In “Bitcoin Is Venice” and this series we have focused mainly on alternating between applied logic and historical analysis, with what little social theorizing we offer tending to be outsourced to the likes of Ostrom and Scott. We include no statistical analysis whatsoever, not because we have anything against the practice but purely out of intellectual honesty: Neither author has relevant academic training in this area, nor did either have points that could only be made in this language.
Part of the thesis of this extract, and in a sense the entirety of “Bitcoin Is Venice,” is that Bitcoin will, slowly but surely, gradually then suddenly, bring us back to an understanding and practice of economics in which the scientism just described will be acknowledged to be ludicrous, and will be impossible to enact besides. The future is bright; the future is orange.
But to look forwards, we ought to first look backwards. Some elements of Bitcoin are unprecedented, for sure. The discussion that follows on programmable money and sovereign digital identity will hopefully make that strikingly obvious and undeniable. But the ideas of sound money, low time preference, heuristics, localism, methodological individualism and the like, are very, very old. They may be the oldest ideas of all. They are encoded in the customs of the world’s oldest continuously surviving cultures; their traces are in the common law, the English language, the King James Bible and the works of William Shakespeare. Predicting how the very old and the very new will interact is no easy task. It is likely impossible, in fact, and we make no pretensions of being able to see the future. But hypothesizing is fun, frankly, and the more bounteous the hypothesized future the more fun the act.
Unfathomably complicated on the one hand, we see fit to characterize Bitcoin’s effect with an analogy so holistic as to be glib: We stand at the precipice of a new renaissance. Time will tell if art and culture will flourish once again as we still, to this day, cherish the culture from Florence and Venice in the late Middle Ages. But we do strongly predict what we might call a capital renaissance . Bitcoin will make us lower our time preferences. Everybody. Whether we like it or not. This will make us take capital more seriously; nurture it, replenish it and grow it, in all its forms.
[i] “CBDCs: An Opportunity for the Monetary System,” BIS Annual Economic Report 2021 , https://www.bis.org/publ/arpdf/ar2021e3.pdf.
[ii] Cited in multiple earlier extracts but all pointing to the following more in-depth treatment!
[iii] The reader may also be interested in pondering that this schema readily debunks so-called “intellectual property.” The standard defense of this legal regime, although clearly never openly advertised as such, is to imply that “ideas” are common-pool resources, even though they clearly are actually public goods , as ought to be clear from the analysis presented in the main text. Even though this error essentially follows from definitional sloppiness, the proponents nonetheless immediately go further with their slipshod analysis and demand what Ostrom specifically cautions against, even if they had previously been correct in their starting assumption, that the only way to save society from catastrophe is to make these common-pool resources private goods that belong to the government, on which legalized monopolies may then be issued to favored patrons. Continuing this train of thought is outside the scope of this extract, but curious readers are encouraged to source “Against Intellectual Monopoly” by Michele Boldrin and David K. Levine, as well as the many writings and talks of Stephan Kinsella, of which a natural starting point might be, “Against Intellectual Property,” Journal of Libertarian Studies , https://cdn.mises.org/15_2_1.pdf.
Please note, we practice what we preach in this regard: “Bitcoin Is Venice” has been fully open-sourced, meaning the authors retain no nonsensical “rights” to its content. It may be reproduced or referenced by anybody, in any way. We ask only that anybody doing so properly credit the source material, but of course even this we cannot compel anybody to obey.
[iv] This touches on the idea of local knowledge and competence in tension with global authority, which is discussed in much more detail in Chapter 9 of “Bitcoin Is Venice.”
[v] The reader is encouraged to look into dynamic stochastic general equilibrium , if only for comedic value. Just don’t spend too long on it: Time is scarce, after all.
This is a guest post by Allen Farrington and Sacha Meyers. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.