Logan Bolinger is a lawyer and the creator of a free weekly publication concerning the intersection of Bitcoin, macroeconomics, geopolitics and legislation.
Part Two: The Big “This” That Bitcoin Fixes
“Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies.” – Groucho Marx
In Part One of this collection, I wrote concerning the first main breakthrough for me on my journey from being a fervent Bernie Sanders supporter to a dedicated Bitcoiner, which concerned confronting the thought of belief in politics and questioning how Bitcoin’s trustlessness may very well be leveraged towards a optimistic political finish through its potential to constrain lawmakers.
Now I would like to discuss concerning the second main breakthrough I skilled on this journey. I would like to begin by suggesting one thing that is going to sound, at first blush, plainly antithetical to some within the Bitcoin neighborhood, however which I believe may resonate with those that have emigrated to or have arrived at a perception in Bitcoin from a extra left-leaning political beginning place (like, say, the Bernie Sanders/progressive orbit or the liberal arts ecosystem): Progressives and Bitcoiners each establish and acknowledge an identical slate of issues with the established order.
Progressives would spotlight and emphasize wealth inequality, unequal monetary entry, monopolies, an overpowerful cadre of tech corporations, extra company energy, exploitative (and discriminatory) huge banks and, usually talking, an excessive amount of affect being wielded by a small group of people and companies as main points. This checklist is clearly non-exhaustive, however I believe it’s a good illustration of main issues.
The majority of Bitcoiners would agree with most, if not all, of those criticisms, and would in all probability add the pursuit of GDP (gross home product) development in any respect prices and ubiquitous malinvestment, each of which are necessitated and sustained by the present fiat system, to the checklist.
(Source)
Progressives and Bitcoiners differ radically, nevertheless, on the precise location of the supply of those issues, in addition to on the suitable options to these issues.
These divergent views are analogous to two docs inspecting a affected person and agreeing upon the signs, however disagreeing on the remedy. I would like to tug on this medical/corporeal metaphor a bit extra to draw out some extra factors as a result of it’s illustrative of Bitcoin’s distinctive and transformative promise.
Imagine our financial system as a physique. This physique lives arduous and quick and begins to exhibit signs of ailing well being. Two docs study this physique and suggest two starkly totally different cures. Doctor A suggests giving the affected person some medication, which is to say a focused pharmacological intervention, and sending her on her manner. Then Doctor B means that the foundation explanation for the signs are deeper and recommends basic way of life modifications. This physician endorses common train, clear consuming, ingesting much less alcohol, spending extra time exterior and the like. The affected person opts for the simple prescriptions of Doctor A.
It doesn’t take lengthy for the affected person to return to see these two docs with new and worsening signs. It seems the drugs has had unwanted side effects, which now want to be addressed. Doctor A suggests extra drugs to handle these unwanted side effects, whereas Doctor B continues to suggest wholesale way of life modifications to essentially handle the foundation explanation for the affected person’s situation.
You can see the place this is going. Reactively addressing signs with out ever treating the underlying situation or worse, misdiagnosing/mislocating the underlying situation, ends in a sicker affected person with extra issues.
Bringing it again to Bitcoiners and progressives, Bitcoiners find the supply of many issues on the financial degree. The cash is now not sound and this is the provenance of lots of the subsequent societal signs. Bitcoiners can hint this downside to a exact time limit, 1971, the purpose at which cash successfully grew to become debt and forex formally grew to become unbacked. From there, issues emerged, multiplied and compounded. For this cause, Bitcoiners suggest fixing the cash so as to start therapeutic the litany of consequent societal maladies.
On the opposite hand, progressives coalesce round totally different causal narratives. Sometimes it’s the billionaires, generally it’s capitalism itself, generally it’s companies, generally it’s Mark Zuckerberg, and so on. Sometimes the narrative simply devolves or settles into an amorphous, all-encompassing oppressor/oppressed framework through which each human relationship or sphere of human motion might be (and is) categorized by and through this binary. In this surroundings, scoring rhetorical factors too typically takes priority over formulating considerate, thoughtful options. Instead, proposed options nearly all the time contain shoveling extra {dollars} at numerous events.
