Logan Bolinger is a lawyer and author of a free weekly newsletter on the intersection of Bitcoin, macroeconomics, geopolitics and law.
Part Two: The Big This That Fixes Bitcoin
“Politics is the art of looking for trouble, finding it everywhere, misdiagnosing and using the wrong means.” – Groucho Marx
In Part One of this series, I wrote about the first major breakthrough for me in my journey from an ardent Bernie Sanders supporter to a dedicated Bitcoiner, which was to grapple with the idea of trust in politics and how Bitcoin’s lack of confidence could be exploited towards a positive political end over its potential too restrict legislature.
Now I want to talk about the second major breakthrough I experienced on this journey. I’d like to start by proposing something that at first might sound simply antithetical to some in the bitcoin community, but I think might resonate with those who migrated to bitcoin or came to a belief in bitcoin from the left -crooked political starting point (such as the Bernie Sanders/progressive orbit or liberal arts ecosystem): Progressives and Bitcoiners identify and acknowledge a similar list of issues with the status quo.
Progressives would highlight and emphasize wealth inequality, unequal access to finance, monopolies, an overpowering cadre of tech companies, excess corporate power, exploitative (and discriminatory) big banks, and generally too much influence wielded by a small group of individuals and corporations as major issues . This list is of course not exhaustive, but I think it is a fair representation of the main concerns.
The majority of bitcoiners would agree with most, if not all, of these criticisms and would likely add the pursuit of GDP (gross domestic product) growth at all costs and pervasive bad investments, both of which are required and sustained by the current fiat system, to the list .
However, progressives and bitcoins differ radically over the exact location of the source of these problems and the appropriate solutions to these problems.
These divergent views are akin to two doctors examining a patient and agreeing on the symptoms but disagreeing on the cure. I would like to take this medical-physical metaphor a little further to highlight a few additional points as they illustrate Bitcoin’s unique and transformative promise.
Think of our monetary system as a body. This body lives hard and fast and begins to show symptoms of ill health. Two doctors examine this body and propose two completely different remedies. Doctor A suggests administering medication, i.e. a targeted pharmacological intervention, to the patient and sending her on her way. Doctor B then suggests that the cause of the symptoms is deeper and recommends major lifestyle changes. This doctor advocates regular exercise, healthy eating, drinking less alcohol, spending more time outdoors, and the like. The patient opts for the simple prescriptions of Doctor A.
It doesn’t take long for the patient to return to these two doctors with new and worsening symptoms. It turned out that the drug had side effects that need to be addressed now. Physician A suggests additional pills to address these side effects, while Physician B continues to recommend comprehensive lifestyle changes to fundamentally address the root cause of the patient’s condition.
You can see where this is going. Reactively addressing symptoms without ever treating the underlying problem, or worse, misdiagnosing/mislocating the underlying problem, results in a sicker patient with more problems.
Back to bitcoiners and progressives, bitcoiners pinpoint the source of many problems at the monetary level. The money is no longer healthy and that is the origin of many later shareholders symptoms. Bitcoiners can trace this issue back to an exact point in time, 1971, the point when money effectively became debt and currency formally went unfunded. This created problems that multiplied and worsened. For this reason, bitcoiners are proposing to lock in the money to begin healing the litany of resulting societal ills.
On the other hand, progressives fuse around different causal narratives. Sometimes it’s the billionaires, sometimes capitalism itself, sometimes the corporations, sometimes Mark Zuckerberg, etc. Sometimes the narrative simply evolves into an amorphous, all-encompassing oppressor/oppressed framework in which any human relationship or sphere of human agency is possible by and by be (and will) be categorized via this binary. In this environment, rhetorical scoring too often takes precedence over formulating thoughtful, considerate solutions. Instead, proposed solutions almost always involve shoveling more money at different parties.
Before discovering Bitcoin, I was a staunch advocate of spending whatever money was needed to “fix” problems like wealth inequality, excessive corporate power, unfair access to services, etc. while the monetary system that causes the pain in the first place remains intact. We can see this in inflation today. We pumped the economy full of liquidity and distributed stimulus checks. Sounds great right? Almost two years later and, wouldn’t you know, the money had to come from somewhere. And by increasing the money supply so drastically to carry out these (largely) well-intentioned interventions, we have ensured the inflation we are now witnessing. The brunt of this will be borne by the same wage-earners who the stimulus was meant to help.
Furthermore, the Federal Reserve Board is now in a position to raise interest rates in a slowing growth environment to curb this inflation, which in turn is likely to cause a recession – which will continue to hurt wage-earning savers. When the pain hits a tipping point, the Fed will step back in with a new liquidity painkiller, depreciating the currency even more, enriching wealthy wealth holders and punishing wage-earning savers. We will continue this vicious circle and not solve any of the problems that we wanted to address. Basically, Fiat solutions cannot solve Fiat problems.
In other words, we will just keep treating the symptoms until they become too numerous and ultimately incurable.
As an aside, I find it interesting that the Western world, with its globally unique concept of pain and culture of painkiller medicine (as opposed to a more holistic Eastern approach to locating and treating the source of pain), chooses to treat their monetary system in the same way. The government treats money the way Big Pharma treats health, with similar results.
But whatever the case, treating the symptoms of a sick monetary system without addressing the root cause has the perverse effect of merely delaying more serious and potentially deadly future symptoms, while the existing symptoms are made worse in the meantime.
If I hadn’t found Bitcoin, I’m not sure I would ever have understood. And I suspect there’s a reason for that. Learning about bitcoin promotes financial and economic literacy that is neither widespread nor widespread. I don’t think it belies faith to suggest that many of the people in Congress tasked with making these important decisions about fiscal spending, the budget, and the national debt are similarly uninformed about the downstream consequences of popular intervention ideas, a situation made worse by an overriding interest in reelection. The promise to spend more money, regardless of where that money comes from and regardless of the serious future consequences it may have, is a much easier political sell-off to voters than the pursuit of fiscal discipline. The former is a pain reliever that temporarily masks its causes. The latter is a painful withdrawal that, once begun and completed, offers hope for more enduring long-term health.
I was a Bernie supporter because I wanted to address a litany of societal issues. I’m a bitcoiner now because I know that deca billionaires, dominant corporations, “late capitalism” and Mark Zuckerberg – while certainly offensive – aren’t who caused these problems. You are the symptoms a broken money. And trying to resolve these discrete symptoms will only result in systemic distortions that allow other symptoms to metastasize. It’s whack-a-mole problem solving.
Simply put, bitcoin made me realize that it is impossible to solve the problems caused by fiat money within the fiat framework. In fact, it is impossible to have a fiat system where these problems can be avoided. For this reason, real solutions, the “major structural changes” that progressives like Elizabeth Warren tout and call for, require rebuilding the system itself on a better footing, which means freezing the money.
Bitcoin’s promise is the prospect of fixation This. And anyone serious about addressing all the issues that progressives and bitcoiners agree on needs to address the root cause of a completely and irreparably broken money at the grassroots level.
This is a guest post by Logan Bolinger. The opinions expressed are solely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.