There’s a common refrain that “Bitcoin fixes this.” Sometimes it’s used well and other times less so, but I’m being very serious when I say that Bitcoin fixes society. And in this article I’ll illustrate precisely how Bitcoin is able to change the world at the largest scale.
Fundamentally, Bitcoin does this by changing the incentives that give modern society its shape. And as it happens, the world’s incentives in our time have been set primarily with money. And so if we change those incentives, we change the world overall. That process may not be fast, easy or pristine, but the principle remains true: Change the incentives, change the world.
So, let’s get directly into real-life applications of Bitcoin to large and fundamental societal operations. We’ll start with the most obvious and move on from there.
Bitcoin can’t entirely fix war, of course; that won’t happen until humanity itself upgrades. But it will drastically reduce it. Bear in mind that we (and I’m focusing on the US here) haven’t paid for a war since World War II. That war required actual sacrifices of the populace: rationing, massive sales of War Bonds and shortages. People had to cooperate in the war effort.
In 1971, however, dollars were cut free of gold and could be printed up in any number with no immediate consequence. All the wars since have been run on credit. Bitcoin does not permit this. You cannot conjure new bitcoins by entering a figure on a ledger, as you can with dollars.
In a Bitcoin economy, running a war requires people to actually pay for it. Hence there will be fewer wars, and much more careful ones.
The subject of welfare is a political cauldron bubbling over with intimidation, guilt and fake absolution. So, let’s start by acknowledging that welfare has failed spectacularly. I’m sure people once supported it with decent intentions, but they were wrong. Consider this please:
Today’s “disadvantaged” are precisely those whom welfare programs have been saving for generations.
Like war, welfare was unleashed by cutting the link between gold and the dollar. Under a large number of programs, trillions of dollars have been spent for “human needs.” But the operation simply hasn’t worked.
In addition, welfare has massively indebted productive people, who are accused of “privilege” at the same time. No clear-minded person would sign up for that deal.
This mess could not exist under a Bitcoin model: Welfare would have to come directly from working people, and it would be very easy to see that private charity produced far better results for a fraction of the cost. Past that point, almost no one would choose to pay for government charity.
Corruption is as old as positions of advantage, of course; so again, Bitcoin won’t entirely fix this, but it will chop it down to size.
One way or another, corruption is always proportional to government spending. The briber pays according to what the bribee has to give. And the ability to give has massively expanded under the model of fast, painless money creation. Whole departments and regulatory regimes are created and funded with no more effort than the stroke of a few pens and keyboards. As a result, billions of dollars are spent every year to “influence legislation.” That’s bribery, of course, but it’s “legal.”
Once the money stream staunches because getting money is painful, the bribery business will dry up; not entirely, but very significantly.
Now, before we get to the deeper ways that Bitcoin fixes society, let’s pause to consider that we’ve just solved war, welfare and official corruption. Let me say that another way, to make the scale of this clear:
The first and most obvious effects of Bitcoin, were it to become our primary currency, would be to massively diminish war, the robbing of Peter to pay Paul, and corruption in government.
Can we call this anything but gigantic and stunning? And it really is just the start. So, let’s continue.
I’d like you to consider the economic world of 1910. While the daily lives of these people strongly resembled our own, their economic lives were wildly different. These people had been using honest money (gold and silver) for most of the past century, and it created a very different situation.
In 1910, new money had to be pulled, grudgingly, from the ground. If governments wanted money to spend, they had to get it from those who earned it. That pushed them more toward to beggars and less toward dictators.
New investments were funded mainly by subscription, which was roughly equivalent to GoFundMe. Stock prices were based upon earning and the dividends that came from them; people retired on those dividends.
But the greatest difference in that time was the dignity of the working man. The next time you go through an old city, look at the grand homes that were built in this era, then consider this: Those homes were built by grocers, mechanics, longshoremen and bakers.
Hard work and prudence, in those days, allowed someone to do very well. And please notice that mating ritual of the time embodied this: The man goes out to earn his “nest egg,” and so convinces the girl to marry him. If that was impossible, the young people of 1910 would have rejected this model… as young people did a generation or two later, when it really did become impossible.
Consider also that the honest, hard-workers of this era made loans. Their grandchildren, conversely, found themselves walking into banks and begging for loans. This fundamentally changed their attitudes regarding themselves.
Under a new honest money regime, the dignity of the productive man or woman will be restored. They will return to their position as the primary – as the source of all value – rather than a derivative entity, forever beseeching the money spigot to turn their way. This is the change that really matters, and it will fundamentally reshape society.
What we’ll also gain from living under an honest money regime, is the restoration of a comprehensible world. The value and the effects of that will be gargantuan.
Under the fiat money regime, life has been overrun with complexity. Considering that money is our central tool of survival, and that the nature of money itself is purposely confused, it could hardly be any other way. And just so you hear it from someone other than me, here’s John Kenneth Galbraith saying the same thing a generation or two ago:
The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it.
Once that changes – once money is comprehensible and honest – a large portion of the confusion surrounding us will fade away. And with it, a whole range of persistent human errors.
A Bitcoin regime would still encompass flaws, abuses and stupidities, of course (those will be with us until we, ourselves, improve), but it will not fund them and defend them.
So, yes, a Bitcoin regime will fix society, deeply and enduringly. Laboring for this is one of the noblest efforts of our time.