Stefan Molyneux Bitcoin vs. Political Power (Must see if you haven't yet)

[Beliathon]

If the barometer for what people use as money is gold, something which government can't simply create to dish out, then people will feel the cost of things like war in a more pronounced way, rather then gradually over years by inflation.

Exactly. Like Stefan says, government doesn't want to have to make people choose between bread or war, because people will always choose bread. But war is profitable. Extremely profitable.

So fiat (=fake) money was invented. Print as much as you want, it doesn't matter! Now we can do war-for-profit forever! Hell, we can base our entire economy off that! Problem solved.





Nation states devour their children. Just watch this repeatedly until you get it.

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[twiifm]

Yeah but you can't single out War Financing.  If the govt cannot print money then nothing else can get financed (or limited financed).

Then how did the U.S. survive prior to 1913 when the Federal Reserve was created?

Govts don't want the power to print money in order to engage in war.  They want that power to finance whatever they want to finance

Governments want ability to print money to do whatever they (and their special interests, including war profiteers) want to do. This includes financing popular social programs which help politicians win election, but put a costly drain on the economy.

Also you & Stefan are conflating separate issues.  Wars still occurred when money was backed by gold.  WW1 & WW2 are examples of huge wars that occurred when currencies backed by gold

That's our point. Governments did suspend gold standards and inflate for those wars. Check out the following:

http://www.zerohedge.com/article/war-causes-inflation-and-inflation-allows-government-start-unnecessary-wars

From Wikipedia:

https://en.wikipedia.org/wiki/Gold_standard

Impact of World War I

Governments with insufficient tax revenue suspended [gold] convertibility repeatedly in the 19th century. The real test, however, came in the form of World War I, a test which "it failed utterly" according to economist Richard Lipsey.[4]

By the end of 1913, the classical gold standard was at its peak but World War I caused many countries to suspend or abandon it.

It was the newly created Federal Reserve in 1913 which inflated for WWI leading to a bubble facilitating the "roaring twenties". The subsequent popping of that bubble caused the stock market to crash in 1929 ushering in the Great Depression.

World War II cost the U.S. 15 times more gold than it had in Fort Knox and the Fed.

OK I get your point now and perhaps you are right.  I'm glad you debated me.  I had to go back and watch that video again and ignore the distraction of his political ranting to figure out what point he is trying to make.

Still i think he must be some kind of nutcase to want to LIMIT money supply.  Again, my point is you can't single out war finance when it comes to economics.  And I don't agree that you can arrive at simple conclusions like "If we only limited money then the wars would only last a few months"

If history has proven anything is that once war is engaged there is no stopping til someone wins.  And the state will do whatever it takes to win.  So I think he has the cause & effect backwards.  Its not that govts print money because they want to wage war.  Its that once war is engaged you have to print money to win at all costs.   Imagine if you were Churchill, would you let Hitler occupy the UK cause you couldn't come up w couple hundred billion pounds?

But as a argument for BTC I think war financing is a weak argument.  Because if you limit money supply you limit ALL economic activity.  I could easily make a counter argument that Federal Reserve System was necessary for the Industrial Revolution & the Information Revolution to happen because it modernized banking.  But I won't because thats also a simplistic economic view

In his talk Stefan longed for the "good old days" of the 19th Century.  I don't know why he thinks times were better back then.  Wealth inequality today is at historical highs since levels of 19th century.  The wealth distribution was most even post WW2.  So perhaps prices were more stable back then but less people had access to wealth.  If you don't know about this economist, Thomas Piketty you should check out his work.  He writes about wealth inequality.  He actually says that WW1 & WW2 destroyed capital & reset the wealth inequality.  If you look at empirical data -- these wars HELPED the middle class

http://www.hup.harvard.edu/catalog.php?isbn=9780674430006

http://www.businessinsider.com/charts-on-us-inequality-2014-4

I think all this talk about gold standards & fractional reserve banking are all smoke and mirrors used by people who simply want to transfer wealth from one population to another --namely themselves.  If you limit money supply then it becomes easier to one class to monopolize money supply.  No difference than when Marxists tried to convince the proletariat to uprise against the bourgeois.

If you want to stop wars then create stronger treaties.  If you want to balance out wealth inequality then limit wealth monopoly thru progressive taxation.  If you want to avoid systemic risk then regulate banking.  Its not like these issues aren't being discussed and debated all the time by super smart people.  Maybe the solution is already out there but there is no political will to make the changes necessary.  In any case changes have to made made from within the system not by creating noise outside the system.  BTC is a non-solution as far as I'm concerned because it ignores existing institutions that built over long spans of history.  Maybe that's why Communism also failed.  It doesn't work so lets destroy everything and start over is just crazy 20th Century 'tabula rasa' ideology.  Who the hell wants to experience that again?

