Government Failure Makes Bitcoin Succeed

Bitcoin, the premier cybercurrency, is at an all-time high in price and an all-time low in volatility. In a new article, Bitcoin: Order without Law in the Digital Age, Kyle Roche and I compare Bitcoin to fiat money and show why and how it may succeed in the long run in becoming a currency relied on by millions. In this post, we focus on the flaws in fiat currency that may enable Bitcoin’s success. In the next we will describe how Bitcoin is succeeding.

In 1924, Georg Friedrich Knapp, the father of monetary theory, wrote that “[t]he soul of currency is not in the material of the pieces, but in the legal ordinances which regulate their use.” The state must instill confidence through law that its currency will retain value. And it is the uneasy relation between a state and its currency that gives Bitcoin the opportunity to grow. Citizens in some nations rightly distrust their currencies, precisely because they have little confidence in the legal ordinances and institutions, like central banks, that regulate their use.  For instance, in the recent past nations, like Argentina and China, have undermined the value of their currencies and yet also tried to prevent citizens from using other more stable and reliable currencies to maintain the value of their assets.

Bitcoin provides many people in monetarily oppressive regimes with a better alternative.

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Is the Chinese Government in Late-Stage Regime Decay? A Conversation with Minxin Pei

china's crony capitalismThis new edition of Liberty Law Talk discusses with professor and author Minxin Pei how the nexus of corruption between businesses and officials within the Chinese Communist Party is negatively shaping the country's current trajectory in economics and foreign policy. Much conventional thinking holds that China's economic rise will continue unabated, but Pei's account breaks with current wisdom by focusing on a decadent ruling class mismanaging China towards disaster.

Reflections on China

I recently visited China for the first time.  Here are some of my impressions.

My main motivation for visiting China was to see a place that was as different from the West as possible, but also had a significant, ancient civilization.  In many ways, China did not disappoint.  Its history, despite the Silk Road, is largely independent of the West.  But it involves millennia of economic and cultural development.

Today, though, China seems a mix – of capitalism and communism.  The flashy new China of Shanghai strikes one as capitalistic.  But the authoritarian state that strictly controls information is communistic.  China also seems a mix of West and East.  The people dress as westerners in much of the country, yet the culture differs from the West in oh so many ways.  There are a range of things that one comes upon daily that seem alien.  For example, interactive norms such as queuing and matters of personal space struck me as quite different in China.

The diversity of the country was striking.  That there are different dialects of Chinese – Mandarin and Cantonese – is of course well known.  But there are also significant differences within these dialects that are very interesting.  For example, I was surprised to learn that the Mandarin spoken in Shanghai is quite different than that spoken in Beijing, and that the Shanghai version is similar to Japanese, allowing Shanghai speakers to understand significant amounts of Japanese (while the Beijing version does not permit this).

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Hong Kong

Recently, I visited Hong Kong and China for the first time.  Traveling to Hong Kong was a lifelong dream for me, as I have long admired the economic freedom that it possesses.  But how would the real Hong Kong appear to me, as opposed to the theoretical place that topped the Economic Freedom lists?  And would Hong Kong be significantly changed, given the 20 years it has been under Chinese control? I thought the real Hong Kong was incredible.  This city of skyscrapers was absolutely beautiful, with a skyline that rivals and perhaps surpasses any city in the world.  Hong Kong…

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Russia, China, and Us: A Response to Mark Helprin

gas tubes with russian and china flag

Lord Salisbury, Britain’s 19th century strategist and prime minister, famously remarked to a correspondent that “if you believe the soldiers, nothing is safe.” Alarms that experts raised from their own preoccupations, he believed, required tempering with common sense before such warnings could offer a reasonable guide for policy. Much of the discussion of American security over recent years brings to mind Salisbury’s observation. Mark Helprin’s “Indefensible Defense” in National Review’s June 22 offers a case in point.

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Is America in Retreat? A Conversation with Bret Stephens

america retreat

This edition of Liberty Law Talk discusses with the Wall Street Journal’s Bret Stephens his recent book, America in Retreat. Stephens argues that an America which declines to engage globally with its military is accepting a false promise of peace at the expense of rising disorder. The introduction chapter is entitled “The World’s Policeman” where Stephens quotes President Barack Obama’s proclamation in a 2013 speech: “We should not be the world’s policeman.” Similarly, Rand Paul states that “America’s mission should always be to keep the peace, not police the world.” “This book,” says Stephens, “is my response to that argument.” Our conversation focuses on…

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People Against the American Way

We have only begun to digest the full implication of the assault on Sony pictures.   Assuming it indeed was perpetrated by North Korea, (and evidence is building that it may have been, at least partly, an inside job) in order to block a movie it does not like, the hack, and the extortion of a private corporation is an assault on the very idea of civil society that we Americans cherish. 

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Pass Fast-Track Legislation for the Trans-Pacific Partnership

As one of its first acts, the Republican Congress should give President Obama fast-track authority for the Trans-Pacific Partnership, a proposed trade agreement between the United States and most important Asian nations with the exception of China. This free trade zone can help boost economic growth and help balance growing Chinese power in Asia.  Negotiations have been ongoing for some time, but fast-track is needed to throw them into high gear.

Under fast-track authority, Congress suspends its rules and guarantees the President an up or down vote on a trade agreement that meets certain conditions. These provisions can help the agreement succeed by preventing interest groups from picking it apart.  When the United States uses fast-track authority, other nations are more likely to summon the political will to make concessions in negotiations.

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The Guilelessness of Tricky Dick

In Oliver Stone’s laughable Nixon (1996), the director’s penchant for inventive history is exampled by a drunken—and randy—Pat Nixon advising her husband to destroy the tapes. “They’re not about you,” she slurs, “they are you.”

This has been certainly seconded by Nixon’s critics. For 40 years, they have zeroed in on the potty mouth (the biggest surprise for my Republican parents), the anti-Semitism, the enemies list (the work of a “fascist,” according to William F. Buckley), the pay-offs, the disturbing plots against political enemies (for example, slipping LSD to hostile reporter Jack Anderson), to present the image of a paranoid, insecure totalitarian.

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Minding America’s Business—Forcefully

The American people’s simplistic, self-contradictory demands are the reason for President Obama’s vacillations on foreign policy. Thus did Gerald Seib explain conventional wisdom.

A poll taken last week by NBC News and Seib’s publication, the Wall Street Journal, found that “respondents by a whopping 47 percent to 19 percent margin said the U.S. should be less active rather than more active in world affairs. At the same time, though, a majority said they want a president who shows a willingness to confront America’s enemies.”

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