Bitcoinist Book Club: “The Bitcoin Standard” (Chapter 7, P. 1: Economic Thought)
Welcome back, fellow student. Let’s dive back into Saifedean Ammous’ “The Bitcoin Standard” to discover the secrets of economic theory. In today’s lesson, we’ll study the “two main government-approved mainstream schools of economic thought: Keynesians and Monetarists.” Then, we’ll contrast them with the Austrian theory of money. Get the facts of the matter in a convenient bullet-pointed tip format.
Also in this chapter, Saifedean Ammous finally talks about Bitcoin. We’re seven chapters in and, leaving out prologue and introduction, this is the first time the author mentions the book’s subject directly. Bitcoin is always present, though, implicit in the narrative.
In any case, let’s get into it… but first…
About The Coolest Book Club On Earth
The Bitcoinist Book Club has two different use cases:
1.- For the superstar-executive-investor on the run, we’ll summarize the must-read books for cryptocurrency enthusiasts. One by one. Chapter by chapter. We read them so you don’t have to, and give you just the meaty bits.
2.- For the meditative bookworm who’s here for the research, we’ll provide liner notes to accompany your reading. After our book club finishes with the book, you can always come back to refresh the concepts and find crucial quotes.
So far, we’ve covered:
And now, The Bitcoin Standard: “Chapter 7: Sound Money and Individual Freedom”
The central thesis of this part of the seventh chapter is that without inflatable money, governments couldn’t sustain endless wars. Because wars would end whenever one of the warring governments runs out of money. In other words. “government budgets had to obey the regular rules of financial responsibility which apply to every healthy normal entity.” A little accountability will do the governments well.
The question is, should the government manage the money supply? The author answers:
“It is an unquestioned starting assumption of all mainstream economic schools of thought and political parties. There isn’t a shred of real-world evidence to support this contention, and every attempt to manage the money supply has ended with economic disaster.”
And here it comes, Saifedean Ammous’ first mention of Bitcoin is one for the books:
“But whatever historical quibbles the proponents of the state theory of money may have with these facts, their theory has been obliterated before our very eyes over the last decade by the continued success and growth of Bitcoin, which has achieved monetary status and gained value exceeding that of most state-backed currencies, purely due to its reliable salability in spite of no authority mandating its use as money.”
Of course, that ending was rendered outdated by El Salvador’s decision to adopt Bitcoin as legal tender, but that’s beside the point. Among other things, Bitcoin exists as proof that the population eventually chooses the better money.
The Bitcoin Standard On The Schools Of Economic Thought:
It’s time to study the Keynesians and the Monetarists. As Saifedean Ammous puts it:
“It’s important to understand the different rationales for the two schools of thought in order to understand how they can both arrive at the same conclusion and be equally wrong.”
Keynesians’ Main Ideas
Monetarists’ Main Ideas
The Austrian’s School Main Ideas
That’s it for today’s “The Bitcoin Standard” lesson. Tune in next time for more.Source