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Well, I don't have a crystal ball, but
I would anticipate that if so-called, digital currencies like bitcoin, and
there are many other brands
that're trying to do the same sorts of things as bitcoin, if they
continue to be successful, if they are adopted by more and more people,
if they begin to be used by more and more businesses, accepted by businesses,
used for more and more transactions so that they become more like money,
I think it's very likely that the government will do everything that it
can
to try to regulate and control and get its hands
into the operation at these currencies. But, there's a more fundamental point
at stake here-
personally, I'm all in favor
of these crypto currencies. I think they're great entrepreneurial
experiments.
I wish their creators well. I think it's great if people want to use them. I've
even dabbled in
some of these myself. But
I'm not convinced that the widespread adoption
of these kinds of currencies is necessarily going to lead
to a dramatic reduction in the role of government in the economy,
and here's why. As Mises always emphasized,
to get economic freedom, to bring about improvements in economic conditions,
we really need people to have the right ideas.
In other words, ideology is more important than technology.
Unfortunately at present, most people in the US and other Western countries-
all countries- tend to have a fairly-
that they tend to accept a sort of paternalistic, interventionist, government.
Most people believe that government intervention is for their own benefit;
the government just wants to help them out, the government is here to protect
against market failure,
the excesses of capitalism and so on. And as long as people continue to have
that mindset
my concern is that, that will voluntarily give up control
of their private digital wallets and other
technologies that they use of for a transactions.
Rather than use them to bypass the state, they'll hand them over to the state.
There was an op-ed in the Washington Post just a couple days ago
about bitcoin, pointing out that
the value of bitcoin relative to the US dollar
has fluctuated quite a lot in recent weeks,
calling for a central banker for bitcoins. What bitcoin andanother digital
currencies need, according to The Washington Post,
is some government planner who can regulate the supply,
to keep the prices stable, and so forth. Now, most of us would scoff at such a
recommendation,
and indeed digital currencies were created precisely to prevent
that kind of monetary smoothing
on the part of a central authority, but as long as most
users of digital currencies continue to believe in
Keynesian economics and a benevolent dictator
role for the state, it's quite likely that they would also embrace such calls
for regulation.
Now, some of these digital
currency technologies don't allow for
artificial manipulation of the supply. That's one of their
key selling points, but who knows what sort of regulations people would call
for
or embrace. Consumers might
switch away from something like bitcoin, and move towards another currency
in which the keys are given to the state, in which the Fed has control
over the digital currency because they don't understand the reason
for separating money and the state.
That's why educational organizations like the Mises Institute are so
important.
It's great to have available technologies that allow us to bypass
some of the state's interventions in the economy, but ultimately to bring about
long-term social change, we need to change the way people think.
We need an ideological revolution, and not just a technological one.