The Bitcoin Standard: The Decentralized Alternative to Central Banking

by Saifedean Ammous

Without a market for capital where independent actors can bid for capital, there can be no price for capital overall or for individual capital goods. Without prices of capital goods reflecting their relative supply and demand, there is no rational way of determining the most productive uses of capital, nor is there a rational way of determining how much to produce of each capital good. In a world in which the government owns the steel factory, as well as all the factories that will utilize steel in the production of various consumer and capital goods, there can be no price emerging for steel, or for the goods it is used to produce, and hence, no possible way of knowing which uses of steel are the most important and valuable. How can the government determine whether its limited quantities of steel should be utilized in making cars or trains, given that it also owns the car and train factories and allocates by diktat to citizens how many cars and trains they can have? Without