I’m going to use a couple of passages from the Bible (the original set of moral standards for our Western civilization), followed by an examination of both Bitcoin and cartel money, to see how they hold up in comparison.
As for my use of the term “cartel money,” it’s the best short description I know for the dollars, euros, yen (and so on) that we use in our daily commerce. They are produced by secretive and monopolistic groups of private banks. That rather precisely matches the definition of cartel.
Principle #1: For wherein you judge another, you condemn yourself; for you who judge practice the same things.
I think by now we have all heard the big accusation against Bitcoin – that it is used for “money laundering” – made especially by the money cartels (the European Central Bank first).
First off, that doesn’t make sense to me. A currency is supposed to be neutral – that is its purpose. So, accusing a currency of money laundering is like jailing a knife for murder. But, that’s not precisely the point we’re addressing here.
Rather, the question is: do the cartels do the same thing that they condemn?
You bet they do!
Read this story on HSBC. Then read this one on Wachovia. These banks laundered hundreds of billions of dollars – knowingly – for violent drug lords. And it gets worse: No one from either bank went to jail. Neither bank was shut down. Neither bank suffered more than a minor fine.
So, how much of a concern can money laundering really be to the cartels and their politician partners? Clearly none, or very close to none.
And, since the cartels accuse Bitcoin of being used for bad things, let’s be clear about the situation: Every mafioso on the planet uses cartel money. So do all the drug smugglers, terrorists, and pornographers.
Does Bitcoin accuse the money cartels? Nope. Bitcoin has no official operators to speak for it at all.
It is true that many Bitcoin users accuse the cartels of being manipulators, but, at least for now, there is no Bitcoin cartel that is even capable of manipulating the currency.
So, round one goes to Bitcoin: The cartels very clearly condemn themselves, and Bitcoin clearly does not.
Principle #2: Everyone who does evil hates the light, and does not come to the light, lest his deeds should be exposed. But he who does what is true comes to the light.
When Bitcoin creator Satoshi Nakamoto posted his Bitcoin paper in 2008, he laid everything open for all to see. Then he wrote the Bitcoin program and left it “open source,” so anyone could see the programming.
The process of creating cartel money, on the other hand, is mostly hidden, purposely confused, and isn’t even taught to most Econ majors. And if you think that’s just my opinion, here’s one from the esteemed economist John Kenneth Galbraith:
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.
The argument is made, of course, that the process of creating dollars, etc. is very complicated, and that people don’t understand it because of that.
I don’t think that’s true, but even so, let’s compare it to Bitcoin: Making bitcoins is also complex, but Bitcoin enthusiasts have been working night and day to explain their new currency and how it works. I’ve seen them cornering people at birthday parties, trying to make them understand.
Round two goes to Bitcoin also. Bitcoin wants to be seen and known, and the cartels surely do not.
It all comes down to the reason “why.”
Satoshi Nakamoto began the original Bitcoin document by saying that he wanted to, “allow online payments to be sent directly from one party to another without going through a financial institution.” He goes on to say that he was creating,
an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.
In other words, Satoshi wanted to remove the necessity of one man ruling another in the area of money. Furthermore, he did it, then went away.
As for the motives of the cartel, we can’t really tell. The visible heads of the Federal Reserve are certainly not the owners of the Federal Reserve, and the US government refuses to reveal the names of the owners.
Perhaps the closest real examination of their motives comes from a renowned professor who worked for them for a few years. Professor Carroll Quigley of Georgetown – and a major influence on none other than Bill Clinton, wrote this in his book Tragedy & Hope:
The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations. Each central bank… sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent rewards in the business world.
So, was Quigley right? I have no solid proof that he is, but he would be an awfully hard witness to impeach. One substantiation that comes to mind is a recent comment by Illinois Senator Dick Durbin. In the midst of a political fight, he complained, “The banks own the Senate.”
That’s not really proof either, but it is interesting.
You can make up your own mind on the banks, but Satoshi’s motives are fairly well beyond question.
I think it is clear that from a moral standpoint, Bitcoin is far, far better than cartel money. (As are silver and gold.)
So, the next time you hear someone calling Bitcoin dangerous and evil, don’t let them get away with it!