Seeing Bitcoin be used to separate the control of money from governments is the exact reason Bitcoin was created, and the exact reason so many early adopters, including myself, decided to get involved. These disruptions can't come soon enough. Thanks for pointing some of this out.
As somebody who first got involved with Bitcoin back in 2011, I couldn't agree more. Its potential for taking back ownership of one's finances from government was what first sparked my own interest in it.
I would think that separating government control from the money supply would have its drawbacks, and the unforeseen consequences of such a disruption carries a significant risk to the health of society.
Firstly in regards to this picture, I am not so sure that bitcoin would be a solution to the problem at hand. After all, if the government is bankrupt and defaulting on their sovereign debt, it wouldn't matter what the currency instrument is. If there's no money in the treasury, there's probably no money for pensions. This man would be out of luck in either monetary world.
Thank you, jerry, for your well thought out response and the interesting points you raise. Separating government control from the money supply would, of course, have certain drawbacks. However, I think the definite gains where freedom and liberty are concerned when one removes government from the monetary supply (and taxation along with it) would far outweigh any unforeseen consequences of such a disruption, and also outweigh any risks to the health of society. In fact, society as we know it is part of the problem as it encourages an individual's reliance on government for security, welfare and in many respects a sense of morality.
As I mentioned in my previous post, the fact that the man pictured was in receipt of a state pension is something that I wanted to discuss and I'm glad you brought that point up. As it currently stands - in today's society - Bitcoin would not be a solution to the problem of
state pensions going unpaid. However, I am very much coming at this from the position of taxation being theft, and state pensions being an extension of that. Thus it would be a solution for
private pensions being withheld by an institution or government, and ideally this is the model that I think we should be working toward. Complete control of your own wealth and personal responsibility for your own welfare. For a government to become bankrupt and default on its sovereign debt it must be borrowing and subsequently spending more than it is taking in through taxation. No individual should be entitled to a state pension - that is, the fruits of another's labour; pensions should be entirely self funded through savings and investments. Having them funded otherwise abdicates personal responsibility for one's well-being from the shoulders of the individual and lands it squarely on the shoulders of all the other individuals who are contributing to the state's coffers.
Instead of a situation such as that, imagine a world where government is taken out of the equation entirely. This is ultimately what I'm trying to get at - a world where government control is completely removed through the removal of taxation which it uses to fund itself. The individual, not being taxed through the nose, now has a large amount of extra income with which to fund any savings scheme, investment or social service that they wish to avail of. If they wish to contribute a portion of that to saving for their later years, they can, and they should as they will know that nobody else will be shouldering that burden for them. If they do not, then perhaps other individuals will set up a voluntary system which will cater for individuals that did not deem it necessary to take personal responsibility for their future. Then again, perhaps not. It is up to the individual to plan for such eventualities. The point I'm trying to make is that Bitcoin allows us to imagine a world where personal responsibility for one's own welfare (both present and future) is paramount, and where government
can be completely cut out of the monetary supply.
In a broader sense, there's a consensus among a faction of Bitcoiners that believe the government control of the money supply is bad because of the inevitable debasement of the currency base for the government's benefit. An example brought to light is the Roman empire's debasement of their currency, or the German Deutsche Mark after WWI. But considering the alternatives given the circumstances, I am not sure that government monetary control is the evil concept that is vilified in the community.
Rome, which was in an existential crisis, needed to pay for their army. The Mongols, under Genghis Khan, were consistently attacking the Roman empire in an effort to conquer her, and the empire was running out of money to pay for soldiering. Would it have been better to not debase the currency? To allow the army to fall apart due to lack of funds? The roman empire was able to stand stronger because they had control of the money supply. It was a strength that allowed them to protect their citizens and way of life.
After WWI, Germany had to pay for war reparations instituted by the winning war powers. Since the payments were marked in Deutsche Marks, and the fine was so exorbitant, the currency devaluation was really the only option on the government's table. But if it weren't, and the payments were marked in a global currency such as bitcoin, the end result in Germany would have been equally if not more bleak. There's no way Germany would ever have been able to repay those debts if they were marked in an uncontrolled currency, and the economic consequences of Germany's fines would have been arguably more devastating.
rogerver's response mirrors my own view on the above; the Roman Empire and the Mongols were both precursors, or at the very least close ancestors, of the forms of government that exist today. In those times the common people did not have the mechanisms available to them to overthrow such empires had they wished to do so en masse; today, they do. The Roman Empire was able to stand strong because young men placed a certain value on their lives, one that Rome met with silver coins (which were consistently debased over time by various Emperors). So yes, you are quite right in saying that Rome stood strong because it controlled the money supply and was able to pay soldiers, but the existence of the Empire in the first place - and crucially, the fact that it stole funds from citizens under threat of force - was morally repugnant though in the respect of soldiers based on free market principles of trading one thing of value (service in an army) for another (silver coins). Yes, the Roman Empire advanced civilisation, but did it do so in the right direction? It was the perfect road map to bring us to today's system of governance and taxation, so I would argue that it did not bring us in the right direction. Rather it limited freedom in the interest of "security" or "protection against enemies", the same threats trotted out then as now and a majority of which would not take aim at the individuals in any given geographical area if a State did not exist to attack in the first place. And if they did, the individuals in that geographical area should be free to organise amongst themselves how they wish to deal with such a threat.
Again, regarding World War I, I tend to agree with rogerver. A strong argument can be made that that war would not have been possible at all - and certainly not to such a large extent - without government control of the monetary system and control of commodities required for waging war (metals, foodstuffs etc.) Time and time again you see governments taking control of private enterprises and indeed entire industries in the pursuit of war, all of which they deem necessary to continue the fight. If governments had no power (by starving them of taxes, as is possible with Bitcoin) then wars would be far less destructive and far less capable of being pursued. Wars would still occur, no doubt, but those waging war would have to do so with the resources available to them, knowing that they cannot simply commandeer an entire countries steel industry to produce bullets, tanks and warships to continue their fight if they deem it necessary.
So is it for sure a positive to remove control of the money supply from the government? I don't think so. The current "tax" on the system is inflation (which in the US is a dwindling ~0-3% over the last 9 years and ~3% annually over the last 100 years), but the insurance it buys, that the government can use it as a tool in an existential crisis, is incredibly valuable when the time comes to use it.
rogerver's sentiments echo my own on this point also:
When I look around the world today, I see governments doing the exact things that people claim we need governments to prevent.
We have bombs being dropped on innocent people around the world. (Drones and wars)
People are being robbed and extorted on a massive scale. (taxes)
Peaceful people are being locked in cages and tortured by the millions. (The war on drugs)
Kidnapping and slavery is seen as perfectly acceptable. (Mandatory military service is common around the world)
Children are forced to attend 13 years of mandatory propaganda camps to convince them to see the above as acceptable. (Government schools)
Government is a permanent and and sure violator of individual rights on a grand scale in order to prevent some potential future unknown violation. This sort of trade off doesn't make any sense to me.
Fremont
