There’s a famous quote attributed to actor/comedian Billy Murray that goes:
“Common sense is like deodorant, those who need it the most never use it.” That pretty much sums up the chorus of big bankers, financial analysts, acclaimed academicians, and elitist economists who try to bash Bitcoin and cryptocurrencies in general.
They are all supposed “experts” that have traded common sense for credentials, prestige, and acceptance.
The latest attempt to bludgeon Bitcoin comes from the economist Bernard Connolly, in a recent article in MoneyWeek.com.
Before we explore his critical critique of crypto, we might check his credentials – because that’s what “experts” require from us. They want you to be overwhelmed by their education and experience, so you don’t dare question their “expert” opinion.
The first thing B.Connolly lists in his bio is that he’s Oxford-educated – which is very fancy. Additionally, he’s worked for the European Commission (EC), the Organization for Economic Co-operation and Development (OCDE), and AIG (NYSE:AIG) Group.
For all those low-brow, non-experts – the EC is the executive branch of the European Union, which is responsible for proposing legislation, enforcing laws, and directing the Union’s administrative operations. OCDE is an economic council comprising governments from 38 member countries. It was formed to stimulate economic progress and world trade.
And AIG Group defines its business as
“...a leading global insurance organization with operations in approximately 80 countries and jurisdictions. We provide a wide range of property casualty insurance, life insurance, retirement solutions, and other financial services to support our clients in business and in life through our General Insurance, Life & Retirement and Investments business units.” Fancy.
Fancy. Fancy.
This guy is clearly an “expert” to whom we must bow and genuflect, because…well, he’s an “expert” right? Nothing circular in that logic. I mean, you would assume he knows what he’s talking about because he’s an Oxford-trained global economic “expert.” While his credentials may speak for themselves, his credentials certainly don’t seem to help him speak on the topic of cryptocurrencies.
The following excerpts from the aforementioned MoneyWeek article would be shocking if they weren’t so laughable. Take for instance this first quip that trots out the tired trope that cryptocurrencies are a “bubble” – a bubble that’s worse than even the *gasp* current stock market bubble according to Connolly.
Yet there is another, even more dangerous bubble [than the equity bubble] that has developed in the past few years. This is one that, if unchecked, is bound to produce cataclysmic changes in wealth distribution. That bubble is in private cryptocurrencies.
This hyperbolic frenzy is completely unhinged. The only reason cryptos and DeFi could “…produce cataclysmic changes in wealth distribution….” is because those blockchain-based alternatives will remove and neutralize the power of intermediaries – like the European Commission, OCDE, and the AIG Group.
For centuries, banks and governments have monopolized societal wealth distribution. Cryptocurrencies will increasingly prevent the establishment from taking their cut, applying their influence, and using their power. The only ones who could possibly view that as “cataclysmic” are the “experts” whose reputation and livelihood depend on the status quo.
Another assertion by this “expert” in absurdity is his forced choice fallacy that the market price of Bitcoin, will only become infinite or nothing.
If instead the price can and does move towards infinity, then the use of an infinitesimal amount of a single person’s bitcoin wealth would exhaust all the world’s productive potential; that is, each holder could command all the world’s resources by being the first to sell and spend. The rise in the general price level towards infinity as bitcoin holders competed for resources would impoverish everyone else.
Hmmm…it seems that while at Oxford, this “expert” majored in fiscal film-flummery with a minor in Chicken-Little-Falling-Sky hyperbole. How could he honestly state that Bitcoin holders will “…impoverish everyone else” – I believe, he knows that’s not true.
What IS true and what WILL impoverish everyone else is the continued, coordinated reckless printing of fiat currency under the banner of Modern Monetary Theory by governments around the world. I’m no Oxford Don but the law of supply and demand shows that the more abundant an asset/resource, there’s a resulting inverse drop in its value. That holds true for fiat currencies as well as deodorant. Aren’t government-stoked inflation, ever-increasing taxation, quantitative easing, and runaway money printing what will truly “impoverish everyone else?”
To be clear, Bitcoin didn’t create these problems. The problems are the result of decades of failed fiscal policies and monetary malfeasance funded off the backs of taxpayers. Bitcoin and cryptocurrencies are part of the solution. However, “expert” bloviator Connolly disagrees.
To avoid serious social and political discontent, leading to unrest and ultimately sociopolitical breakdown, the authorities will have to burst the bitcoin bubble before its macroeconomic importance becomes much greater.
The true bubble we need to burst is tyranny of experts such as Connelly. Not one of his criticisms levelled in this article were data driven or fact based. He simply wrapped opinion and innuendo in puffery, passing it off as tyrannical truth that cannot be questioned. Tyranny of the experts is real. In fact, author William Easterly wrote a book in 2014 titled The Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor.
Easterly’s main assertion in the book is that developed nations see poverty in developing countries as a problem that can only be solved with oversight from “experts.” First-world “experts” believe that third-world nations need our “expert” assistance to resolve economic woes. But the proposed solutions and economic tinkering by first-world “experts,” forces developing countries to become dependent – not self-reliant, ergo tyranny of the “expert.”
Lastly, Easterly states that instead of focusing on large-scale economic development and building infrastructure, we should empower the world’s poor to help themselves. With 1.8 billion of the world’s population unbanked – having no access to financial services, micro-loans, or credit tools – Bitcoin is the best chance for those impoverished around the world to help themselves.
That’s basic common sense, which makes sense to everyone but the experts who will be knocked from their pedestals of power in a crypto-based economy. Bringing us back to the quote:
“Common sense is like deodorant, those who need it the most never use it.” So, on behalf of us common folk, we strongly encourage all you experts to start liberally using some common sense. You desperately need it because your “expert” thinking is simply stinking.
On The Flipside
- Just as economic experts such as Connolly are trying to saddle Bitcoin with a FUD-induced narrative of economic collapse, central banking experts are promoting their sovereign digital currencies as the prosperity panacea.
- Both narratives are filled with fiscal falsehoods.
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