Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
Author Adam Livingston argues that Bitcoin, as a supply-capped, decentralized, and neutral form of money, possesses the potential to curb warfare by eliminating the government’s ability to finance conflicts through inflationary currency printing. He posits that sound money compels fiscal discipline, whereas inflationary currencies encourage reckless spending and enable wars that citizens might not otherwise support through direct taxation.
The Case Against Fiat Money and War
Livingston highlights the 20th-century World Wars as a prime example, linking the rise of central banking and the erosion of the gold standard to fiat money’s role in fueling prolonged conflicts. He also cites historical instances, such as the collapse of paper currency under China’s Song dynasty in the 13th century and the hyperinflation of Assignats in 18th-century France, where governments financed wars beyond their means by debasing their currencies.
Monetary Power and Political Influence
“Monetary power is political power,” Livingston stated, elaborating that the ability of a government to create currency at will allows it to project violence far beyond what its citizens would sanction if the cost were a direct tax. He concludes that “fiat money is the silent partner of every modern war,” noting that the U.S. dollar has lost over 90% of its value since 1913 due largely to currency inflation.
Bitcoin as a Catalyst for Change
Advocates of sound money have long championed Bitcoin’s capacity to separate money from the state, believing it can fundamentally alter humanity’s trajectory, much like transformative technologies such as the printing press. They argue that a global shift to a Bitcoin standard could foster technological innovation, enhance social cohesion, spur artistic creation, and promote greater freedom.
Flaws of Traditional Monetary Systems
Saifedean Ammous, author of “The Bitcoin Standard,” contends that earlier monetary systems, including gold and paper currencies, have inherent flaws. Gold, he argues, can lead to money centralization, while paper currencies are poor stores of value due to government printing. Ammous suggests that the continuous erosion of value in paper currencies slowly robs holders of future value, impacting societal aspects from family life to long-term planning.
Societal Benefits of Sound Money
Ammous further explains that societies with unreliable stores of value tend to “discount” the future, prioritizing immediate gratification. In contrast, he asserts that a society built on sound money would emphasize saving, invest in paradigm-shifting technologies, and actively build civilizational capital, leading to greater overall prosperity and stability.
Key Takeaways
The core argument from these authors is that sound money, exemplified by Bitcoin, is essential for human flourishing by instilling fiscal discipline in both governments and individuals. This discipline, they suggest, could lead to a more peaceful world, free from the hidden taxation of inflation used to fund conflicts and encourage short-sighted economic decisions.
