Inequality is at an all time high. CEOs keep paying themselves more and more while the poorest in society keep getting less.
Irresponsible companies have spent the last 40 years pursuing short term gains at the expense of taxpayers and the environment.
Whatever cash they’ve had left over, they’ve used to artificially inflate their share prices by buying back stocks and making their executives rich.
And now they’re coming to government, cap in hand to ask for taxpayer-funded bailouts to cover their reckless behaviour.
Behaviour that your taxes now need to subsidise.
Bankers are in the pockets of government, ensuring there are no regulations on their next round of market manipulation that will inevitably lead to a financial crash.
And all the while, you’re just trying to keep your head above water, trying to afford the price of everyday goods that keep on rising due to inflation.
Inflation that is caused by the Federal Reserve printing mountains of cash at your expense.
Inflation that is destroying your hard earned savings in an insidious attempt to prop up all this unsustainable and crooked behaviour.
But, you know…
So what can you do about this?
You can’t just sit idly by and watch the richest of the rich take advantage of the rest of the world.
You need to do something.
But the question is: what?
Well, you could protest.
You could march in the streets yelling slogans and holding signs, just like all the other protests that have come and gone before and made no difference.
Even Occupy Wall Street with its hundreds of thousands of participants changed exactly zero.
It seems as though physical protest is impotent at creating change.
And that’s because protesting fails to change the incentives of those that got us to this point.
Unfortunately, money talks.
And if the money is still flowing into the hands of the bankers, the CEOs and the crooked government officials, the system will never change.
These individuals and organisations will continue to behave the way they do, because that’s where their incentives lie.
We can march in the street all we like, but we’re still participants in the current economic system that benefits these few elites.
So it seems that the only effective protest is to opt out of the existing system.
Voting against the incumbents by exiting the system altogether.
And the simplest way to do that is to buy Bitcoin.
It might sound trite and simplistic at first, but at the heart of our current problem is a broken, rotten and manipulated monetary system that distorts everything else that relies on it.
And the antidote to this is to choose fundamentally better money, and all the downstream effects this brings.
Let me show you what a vote for (and the purchase of) Bitcoin really means.
Fiat money and the stealth tax of inflation
The primary and most obvious use of Bitcoin as protest is against the inflationary fiat currency in use all around the world today.
Firstly, inflation in and of itself is not necessarily a bad thing.
It has been a part of every currency used throughout human history, and is even deliberately programmed into Bitcoin.
But successful currencies were always those that were difficult to reproduce – demonstrated best by precious metals like gold and silver.
Inflation did occur, but it was naturally constrained by the difficulty of producing these metals through mining.
For more context on fiat money and its origins, have a read of my previous article on the history of money.
But when money is based on nothing, when it is pure fiat – based on the will of those who control it – production difficulty essentially drops to zero.
And when creating new money is as easy as pressing a button on a computer, inflation, therefore, becomes potentially limitless.
When inflation is limitless, the value of each unit of currency will inevitably head closer and closer to zero.
What most people don’t understand is that wealth creation and money printing are two very different things.
Wanting to print more money to pay for something is like wanting to feed more people by cutting your pizza into smaller and smaller slices.
However, this concept doesn’t seem to be well understood, and governments have been able to use that to their advantage.
When the gold standard was removed in the early 20th century, governments in Europe and the US gained control of this ability to print money.
They got away with this by promising their citizens that inflation would only be used for ‘good’ causes, and would, of course, be restrained.
They seemingly thought of themselves as all-seeing, all-capable entities that could know and act for the billions of individuals and their market choices.
So what do we have to show for 100 years of centrally controlled money?
A 90% or more reduction in the purchasing power of the US dollar, Pound sterling, Yen and what is now the Euro against gold.
It’s pretty clear to see that this inflation has not been controlled or managed well in any way.
This persistent inflation has created subtle and pernicious effects on our society that most don’t even recognise.
Let’s now take a look at what these secondary effects of fiat money and unchecked inflation have on society.
Government overreach and restricted freedoms
I want to start this section with a quote from French economist Frédéric Bastiat in his 1849 book ‘The Law’:
What is the law? What aught it to be? What is its domain? What are its limits? Where in fact does the prerogative of the legislator stop? I have no hesitation in answering: law is common force, organised to prevent injustice. In short, law is justice…Its mission is to prevent the right of one from interfering with those of another.
