## Metaveri Başlık: **The Philosophy of Bitcoin and the Question of Money** Yazar: *Simon Butler* Kategori: #articles ## Altı Çizilenler - We contend that the political dimension is at the heart of the debate about money and that at the epicentre of centuries of tension is one issue: supply. In the 21st century, this is where we need to focus debate about the future of money. Society depends on it. (Page 82) - We see here a seemingly inescapable paradox of money; metal restricts spending, but without it, confidence in government money falters. (Page 83) - But orthodoxy was challenged by the likes of Keynes when he famously dubbed the gold standard ‘a barbarous relic’ (1923: 172). However, even Keynes acknowledged that the consistent devaluation of money throughout history was not an accident and that two great forces were behind it: the ‘impecuniosity of Governments and the superior pol- itical influence of the debtor class’ (Keynes, 1923: 9). Yet, Keynes argued that the gold standard was old-fashioned as it was no longer stable nor free from the dangers of a managed currency. (Page 83) - This raises the question of what we call Schrodinger’s debt: if you borrow money but never have to pay it back, is it really a debt? The ultimate expression of this thinking is Modern Monetary Theory. (Page 84) - I don’t believe we shall ever have a good money again before we take the thing out of the hands of government. That is, we can’t take it violently out of the hands of government. All we can do is by some sly roundabout way introduce something they can’t stop. (quoted in Harvey and Branco-Illodo, 2020) (Page 84) **Not**: Hayek - For Mitchell-Innes, the gold standard was tantamount to a charade – redeeming paper for gold does not settle debt but merely changes ‘one form of obligation for another of an identical nature’ (1914: 10). The gold standard only restrained the creation of government money/debt but did nothing for repayment of any money or debt created. And without repayment, prices rise and the poorer we become. (Page 85) - Mitchell-Innes is clear that ‘excessive indebtedness’ causes a fall in the value of money and a ‘general rise in prices’ – a depreciation that has become ‘more gradual and therefore more insidious (Page 85) - Monopolistic state money has proven to be far from a resilient, equitable system and, historically, societies with multiple currencies enjoyed greater stability and equality (Lietaer et al., 2012: 9). Perhaps, then, a desecuritisation of other currencies could see them become part of the solution to systemic volatility, rather than merely as a challenge to state monetary hegemony. (Page 86) - According to the International Monetary Fund, there were 425 systemic banking, monetary and debt crises between 1970 and 2010 – 10 per year (Lietaer et al., 2012: 10). (Page 86) - This deflationary policy is a political statement aligned with the Austrian theory of money and establishes Bitcoin as hard money in contrast to the soft money of the state (Hayes, 2019). Whilst we do not know the identity of Satoshi Nakamoto, the roots of Bitcoin go back to the ‘Crypto Wars’ and the libertarian idealism of the cypherpunks, who sought privacy in cyberspace and saw electronic money as part of that vision (Hughes, 1993). (Page 87) - If Smith, Knapp, Keynes, Von Mises, Hayek and others have acknowledged the problem of the state in money, then why does Bitcoin receive such opposition? The arguments outlined provide some explanation, but many of them ‘apply equally... to our current forms of conventional money’ (Bjerg, 2016: 69). (Page 88) - A tree in a remote forest has uses for fire or as a building material but, in that context, there is no demand for it, therefore no utility, no economic activity. The claim, there- fore, that Bitcoin has no utility is not valid according to Simmel. There is great demand for Bitcoin and so great utility, as it is driving the exchange of many objects and an enormous amount of economic transaction. (Page 89) - Interestingly, for Simmel, utility is ‘the desire for the object’; it is not about usefulness but rather economic activity as a result of demand. In fact, Simmel observes that ‘we desire, and therefore value economically, all kinds of things that cannot be called useful or serviceable’. And so, if usefulness is all that is in demand, we must accept that it is demand that is the driver of economic activity (Simmel, 2004: 88–9). (Page 89) - To those that say that Bitcoin has no value, they are correct – but then no object, including gold, has intrinsic value either. Value is a subjective assessment. Another simple way to think of this is that value is not fixed and inherently measurable, unlike an actual quality of an object, like weight. It is a unit of measurement, and like all our abstract meas- ures ‘no one has ever seen an ounce or a foot or an hour’ (Innes, 1914: 4). (Page 89) - But does money need to have ‘value’? And what is value anyway? In Chapter 1 of The Philosophy of Money, Simmel notes that ‘an object does not gain a new quality if we call it valuable; it is valued because of the qualities it has’ (2004: 57) (Page 89) - Furthermore, Simmel argues that even the most useful object has to give up its usefulness to function as money (p. 151). (Page 90) - Indeed, for Simmel, the growth of intellectual ability in society and the development of abstract thought is characterised by the devel- opment of money closer and closer to a symbolic form, without intrinsic value (p. 150). (Page 90) - The substance of money is not important. In this regard, fiat proves that something without intrinsic value can be money. (Page 90) - Simmel, like others, makes the issue of abuse clear here in reference to the Cantillon effect, where those who issue money benefit from spending money before prices have a chance to ‘catch up (Page 91) - Although, in principle, the exchange function of money could be accomplished by mere token money, no human power could pro- vide a sufficient guarantee against possible misuse. The functions of exchange and reckoning obviously depend upon a limitation of the quantity of money, upon its ‘scarcity’. (Simmel, 2004: 158) (Page 91) - Both sides acknowledge the problems of state involvement in money; the contention is over what to do about it. (Page 92) - And this is the fundamental issue with state money – how much new money is created and, crucially, who gets it? Simmel wrote that if everyone received an equal share of new money then ‘no one would