[acoindr]

Still i think he must be some kind of nutcase to want to LIMIT money supply.  

I guess you don't appreciate why limits are necessary. Without limits you lose meaning. It would be like a basketball game with no limit on how many players each side could bring onto the court. Pretty soon that game becomes meaningless because there is just no point to passing the ball.

Again, my point is you can't single out war finance when it comes to economics.  And I don't agree that you can arrive at simple conclusions like "If we only limited money then the wars would only last a few months"

War would have a heck of a lot better chance at being over quicker. As Stefan says when the money stops so do the bullets. War is expensive, yet governments don't have unlimited wealth without ability to create/counterfeit/inflate fiat money.

If history has proven anything is that once war is engaged there is no stopping til someone wins.  

Really? Who won the Vietnam War, which spanned almost 20 years? The U.S.? What about Iraq? Did the U.S. win that war? What exactly were we fighting over again and what was the win?

Do you see how murky these answers get? That's the problem with going to war without clear impetus and objective. The wars drag on and because governments can mask the cost via currency inflation, there is little deterrent to those favoring war, for whatever reasons.

...And the state will do whatever it takes to win.  So I think he has the cause & effect backwards.  Its not that govts print money because they want to wage war.  Its that once war is engaged you have to print money to win at all costs.   Imagine if you were Churchill, would you let Hitler occupy the UK cause you couldn't come up w couple hundred billion pounds?

Well it's a slippery slope. If you provide people no restraint on drinking and driving that will inevitably get abused. Then you get the casualties of that policy.

But as a argument for BTC I think war financing is a weak argument.  Because if you limit money supply you limit ALL economic activity. ...

Why so? Even if you follow a hard gold standard global human population increases by roughly 2% per year, which is about how much gold enters the supply as well.

In his talk Stefan longed for the "good old days" of the 19th Century.  I don't know why he thinks times were better back then.  Wealth inequality today is at historical highs since levels of 19th century.  The wealth distribution was most even post WW2.  So perhaps prices were more stable back then but less people had access to wealth.  If you don't know about this economist, Thomas Piketty you should check out his work.  He writes about wealth inequality.  He actually says that WW1 & WW2 destroyed capital & reset the wealth inequality.  If you look at empirical data -- these wars HELPED the middle class

I think that's an over simplification. The fact is that inflation of a currency provides an automatic, gradual transfer of wealth from lower to upper classes. That's a key reason wealth inequality is so high currently, that along with crony capitalism. Those wars and inflation certainly had effects on the economy, but the real way you help the poor is by allowing open access to a free market built on top of sound money.

I think all this talk about gold standards & fractional reserve banking are all smoke and mirrors used by people who simply want to transfer wealth from one population to another --namely themselves.  If you limit money supply then it becomes easier to one class to monopolize money supply.  No difference than when Marxists tried to convince the proletariat to uprise against the bourgeois.

The talk about gold standards and fractional reserve is about keeping the upper echelons of society, government and banks, honest. Once you have those two, which can do much damage due to the power they wield, under control then you let the free market work. I agree there should be common sense policies against unfair, uncompetitive monopolies.

If you want to stop wars then create stronger treaties.  

I don't know why you have faith words are the simple answer. Even the U.S. Constitution has clear language, for example, which is routinely ignored.

[justusranvier]

Still i think he must be some kind of nutcase to want to LIMIT money supply.

Then what are you doing on a Bitcoin forum?

[twiifm]

@acoindr  the purpose of war is NOT to end it quickly.  The purpose is to have victory over your enemies and make them legally comply by your demands afterward.  That might take years so money is needed.  No general can accept defeat because he didn't have enough money to win.


I don't understand the basketball analogy at all.  Economies need money and if money is limited economies cannot thrive. This is simple

Viet Cong won the "American War".  Vietnam became a Communist state after that.  The deterrent would be a treaty.  An agreement that we will not go to war.  Something like NATO

You overlooked my example of Pikertty research.  Wealth inequality happens when R (return on capital) is greater than G (growth).  pls refer to his research of empirical data



The middle class benefitted from post WW2 because the war destroyed capital and it reset the wealth distribution.

I don't get what you are trying to say but hope these few lines emphasize what I'm saying

[acoindr]

@acoindr  the purpose of war is NOT to end it quickly.  

