LETTER FROM THE EDITOR
No intrinsic value is involved in fiat money, just a pronouncement of Existentialism from central banks. Trillions and trillions of dollars, euros, pounds, and renminbi are singing, “We’re Here Because We’re Here Because We’re Here Because We’re Here.” (A popular tune in the trenches during World War I – appropriately enough, since WWI was when fiat money came into global use.) By now, anybody who isn’t confused by currency is simply insane. And the extra confusions of cryptocurrency aren’t the anti- unwelcome mysticism to the already baffling material and philosophical aspects of money. Some regard the blockchain with almost religious awe, as if it were the work of mythical “Geek Gods” high upon Mount Laptopus. An article by Marco Iansiti and Karim R. Lakhani in the January issue of the Harvard Business Review claimed that blockchain technology “has the potential to create new foundations for our economic and social systems.” No, it doesn’t. I give you this from Wikipedia, where information was drawn from more extensive 2015 and 2016 articles in The Economist , Fortune , and Wired : “A blockchain is a decentralized and distributed digital ledger... authenticated by mass collaboration powered by collective self-interests... This allows the psychotic medication that’s needed. Cryptocurrency even adds a kind of
concerning money. The history of money is a history of increasing confusion – much of it deliberate. When the medium of exchange was barter, we were doing things like trading goats for pigs. Unless we were so stupid that we fell for the old “pig in a poke” trick, what we saw was what we got. The move to “commodity money,” with prices set in coins made of something valuable – gold, silver, copper – complicated trade. Yes, making change was easier. (No more having to pay for a goat by fishing a ham and three pork chops out of our pockets.) But it raised new questions. How to assay the metal content in coins? Who to trust to mint them? The advent of “fiduciary money” – pieces of paper redeemable in coins – meant further confusions. Who really had those (possibly dodgy) coins? Where did they keep them all? Did they have enough? And then came “fiat money.” This, as I mentioned, is what the government prints when it feels like it. Most of the money in the world today is fiat money. We’ve got it because the government says we’ve got to. Anybody who isn’t confused by currency is simply insane. And the extra confusions of cryptocurrency aren’t the anti- psychotic medication that’s needed.
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8 | July 2017
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