gain any advantage’. But this is not what happens, and this is why Bitcoin has emerged, to use some of Simmel’s words, to protect ‘against political crises, party interests and government interference’. (Page 92) - Bitcoin (specifically) is a form of activism, in that it would not have been created unless it was designed to challenge something else. (Page 93) **Not**: #spmakalesi zıtlık sayesinde var oluyor? - In this way, Bitcoin is counter- securitising. The challenge that Bitcoin symbolises, therefore, lies in the political dimension of the money question. (Page 93) - Bitcoin is not libertarian or right-wing because anyone says it is. Bitcoin has the properties it has and people from different leanings use it for those properties – it is a mistake to then transfer those political leanings back on to Bitcoin as ‘new’ properties. Doing so only clouds our view of Bitcoin. This is important, as it helps explain why there is such a variety of people and groupings using Bitcoin. Users do not define the properties of the system; the system is what it is. (Page 94) **Not**: #spmakalesi bitcoinin kapsayıcı vurgusu, değin. - Furthermore, Bitcoin is prima facie evidence that other types of higher supra-individual formation can fulfil this role in society, and in money. It is for those in the economic community of Bitcoin to believe in it as money, to have faith in it, and Bitcoin is the third party that provides the degree of guarantee. It is not only the state that can give confidence in money. (Page 95) **Not**: #spmakalesi devlete ve itibari paraya alternatif. - That Bitcoiners are fervent in their beliefs is a strength for their community, not a weakness, and testament to their corresponding lack of faith in fiat. (Page 95) - And society evolved from private transactions to ever-widening economic circles. This progress was also marked with a trend towards centralisation, which Simmel saw as mankind’s concentration of energies, forces and unity in order to achieve more with less effort – some examples being machinery, gunpowder, and family (Simmel, 2004: 196–8). The modern state represents an ‘unrivalled concentration of forces’, and money, as it develops, increasingly expresses values in the ‘most concise and condensed way’ (p. 197). Yet, our current financial systems and monies were shaped by an industrial-age world where ‘nationalism, competition, endless growth and colonization were encouraged’ (Lietaer, 2001: x). A national currency was a powerful tool for national consciousness (p. 45), but the creation of hundreds of currencies along nationalistic lines, with its inconveniences, instability and speculation, cannot be a final realisation of the centralisation of money. For Simmel, in an ideal social order money would have no intrinsic value and would be purely symbolic (2004: 191). It would also be centralised in the sense of maximising its force and unity. (Page 96) - Bitcoin is a central authority, a public institution, in the same way that the state performs that role in money. And it is centralising ‘great forces at a single point’ (albeit through a decentralised computing system), combining the energies of hundreds of currencies limited by borders (Simmel, 2004: 196). Bitcoin represents an evolution of higher supra-individual forma- tions and an evolution in money paralleled by a developing global society. (Page 96) - In a global, digital age, our world is deserving of a more fitting money, one that reflects a society that evolves beyond borders, and perhaps one that does not depend upon nation-state law and even violence for its protectionism. (Page 96) - We, therefore, refine Ingham’s money question to our question of money, which is solely about supply, broken into the same three elements – first, who or what can be a public institution for the management of money; second, how is money produced and, crucially, how much (the rate of new supply or destruction); and third, is money (new and old) distributed fairly in society? (Page 97) **Not**: #spmakalesi önemli sorular. - It is in the political dimension, therefore, that the issues with Bitcoin and money lie. We are not concerned now with what money is, where it came from or its form. These issues are largely settled, in practice if not in theory – modern money no longer has intrinsic value. But supply is very much contested, and it is the issue of the political dimension. (Page 97) - Specifically, Bitcoin threatens only the state’s ability to wield power by creating money. (Page 97) - Bitcoin directly challenges the soft money of the state, which puts it in conflict with those that benefit from the power that control of money brings. In this way, we see further evidence that money is more than a means of exchange. It is a ‘source of power – infrastructural and des- potic’ that comes from having more money than others but, more importantly, from the ability to create it (Ingham, 2020: 13). (Page 97) - Here, the control of supply, and the power that comes from it, is the real source of tension. It is supply that led to metallism, as we turned to gold to temper man’s nature for debasement in an attempt to address the ‘alchemy’ of the state problem in money. Commodity versus claim theory is not about a physical ‘commodityness’. It is about the issue of supply, which tran- scends the political dimension. (Page 98) **Not**: #spmakalesi - The state has failed throughout history in the management of money, and we may be better off without it monopolising that position. Modern money is founded on outdated industrial age thinking, nationalism, and crumbling hierarchies of power. Trust in it has been broken. Bitcoin has emerged as social resistance and as a new type of higher supra-individual formation, where it is a community institution alongside the state – money as a public institution. And Bitcoin has expanded economic circles beyond the physical, geographic borders of state currency and proven that money does not depend on the state for guarantee. It is for an economic community to believe in a money, and the wider a money is used the better it needs to be. Bitcoin may be very different to state money technically and politically, but it is very similar philosophically. Bitcoin is a centralised institution for money, a machine for the concentration of the forces of value. (Page 98) - Debate must move past these old divisions, as money does not need to be a commodity. (Page 98) - An ideal society is worthy of ideal money. And the future does matter. (Page 99)