A more simple and succinct explanation of the purpose of the law would be difficult to create.
Bastiat here is essentially advocating for the non-aggression principle. He argues that each individual has natural rights to defend their person, liberty and property.
Therefore the law and by extension the government should exist only to protect these rights from harm, not to impose other restrictions on them.
This quote gets to the heart of the modern-day struggle with government overreach: what should the domain of government be, and where does this domain end?
These are not questions we ask of our modern society, and therefore nobody thinks to question the ever-expanding role of government in our lives.
The essence of Government is power; and power, lodged as it must be in human hands, will ever be liable to abuse.– James Madison
So how does government acquire this power?
Primarily, this is done by acquiring money from its citizens through taxation.
Taxation that citizens openly consented to pay in return for a certain set of services.
A government wanting to enact a costly policy almost cannot do so without the will of its taxpayers behind it.
However, said policy becomes so much easier to enact with the ability to print money and impose a stealth tax on its citizens.
And since the goal of those who seek power through government office is primarily to gain more power, this ability to spend in secret is the utmost expedient to more power, and is almost guaranteed to be abused.
“It requires handcuffs to stay the hand which turns the crank of the printing press”– Lord Edgar D’Abernon on German hyperinflation, 1922.
Therefore, printing money allows those in government to continue to expand their power unceasingly, and eventually gain influence in areas they have no justification being.
In normal conditions, the natural constraint of a budget means that governments can only spend on the most vital projects. Projects that have a relatively higher chance of generating a return for citizens.
But with the almost unlimited ability to print money, the opportunity costs of government spending appear to be zero.
Therefore, any project, no matter how inefficient or ill-conceived can get funded.
All this means that we’ve slowly seen more and more government creep over the last 100 years, and the unrelenting rise of bureaucratism.
Unsurprisingly, government spending per capita over the last 100 years has risen dramatically throughout the world.
And the more government imposes itself on our lives, the harder it is to regain our lost freedoms.
It’s no wonder that trust in government across the Western world is at a historic low.
Could it be because governments view themselves now as being too big to fail, and frequently break the laws written into the constitutions meant to constrain them?
They conduct illegal spying operations on their citizens and wage wars in foreign lands for opaque reasons, while creating more and more laws that grant them even more power and influence.
The trend of big government can be seen as a double-edged sword.
On one hand, it can be argued that this spending and these programs need to occur, because who else but the government will build roads, fund hospitals and give welfare to the elderly?
But on the other, we need to ask what the costs are of giving government excess power.
We have become a society dependent on government to take care of all our needs.
We have become a herd of sheep, relying on our shepherds in government to guide us into better pastures, to paraphrase Carl Jung.
But, as he states in ‘Civilisation in Transition’:
“The shepherd’s staff soon becomes a rod of iron, and the shepherds turn into wolves.”
And in accepting the security our governments provide, we have traded in much of our freedom.
The words of Benjamin Franklin ring as true now as they did in 1775:
“Those who would give up essential liberty to purchase a little temporary safety deserve neither liberty nor safety.”
I’m not here to give answers to the questions posed here, but to point out that an unlimited government domain has its dangers.
Dangers that as a society we’ve been unwilling to learn from or pay attention to.
The term ‘capitalism’ seems to be used in so many different contexts these days that it’s easy to lose sight of what it actually means.
In essence, capitalism is simply the preservation and growth of capital over time.
This is the motive that drives every investor and business owner – wanting your assets to be worth more over time than they were when you acquired them.
This idea of using assets as capital as opposed to simply holding them as wealth is a historical abnormality.
What does this mean?
Until only recently, most human societies viewed the economy as a zero-sum game; if I’m able to increase my wealth, somebody else had to lose.
If the baker was to sell more loaves of bread, it meant fewer jackets sold for the tailor.
So those whose aim it was to make more money for themselves were scorned by their community for most of history.
That was until merchants in Europe in the 16th and 17th centuries stumbled on a fascinating idea.
Rather than simply flaunting wealth through conspicuous consumption as kings had done for centuries, they could use their wealth to finance productive enterprises.
Enterprises such as ships sailing to the new world for trade, that would come back with orders of magnitude more value than it took to send them off.
This subtle shift from static wealth to dynamic capital that could be deployed to generate a return was the spark that ignited the industrial revolution.
