We’re All Default Keynesians Now, and How Bitcoin is Changing That

“We’re all Keynesians now.” Milton Friedman coined the phrase, often miscredited to Richard Nixon, back in 1965. And that hasn’t changed since then. Unless you began your Austrian economic education at birth in some unknown Austrian paradise, on this planet at this particular time in human history, I think we can safely say we’re all Keynesians by default.

What’s a default Keynesian?

A default Keynesian is a person who, probably unwittingly and passively, supports the centralized monetary and fiscal policies that are descended from the ideas of economist John Maynard Keynes simply because that’s the way things are now.

Who’s John Maynard Keynes?

He’s a dead economist whose ideas currently have an effective ideological monopoly on the global economy.

Why does this matter?

There are excellent resources available to help you understand what money is and to learn its history, but here’s the gist:

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Cartoon by Riley Yates

The red pill at the bottom of the rabbit hole.

Bitcoiners love analogizing bitcoin. Mycelium and mushrooms. A tree. A social contract. A virus. A cure. Digital gold. Magic Internet Money.

What money really is.

These days, like many before them, we’re forced to use certain monies by the decree and enforcement of national governments and monarchs. But this isn’t what money really is. This is what we bitcoiners refer to as “fiat money”.

A new option: bitcoin is the best money we’ve found.

The technological miracle of bitcoin is that Satoshi invented a sound money able to resist capture by central authorities. It is the first good, asset or technology able to be free to operate as money for a global human economy. It is unable to be confiscated, censored, debased or inflated. Bitcoin is a profound zero to one moment and the implications for human society are nothing short of revolutionary.

The reeducation of the default Keynesian masses.

The collection of economic ideas that has persisted as an alternative, like heroic cockroaches after a Keynesian ideological Armageddon, is called Austrian economics. Austrian economic thinking has been carried forth by small groups of devotees to the academic tradition of Mises, Hayek and Rothbard, political bands like the Libertarians of the United States and speculators like the gold bugs.

Two great experiments.

We’re now in the midst of competing experiments of epic proportions. Central banks and governments around the world have gone all in on centralized, inflationary monetary and fiscal policies. And the first sound money able to resist control by central authority is competing against this centralized model of money control. Austrian economics has a new and better horse in the race. Where gold inevitably wore down in the face of the constant pressures to centralize control of money, bitcoin seems able to resist, and indeed actually grow stronger in the face of centralization pressures.

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