Bitcoin, as I have argued, is a store of value that is now more attractive than bad fiat currencies and is likely to become even more attractive over time. It is an innovation that replaces trust in government with trust in a decentralized order— an order run by the miners—who verify transactions over a transparent blockchain. The interests of these miners are well aligned with holders of bitcoins, because the miners are partially compensated in bitcoins. It is this alignment that has sustained Bitcoin’s trajectory to ever higher valuations—a more than tenfold increase in this calendar year alone.
Bitcoin’s market order is strengthening because other markets are arising to improve the function of the underlying market. Yesterday the Chicago Board of Trade provided a futures market in Bitcoin, just it has for other commodities, like gold and oil, and as other exchanges have for fiat currencies.
Margaret Thatcher at Her Zenith: In London, Washington and Moscow not only celebrates Thatcher’s many virtues but brilliantly captures the tragic flaws that were to bring her career to a bitter and unplanned end. Her fall was sad not only for her personally, but for classical liberalism more generally, because she left without grooming a successor who could have continued her reforms.
To begin, there is Thatcher’s character. The very single-mindedness and refusal ever to admit error that helped her push though transformative policies alienated everyone. Her opponents within the Conservative party were energized to wait for an inevitable misstep. But even Thatcher’s closest allies fell out with her. The book recounts how, as Prime Minister, Thatcher irritated and belittled Norman Tebbit, a star of her cabinet who had both the common touch and toughness to carry on her policies. Sadly, part of the reason for her abusive treatment was fear: she worried that he might gain the grassroots support to oust her, although he was in fact one of her most loyal acolytes.
Moreover, without a sound successor, Thatcher was unable to safeguard her legacy when she resigned for lack of sufficient support in the party. She had to choose John Major, who had been inadequately vetted as a short-term member of the cabinet. He turned out to be something of an opportuntist who was both unwilling and incapable of pushing Thatcher’s revolution further.
The other great tragic flaw was an intellectual mistake.
Princeton University Press had just published a new paperback edition of my book, Accelerating Democracy: Transforming Governance Through Technology. It argues for using the tools given by our new computational technology to help democracy adapt to our accelerating rate of social change.
The basic insight of the book should be congenial to friends of the classical liberal tradition in political thought. It is to deploy decentralized mechanisms that modern technology makes possible to improve self-government. For instance, the internet greatly facilitates betting pools, called information or prediction markets, which permit people to bet on the occurrence of future events. Such markets already gauge election results more accurately than polls. If legalized and modestly subsidized, they could also foretell many policy results better than politicians or experts alone. We could then better predict the consequences of changes in educational policy on educational outcomes or a stimulus program on economic growth. In short, such markets would provide a visible hand to help guide policy results. Unfortunately, while such markets are a public good, our government now impedes them at every turn.
The internet today also encourages dispersed media like blogs to intensify confrontations about contending policy claims.
In the sharing economy, companies like Uber, Lyft, and Airbnb, add value by using resources that would otherwise be idle. The Internet connects people who need transportation or accommodations with people who are willing to provide them. Another substantial advantage is that these same connections permit social norms rather than government regulation to enforce standards of good conduct.
Government has a model for regulating taxis. It generally requires substantial licensing and enforces rules by tracking complaints and disciplining drivers found in violation. But a company like Uber makes much of this regulation unnecessary. First, given its substantial capital investment, it has every interest in checking out drivers itself before it permits them to represent its good name.
But Uber also makes use of social media to assure continuing good behavior of its drivers.
Staid old Gallup knows how to get attention. Its Presidential Job Approval Center recently announced a new report with the provocative title: U.S. Muslims Most Approving of Obama, Mormons Least. The full results of this extraordinarily large sample of 88,000 interviews showed an even more dramatic division. Majorities of Muslims (72 percent), other non-Christians (59 percent), Jews (55 percent) and atheists (54 percent) supporting President Obama faced Catholics (51 percent), Protestants (58 percent) and Mormons (78 percent) opposing him.
It looks like the basis for a religious war. Then it gets even bleaker.