574 sats \ 10 replies \ @elvismercury OP 15 Nov 2023 \ on: _Broken Money_ book club, part 4 bitcoin
According to neo-Keynesian theory, the government is meant to be deploying its money-printing powers in counter-cyclical fashion; but as Lyn describes here, incentives are such that it's always more expedient to kick the can down the road.
To put it another way: governments won't do the short-term hard thing and so we all endure the long-term harder thing. And yet many bitcoiners pride themselves on their low time preferences. If sacrificing for the future is possible, and produces superior results, why are governments -- and many people -- unwilling to do it?
Short attention spans that are getting shorter? I think of James Carvel- "it's the economy, stupid!" People vote for the guy if they're better off than they were four years ago. It's even more prevalent in our tiktok modern world where politicians begin raising money for their reelection campaign their first day in office.
Will bitcoin change this? I don't know, but if most people no longer worried about finding the money to pay the rent and feed the kids, maybe.
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The "having more mental space" argument is very interesting to me. There's some interesting science around this across a number of disciplines. The most readable intro is probably this one but the idea goes deep: if the organism has to devote cycles to survival, there are less cycles to devote to longer-term projects. This shakes out everywhere, including mating strategies.
So I think it's plausible, at least. But I'm trying to guard against telling myself a story that I want to hear.
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Taking your point a bit off topic, I sometimes wonder about this factor when I see those unlikely animal friends or guy with a pet grizzly bear videos. It seems like even apex predators, when they're reliably well-fed, can be quite friendly to animals they would just kill out in nature.
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Yes. When organisms have enough, pro-sociality can get expansive. I think about this all the time. It's an interesting lens to invert: if someone is being a giant douche, what else is probably true, or has been true?
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I try to keep that in mind, too (it's not always easy). We don't know what other people are going through and it's good to grant them some benefit of the doubt, until they prove they don't deserve it.
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I think some of Hoppe's insights about the different incentives faced by democracies and monarchies is relevant here.
In democracies (broadly defined), the ruling class is incentivized to not have things blow up during the current election cycle. It's very myopic.
In monarchies (broadly defined), the rulers have longer term concerns, because they expect to be in power for a long time and because they expect to pass their rule on to their heirs.
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That makes sense to me on the surface, but I can imagine this framing, too:
In a democracy, someone goes into government for a short time, with substantially less power than a monarch has, and then emerges afterward, and has to live in the environment that she created, with her fellow citizens. Her heirs will live in the same conditions, with no special privileges. In a monarchy, the person is cloistered in power for the entirety of her life, and any heirs receive similar privilege and protection.
In other words, I think I could argue for any point along this gradient, which makes me dubious of these kinds of arguments at all, when divorced from more empirical findings. Theory is pretty hollow when it comes to complex systems, in other words.
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That's fair. We have to look to historical comparisons to help decide which analogies and hypotheses actually fit.
I think the analogy of renters vs owners is pretty good in this context. Those in power under democratic systems are like renters, in that their period of control is limited, and the incentive is to extract what value you can while you can. Even if that is the case you point out, where they're looking ahead to after they're out of power, the incentive is to make the world more personally profitable. That's not necessarily the same as making society more prosperous. The reason that's different from the monarch's incentives is that the monarch lives off of the taxes levied on their society, so the can live more extravagantly when there's more available to be taxed.
Also, (and this would take us off topic) I think it's naive to believe democratic rulers rejoin society with no special privileges.
The monarchy stuff, isn't totally relevant here. My point is just that it's easy to see why democratic rulers are short term oriented. If things go bad, they lose their job. It's pretty common to hear things like "They just need to focus on getting reelected. Then they can actually do...", so I don't think I'm super off target.
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I think the analogy of renters vs owners is pretty good in this context.
Oh man, there is a question I'll post later that you're going salivate over I think. I'll move it up in the queue when I get back to the computer.
Also, (and this would take us off topic) I think it's naive to believe democratic rulers rejoin society with no special privileges.
That's for sure true, I was just trying to not bleed the argument everywhere.
My point is just that it's easy to see why democratic rulers are short term oriented. If things go bad, they lose their job. It's pretty common to hear things like "They just need to focus on getting reelected. Then they can actually do...", so I don't think I'm super off target.
I don't think you're off target either.
There's all these famous examples of how this worked in the mid to late Roman Republic, where people would get elected to these different administrative positions for a term (I forget the non-Consular titles, and I forget how long the appointment was -- I think 2 years?) and they'd absolutely bleed the provinces dry for as much tax revenue as they could harvest, to unlock the next step in the Roman political cycle. Political office has always been expensive.
Aside from the obvious takeaway, which was the point you made, it's interesting to me that sound money helped curtail this process not at all. Bitcoiners sometimes talk about eras of debasement leading to the fall of the Empire, but that came later, and was (not surprisingly) multi-factorial.
Figuring out the true, non-hopium-derived power of sound money is a topic I think people should care about a lot more than they seem to.
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it's interesting to me that sound money helped curtail this process not at all.
I was making a similar point on a recent post. There are lots of perverse incentives in society that are based on a wide variety of institutions. What sound money does is fix a small subset of those.
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