I’ve always considered myself a left-leaning, progressive guy…or, in my opinion, someone who prides himself on putting the needs of ordinary people ahead of the interests of corporations or the wealthy few.
I grew up in a coastal town with liberal parents, attended progressive schools, and can spit out a Marxist critique of just about anything thrown at me. The fair distribution of wealth across classes – and narrowing the wealth gap – has been at the forefront of my political consciousness for as long as I can remember.
Fast forward to my learning about bitcoin and I quickly began to understand the economic injustice of the present Fiat monetary policy and how government control of the US dollar has been used to “make the rich richer” at the expense of pretty much everyone else.
When countries are in hot water economically for any reason — from irresponsible use of debt to unpredictable challenges like the pandemic — they will print new currency (aka expanding the money supply) to pay whoever they see fit what usually creditors or investments are holders, also known as existing rich people.
In the process, the purchasing power of the average paycheck decreases. When there’s more money in the economy, everything gets more expensive, especially things that are hard to make more of — like real estate and commodities.
Until I started learning about bitcoin, I didn’t Yes, really understand what caused it the rapidly rising prices of assets such as real estate. I just knew it was happening, and it was happening faster than I could keep up.
Younger generations are of course disproportionately affected by these policies – as even high-income millennial earners will struggle to afford home ownership in the cities where they are likely to be employed.
Most millennials will remain permanent renters as housing prices have far outpaced wages and have all but destroyed the American Dream.
Fortunately, and quite uniquely, this particular economic problem can have a relatively simple solution: one that does not depend on the results of an election, a disorganized legislature, or some other governmental agency outside of our individual control.
Enter bitcoin — digital money engineered to be non-inflatable (meaning no one can “print” from it) and uncontrollable by a central government agency. The network operates on thousands of independent computers without a primary authority.
Unlike other inflation-resistant assets like gold or real estate, Bitcoin is also incredibly accessible. There is no minimum investment to buy bitcoin and you can store as much or as little of it as you like on a USB stick in your studio apartment. You don’t even need a bank account to buy Bitcoin. Head to your local “Bitcoin ATM” with some cash and boom – you own scarce financial assets that cannot be pumped away. Of course if you to do have a bank account, you don’t have to get up. Buying bitcoin takes less than a minute on any number of mobile exchange apps.
Yay for the “common man,” right?
Bitcoin was a great leveler for the average worker and immediately felt aligned with the values I grew up with… until I was hit with cognitive dissonance upon learning that many of “my people” – most visibly people like Elizabeth Warren and other leftists – who were Democrats – seemed to have a stronger negative bias against Bitcoin than those from the right.
“Why do Democrats hate Bitcoin?” I figured.
After doing a little research and talking to some savvy economists, what I found wasn’t too surprising.
First of all, from a straight-forward perspective of political theory, left-leaning people are ideologically more apt to trust a central government to distribute wealth “fairly” than to trust the free market economy. The left is generally pro-government (especially when it comes to finance) and Bitcoin was purposely designed to defy government control.
Bitcoin was essentially born out of a libertarian ethic — a word many on the left hear with skepticism.
It was, after all, unfettered “free capitalism” that led to the subjugation and subsequent unrest of the working class in the Standard Oil and US Steel era. Absent government intervention and the advent of antitrust laws, it’s entirely possible that today’s capitalism looks more like feudalism than the relative financial freedom we have today.
Skepticism aside, there’s also a practical argument for government control of the currency – an argument most bitcoiners don’t like to talk about – and that is, government-controlled currency allows us to avoid or mitigate economic contractions .
It would be difficult to avoid a full-blown pandemic depression or full-blown banking collapse like in 2008 if the government were unable to “bail out” who it sees fit with freshly minted money.
In theory, this type of printing will save jobs (the number one determinant of quality of life for most of the country) and in some cases new money will be distributed directly to working and low-income people, as was the case with Covid. Era stimulus checks.
However, if you look more closely at this reality, it is the lion’s share of the money that has been printed during the pandemic not intended to save jobs or pad the wallets of ordinary people, but instead to save the stock market and other interests of wealth holders.
According to the Washington Post, just a fifth of the U.S. stimulus packages distributed during the pandemic went to individual citizens, while the majority went to businesses that didn’t have to prove they’d been affected by the pandemic, nor did they have to use the funds to keep people employed.
Another clear example of incentives being used to bail out the rich instead of the working class was in 2008, when incentives were used to bail out the banks (creditors) who made bad loans, rather than using incentives to bail out the debtors save the ordinary working people who were victims of such robbery loans in the first place.
All that to say, if anyone claims that the government should be able to control the money supply, then they must also be held accountable for how those dollars are distributed. Unfortunately, neither side of the aisle has a proven track record in this regard.
If you look back through the history of money – all the way back to ancient Rome – government control of currency has almost always been used to widen the wealth gap, not narrow it.
Roman emperors often debased silver coins by adding more bronze or pewter to increase the money supply – and the windfall was mostly spent on wars of conquest and elaborate architectural projects. Similarly, Henry VIII was famous for debase bullion with copper to improve his personal lifestyle and fund sieges across Europe.
The history of currency debasement has a very clear connection with irresponsible spending by governments at the expense of civilians, with very few, if any, examples to the contrary.
That makes me sad. In fact want to live in a world where wealth can be distributed equitably by a trustworthy government. But I’m beginning to understand why so many believe that hope is naïve. This is because of an observable history of thousands of years of governments using currency debasement in the best interests of the few rather than the many.
If I’ve learned anything from hanging out with Bitcoiners, it’s that millennials, many of whom are generally progressive voters, are joining in this chorus after learning how current monetary policy is rapidly destroying our chances of accumulating wealth.
I recently heard a friend at a Bitcoin meetup say, “I’m a vegan environmentalist — and suddenly I agree with Ted Cruz about Elizabeth Warren.”
Until we see fiat monetary policy that actually benefits us (which I have no hope of), I want to store my money in an inflation-proof asset that I can easily afford, maintain, and self-manage.
In other words, I buy bitcoin.
This is a guest post by Isabel Foxen Duke. The opinions expressed are solely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.