On this podcast from the Bitcoin Standard, Dr. Saifedean Ammous hosts Philipp Bagus, the economist who wrote the definitive Austrian treatment of deflation, In Defense of Deflation. They discuss the history of anti-deflation thought in economics, the different kinds of deflation, the consequences of deflation, and whether this is a problem for bitcoin. They also discuss Philipp’s views on bitcoin, as well as his work on the Euro.
At the very last part, there’s a question about the future of the Euro. Part is 01:15:02 / 01:21:11.
Philipp Bagus wrote the book In Defense of Deflation but of course that was written 10 years ago, so the question was about his extended views on the Euro including the events of the last decade. He tells us about the near Grexit, which I was opposed to, the way Germany wanted us out, how France convinced them to cave in to our demands, and how the Euro and the Eurozone in general is poised to become a Superstate with a digital currency that will allow governments to control and track all the citizens.
Now, I’m not an anarchist or a libertarian or whatever those ideologies are called. But I do understand the capabilities of a digital currency, one that is essentially one node, a shitcoin, a centralized blockchain. That type of digital euro will allow them to track our spending down to the last purchase, giving them great power over our lives and opening the way to abuse.
I think it’s possible that people will live in a dystopian Europe where any thinkers will be demonized, like, why did you purchase that book, or why did you spend your money in that Syrian immigrant’s shop when you claim to have political views that oppose the influx of more immigrants, and crap like that. A digital centralized currency provides literal proof, undeniable proof of anything you do. And that is open to abuse. Things can be twisted out of shape, blown out of proportion, smear campaigns, witch hunts, undermining of people’s ethics. I can see court cases being thrown out by requesting the plaintiff’s purchase history (along with his search history, because why not throw that into the mix?) Is it really hard to imagine a case of a career woman accusing her boss of improper sexual harassment and the lawyer bringing out her purchase history of dildos to “prove” her promiscuity to a carefully-selected panel of prudish jurors? I can see defendants being overwhelmingly charged with crimes that wouldn’t have mattered in a cash-only society, but which have retroactive penalties in a digital system where nothing is ever lost or forgotten.
And how much can you even trust the centralized blockchain anyway?
It’s’ a single point of failure, open to manipulation and abuse.
And I think that when we get to that point, we’ll be glad we have a decentralized and fair system like Bitcoin.