Capital could now be used to make better goods more efficiently, enriching these capitalists as well as improving the lives of consumers in the process.
And this is the essence of the capitalist system – those that make returns on their capital have done so because they have provided value to large numbers of people.
So what happens when the lifeblood of this system – its currency – is distorted?
What happens when the price (interest rates) and supply (inflation) of money are manipulated?
What happens is that you distort the price signals that allow a market to operate effectively.
You create zombie capitalism where the incentives are ‘share price growth at all costs’ at the expense of creating real value for consumers.
An inflationary currency incentivises a society of consumerism and debt-based spending rather than long term saving, making households precariously susceptible to unseen disruptions (sound familiar?)
It also puts massive pressure on businesses to focus all their efforts on increasing their stock price in the short term.
This, therefore, incentivises them not to invest in long-term growth, but to do things like share buybacks to make their executives rich and artificially increase the stock price.
Because, after all, businesses are beholden to their shareholders, who are desperate to see growth to try to escape inflation themselves.
So how would all this be different in an economy built on sound money that, like gold for most of history, actually appreciates over time?
In this sort of economy, most individuals wouldn’t be forced into the stock market to preserve their wealth, they could simply leave it in the bank.
This incentivises savings, meaning households would be far more financially robust, as well as less enticed into the shallow, consumerist society that we’ve produced.
This move from investing to saving means that capital is far more likely to only flow to efficient businesses that are creating real value.
Businesses will, therefore, strive to have their stock prices appreciate more than money would naturally over the long run.
This removes the frantic scramble for yield over inflation that anybody who wants to preserve their wealth must take part in.
And therefore, this causes far less pressure on businesses to return short-term gains to shareholders, who instead can focus on long-term growth.
This reduces the cronyism that is so prevalent in our current system since businesses are far less likely to succeed by relying on political expediency rather than providing real value.
It also means businesses can begin to focus more on environmental protection, as long-term sustainability would be far more important than it is now.
The original characteristic of the capitalist system was that by acting in self-interest, individuals could actually improve the wellbeing of those around them.
But in this era of zombie capitalism, those at the top are enriching themselves by extracting from the rest of society.
This isn’t capitalism.
It’s time we end this system now.
Bitcoin as protest
As we can now see, the flow-on effects of fiat money are pernicious, dangerous and quietly devastating for the majority of society.
This has made inequality the buzzword of the times, and anyone and everyone seems to have a different answer for how to reduce it.
But these ‘solutions’ only ever focus on the effects rather than the cause.
People rally against income inequality, affordable housing and minimum wage laws with no conception of what caused these problems to be so big in the first place.
And that cause is the zombie capitalist system we have created through fiat money and unlimited inflation.
So in order to combat the cause of all these problems, the only action we can take to meaningfully disrupt this system isn’t to protest in the street or rant at your friends who already agree with you.
It’s to opt out.
And the only way to do that is to buy Bitcoin.
At its core, Bitcoin isn’t just some fad or competitor to PayPal.
It’s fundamentally better money.
Bitcoin is provably scarce, with only 21 million coins ever to be created.
It is also disinflationary, meaning its inflation rate is programmed to decrease to zero over time.
This means that in a world where money is – or is backed by – Bitcoin, the value of this money is once again based on a real, tangible asset.
An asset that can’t be tampered with or manipulated.
Just as gold was priced by its scarcity and difficulty to mine, so is Bitcoin.
This makes inflation impossible and makes money more likely to increase in value over time.
And just in these characteristics, you solve the root cause of so many of the world’s economic problems.
Bitcoin is also unconfiscatable, uncensorable and immutable, meaning that once you own Bitcoin, nobody can tell you when, where or with whom you can transact.
It gives its users true financial freedom.
And best of all, the rules that govern Bitcoin are written into 10,000+ computers around the world.
Computers that all share the same open-source code, run by individuals who all have the same steadfast belief in Bitcoin as sovereign money.
With its decreasing supply, Bitcoin is well on its way to becoming the most scarce and valuable asset in existence.
With 11 years of history and the title of the best performing asset of the last decade, it has become an unstoppable force that is destined to upend our existing economic system.
So you can watch preachy speeches based on misguided economics, you can whinge about inequality on social media and you can protest in a vain attempt at improving our current system.
Or you can put your money where your mouth is and vote for a better system altogether.
Vote 1 Bitcoin.