I’m not into crypto. I talk about it reluctantly. I don’t like repeating myself but I still like these lines from Chartbook Newsletter #15 Money talk is political talk. We should be selective in the political talk we engage in. I don’t like the politics of crypto/bitcoin. Indulging silly money talk is to indulge silly and dangerous politics. We should avoid doing that.
I'm delighted that you got over your reluctance to discuss this topic, Adam, because this is excellent on so many levels.
I think the reason that so many struggle with the "what is backing it?" question about money (or is currency the more accurate term?) is because of the hard money/gold standard notions that continue to pollute the public narrative almost 50 years after the Nixon shock binned them in operational terms. Most people think of currency as an object when it is actually more like a public monopoly with characteristic network effects.
So the US dollar isn't "backed" by a pile of stuff (any commodity or basket of commodities) -- it's "backed" by over 750 military bases, nuclear weapons and the world's most powerful navy and air force. Not to mention all the police, prisons and legal apparatus at the pointy end of the state's monopoly over the legitimate use of force.
As I like to quip to the crypto bros (with apologies to Stalin), "the Bitcoin? How many divisions has it?"
Clearly an article written with a lot of thought put behind it. Below my best part amongst many
“But that is what I am gesturing to: the possibility of organizing ourselves around money that is accepted for what it is, i.e. a conventional set of arrangements ultimately arising out a complex of social and political interactions, part of the material constitution of our society, warts and all.”
Seen from this lens, Crypto/Bitcoin is as much an indictment against the current Politics/Culture/Society as it is against the specifics of Monetary policy. Trust, in institutions and within the society, is clearly deteriorating faster than anyone expected post-GFC crisis. And as Trust in the State declines, so does the Trust in Fiat/Paper money and ppl instead turn towards Neutral assets of value that are difficult to confiscate
The statal monopoly of legitimate violence only creates a limited amount of monetary power. Look at the status of the $100 bill in Russia. It's a much better store of value than the ruble--or at least Russians seem to think so. A state's monetary power mostly lies in its central transactional role. iow, it is manufactured consent, all the way down.
I'm delighted that you got over your reluctance to discuss this topic, Adam, because this is excellent on so many levels.
I think the reason that so many struggle with the "what is backing it?" question about money (or is currency the more accurate term?) is because of the hard money/gold standard notions that continue to pollute the public narrative almost 50 years after the Nixon shock binned them in operational terms. Most people think of currency as an object when it is actually more like a public monopoly with characteristic network effects.
So the US dollar isn't "backed" by a pile of stuff (any commodity or basket of commodities) -- it's "backed" by over 750 military bases, nuclear weapons and the world's most powerful navy and air force. Not to mention all the police, prisons and legal apparatus at the pointy end of the state's monopoly over the legitimate use of force.
As I like to quip to the crypto bros (with apologies to Stalin), "the Bitcoin? How many divisions has it?"
Clearly an article written with a lot of thought put behind it. Below my best part amongst many
“But that is what I am gesturing to: the possibility of organizing ourselves around money that is accepted for what it is, i.e. a conventional set of arrangements ultimately arising out a complex of social and political interactions, part of the material constitution of our society, warts and all.”
Seen from this lens, Crypto/Bitcoin is as much an indictment against the current Politics/Culture/Society as it is against the specifics of Monetary policy. Trust, in institutions and within the society, is clearly deteriorating faster than anyone expected post-GFC crisis. And as Trust in the State declines, so does the Trust in Fiat/Paper money and ppl instead turn towards Neutral assets of value that are difficult to confiscate
The statal monopoly of legitimate violence only creates a limited amount of monetary power. Look at the status of the $100 bill in Russia. It's a much better store of value than the ruble--or at least Russians seem to think so. A state's monetary power mostly lies in its central transactional role. iow, it is manufactured consent, all the way down.
Money talk is political talk. But libertarian political talk is still political talk.
Spot on.
Speaking of "morbid symptom[s]", how should we characterize TARP? Does it rank above or below crypto in terms of morbidity?