You might remember him as President Trump’s Director of Communications who was sacked after 11 days in the White House. But “The Mooch” has owned his mistakes and reinvented his business in the spirit of a true entrepreneur, and, as it happens, a practising Catholic. I spoke to him about finance, his new ventures, his faith, and – something we Catholics sometimes tend to ignore – the future.
Finance is not the first thing that comes to mind when we think of Catholic social teaching, but the Church has long made pronouncements on the limits of what markets and marketeers ought to be allowed to do. Moreover, Catholic directives have had to adapt as economic reality shifts. In the Middle Ages, interest collection was condemned as usury, but the Church has since clarified that the sin lies in extortion, not the practice itself. The Church sets boundaries based on principles which are meant to aid the good of society, focusing our hearts and minds on values beyond the merely material. In this vein, Pope Leo XIII promulgated the encyclical Rerum Novarum in 1891, endorsing the right of workers to form unions, while rejecting both socialism and unrestricted capitalism. Coming after the Industrial Revolution, the Pope thought it necessary to respond to a new economic reality. Today, some say we find ourselves amidst a new revolution, which in turn requires a reassessment. One of these avant-gardists is Anthony Scaramucci.
The revolution in which we find ourselves is fuelled by Crypto, yet this doesn’t suffice to explain the new reality. Scaramucci describes it as a technological revolution which has been taking place for years. “This is the first inning,” he says confidently, adding that skeptics have been wrong before. “Nasdaq dropped 60% in March of 2000, and things like Amazon.com were down 85% and yet people were saying ‘amazon is worthless…it’s a joke…’ But last time I checked Jeff Bezos is one of the richest people in the world and he shot himself into outer space in his own rocket. And oh, by the way, on the second trip he took Captain Kirk with him.”
Scaramucci is being criticised for his Bitcoin investments by traditional quarters. In fact, The Mooch himself was an early skeptic. Ten years ago he didn’t know what Bitcoin was, nor did he care. Five years ago, he heard the US government talk of digitising the US dollar and putting it on a “blockchain.” Bitcoin was mentioned. He realised it was a lot bigger than he had originally thought. Fast forward past the 11 days in the White House, and we find Scaramucci back at the helm of his company where he bought the domain skybridgebitcoin.com. He did his research and wrote a book detailing his Crypto-Odyssey. But until October 2020 he made no investments. What changed? Three criteria had been met: 1. Lots of people had invested. 2. It was safe to store. 3. There was benign regulation. When the IRS deemed Bitcoin an intangible property, The Mooch was convinced.
This all sounds well and good for someone in the business, but how does this affect lives and why does it matter to society? Pope Francis has repeatedly called for social reforms to promote diversity and creativity, placing human dignity at the centre of economics as opposed to mere profit incentivisation. In this, he follows his predecessor Leo XIII, who also called for distributed ownership, calling for “as many as possible of the people to become owners.” Here is where Scaramucci sees potential, as Cryptocurrencies offer people direct access to their funds, cutting out the middle-man:
“To understand the technology is to understand the revolution. Ultimately this is a massive delayering mechanism. Massive! And if you understand it from that perspective, well, then you see how massive this opportunity can be. If I can delayer, and take out the credit card companies on retail or restaurant expenditures, it’s billions upon billions of dollars in terms of cost savings. If I am an ex-patriot living in the United States and I want to send money back to my mom, and I’m not banked, I’m sitting on US cash, I can walk those 100 dollar bills over to Western Union and they’ll charge me 10% to move that wire to my mother. But if I have a wallet-to-wallet transfer over the network, vis-a-vis Bitcoin, El Salvadoran ex-pats can save 400 million dollars a year.”
This may sound like a non-problem to most people banking with high street banks, but Scaramucci adds that many people in America do not have bank accounts. These people need to use costly services like Western Union. With Cryptocurrencies, believers see the revolution in the removal of potentially exploitative third parties.
In the last few months, sceptics have had reason to rejoice as the Bitcoin market has dropped significantly. The Mooch remains unfazed. “Every time we have a massive technological revolution, concomitant with that is lots of volatility. Lots of uncertainty, and an old guard saying ‘that’s a fad. That horseless carriage is a fad, nobody is going to use that.’” Nevertheless, we spoke on a smartphone with The Mooch sitting in the back of a car in Eastern USA while I sat in my garden house in Cornwall. This, he says, evidences the 30-year communications revolution we have lived through. To frame how big this is, he goes back to 1998 when it took over 30 seconds for an internet landing page to load. Now we have an internet that allows billions of people to download high-resolution videos simultaneously, globally. Crypto, the “internet of money,” he says, is still in 1998. “It’s slow-moving. There are not a lot of applications. It’s clunky. There’s been some hacks and some stolen crypto. But over time, what will happen is there will be maturity to the market, and as you get maturity you get wider and wider bandwidth of market activity and you get additional applications. If I am right that this is meaningful cost savings for people, then entrepreneurs will crop up and say ‘hey, sell your real estate over this tokenised platform.’”
If this truly is a revolution, we might ask ourselves what the moral response should be. For Scaramucci, the advantages are clear. Institutions have disadvantaged the poor and middle classes, and Crypto can open up a system that is more accountable, which, in turn, is more fair and moral. The moral case for financial innovation is not new to The Mooch. In 2010, Scaramucci wrote Goodbye Gordon Gekko: How to Find Your Fortune Without Losing Your Soul. Drawing our conversation to a close, Scaramucci returned to the importance of owning one’s mistakes: “To really understand Catholicism, in Catholicism you not only own your mistakes, you’re asking God for forgiveness through the confessional process.” It remains to be seen if Bitcoin is a mistake that will have to be owned, or a revolution to be tamed by Catholic social teaching.
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