Kyle Roche and I published an essay on Bitcoin in the Wall Street Journal on Monday, explaining why it is rising in price and becoming less volatile. It gains as national currencies become more risky stores of value. Given the state of the world, that means bitcoin has a bright future! As we say “The instability caused by problems with the euro, Brexit and the many Western democracies’ growing ratio of debt to gross domestic product threatens the value of even established currencies. Bitcoin is likely to succeed so long as the value of other moneys rests on politics.” We could have added that by serving as a hedge against bad politics Bitcoin is also an instrument of liberty.
Some commentators responded by impugning Bitcoin, but they did so on the basis of false notions and confusions. Here are the most common claims and brief rebuttals.
1. Bitcoin is simply an instrument of crime. The argument is that Bitcoin is used because it helps criminals make payments that avoid discovery. This assertion would not explain why Bitcoin continues to rise in price. Moreover, investigators find Bitcoin helpful in tracking down criminals, because it helps them follow money changing hands and connect it to criminal activity. Central banks themselves have concluded that cash better facilitates crime than does Bitcoin.
2. Bitcoin can be hacked. In fact, the record of Bitcoin transactions is kept on thousands of independent computers, making it almost impossible to disrupt its ecosystem.
A group of law professors, now more than a thousand in number, has written a collective letter opposing Jeff Sessions’ nomination as Attorney General. The letter’s list of particulars against him is long—from his position on environmental laws to civil rights laws—as well as allegations of racial insensitivity that figured in his failed nomination to be a federal district court judge thirty years ago.
Of course, these law professors have every right to oppose Jeff Sessions as citizens, but they are clearly here writing as legal scholars, noting their position as law professors at the start of the letter and signing with their institutional affiliations.
What is notable, however, is the lack of any scholarly argument in the letter. There is no analysis of why Sessions’ positions are wrong as matter of law or policy.
Technologists celebrate accelerating change. For much of human history, it would have been impossible even to notice technical innovation in the course of a lifetime. But today technological change is a yearly event. This trend is not only or mainly a matter of ever smaller and faster gadgets. More profoundly, more spheres of social and economic life come to rely on the platform of interconnected computation, which itself becomes ever more powerful. Law itself is on the cusp of computational envelopment.
But technologists rarely reflect on the kinds of political institutions we need to govern a world of faster change. Flexible institutions and policies must not only respond to the rate of technological change but also incorporate it. Consider the latest predictions of even more dramatic change by Ray Kurzweil, Google’s AI chief:
There is a new meme circulating among journalists about the Supreme Court’s decision not to take certiorari in the same sex-marriage cases. According to the left-liberal Jeffrey Toobin, the Court’s decisions allow the “political process to go forward, one state at a time.” Or as David Brooks, a moderate conservative, said at greater length: “Sometimes, you just let the country have its way, and you don’t try to determine the shape of the country. You sort of modestly step back and let the country figure out what it believes. And I think they’re doing absolutely the right thing in just withdrawing and not getting too involved.”
Whatever one thinks of same-sex marriage (and I favor it as a policy matter), these claims completely distort the truth. The Supreme Court is letting go forward a judicial process that permits courts to invalidate traditional marriage laws if they think such a decision would best reflect the signals the Court itself has previously sent on the subject. In contrast, a political process would allow states—principally their legislatures and people—to make decisions about same-sex marriage, one state at a time.
The journalists’ claims are even more disingenuous because of the way the Supreme Court has set the stage for the lower courts.
My co-blogger John McGinnis has a great post up on the politics of Game of Thrones. (I cannot resist mentioning that I initially recommended that John watch the show but he resisted; obviously, he has come around.) Unlike John, I watch Game of Thrones for all of it – for the politics, for the great characters, for the surprises, for the sex, for the violence, for the humor as well as for the politics. I thought I would add a couple of reactions to the show and John’s post. (Some spoilers below.)
John notes how the show vividly illustrates that “a stable monarchy was a great advance for liberty over warring barons.” True enough, but the show also makes clear that the danger that the hereditary monarch can impose when he turns out to have the wrong traits for ruling, as the mad king, Aerys II of the House of Targaryen, displayed. By the same token, such a mad king might have good or bad heirs – Aerys’s son Prince Rhaegar may turn out to be have been a good man (or at least not a bad one), and while Aerys’s younger son, Viserys, would certainly have been a disaster, his daughter Daenerys, shows signs of greatness.
John also notes that some men just do not have the capability for exercising power, such as Robert Baratheon and his successor Joffrey. This is certainly right, but author George Martin also recognizes that some men cannot exercise power well, because they lack a Machiavellian insight into the nature of the political world. Ned Stark was disastrous because he sought to impose his ideals of how the world should be rather than recognizing and responding to how it actually is. As Daenerys shows, one need not be a bad person or ruler in order to rule effectively. One just has to understand how the world works.
In my view, the most distinctive characteristic of Game of Thrones (apart from George Martin’s willingness to kill off important characters) is his mixed view of the world, with few characters being entirely good and even fewer being entirely bad.
I watch the Game of Thrones for the politics, and there is a lot of political insight to admire. In anticipation of the next season that begins this Sunday, I thought I would comment on some of it.
An overarching theme is the nature of power—what is it and where does it lie. The two Kings on the Iron Throne portrayed so far—Robert Baratheon and his successor Joffrey– are not the real powers within their own kingdom. They are either insufficiently vigilant or insufficiently self-possessed to enjoy enduring authority. Even kings must exercise power through agents. Game of Thrones in large part reflects this principal-agent game and these two principals lack the self-agency to control their external agents. As Machiavelli recognized, only people of a certain character can wield power over the long term.
Mancur Olson (and Thomas Hobbes before him) understood that a stable monarchy was a great advance for liberty over warring barons, because the king has incentives to invest in the prosperity of his people so as to gain more taxes and more power rather than simply to seize the assets of his subjects. Game of Thrones vividly illustrates this truth. Once there is no agreement among the leading houses on the successor to Robert Baratheon , death and destruction reign instead. And Robert’s own displacement of his lawful predecessor, Aerys II of the House of Targaryen, weakened the royal legitimacy that his death then undoes.
The most powerful noble House in the series—the Lannisters— boasts the motto: “We always pay our debts.”