Bitcoin’s Creation of Order without Law

Concept Of Bitcoin Like A Computer Processor On Motherboard

Modern fiat currencies depend for their value on confidence in the laws of the states that issue them. Some nations, like the United States with its established central bank, inspire substantial confidence relative to nations that may debase for their currency for political objectives. But no nation can absolutely insulate its currency from political manipulation.

That is what gives Bitcoin the opportunity to succeed as a currency. But what gives users confidence in Bitcoin? It is precisely the fact that the rules regulating its currency do not depend on the currency law of any nation state. Bitcoin provides an example of order without law or at least without currency law.

Order without law is not unknown to society. Social norms often regulate behavior without the benefit of formal law. Rules of etiquette tell people how to behave at table without causing offense. Coordination rules help people walk down the street without bumping into one another. In a major work, Robert Ellickson showed that social norms, not law, governed responsibility in a community of cattle ranchers and farmers for the damage caused by cattle straying on the range.

But while order without law is possible without software, software can improve on the enforcement of that order. The beauty of Bitcoin’s design is that its mechanism for enforcement can not only be more powerful than the informal mechanisms that enforce social norms but even more powerful in some respects than the formal mechanisms of law.

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Campaign Finance Restrictions Help Trump

Campaign finance reformers worry a lot about the influence of money in politics. But big money was not decisive this season. Jeb Bush had over $100 million in his campaign chest and associated Super PAC but went nowhere, at a cost of over $500 per voter. Ben Carson was well-funded and flopped. Over in the Democratic primary race, the less flush candidate came near to pulling off an upset against a powerful legacy candidate.

But even more importantly, this campaign season shows that celebrity can count for more than money. Donald Trump may be a billionaire, but he spent very little money up to this point compared to the other major candidates. What fueled his candidacy was celebrity. He had one of the most ubiquitous names in real estate for decades and one of the most watched reality shows on American television.

He was able to leverage that celebrity to secure vastly more free media exposure than any other candidate. With a savvy born of years in the New York media market, he knew exactly how to spin the Fourth Estate. The media was more than happy to return the favor. Trump makes great copy. And not only that, at least some in the largely liberal press corps were happy to see him split the Republican Party.

The more abstract point is that restricting money in campaigns, far from being a safeguard, increases the political power of celebrity.

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