> There's a reason we don't use the gold standard.
Some things take a long time to fail, but will undoubtedly fail. There are numerous examples of failed fiat currencies in modern times and ancient times. Just because dollars, euros and yen survive now, doesn't mean it will survive forever.
The core reason for this is simple: humans are bad at decision making in groups. Economic policy becomes sensitive to election cycles, populism, partisan agendas, etc. Every economic recession becomes a dire problem to be solved with state intervention. Every economic expansion becomes evidence of good policy decisions that emboldens some economic theory, convincing people that good times can continue indefinitely with the right policies.
The rules for that govern economic systems SHOULD be concrete, they should not be subject to human opinion so frequently. But we find ourselves pushing the edges of what amount of debt is acceptable, or how inflation is even measured.
The rules for money should be transparent, mathematical, algorithmic.
Economic systems failing in the past is not evidence that the current paradigm will fail and it’s certainly not evidence that it will fail because it’s fiat. Economic systems in the past have failed for countless reasons that had absolutely nothing to do with the dominant paradigm of the economic setup.
> The rules for that govern economic systems SHOULD be concrete… The rules for money should be transparent, mathematical, algorithmic.
Why?
I’m not being pedantic when I ask this, Why?
If there’s one thing we all should have figured out by now, it’s that humans, society, stuff, and the almost unlimited amount of chaotic ways these interact with each other, we should have learned by now that we have to be fluid, we have to be agile, we have to be ready to adjust. Why should the rules be rigid and unable to adjust for the almost infinite ways wrenches can be thrown in to the gears?
Are there still a large number of people who don’t yet understand the complexity of human nature and everything we touch?
Look, I live, work, and play in a technological wonderland. Along with the people in this community, I’m about the furthest away from a luddite that one can find, but we’d be foolish if we failed to recognize how early in the iterations we are from letting math be the sole decider of infinitely complex societal interactions. If we don’t recognize this yet, we’ve somehow let hype get in the way of an accurate analysis.
> Economic systems failing in the past is not evidence that the current paradigm will fail and it’s certainly not evidence that it will fail because it’s fiat.
If the reason for failure is hyperinflation, then it is a pretty concrete pattern relating to a debt crisis.
> Why?
Because state monopoly over money is not a free nor fair, and leads to an eventual weakening of money.
Yes, governments and elites often make terrible mistakes about monetary and fiscal policy. But it's also important to recognize that the rules of a monetary system controlled by an algorithm are not derived from incontrovertible laws of space-time, they are created by an organization of people. Those rules will have implicit assumptions about society and power that may not hold true in 10, 50, or 100 years. It may also be unable to respond to changing real-world conditions. For example, if we find that aliens are about to blow up the earth, some flexibility in the money supply may be beneficial to redirect capital to planetary defense. "The elites may make bad decisions in the future" is not a convincing argument to me, because they also may make good decisions in the future. I think it's important for society (and money) to be agile in the face of tough decisions.
- Open source money is flexible, you just have to convince enough people to be willing participants rather than coerce them. Competition ends up making everything better for everyone.
- If the state needs to borrow or raise money, it can still do so. It will make an offer to the capital market. These were previously called "war bonds".
> Some things take a long time to fail, but will undoubtedly fail. There are numerous examples of failed fiat currencies in modern times and ancient times. Just because dollars, euros and yen survive now, doesn't mean it will survive forever.
I take it that goes for gold too, then?
> The rules for money should be transparent, mathematical, algorithmic.
1) Sez who?
2) But OK, if we stipulate that: How are ordinary fiat currencies any less so than blockchain just-as-fiat ones?
Some things take a long time to fail, but will undoubtedly fail. There are numerous examples of failed fiat currencies in modern times and ancient times. Just because dollars, euros and yen survive now, doesn't mean it will survive forever.
The core reason for this is simple: humans are bad at decision making in groups. Economic policy becomes sensitive to election cycles, populism, partisan agendas, etc. Every economic recession becomes a dire problem to be solved with state intervention. Every economic expansion becomes evidence of good policy decisions that emboldens some economic theory, convincing people that good times can continue indefinitely with the right policies.
The rules for that govern economic systems SHOULD be concrete, they should not be subject to human opinion so frequently. But we find ourselves pushing the edges of what amount of debt is acceptable, or how inflation is even measured.
The rules for money should be transparent, mathematical, algorithmic.