Before I found Bitcoin, I used to be a loyal advocate of spending nevertheless a lot cash was needed to “fix” issues like wealth inequality, extra company energy, inequitable entry to providers, and so on. This, I got here to study, solely briefly relieves the ache, whereas leaving intact the financial system that causes the ache within the first place. We can see this immediately with inflation. We pumped the financial system filled with liquidity and handed out stimulus checks. Sounds nice, proper? Almost two years later and, wouldn’t it, that cash did have to come from someplace in any case. And by growing the cash provide so dramatically to undertake these (largely) well-intentioned interventions, we ensured the inflation we are now experiencing. The brunt of which is borne by the identical wage-earning savers for whom the stimulus was meant to support.
IMF; M2 knowledge; Central Banks (Source)
Furthermore, the Federal Reserve Board is now within the place of elevating charges in a slowing development surroundings so as to curb this inflation, which is able to itself probably trigger a recession — persevering with to hurt wage-earning savers. When the ache reaches a tipping level, the Fed will step again in once more with a brand new painkiller of liquidity, devalue the forex much more, additional enriching the rich asset holders, whereas additional punishing the wage-earning savers. We will proceed this vicious cycle, failing to resolve any of the issues we had been looking for to handle. Fiat options can’t resolve essentially fiat issues.
Jim Bianco / Bianco Research (Source)
In different phrases, we’ll simply proceed to deal with the signs till they develop into too quite a few and finally, terminal.
As an apart, I discover it fascinating that the Western world, with its globally distinctive conception of ache and its painkiller medical tradition (as opposed to a extra holistic Eastern method of finding and addressing the supply of ache) opts to deal with its financial system the identical manner. The authorities treats the cash the best way Big Pharma treats well being and will get comparable outcomes.
But anyway, treating the signs of a diseased financial system with out addressing the trigger has the perverse impact of merely delaying extra extreme and doubtlessly terminal future signs, whereas exacerbating the prevailing signs within the meantime.
If I had not discovered Bitcoin, I’m undecided I ever would have understood this. And I believe there’s a cause for that. Learning about Bitcoin incentivizes monetary and financial literacy, which is neither broadly taught nor broadly distributed. I don’t assume it strains credulity to recommend that lots of the people in Congress charged with making these essential choices about fiscal spending, the finances, and authorities debt are equally underinformed concerning the downstream penalties of in style interventional concepts, a scenario that is compounded by an overarching curiosity in successful re-election. Promising to hand out more cash, no matter the place that cash comes from and no matter any grave future penalties it could produce, is a a lot simpler political promote to constituents than the pursuit of economic self-discipline. The former is a painkiller that briefly masks its root causes. The latter is a painful withdrawal that, as soon as undertaken and accomplished, provides hope for extra lasting long-term well being.
I used to be a Bernie supporter as a result of I needed to handle a litany of societal issues. I’m now a Bitcoiner as a result of I do know that deca-billionaires, dominant companies, “late-stage capitalism” and Mark Zuckerberg — although definitely objectionable — are not the causes of those issues. They are the signs of a damaged cash. And making an attempt to resolve for these discrete signs will solely end in systemic contortions that permit different signs to metastasize. It’s whack-a-mole problem-solving.
Put merely, Bitcoin made me notice that it is inconceivable to resolve the issues brought on by fiat cash throughout the fiat framework. It is, in truth, inconceivable to have a fiat system through which these issues might be averted. Which is why true options, the “big structural changes” that progressives like Elizabeth Warren tout and demand, require a rebuilding of the system itself upon a greater basis, which implies fixing the cash.
Bitcoin’s promise is the prospect of fixing this. And anybody who is severe about addressing all the problems progressives and Bitcoiners agree upon should confront the foundation explanation for a completely, irreparably damaged cash on the base layer of society.
This is a visitor put up by Logan Bolinger. Opinions expressed are fully their personal and don’t essentially replicate these of BTC Inc. or Bitcoin Magazine.