Nonsense. Humans (for the most part) have a natural aversion to violence. Are you a spokesperson for the Military Industrial Complex? If you end up in a street fight, if it came to that, would you rather it dragged on as long as possible or would you rather it culminated in some result sooner so both sides could move on?

The purpose is to have victory over your enemies and make them legally comply by your demands afterward.  That might take years so money is needed.  No general can accept defeat because he didn't have enough money to win.

Yes... and now we get to the root of the problem. For whom is war fought, generals or the state they represent? If the answer is the state, then whom does the state work for if it's not a communist regime? If the answer is the people then what you're really talking about is not money, but support. To win generals need the support of the people they fight for, but can do much without any support whatsoever so long as they have funding, and that can come from a state even if not willingly from the people, via inflation.

If a war is unpopular its funding will be withdrawn by the people and be over, that is unless the people don't feel the direct costs of the war while it can remain funded, as in Vietnam where as you correctly point out the U.S. lost that unpopular war, which dragged on nonetheless. We now trade with the Vietnamese.

I don't understand the basketball analogy at all.  Economies need money and if money is limited economies cannot thrive. This is simple

I believe this is a key argument of Keynesians. It is false. You can have a thriving economy, by some definition, without money at all. Wealth comes from things people produce, not units of account. I should define "wealth". When I say wealth I mean things which provide directly for or some enhancement to the basic needs of humans. If your house is filled with useless trinkets, although pleasure may have been taken in buying them I wouldn't say it makes one truly wealthy.

In this light we see it's goods and services which are produced by people, such as quality farm fresh food and the skilled chefs to process it, which are examples of valuable products within an economy and these things can be bartered for in the absence of money. Money simply makes barter more efficient, by providing a common medium through which various goods are traded.

Let me put it another way. Say there was an isolated neighborhood of a few city blocks, completely cut off from the rest of the world. Within this neighborhood there are people with different skills, doctors, chefs, musicians, etc. These people get together and determine to make an economy. They find a special sheet of paper and cut it up so that everyone has an equal amount of squares. They ask the doctor how many squares he would charge to do a life saving surgery. The doctor upon seeing everyone had 100 squares said 30 squares, this thereby giving each square measurable value. For example, the musician couldn't charge 30 squares to play a song.

For years this community lived happily enjoying fine food and music, trading squares for things they want, and building fine houses for say 1,000 squares. There would be no need to increase the money supply if the population didn't increase.

One day a stranger with zero skills arrives, but he finds a hidden trove containing three sheets of that special paper. Realizing he has stumbled into enormous wealth he calls over a few friends and they cut up the paper between them. They enter the economy wealthy men though they have contributed nothing of value. What effect does their lavish spending have on everyone else? The extra paper in circulation bids up prices, aka inflation, causing the other square holders to become poorer. That's what simply adding more money into supply does. It doesn't inherently add valuable GDP.

[CoolBliss]

Very good. Every human is fundamentally anti war, do what you can do abolish this war state which exists to provide revenue to the big defense contractors, fuck them all.

[Beliathon]

Very good. Every human is fundamentally anti war, do what you can do abolish this war state which exists to provide revenue to the big defense contractors, fuck them all.

Well said. The warmongers and murder-profiteers will extract every last drop of blood-profit they can from humanity, until we strip them of all power. Bitcoin just happens to be the first effective way to achieve this goal.

"I can see now that the Game reflects my own efforts to negotiate those old primal categories: individual, community, nation, planet. Inevitably, then, the Game comes with an attractive lure to be nationalistic, tribalistic, and provincial. It forces students to go through the process that we all go through as adults, in which we must examine, as I had done, the local cultures we come from and the world culture we might one day join. The Game makes it clear that, sooner or later, if students remain solely within their own cultures, loyal only to their "own kind," they will put the planet at grave risk. But if they embrace a larger vision, they have the opportunity to heal the planet and create peace. Students learn, in other words, that without a total collaborative effort, no one can succeed.

Of course, it's tempting to hold to an individualistic view and pursue short-term gains. It's certainly possible, over the arc of the Game, to seem to be winning: to increase your territory and your assets; to enter into alliances that benefit you and hurt your adversaries; to expand your military influence; to amass wealth and power at others' expense. But these victories are only apparent. You seem to be winning, but you're actually losing. The Game forces you to learn interdependency. If you behave as an island unto yourself, ultimately you will be isolated. And no matter how many resources you might have accrued, the planet as a whole will not achieve the global peace and prosperity that are the Game's definition of victory."

-John Hunter, World Peace and Other 4th Grade Achievements

[Beliathon]

To the top you go, little thread.

