24
Mar
2014
Potpourri
==> A funny Twitter response to the Obama Administration’s attempts to build intelligent military machines.
==> Nikolay Gertchev offers a different type of objection to Bitcoin.
==> Interesting Mankiw post on the temptations of the policy economist.
==> A very funny Jim Grant lecture on Hazlitt at the recent Mises Institute academic conference.
==> Powerline vs. WashingtonPost on Keystone, Koch brothers, conspiracies in politics, etc.
1. Before we had Scott Horton, we had the great Roy Childs explaining Iran and the Shah in 1979, subsidized by those evil Koch brothers. “Nightline” with Ted Koppel got its start as a nightly panic-inducer without the historical perspective regarding Mossadegh which was understood in 1972 by most people I knew.
http://www.unz.org/Pub/LibertarianRev-1980feb-00024?View=PDF&apages=0024
2. Mankiw: There are winners and losers as the result the democratic process. Who knew?
+1 for using unz.org, by the way.
😀
As a mild Bitcoin skeptic, I was greatly enjoying the Gertchev piece until he started talking about why Bitcoin is unlikely to become general money. The market won’t adopt it because it’s not material and it requires a computer? That’s most of our money today. And I’d offer the cavalier assertion that computers are more essential to our modern economy than any single money.
Incidentally, it’s quite conceivable that physical media could be issued for Bitcoin, either directly with some inconvenience (every cash transaction would have to be cryptographically cleared with the network), or indirectly like with a gold certificate.
It’s pretty easy to transfer a bitcoin outside the network, just give the keys to a wallet to someone else. They have to trust that you haven’t kept a copy of course but if you do cheat them they will know it was you so possibly other options become available (also outside the network).
It can’t change hands too many times by this method before the cheat has some plausible deniability, but the current owner can transfer to a new wallet at any convenient time, which is less of a constraint.
Yeah, any kind of “sealed envelope” medium would do the trick. Like a scratch-off lottery ticket.
Gertchev’s two objections are really kind of grasping at straws.
1) That not everyone has the technology necessary to use bitcoin he claims. Seriously? Anyone who has a computer, tablet, or smartphone has this technology available to them, which means virtually everyone in the developed world and increasingly in the developing world as well (not to mention certainly everyone who reads Gertchev’s post on Mises.org).. Yes, not every single human being has this technology. So what? There are also still some isolated tribes who have never heard of money of any kind at all. This fact in no way prevents the rest of us from using money. The technology to use bitcoin is ubiquitous and will remain so, barring a collapse of modern industrial society.
2) Adoption of bitcoin now could entail switching costs in the future if people decide to abandon using bitcoin. This is the case with any technology, including past innovations in the use of money and transaction processing. It has not prevented technological progress in general nor technological progress in what we use as money or how. Most money, right now, exists solely as electronic accounting entries at financial institutions, dependent on the specific technologies associated with maintaining them. This has not prevented people from developing and adopting alternative currencies.
Didn’t Apple delete every single Bitcoin app off it’s store? I’m not anti-BTC by any means, but it’s not ubiquitous if the major smartphone companies refuse to support it. And it won’t “remain so” if the government declares it to be an illegal and counterfeit currency used mainly by terrorists and drug dealers, thus pressuring other smartphone companies to ditch support for it also.
They can’t do much about web apps that use bitcoin, which only require you to be able to access them through a browser with HTTPS.
However, that may require you to trust some of your bitcoins with a third party, which takes a lot of the fun out.
You are trusting the app-writer in every case.
If you want the processing done locally, you could well find that javascript is good enough (might be a bit slow).
There’s a big difference between “trusting that a software package works to spec” and “trusting someone not to run away with your money”.
Well, yes of course they could try to ban bitcoin, just like they banned gold as money. This is in no way an objection to bitcoin per se. The fact that gold is “technology-independent and matter-embodied”, as Gertchev puts it, did nothing to prevent the government from banning its use as money.
It’s not obvious from the title, but in the Jim Grant video, “Hazlitt, My Hero”, Jim takes on the depression of 1920, which Hazlitt lived through.
