Why bitcoin is funny money – erick calder – Medium
People often say, albeit less so more recently, that bitcoin is “funny” money, that it isn’t “real”, like the American dollar
One can only laugh at such absurdities but it is important, if we’re ever going to achieve mass adoption, that we understand and debunk the basis for such opinions
The core of the problem lies in the complete lack of understanding of economics by the plebeian masses, which to a certain extent owes to the complexity of the language used in economics, but also to the cluelessness of the modern economist
Take, for example, the renowned Paul Krugman, former economic advisor to the Reagan administration and best known for having received a pretend Nobel prize in economics (the prize is not actually issued by the Nobel Foundation¹, but by some Swedish bank). Krugman states in his New York Times article, Bubble, Bubble, Fraud and Trouble that:
Bitcoin, by contrast, has no intrinsic value at all
Krugman couldn’t well say bitcoin has no value, for he would clearly be wrong (by a margin of $110B, the market capitalisation of bitcoin at present), so he qualifies the assertion with the equivocal term “instrinsic”, which to the man on the street comes across as erudite, lending the article credibility
But our economist-cum-spindoctor is comparing bitcoin to the US dollar, which in his own words is a fiat currency i.e. dollars have no intrinsic value either!
It’s only natural that a simpleton — feeling unprepared to debate the fallacy of the author’s juxtaposition — simply quit thinking and just swallow the tale, lock, stock and barrel, for clearly these lofty matters are above his paygrade
The tragedy in the narrative is that the perplexing language used by Krugman is designed to obfuscate. It’s merely sophistry aimed to confuse the easily confused, which allows him to propound the mythology of the US dollar as real
But the real problem isn’t just that Krugman is clever with words, or that he has a liberal agenda aimed at supporting the welfare state (which requires a continued belief in fake money). It is that, despite all his accolades, he does not understand economy i.e. he does not truly grok the nature of money
Socialism does not work. It cannot work for the simple reason that it does not respect property, and money is deeply rooted on the notion of property. Paradoxically, the US — that self-proclaimed bastion of capitalism — seems to adore socialists like Krugman who, in his own words² idealises state theft as virtuous:
It was, in a way, strange for me to be part of the Reagan Administration. I was then and still am an unabashed defender of the welfare state, which I regard as the most decent social arrangement yet devised.