[5flags]

To the top you go, little thread.

And deservedly so. The ramifications of a fixed (or decaying) supply currency cannot be underestimated. This must be understood.

Other important fact:

At just 2% annual inflation, a currency loses 75% of its value over a lifetime. Great investment.

[shawshankinmate37927]

Molyneux believes the world needs his show for its survival

Molyneux believes the world will be better off without coercive force and fraud.

[Ron~Popeil]

This may be the best thread I have read here. SM was one of the people that got me excited about bit coin in the first place.

[Beliathon]

Good to see this thread back on page 1 where it belongs.

"Nationalism is our form of incest, is our idolatry, is our insanity. "Patriotism" is its cult. It should hardly be necessary to say, that by "patriotism” I mean that attitude which puts the own nation above humanity, above the principles of truth and justice; not the loving interest in one’s own nation, which is the concern with the nation’s spiritual as much as with its material welfare — never with its power over other nations. Just as love for one individual which excludes the love for others is not love, love for one’s country which is not part of one’s love for humanity is not love, but idolatrous worship."
-Erich Fromm, in The Sane Society (1955)

The Sunset of the State

[Catmoonglow]

I was highly unimpressed by his talk. He seems to assert things as facts without evidence.

[Catmoonglow]

The single biggest problem for me was his assertion that the 19th century was some sort of island of financial stability due to gold backing the currency. Really?

how about this: http://en.wikipedia.org/wiki/Long_Depression or this: http://en.wikipedia.org/wiki/Panic_of_1866 or this: http://en.wikipedia.org/wiki/Panic_of_1857

[Catmoonglow]

I could go on, but you get the idea. Don't get me wrong. I'm a big fan of cryptocurrencies, including Bitcoin, but this crap that gets pushed by these extreme libertarians/gold bugs about how wonderful things were in the 19th century is really annoying.

[RepublicSpace]

I'd like to see how many people had their hands up when Stefan asked: "How many people here are interested in bitcoin?"

[shawshankinmate37927]

The single biggest problem for me was his assertion that the 19th century was some sort of island of financial stability due to gold backing the currency. Really?

how about this: http://en.wikipedia.org/wiki/Long_Depression or this: http://en.wikipedia.org/wiki/Panic_of_1866 or this: http://en.wikipedia.org/wiki/Panic_of_1857

Is there a TLDR version of how gold backing can cause a crisis?

[Beliathon]

The single biggest problem for me was his assertion that the 19th century was some sort of island of financial stability due to gold backing the currency. Really?

how about this: http://en.wikipedia.org/wiki/Long_Depression or this: http://en.wikipedia.org/wiki/Panic_of_1866 or this: http://en.wikipedia.org/wiki/Panic_of_1857

Is there a TLDR version of how gold backing can cause a crisis?

Gold backing never caused any crisis. Greed caused every crisis.

I've said it before and I'll say it again: Cryptocurrency did not create capitalism's self-destructive tendencies, and it is not going to solve them.

[acoindr]

The single biggest problem for me was his assertion that the 19th century was some sort of island of financial stability due to gold backing the currency. Really?

how about this: http://en.wikipedia.org/wiki/Long_Depression or this: http://en.wikipedia.org/wiki/Panic_of_1866 or this: http://en.wikipedia.org/wiki/Panic_of_1857

All of those events can be linked to leaving a metal standard:

http://en.wikipedia.org/wiki/Panic_of_1857

In Britain, the Palmerston government circumvented the requirements of the Peel Banking Act of 1844, which required gold and silver reserves to back up the amount of money in circulation.

http://en.wikipedia.org/wiki/Panic_of_1866

The Panic of 1866 was an international financial downturn that accompanied the failure of Overend, Gurney and Company in London, and the corso forzoso abandonment of the silver standard in Italy.

When you leave a sound money (hard metal) standard it affects the market. The greater the deviation/inflation the greater the potential boom bust cycle. Those first Panic events didn't last long:

In about a year, much of the economy in the north and the entire south recovered from the [Panic of 1857]

The [Panic of 1866] led to a sharp rise in unemployment to 8% [in Britain] and a subsequent fall in wages across the country.

However, the U.S. went off the gold standard and inflated for the Civil War in 1862. Which initially led to a boom, partially responsible for full recovery from the Panic of 1857, but ending in a bust causing the Long Depression spanning 1873 to 1879.

Similarly, the U.S. inflated for World War I which resulted in an initial boom ushering in the "roaring twenties" but ending in a bust causing the Great Depression in 1930 lasting into the 1940's.