As bitcoin’s price has risen, so has its popularity. While many in the libertarian world have been aware and supportive of bitcoin for years due to its very political nature, many in the “mainstream” world are just now trying to catch up. And the monetary and financial experts finally offering their opinions seem to be beginning to come to terms with the consequences of what mass adoption of bitcoin and cryptocurrency mean.
Or maybe I’m giving them too much credit and these experts are just floundering around trying to understand and explain away cryptocurrencies. Either way, it’s fun to watch the authorities with the respectable opinions look like robots that had water poured on them. And I haven’t seen a better example than Joseph Stiglitz’s reaction from Futurism.com. He won the 2001 Nobel Prize in Economics, so it’s especially satisfying to see him swing and miss so badly on basic ideas of money and economics.
Bitcoin bothers him so much that he thinks it should be outlawed:
Stiglitz told Bloomberg that “Bitcoin is successful only because of its potential for circumvention, lack of oversight.” He continued, offering a harsh rebuke and recommendation for the future of the world’s most popular and successful cryptocurrency, “So it seems to me it ought to be outlawed. It doesn’t serve any socially useful function.”
It’s nice that Stiglitz wants the state to ban things that aren’t socially useful (according to him). It’s also interesting that he doesn’t see a tool to escape the central banking’s policy of constant currency devaluation as “socially useful.”
The Futurism piece also shared the opinion of Joe Weisenthal, who also holds comically bad views.
Some experts point to various attributes of Bitcoin such as transparency and programmability as facets of Bitcoin’s utility, and therefore, value. However, others do not find this satisfying, Business Insider’s Joe Weisenthal writes, “Gold has real value because it’s shiny and can be used for jewelry…. But what about Bitcoin? If you ask Bitcoin believers why a bitcoin is worth anything at all, they will tell you about how amazing the technology is, and how it’s ‘programmable’ and how cryptography and pseudoanonymity are so great. But none of these are very satisfying answers.”
Weisenthal completely misses the point that value is subjective. He might not care about the technology behind bitcoin and may have no interest in buying any. But that doesn’t make bitcoin valueless—it only means that bitcoin isn’t very valuable to him. Nobody argues that gold isn’t generally valuable, but that by itself does not mean that gold’s value also isn’t subjective.
If Weisenthal got lost in the woods and needed to survive long enough to find his way out, gold wouldn’t be on the top of his list of resources to have. It’s not going to help him eat or navigate or build tools. He’d much rather have a hatchet or a canteen full of water. The fact that “it’s shiny” or that he can make jewelry with it doesn’t provide much value to him in his current situation. Likewise, if Weisenthal doesn’t care about inflation, privacy, or actually owning his money, then he’s not going to find bitcoin very valuable.
Even if it is granted that the recent spike in price for bitcoin is due to speculation, its price had been high enough for long enough to offer some proof that there are plenty of people do find it valuable.
The good thing is that bitcoin and cryptocurrency don’t need people like Stiglitz and Weisenthal on board for it to be successful. It’s happening despite all the kicking and screaming.
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