine arts.

And that defiance of all reason drives the damned things to yet higher soaring valuations! It’s irony and sarcasm taking over the world, and now dictating where millions and millions of dollars do and accumulate.

Going from Bad to Good: Speculation for Cultural Capital

Now, in a world where the unequal distribution of wealth and the skewing of incentives away from honest work are major problems, there can be no doubt whether the NFTs are mostly good or bad. They are beautiful flowers, in a way, at least given the sheer audacity and weirdness of the social logic that brought them to life—but if so, they are still flowers of evil, fleurs du mal.

But just as all good things are also bad, so all bad things are also good. And especially powerfully bad things can lead to especially powerful good things.

The NFTs have opened up a certain Pandora’s Box of “speculation in just about anything”. Here’s my main argument:

• Because the NFTs have made it apparent that you can create avalanches of speculative value worth millions and millions based on the most banal and stupid little things, they have also opened up the space of shared imagination for speculation in investments into increasingly meaningful 
• The very fact that real, hard money is being spent on NFTs is exactly what unlocks their potential for becoming generators of new social realities: this sort of money makes something that was “unreal” yesterday suddenly become “real” today.

And meaningful things are those that have cultural uniqueness and value to people. Meaning, the management of complexity in society, and transformations are the main scarcities of our day and age. Up until now, you couldn’t buy a piece of it with your money. Now, as the world scrambles to create the “best NFTs”, the best ones will—and this is my little ironic prophecy—eventually turn out to be the most meaningful ones.

First, I suppose, this will entail more and more enticing and interesting artwork.

Secondly, from there on, NFTs will be minted that take stakes in the development of entire bodies of philosophy and literature, where sentences and statements are bought and sold, while funding further creative thinking.

Thirdly, solutions to social problems and postcapitalist cooperatives that resolve (like, e.g. Cooperation Jackson) will be able to be speculated in—not because you “want to help them”, but because you understand that others also want to own a piece of this unique piece of social experiment “before it became cool”.

Fourth, you might even see speculations in the creations of entire societies—initially, of course, the unhoused younger generations may be buying virtual real estate in cyberspace and stimulating the creation of all sorts of online worlds (gaming-gone-wild), but eventually, stakes can be bought in experimental societies themselves, in Protopian projects. Imagine you own a piece of the future form of nation-state that effectively resolves issues of work and distribution, versus if you own a cryptopunk—which one do you think will be most cherished in the end?

We can collectively begin to speculate in cultural capital, in sociological imagination, in the artworks of life itself. It will take many more imaginative leaps to get there, but there is good reason to believe that such an attractor point could be on the horizon: in a world where meaninglessness is exposed in all of its vulgarity, the genuinely meaningful would likely become highly valued—indeed, valued enough to explode in crazy evaluations that defy all social logic. And so idealistic recreators of society could begin to manage billions through collective and democratic forms of governance.

In terms of development from modern life, to postmoderity, and onwards to what I call “metamodernity” the most fundamental principle is this one:

• Modernity divides social reality into clearly distinguished spheres, like art, religion, market, politics, science, the civil sphere, and private life.
• Postmodernism challenges and breaks out of the confines of these categories, escapes the implicit definitions of “what art can be”.
• Metamodernity begins to come online when art has escaped from its modern confines and now, as a genie out of the bottle, begins to recreate all of society in its radical experimentation and creativity.

Let’s be honest, it’s an equally wondrous and terrifying prospect.

Future: Metamodern Intellectual Property

The above discussion promptly leads to another one: If the multitude of “pro-social” and transformative movements and creatives are to wrest control over the speculative madness of our age, we would need new forms of intellectual property to manage such projects.

For NFTs to begin to play socially creative and positive roles in the search of Protopian solutions to the troubles of modern society, we must also reimagine the intellectual ownership structures themselves—not least as much of the symbols that could be issued as NFTs would necessarily be intellectual innovations and memes.

In her book chapter of the 2021 volume Metamodernity (in which I also have a chapter), Siva Thambisetty argues that there is something rotten in the kingdom of intellectual property (IP). While the purpose of IP has been to spur innovation and protect innovators, it has also created artificial scarcity, skewed incentives, shifted games from innovation to legal battles, excluded the needing, and radically centralized economic power to few hands. Likewise, my friend Rufus Pollock has written a book titled The Open Revolution that argues for rewarding innovators through a system that still guarantees open access to the innovations themselves (not entirely unlike how Spotify or national license services function for music).

If there are speculative bubbles of “art investments” (where art itself, then, increasingly spills over into other realms and begin to redefine them) in increasingly socially and culturally meaningful endeavors, there should reasonably be regulations that guarantee the accountability of the projects as well as making certain that a part of the speculative drive actually benefits the project itself.

This would be an entirely new form of market—a synthesis of intellectual property, philanthropy, the financial market (including stock markets), and, of course, blockchain and the art market.

At this point, the jury’s still out on what such regulations might look like exactly. All I am saying is that such a new beast would require new regulations and clarified rules of engagement—and that the states that are first movers in innovating this kind of “metamodern intellectual property” are likely to attract a truckload of capital that can be used also by the state itself.

This last one is a tall order. But, as any respectable sociologist will tell you, states and markets develop together as new technological tropes emerge. The home of the next level of intellectual property will thus likely also become the center of metamodernism in the world, with the largest concentration of Protopian experiments.

Protopian experiments are necessary to transform society from its modern trajectory of unsustainability into something more stable and desirable. And Protopian experiments could be funded by self-consciously speculative NFT bubbles.

Or, put differently: If we can swindle ourselves into doing stupid things, we can also swindle ourselves into doing good things. It’s a pyramid scheme turned on its head: taking speculation and directing its forces to those who imaginatively create better societies around the world. It’s a weird path, for certain, but one that shouldn’t be ignored.

That is why I can say—if not with certainty, then at least with some hope—that these flowers of evil can one day save the world.

—

Hanzi Freinacht is a political philosopher, historian, and sociologist, author of ‘The Listening Society’, ‘Nordic Ideology’ and the upcoming books ‘The 6 Hidden Patterns of History’ and ‘Outcompeting Capitalism’. Much of his time is spent alone in the Swiss Alps. You can follow Hanzi on Facebook, Twitter, and Medium, and you can speed up the process of new metamodern content reaching the world by making a donation to Hanzi here.