What about simple substitution? Does bitcoin have an immense first-mover advantage? If not, what will stop a new version with some slightly better technology or just better marketing from replacing it?
Like dollars, bitcoin could not be money and yet outlive our lifetimes. Or it could be money, just demanded at zero.
1. My rule of thumb is: If you don’t want to be viewed as courting disaster, don’t flirt with disaster, get the hell away from disaster, use all your power to prevent disaster.
2. See above
3. Can’t wait for PK to say “Of course him, but not me!”
4. Jim Grant is self-recommending
5. There are these new technologies called “The Pipe” and “The Corporation.” If only journalists knew about these things.
GD pipe and tube deniers.
Bitcoin has a very large advantage due to its acceptance. This doesn’t necessarily prevent a new cryptocurrency from supplanting it, but the relative advantages would have to outweigh *both* the switching costs *and* the liquidity granted by Bitcoin’s established acceptance (the “network effect”).
Furthermore, if there is such a massive benefit provided by the new technology, it is possible for that technology to be subsumed into the Bitcoin protocol (but because of how hard that is to accomplish, it would require a very large advantage — the type that otherwise might allow the new cryptocurrency to supplant it).
“First do no harm.” This is said to be taken from medicine. Every operation starts with a harmful incision and almost all medicines have side effects. So clearly it cannot mean do nothing unless you can avoid all harm. The surgeon or doctor instead weighs up the costs and benefits of the procedure, and continues if the likely benefits outweigh the likely costs. It is not an injunction for inaction unless you can guarantee “no harm”. We should evaluate the likely costs and benefits of economic policies as well, but we should not shun them if the balance appears to be positive just because there will be some harm done to some people.
I think you are undervaluing the humility intended in that phrase. Or you are way overvaluing the humility of policymakers.
Harold, you completely ignored the consent of the patient, which is the actual determinant of whether there it is harming someone to cut them open.
It isn’t a cost benefit analysis by the doctor that determines it. The doctor can only, at best, advise and recommend. Actual harm is decided by the patient.
I am not surprised that the error you make in politics would be the same error you make in an analogy of doctor and patient. To you, the state and the doctor do not have to gain consent. They decide what happens to others using their own cost and benefit calculation.
WHAT ABOUT THE INDIVIDUAL PATIENT’S COST AND BENEFIT CALCULATION?
Your posts are an eye sore.
To Harold, whole human beings should be treated like the skin of a patient on the operating table.
Talk about cognitively muddled.
“consent of the patient, which is the actual determinant of whether there it is harming someone to cut them open.”
Only if you define harm in an odd way. The usual definition is “physical injury”. Injury is “physical damage or hurt.”
I don’t see how you can claim that a surgical incision is not doing harm, since it seems to be an exact fit to the definition. Even with consent, it is still harm.
Unless you are using an alternative definition. I have seen it defined as “moral evil or wrongdoing.” By this definition any physical damage can be non harmful as long as it is not evil or morally wrong.
This definition would be more like Google’s “don’t be evil” as an alternative to “do no harm.” I don’t think they are quite the same.
We should evaluate the likely costs and benefits of economic policies as well, but we should not shun them if the balance appears to be positive just because there will be some harm done to some people.
There’s no such thing as a positive balance in economics, since, the moment any individual is harmed for the benefit of others, is the moment he is treated as if he were NOT part of the collective.
Which would be a contradiction in the purported goal of socialists – to behave as a collective.
Treating people as a collective is the reason why socialism leads to tyranny:
To those socialists who consider themselves to be True Believers, I ask that they watch the following video, which explains why the value of every good is ultimately derived from the consumer, rather than the laborer:
The Birth of the Austrian School | Joseph T. Salerno
http://www.youtube.com/watch?v=dZRZKX5zAD4
There is simply a huge difference between seeking bona fide public goods striving for Pareto improvements versus using the difficulty in achieving that as an excuse for Machiavellian utilitarianism as our current government is doing.
Not only can you convince yourself you are helping 51% of the people if that is your only standard, but you evolve to trying to even fool the 51% you’ve fooled yourself that you are helping.